Why does COP26 remain indecisive on ‘Nature-Based Solutions?’

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The buzzword for this year’s climate negotiations was ‘nature-based solutions’ or NbS. Several negotiations throughout the year discussed the importance of harnessing the benefit of nature utilising nature-based solutions. While the concept is still evolving and being pushed at COP26, its inclusion in the draft proved to be controversial.

The draft initially published by the presidency emphasised “the critical importance of nature-based solutions and ecosystem-based approaches, including protecting and restoring forests, reducing emissions, enhancing removals and protecting biodiversity”. However, in the recently published updated draft, the word “nature-based solutions” was replaced by “protecting, conserving and restoring nature”.

It is widely acknowledged that Nature-based solutions can play a crucial role in climate action, i.e., mitigation and adaptation. In fact, to back the argument, The Nature Conservancy and 15 other institutes highlighted that nature-based solution can reduce emissions up to 37 per cent by 2030 to keep the global temperature on track for a 2° Celsius trajectory. Adding further to the Nature Conservancy Report, research by the OECD highlighted that nature-based solutions could have a significant positive impact on the economy and provide benefits like job creation.

What went wrong with ‘Nature-based Solutions?’

Over the last few years, numerous governments and businesses have expressed their interest in pursuing projects involving NbS. In fact, more than 66 per cent of the countries globally have included Nbs in their nationally determined contributions. Most of these solutions identify forests as the sanguine options for climate actions. This joint interest was also backed at Glasgow, where more than 130 leaders pledged to end deforestation and forest protection by 2030. The pledge is also supported by 95 high profile companies from various sectors and is backed by a USD 20 billion investment.

While the public and private sector recognised this as a welcoming move, the indigenous people and several global south countries have expressed their disagreement over the pledge and the inclusion of NbS. Since the very beginning, the evolution of the concept of nature-based solutions has been ambiguous. Despite the clarifications and descriptive background research by the International Union of Conservation of Nature, the term has attracted much criticism. The reason for this criticism was because of the following:

Firstly, the business connotation of nature-based solutions is often taken to be planting more trees, irrespective of understanding of plant species indigenous to the region. The latter is, unfortunately, not respected enough while thinking of NbS strategies! It is critical to understand here that the natural system is not the same everywhere. A million years of evolution have endowed every ecosystem with a unique identity and characteristics.

Secondly, in a rush to fix the planet, we have done all sorts of harm that could have been easily avoided. The lack of cognisance of the fact that native species play a crucial role in any ecosystem functioning leads to a huge flux of non-native, fast-growing species plantation, which severely hampered ecosystems.

Thirdly, the mere recognition of nature as a commodity meant to serve humanity. Nature is definitely more than that; across the globe, nature is worshipped in several forms. Kim Tam argues that the connection between nature and humans is the key to solving the environmental crisis. While this relationship is often misunderstood, and in several cases, we as humans feel our superiority over the natural systems, the failed recognition of this interaction has resulted in criticism of the NbS concept.

Fourthly, the implementation of projects based on NbS must be done in consent with the local communities. This is a considerable concern for regions where land tenure rights are less stringent and can be infringed.  

Natural systems are critical for the planet; however, their benefit is not limited to being a carbon sink. Instead, it provides multiple ecosystem services, is home to biodiversity, and innumerable other benefits. Additionally, nature-based solutions will provide businesses and governments with an easy opportunity to offset, which they are already pondering. Thus, rather than promoting this nascent idea, the presidency must push the leaders and businesses towards adopting low carbon development pathways and limiting the emissions for a systemic change.

The need for concrete solutions

Despite our high hopes, The COP26 discussions so far are disappointing given what they have been able to achieve thus far. This year’s presidency has presented nothing concrete on the table, and the discussion seems nothing apart from a ‘reverie’. The negligence and lack of seriousness at Glasgow raise serious questions on the vision and will of global leaders towards climate action. What we call for is concentre actions, not mere greenwashing. The action must be radical and must be pillared on climate equity.  

