India as G20 president can help business go faster to cut emissionsGitika Mohta, Industry Manager & Rasmus Valanko, Managing Director, Systems Transformation
This article originally appeared in The Economic Times.
As the G20 president, India has a unique opportunity to drive climate action and showcase ambition and plans for bolstering economic growth alongside sustainable prosperity. India can also set an example by reducing its own emissions and implementing policies that enable Indian businesses to play a central role in the country’s climate transition. Policy support like financial incentives and business-friendly regulation will give companies the confidence to invest in low-carbon technologies and plans.
In India and beyond, thousands of companies are already working to reduce their emissions in line with climate science, because the business case is clear: it cuts costs, increases investor confidence and helps get ahead of regulation. It also builds business operations and supply chains that are more resilient in the face of extreme weather events.
In India alone, 116 companies including Infosys, Dalmia Cement and the entire Mahindra Group are committed to cutting their greenhouse gas emissions across their value chains. Additionally, 75 companies with operations in India, including Tata Motors and Ultratech Cement, have committed to procuring 100% renewable energy and 13 Indian companies including WIPRO and Flipkart have committed to electrifying 100% of their corporate fleets, which means they will be procuring over 200,000 electric vehicles locally and setting up 2,850 charging stations in India.
To achieve their targets, these companies – and their counterparts across the G20 nations – need widespread access to clean energy and sustainable infrastructure. They also need finance and R&D support to innovate, launch pilot projects and take demonstration projects to commercial scale to drive adoption of clean technologies across industries.
But even the most climate progressive companies face obstacles to how far they can go. This year, India can lead G20 governments to overcome these obstacles with a clear communiqué that signals the phase out of all fossil fuels. This will unleash a wave of unstoppable private sector climate action and innovation in India and beyond, which will accelerate the world’s journey towards sustainable economic growth and development.
As a leading voice of the global south, India can change the course of history by encouraging G20 nations to agree to provide supportive policy environments that enable companies to cut their emissions.
India has already shown leadership with strong national commitments on renewable energy and hydrogen through its National Green Hydrogen Mission. India’s annual budget for 2023 is a step towards green growth with major investments allocated towards a cleaner energy transition. At COP27 in Sharm el-Sheikh, businesses were strongly encouraged by India’s international leadership in calling for a phase down of all fossil fuels.
Building on this, specific language in the G20 communiqué on how countries can accelerate the transition to clean energy and away from fossil fuel will drive private investment into the growth industries of tomorrow. This will give CEOs across the world the confidence to scale up investments and innovations for clean solutions within energy systems as well as across heavy industry and transportation. It will also drive investment into those countries that are scaling up clean energy fastest.
As the world faces multiple crises – we can best achieve energy security through an accelerated, just transition to a diversified, reliable, clean energy system. This will require redirecting fossil fuel subsidies — which in 2021 represented almost $700 billion across G20 nations and in India in 2019, over $10 billion.
This redirected finance can help scale up deployment of renewables, the roll out of grid infrastructure and clean transportation such as EVs and mass transit. Subsidies can also be redirected towards energy efficiency measures in buildings, industry and transportation through energy efficient appliances, cooling systems, building codes with energy efficiency performance standards and more. Energy efficiency is a great cost saver – actions taken since 2000 have led to over $680 billion cost savings globally. Furthermore, over 125 companies committed to enhancing energy efficiency measures saved over $128 million annually from their efforts over the past few years.
In India, ensuring a just energy transition is particularly relevant given the size of its population dependent on fossil fuels, as well as the need to re-skill and upskill large swathes of people joining the clean energy economy. G20 leaders therefore must agree to implement community-centric policies that support a just transition for people who rely on fossil fuel industries for their livelihoods both directly and indirectly. Some G20 countries are already further along on this journey than others, so sharing learnings will be valuable.
But time is of the essence. Global emissions must be cut in half by 2030 to avoid the worst impacts of climate change. India has a unique opportunity to chart a healthier, safer, more sustainable future not just for its own citizens but also for others on our shared planet. The eyes of the world are watching, and we are confident that the Indian government and Indian business will rise to the challenge.
Gitika Mohta is Industry Manager & Rasmus Valanko is Managing Director, Systems Transformation, We Mean Business Coalition.