Economic Survey speaks about India’s approach to climate change, highlights achievements 

Just a day before the presentation of the 2024 Union Budget, Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2023-24, an annual document that highlights the state of the economy of the country in that period. What seemed to be significant was the fact that climate change emerged as a major topic in the same. The report claimed that despite being one of the fastest-growing economies in the World, India’s annual per capita carbon emission is only about one-third of the global average. The Survey also quoted a recent report by the International Finance Corporation, which highlighted that India is the only G20 nation in line with 2-degree centigrade warming. 

Western climate strategies flawed and not universally acceptable

One of the major highlights of the 2024 Economic Survey was the criticism of the Western approach in terms of climate change related strategies. It argued that adopting those practices could be disastrous for countries like India as culture, economy and societal norms are deeply intertwined with the environment. The survey report stressed that all developing countries should address the climate change problem through a local point of view and the western approach of ‘one-size-fits-all’ won’t be fruitful in this regard. ‘The developing countries need to be free to choose their own pathways since they are tasked with balancing developmental goals with meaningful climate action,’ the survey said. 

Climate Action – Achieving NDC targets

The report stated that India achieved most targets of the first NDC well in advance like achieving the 40 percent cumulative electrical power installed capacity from non-fossil fuel-based energy sources in 2021 and reducing the emission intensity of India’s GDP from 2005 levels by 33 per cent in 2019. These were achieved nine and eleven years before the target year of 2030, respectively, the report claimed. 

Further, the share of non-fossil sources in the installed electricity generation capacity has reached 45.4 per cent up from 32 per cent in April 2014, the report added. 

India is also on track to make an additional carbon sink of 2.5 to 3.0 billion tonnes through tree and forest cover by 2030, the report claimed. A carbon sink of 1.97 billion tonnes of CO2 equivalent has already been created from 2005 to 2019, the report highlighted.

Rate of emission growth is slower than GDP

Between 2005 and 2019, India’s emissions grew at a Compound Annual Growth Rate (CAGR) of about four percent whereas the GDP has grown with a CAGR of about seven percent confirming that ‘India has successfully decoupled its economic growth from greenhouse gas emissions,’ the report revealed. 

The fact that India’s total adaptation-relevant expenditure has increased from 3.7 percent of GDP in 2015-16 to 5.60 per cent of the GDP in 2021-2022 shows that climate resilience and adaptation have integrated into development plans, the report further claimed. 

Challenges and Way Forward

The Economic Survey highlights several challenges to India’s development of a low-carbon path. Expanding renewable energy and clean fuels will increase the demand for land and water, as most renewables are land-intensive and require significant land use compared to other energy sources. Additionally, the growth of renewable energy depends on battery storage technologies, which need critical minerals. These minerals are often geographically concentrated, presenting a challenge for their availability.

Recognizing the importance of energy efficiency in accelerating clean energy transitions while supporting energy security, the Survey outlines various government initiatives to improve energy efficiency. These initiatives include:

Energy Conservation Building Code (ECBC): Implemented for buildings to enhance energy efficiency.

Standards and Labelling (S&L) and Star-rated program: For appliances to encourage energy-efficient choices.

Lifestyle for Environment (LiFE): An initiative promoting sustainable lifestyles.

Perform, Achieve, and Trade (PAT) scheme: Targeting the industrial sector to improve energy performance.

Charging Infrastructure for Electric Vehicles: To support the transport sector’s transition to clean energy.

These initiatives collectively result in annual cost savings of approximately ₹1,94,320 Crore and a reduction in annual CO2 emissions by around 306 million tonnes.

Finance for Sustainable Development

The Survey outlines measures to improve the business environment and catalyse more resources for sustainable development. In January-February 2023, the Government issued sovereign green bonds totaling ₹16,000 Crore to fund public sector projects aimed at reducing the economy’s emissions intensity and this was followed by an additional ₹20,000 Crore raised through sovereign green bonds in October-December 2023, the survey revealed.

Furthermore, the Reserve Bank of India (RBI) has implemented the Framework for Acceptance of Green Deposits for Regulated Entities to foster a green finance ecosystem in the country. The RBI also promotes renewable energy through its Priority Sector Lending (PSL) rules, the report highlighted. 

Reference: https://pib.gov.in/PressReleasePage.aspx?PRID=2034915

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