(The author is a researcher at ICRIER. Views expressed are the author’s own and don’t necessarily reflect those of ICRIER )   

Corporate climate reporting framework in India and the world

Source:https://elearning-adbi.org/courses/governing-sustainable-finance/

Both, the recent Intergovernmental Panel on Climate Change (IPCC) report, and the COP at Glasgow amplify the concerns of voices in favor of curbing emissions. This is in line with the Paris agreement as well where almost the entire globe pledged to limit temperature rise to well below 2°C. These ambitious targets of limiting the temperature rise are however difficult to achieve if companies do not comply with recording their greenhouse gases (GHG) emissions and managing it. In order to facilitate the proper accounting of GHG emissions, frameworks like GHG protocol and ISO 14001 audits provide the guidelines for responsible recording, accounting and verification of the six Kyoto Gases emitted during operations and processing at a particular industrial entity. In order to make net-zero commitments successful, companies’ adherence to the green accounting principles will play an important role.

The GHG protocol also serves as the basis for two important principles namely, Science Based Target Initiative (SBTi) and The Climate Related Financial Disclosures (TCFD). These two frameworks play a critical role in defining the flow of capital, as the companies complying with these standards have to adhere to net-zero strategies and trajectories, which defines sustainable and green finance in a portfolio. SBTi decides whether the emission reduction targets are science based or not, while the TCFD makes sure that the climate change concerns of companies are not addressed in silos but holistically. This is done by making the company apprising its board members and investors about the risks and opportunities for the firm due to climate change on a periodic basis. The company is also expected to prepare at least two transition pathways incorporating climate change induced issues, with at least one transition pathway including 2°C or higher temperature rise.

Similarly, the framework governing the investments and finance companies on sustainable finance is European Union (EU) Taxonomy which lays down principles of green finance based on categories defined under the framework. Recognition of the framework by asset managers and investment bankers can be observed by their stress on companies to reveal information on climate change and related parameters. This helps financial institutions to reduce their risks associated with climate change and also manage their portfolio in a better way. Most investors are making green investments and tracking it based on the EU taxonomy. EU is in process of mandating the listed companies operating in the region to disclose information on the EU Taxonomy and TCFD parameters. All these frameworks make sure that firms are aligned to the Paris Agreement and net-zero strategies. It further promotes companies to reduce emissions in order to attract even more funds from investors.

In fact, countries like the US, UK, Japan, Canada, France, and Australia have made it mandatory for companies to report their GHG emissions. For making it mandatory, initially governments identified companies by their revenues. However, over time many developed countries modified their identification process with the number of people employed in the company being the deciding factor, not the revenues.

In India these developments started very late. In March 2012, World Resource Institute (WRI), the Confederation of Indian Industry (CII) and The Energy and Resources Institute (TERI) launched the India GHG Program which aligned with the voluntarily disclosed Nationally Determined Contributions (NDC) for India. The objective was of helping Indian companies to monitor their progress on low carbon pathways in an acceptable and consistent manner. Further, in May 2021 the Security Exchange Board of India (SEBI) released their guidelines on business responsibility and sustainability reporting (BRSR) for the top 1000 listed companies in the financial year. These guidelines are based on the nine principles of National Guidelines on Responsible Business Conduct (NGBRCs) and reporting under each principle is divided into essential and leadership indicators. The essential indicators are mandatory by the government for the companies to report, while the reporting based on the leadership indicators is optional. Again, this framework is expected to attract investment as the principles captured under the BRSR are considered to be more meaningful based on their environmental and social impacts, and thus expected to attract more investor capital. Various international frameworks and protocols like Global Reporting Initiative (GRI), TCFD, Sustainability Accounting Standards Board (SASB) and integrated reports can be replaced by this framework and companies can disclose information under this protocol.

