Climate change: It is imperative for India to plan towards achieving net-zero emission level by 2050

Vagaries of climate change have tremendously increased the clean energy needs for India that needs a paradigm shift in its overall energy policy. It will ultimately change almost all aspects of human development. To make the transition smooth, India will have to devise better plan for changing the present mix of unclean and clean energy to achieve net-zero emission level, preferably by 2050.

In 2020, Indian industries were using 53 per cent fossil fuel, 31 per cent bio-fuels and waste, 16 per cent electricity, as against 64, 16, and 20 per cent respectively in 2018. Transport sector was using 98 per cent fossil fuel, and 2 per cent electricity in 2020, as against 97 and 2 per cent respectively in 2018, while 1 per cent bio-fuels were also being used. The buildings were using 15 per cent of fossil fuels, 79 per cent bio-fuels, and 6 per cent electricity in 2020 as against 21, 61, and 18 per cent respectively in 2018.

Such a fast paced change in the pattern of energy consumption has been witnessed only in two years, and is likely to change dramatically in near future. India needs to come to a conclusion as to what should be the right energy mix from now onwards for the three sectors and the three types of fuels in use.

The share of renewable energy in total primary energy supply is going to change dramatically, since it is still at very low level in India. Though between 2018 and 2020, the recently published ADB publication titled “Financing Clean Energy in Developing Asia” says the share of renewable energy has been experiencing a rise, it needs to be substantially increased. During 2017-2020, the average growth rate in share was 6 per cent in China, while in India it was only 4.2 per cent. For South Asia, it was only 3.4 per cent.

There is also a role of renewable energy in electricity generation. The share of renewables in electricity generation had increased for almost all countries and subregions in Asia. In India, it grew from 14 per cent to 19 per cent. However, in South Asia, the share decreased from 25 per cent in 2017 to 22 per cent in 2000, mainly due to increased coal consumption for electricity production in Pakistan and Sri Lanka.

India will need to finetune the share of fossil fuel in industry sector which showed an increase during the two years under consideration. The share of other renewable, such as solar, wind, and bioenergy was negligible or nil in the industry sector in all parts of Asia and the Pacific, and it is same also in India.

The transport sector has been increasingly electrified during 2018-2020 in Asia and Pacific region. The use of biofuels in this sector, although very small, mostly around 1 per cent of the sector’s total energy consumption in 2018, seems to be taking place in most subregions also. Significant developments are taking place in transport sector to improve energy efficiency, and the growing penetration of electric vehicles is an important such activity.

China is leading the world in terms of battery-operated electric vehicles (BEVs). Global BEV stock in 2019 was 4.79 million of which 54 per cent was in China. Further, of the total world plug-in hybrid electric vehicle stock of 2.38 million in 2019, about one-third were in China.

In India, 380,000 units of electric vehicles were sold during 2019-2020. According to a study, in the base case scenario, the electric vehicle market in India is expected to grow at annual average growth rate of 44 per cent between 2020-2027, and the annual sales are expected to reach 6.34 million units by 2027.

There were also improvements in the fuel economy of vehicles in the region, and in Southeast Asia, where vehicle ownership has tripled in two years, the fuels economy of the car fleet had improved by more than 30 per cent. The pattern may be replicated in other regions and countries, including South Asia and India.

In the building sector, the share of electricity had increased during the period under consideration in the whole region except West Asia. In India also, it is going to be major shift with completion of electrification of all villages and hamlets. Clean energy usage in households, both in urban and rural areas, is likely to transform lifestyles.

All these would need considerable investment. Investment in renewable energy in India has already increased from $8 billion to $11 billion showing average growth rate of 4 per cent during the last decade. In case of China it grew at 9 per cent, while for the whole Asia Pacific region, it grew by 11 per cent.

India and China obviously need more investment to match their requirement, but they have not been performing well. Investment in renewable energy exhibited a declining trend both in China and India in recent years.

In China, the government announced a suspension of financial support for solar PV in 2018 causing the PV market to freeze. The Indian decline in investment was mainly due to project financing delays resulting from problems with electricity distribution companies.

India will need to invest more on energy efficiency improvements since it is at very low level. In 2016, the country invested only $7 billion, which accounted for only 0.28 per cent of its GDP. China invested $62 billion in the same year which was 0.66% of its GDP.

International Renewable Energy Agency estimates that the Asia and Pacific will need to invest under planned energy scenario a total of $825 billion annually on renewable energy and energy efficiency improvements between 2016 and 2050. In transformative energy scenario, i.e. in low carbon emission scenario, the corresponding investment needed would be $1.22 trillion for the region.

(IPA Service)

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