The global climate landscape faces new challenges following COP30, with the US withdrawal from the Paris Agreement casting a shadow over international cooperation. In this uncertain environment, a critical question emerges: can India still achieve its ambitious goal of reaching net-zero emissions by 2070? Experts Montek S. Ahluwalia and Utkarsh Patel present a compelling case, arguing that India's journey must and can be powered from within.
Growth and Green Goals: Not a Zero-Sum Game
A common misconception is that decarbonisation comes at the cost of economic growth. The authors strongly counter this, highlighting the immense hidden costs of sticking to a fossil fuel-based path. The severe health hazards from air pollution in Indian cities alone provide a powerful impetus for a swift shift. Furthermore, technological advancements have reached a point where major sectors can begin decarbonising without incurring prohibitive extra costs.
Delaying this transition risks locking the economy into outdated, polluting infrastructure, creating stranded assets in the future. In contrast, embracing green energy opens new avenues for economic expansion and job creation, particularly in manufacturing with export potential. Multiple economic models for India demonstrate that high growth is compatible with falling emissions through a three-pronged approach: relentless energy efficiency, widespread electrification of end-uses, and a fundamental shift to renewables for power generation.
The REMIND-India model, developed by Utkarsh Patel with Germany's Potsdam Institute, illustrates two possible futures. A "business-as-usual" scenario, continuing current policies, shows emissions rising until 2045 and remaining high even in 2070. However, a proactive policy pathway can bend the emissions curve downward after 2035, setting a clear trajectory to meet the 2070 net-zero target while sustaining an average GDP growth of 6.25% annually from 2025 to 2050.
Financing the Future: Looking Beyond International Aid
The second pillar of the argument addresses the elephant in the room: finance. The promised $300 billion per year in external assistance by 2035 for developing nations was already deemed inadequate. Now, with the US exit and developed nations cutting aid due to fiscal pressures, the reliability of international public climate finance is in serious doubt.
However, the authors assert this should not deter India. Given the size and sophistication of its economy, India is expected to mobilise most investment from domestic sources. The crucial insight is that global markets are flush with private capital seeking bankable projects, and India's private sector has proven its capability to deliver them. The bottleneck isn't a lack of money but the need for targeted domestic reforms to unlock this flow.
Key Reforms to Unlock Capital
To attract the necessary investment, both domestic and foreign, a series of policy actions are essential:
- Revitalising Discoms: Ensuring the financial viability of electricity distribution companies, through state-level reforms and selective privatisation, is paramount as they are the main buyers in the power market.
- Regulatory Modernisation: Reforming the regulatory framework to allow for more flexible pricing at wholesale and consumer levels.
- Strengthening Investor Confidence: Creating a robust legal framework for the quick resolution of state-investor disputes, a key point in ongoing FTA negotiations.
The role of Multilateral Development Banks (MDBs) is also critical. Rather than providing vast concessional loans, their focus should shift to expanding long-term lending and using risk-sharing mechanisms to catalyse much larger volumes of private capital. While COP forums have underplayed the MDB role, the upcoming G20 summit, hosted by the US, presents an opportunity for India to push for signals that direct MDBs to support the energy transition in this manner.
The conclusion is clear: India's green transition is not held hostage by the availability of foreign aid. By combining strategic policy reforms to mobilise domestic private investment with a smart approach to leveraging international financial institutions, India can confidently chart its own course to a net-zero future by 2070, turning a global challenge into a national opportunity for sustainable growth.