The 2008 economic crisis and the COVID-19 pandemic have made us realise the importance of planning and preparedness. The TCFD makes sure companies look into both acute and chronic risks induced by climate change, and be ready with plans to cope with climate induced financial disruptions and opportunities. Similar guidelines by SEBI are mandatory for top 1000 listed companies in India, irrespective of the economic sector they are involved in. It is to be understood that different kinds of risks are associated with different economic sectors, thus guidelines should differ, considering the relevance of the sector and be made mandatory for companies in some specific sectors prone to risks associated with climate change. Developed countries have already made these guidelines mandatory for a wide range of companies despite their financial performance, hence providing the government with the data to plan and strategies in order to cope up with the economic setbacks due to climate change. A survey was conducted by EY in 2021 to look into the climate risks and preparedness for listed companies globally. The two parameters that define the results in the report include the coverage by companies where organisations were assigned a score on the number of parameters reported based on TCFD recommendation and the quality of disclosures defined as the data points available in public domain, a score of 5 means all the features of aspect were addressed, 3 means aspects discussed in detail, 1 meaning limited disclosures and 0 not publicly available by them.

The graph clearly shows that companies are performing better in the developed countries as compared to the developing. The scores are good for those companies located in areas where the climate regulations are strict by the government and the government itself is leading the steps for emissions reductions. Hence it would not be wrong to say that mandating the framework will help in tracking and then reducing the emissions in a long run. Countries like UK, US, and Canada have a good score both in quality and coverage parameters, while India received a quality score of 28% with 49% disclosures, which is lower than Africa.

Source: https://www.ey.com/en_in/climate-change-sustainability-services/risk-barometer-survey-2021

The experience of developed countries has shown us that it takes time to mandate companies and increase the coverage on parameters and asset level. In order to make the emissions reduction models work, companies need data to make decarbonization pathways and analyze the cost associated with it. Developing countries like India always have the argument that developmental needs take priority, but a question to be asked is given the critical status of air quality due to pollutants in Indian cities can we really afford to ignore emissions reduction? The listed companies in India should take a step forward and reveal information related to emissions, their strategy to reduce emissions and their preparedness for climate change induced risks to their portfolio. This will not only help the government in planning better as well as attract foreign investments to the Indian market.

Ensuring the Just in Energy Transitions

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Global emissions are on the rise again after hitting a low in 2020 due to the pandemic induced worldwide lockdowns. As per the International Energy Agency (IEA), world emissions were 2% or 60 million tonnes higher in December 2020 than they were in the same month a year earlier. This is attributed to the re-start of economic activities post-lockdowns in major economies which in turn has led to an increased energy demand. With expectations of a further rise in energy demand alongside economic growth, the focus comes back to the transition towards a carbon neutral future. With net zero and carbon neutral targets being declared in plenty, the global community still struggles to deal with the arch nemesis of climate, coal. Coal burning is the single largest contributor to climate change.

Transitioning to a low-carbon economy is essential to limit global warming. A crucial role will be played by the transition away from coal towards renewables to achieve a considerable reduction in emission levels, but the key question is to ensure ‘just’ transitions with minimum negative impacts.

The social dilemma of coal exit

While the share of renewables in the world energy profile has been accelerating, the world dependency on coal for a dominant proportion of energy demand needs is still very much in existence. More so for the developing set of countries like India, where energy demand is increasing at an accelerating pace and coal is considered vital for the nation’s energy security as well as is a key source of revenue for the government.

Further, the coal mining sector supports a large number of direct and indirect jobs. This comprises of not just desk jobs but also the low skilled and often uneducated miners, for whom the sole source of bread earning is the coal sector. They are not aware, and frankly do not care about big conferences like COP26 that happen to take major decisions of their lives by phasing out coal. Thus, while an inevitable coal exit is what the world is looking at, the threat of job losses and the associated livelihoods is pretty much real. For this very reason, it is vital for the world leaders to frame and implement policies supporting a just transition away from coal to ensure that those associated or dependent on the sector are taken care of.

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Possibilities

The idea of just transitions is basically not to exacerbate existing inequalities, nor to create new ones. Ensuring the just factor in transition strategy thus lies in providing access to modern technologies, ensuring capacity building for a smoother transition process, and in appropriate availability of finance.

Looking at an inclusive transition, there have been numerous talks about the absorption of coal sector jobs in renewable energy. IRENA pointed to a worldwide renewable energy employment level to be at 12 million in 2020. Furthermore, IEA has also predicted a creation of 14 million new clean energy jobs by 2030 with the global transition to net zero. With the tremendous rise in solar and wind energy sectors around the world, along with rising employment numbers and falling prices, this could then serve to be a viable route for coal transitions. However, the concept of equity requires this to be considered with certain caveats. A further analysis of the type of workers involved in different phases of coal sector jobs would help to plan better, pointing to the more vulnerable sectors to decarbonization. Pai et al. (2021) found the dominant share of jobs in the fossil fuel sector to be in the extraction segment, focusing on coal mining and oil & gas extraction. The study has pointed towards energy sector jobs to grow to 26 million under a WB2C scenario by 2050. While the fossil fuel extraction jobs are expected to rapidly decline, the losses will be compensated by gains in solar and wind employment, particularly in the manufacturing sector.

Another vital link in the just transition story is the provision of adequate skills. Coal is a traditional energy sector and has been there for decades. While the renewable sector is capable of absorbing coal sector jobs, it might not have the capacity to take care of it all. This brings us to the most important necessity, skilling. This would serve twin benefits. First, it would make the transitioning coal sector workers comfortable and equipped to secure and maintain the new job in renewable sector. Secondly, relevant skilling would enable them to prepare not just for the renewable sector profile but will also open other avenues in the economy. Thus, even if the renewable sector is not their ultimate destination, they will have other skills to earn a living, making them self-reliant and not dependents. This would essentially mean that to ensure a just transition, skill sets will need to be imparted according to the needs of the workers in the sector, by involving them in discussions and the decision-making process.

Furthermore, coal transition cannot be a cold turkey, but is a gradual process that will need to be maintained. A stop gap arrangement like clean coal technologies will be needed to take place to cover for the period to a complete transition away from fossil fuels. In addition, focus needs to also be drawn on the arrangement of low carbon technology cooperation between countries. The available technologies need to be shared and the knowledge should be imparted to better prepare countries for the incoming changes in the energy landscape.

The road ahead

COP26 witnessed more than 40 countries with some major coal intensive economies, to have committed to shift away from coal. However, the world’s biggest coal-dependent countries, including China and the US were not a part of this pledge. Moreover, a separate commitment of 20 countries, including the US, did support a pledge to stop the financing of fossil fuel projects abroad by the end of 2022. Furthermore, a collaboration of France, Germany, the United kingdom, the US, and the European Union announced an International Just Energy Transition Partnership with South Africa of providing an initial USD 8.5 billion climate finance to scale up their decarbonisation efforts.

There are however, a few gaps in these commitments. First, why are major coal intensive economies like China being led off the hook and not pressurised for committing to an end to coal. China has faced backlash in the global community with respect to the intensive domestic coal usage, irrespective of its carbon neutral pledge (read further on this in ICRIER’s previous COP26 blog). However, it has still not signed up for ending use of coal power. Second, the plethora of goals, pledges, and financial commitments have different timelines, with no bindings to the commitments made. This raises concerns over the timely delivery of the finance and on the goals. Further, the movement of finance away from fossil fuels is also not ensured. With new coal power plants coming up in a host of committed member countries, it is vital that perhaps an earmarked source of funding identified for green and just transition is put in place to secure a committed fund for a committed goal. Third, question could also be raised that if by providing developing countries the finance to switch over to renewables and away from coal, are countries like the US and China also trying to dodge responsibility of struggling with the same domestically. Greater accountability is not only needed at the finance level, but at the level of ensuring action.

Coal exit is inescapable to avoid a climate catastrophe, but it needs to be made through just transitions. Just transitions offer the lens of development, energy and climate considerations woven together. However, it is a complex issue with many elaborate considerations that need to be understood. From the whole concept of ensuring equity, to the right match of labour demand and supply, and to the appropriate mechanisms that compensate losers while incentivising winners, all require invested collaborative international efforts. The speed and the mechanism of the transition will vary between countries but there is an urgent need to take bold decisions and ensure implementation, while ensuring accountability to pave the way for an equitable, sustainable, and thus a just future for the planet.

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Views expressed are the author’s own and don’t necessarily reflect those of ICRIER.

Distributive impact of green recovery packages

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Currently, the world is in an extraordinary situation and is responding to an unprecedented social emergency caused by the covid pandemic and climate change. On one hand, governments have a task of reviving the economy in the short term, while on the other hand they also have to think and plan how to reduce the impacts of climate change in the medium to long term. While the current situation remains a challenge, and as countries take steps for revival, this is also an opportunity for nations to actively pursue the goals based on the sustainable development paths. For an equitable recovery, countries have an opportunity to promote social, economic and political inclusion, equality and justice while, building resiliency to climate related hazards.

Till now over 5 million lives have been lost due to the pandemic. There has been a severe impact on societies in terms of health and the pandemic-induced economy slowdown. In its ‘World Economic Outlook Report’ in April 2020, IMF had projected a contraction of global output by 3% which was far worse than the global financial crisis of 2008. Further, the World Bank (WB) has estimated that the covid pandemic will push up to 150 million people into extreme poverty by 2021. On the other hand, billionaires’ wealth has  increased drastically in the same period. The pandemic has increased the existing wealth inequality aka ‘the great divergence’ among and within the nations, and there is a clear indication that the catastrophes caused by climate change will do the same. This kind of recovery is certainly on the contrary to the principals of sustainable development and will be inequitable. When inequality is high, it can lead to social and economic unrest.

Countries around the world are attempting to tackle the dual issue by providing fiscal stimulus packages. Comparing the covid crisis with the financial crisis of 2008, countries have increased the total fiscal spending. Developed countries have spent on an average 9.73% of GDP as compared to 2.63% during the global financial crisis of 2008. On the other hand,  developing countries spent an average of 5.46% of GDP as compared to 4.62% in 2008. Unfortunately, countries have failed to properly account for social and environmental equity in the recovery packages.

There is overwhelming evidence to prove that investments in clean energy, sustainable infrastructure is fundamental to boost employment while sustaining long-term socio-economic activities. Studies have shown that investing in renewables can create 1.2 – 1.5  times as many jobs as the same amount spent on fossil fuel production. Recent estimates have shown that the renewable energy sector has created a rising number of jobs in recent years. On the other hand, recovery funds directed towards carbon emission based businesses and fossil fuels risk locking in harmful emissions. Thus, it is only logical, that countries seeking to boost their economies do so by investing in green recovery packages.

However, even though many countries have committed to a ‘green recovery’ through stimulus packages, the overall magnitude of  ‘green’ measures taken up by countries are  relatively small as compared to the total. The countries provided a total of USD 336 billion for environmentally positive measures as of April 2021. This may appear to be a sizeable  investment but  the amount represents only 17% of the total recovery spending. This small percentage highlights that ‘build back batter’ measures as committed by governments at the beginning are not going to have any significant effects on the environment. Further, the stimulus packages lack equity and social inclusion which underpins societies’ ability to achieve sustainable development. While this seems like a strong statement to make, it is proven by multiple records and accounts that are coming through since then. 

Looking at the recovery measures in detail, most countries have adopted fiscal packages to deal with the health emergencies, support vulnerable households through cash-transfers, and provide support to affected businesses through a variety of measures. Despite this, we see glaring disparities on multiple fronts such as jobs and business losses, access to vaccines, increased economic inequality among the various sections of society. To further illustrate, during the pandemic, labour force which includes essential workers and the group which  continued to be employed while working from home, did not face much adversity. However, the group that got either laid off or comprised of  informal workers were affected the most. An estimate the by the International Labour Organization (ILO) projects that globally around two billion people are dependent on the informal economy for their livelihoods, majority of whom  are located in emerging and developing countries. These informal workers had lost around 60% of their wages in the first month of the pandemic. Although, governments have provided some kind of support through their ‘new social protection programs’, workers in the informal sector did not get an equitable support as informality often means a lack of social protection including unemployment insurance, rights at work, decent working conditions, and lack of access to finance. This is critical for countries such as India where the majority of workers are engaged in informal activities and 90% of the women work in the informal sector. Covid recovery also led to unequal covid saving and wealth surge.  Household savings for the people who are at the top of the wealth distribution have increased sharply during the pandemic in many developed countries because of lower consumer spending on account of lockdowns or precautions, combined with an increase in disposable income from government transfers. While for the people who lost their jobs, there have been significant cases of loss of savings. Since the overall increase in net wealth during crisis was unevenly distributed, with much of it accruing to people at the top of the chain, it has resulted in the widening divide between the haves and haves-not. Additionally, government support in the form of direct stimulus benefitted the savings of wealthier households as compared to poorer households.

Green investments is a critical part of recovery packages as it can result in positive economic outcomes, while also addressing climate change. According to a study conducted by the World Bank, it was shown that for Cyprus, integrating green interventions in the recovery efforts can create twice as many jobs per million euros invested than a business-as-usual approach. In another example, electric-vehicle (EV) manufacturing sector in China has attracted more people due to higher pay, and Pakistan has invested USD 135 million in tree planting and forest protection which has resulted in the creation of 85,000 daily wage jobs in the last year alone. In India, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has resulted in capture of 102 million tonnes carbon dioxide (MtCO2) in 2017-18 due to increased plantations and improvements in the soil quality. The  scheme has provided social security to the rural communities in the times of uncertainty while also contributing to helping India achieve its climate goal of creating carbon sink of 2.5 to 3 billion tonnes through additional forest and tree cover by 2030. Learning from MGNREGS, the government should further identify more such schemes that can achieve multiple goals simultaneously. As stimulus packages could play a fundamental role in making the recovery more resilient, sustainable, and set in place pathways to decarbonization, the governments should identify and invest in low carbon pathways, should promote the renewables deployment, build resiliency across communities while encouraging just transition.

Although fiscal policies are focused on fighting the covid-19 induced economic crisis, governments need to address the approaches to tackle the climate change crisis in a just and equitable manner. The lack of proper alignment of financial resources may lead to marginalization of millions of people. The disproportionate impacts of recovery highlight the need to integrate the principles of equity and justice in recovery planning. For developing nations, it is further important to adopt an approach that takes into account wealth inequality and an inclusive low-carbon future. In the short term, recovery policies should focus on supporting health care and also targeting support to affected households, while in the long term, it is imperative that policy focus should be on delivering greater justice and social equity while adopting low carbon pathways.

Views expressed are the author’s own and don’t necessarily reflect those of ICRIER.

Flipping the context: Shifting the focus to developed country climate (in)action

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In the run up to as well as following the commencement of the much-awaited COP 26 negotiations, several countries have announced plans of becoming net zero emitters. Although a welcome move, it is important to highlight the inherent inequities between the developed and developing countries in terms of ambition and concrete action. Perhaps a closer look at some of the historical developments would help drive the point home.

First, it is interesting to note that Annex I G20 countries with net zero targets have already reached their peak emissions several years ago. A key takeaway from this is the gap between the peaking year and the terminal year chosen for fulfilling the targets. This, coupled with the argument of convincing developing countries to become net zero by 2050 (majority of whom are yet to reach their emissions peak) is against the spirit of Common but Differentiated Responsibility (CBDR), is inequitable and unjust. A recent study by Ahluwalia and Patel (2021) reiterates this point and argues that the developed nations should bear a larger brunt of climate action.

Table 1: Emission Peaking Years for Annex 1 G20 Countries with NZE targets

CountryGHG Emissions Peaking YearNet Zero Target YearNumber of years in between peak and net zero
United Kingdom1979205071
USA2000205050
Japan2013205037
Canada2007205043
European Union1979205071
Source: World Bank   

Second, while some countries such as UK and France have passed laws that support net zero transitions, others like EU and Canada have proposed legislations and still others have expressed interest in turning net zero by some terminal year such as Germany, US and Japan.  It is crucial that net zero targets of these countries necessarily feed into their updated Nationally Determined Contributions (NDCs) and/or Long-Term Strategy documents. This has clearly not been done so far in the case for countries like US, UK and Canada. Australia is one such Annex I country that has not only not declared any net zero targets, but has also not increased its level of ambition between the first and the new/updated pledges.

Third, if one takes into consideration outcomes of the previous international agreements on climate change one finds that the results have been rather disheartening. For instance, under the Kyoto Protocol, Annex I countries were assigned commitment periods (Period I: 2008-2012) for reducing their emissions by 5 percent (on an average) from the 1990 levels. However, the target was considered to be insufficient by critics. Following the Doha Amendment to the protocol, a second commitment period between 2013-2020 was initiated, with an emission reduction target of 18 percent from the 1990 levels by 2020. Unfortunately, even these targets were found to be inconsistent with the results of the IPCC report on limiting global temperature increase. Annex I countries who participated in the Kyoto Protocol and are also G20 members include – Australia, EU, France, Germany, Italy, Japan, Russia and UK. During the Doha Amendment, Japan joined the ranks of US, Canada and Turkey (non-participating countries), stating that the second commitment period did not include US and China who were responsible for occupying more than half of the carbon space. While Canada had initially ratified the protocol in 2002, it later withdrew its support on the grounds that penalties for non-achievement of targets were too stringent and would damage its economy. For the entire duration of the commitment period, the Doha amendment did not come into force. Similarly, as per the Cancun Agreement developed countries had committed to collectively mobilize $100 billion every year till 2020 to help developing countries address their developmental needs while combating climate change. However, these pledges have not materialized. In fact, the target year has now been pushed to 2023. The fact that developed countries have been unable to honour their previous commitments, makes one vary of whether they will be able to deliver on their newly released pledges and targets.

Against the previously set target of reducing emissions intensity of GDP by 33-35 percent from the 2005 levels by 2030, India has already registered a reduction of 28 percent. As per the recent announcements, the country has increased its ambition and aims to reduce emissions intensity by 45 percent by 2030. With regard to the earlier target of achieving 40 percent non fossil fuel-based power generation installed capacity by 2030, the country has already installed renewable capacity to the tune of 38.5 percent. Moreover, if one accounts for the renewable capacity that is currently under construction, the share of installed capacity exceeds 48 percent. The point being made here is that, India has gone above and beyond with regard to exceeding its earlier NDC targets, increasing its ambition levels and announcing plans of becoming a net zero emitter.

The country has been an ardent supporter of the argument of CBDR and as such should be provided some leeway given its developing country status. In particular, with limited availability of carbon space coupled with challenges of managing developmental goals, in an economy that is already resource strapped, it is unfair to have developed countries adhere to a timeline similar to the developing countries in becoming net zero and/ or carbon neutral. What is needed is for the developed countries to increase their ambition levels and turn carbon negative rather than focussing on carbon neutrality! It is high time that they vacate the available carbon space and make room for emerging economies to improve their standard of living.

Developing countries such as India are largely coal dependent economies. For them, a shift towards net zero would require not just a shift in energy sources to renewables but would also involve upskilling and absorption of the workforce currently engaged in coal-based activities. The aforementioned tasks would involve substantial costs which would require financing. Moreover, with the recent net zero targets, the country is likely to face the issue of loss of revenue for states dependent on fossil fuel industries such as Odisha, Jharkhand, Madhya Pradesh etc. Similarly, battery storage technologies to supplement the increasing variable renewable energy reliance is a prerequisite for India’s net zero energy transition. More so if the country is to realize it’s target of delivering 50 percent of its energy requirements via renewables by 2030.

With the recent announcement of the country turning net zero by 2070, no doubt India would be advancing towards realizing its targets at a war footing. Perhaps what the country should focus on now, is to complement its climate action with legal backing, thereby ascribing them greater credibility. As far as the developed countries are concerned, what we need is concrete actions in the short to medium term rather than mere declarations of long-term targets.  If emerging economies are to accelerate the process of climate change mitigation, the level of investments required to fund relevant technologies need to be gathered. For this, detailed assessments of their financial requirements need to be carried out and conveyed to the developed countries. Equity in carbon space should be the guiding force for all discussions on emission reduction.

(Views expressed are the author’s own and don’t necessarily reflect those of ICRIER)