Energy Transition: No rush for India on net zero

One is bombarded with information these days on why India should join the net-zero or carbon-neutral coalition of countries, implying that, by 2050, the net carbon emissions of these countries would be balanced by carbon sequestration and removal to the same extent, thus contributing net-zero carbon to the environment.

This would help the world keep the rise in temperatures to within 1.5oC of the pre-Industrial Revolution temperature, thereby preventing catastrophic climate change. Europe, Japan and South Korea have announced net zero by 2050, and China before 2060.

While the goal is laudable, we need to examine whether it is in the national interest. The power generation capacity in the country is about 380 GW, of which about 62% is thermal (mainly coal, 53% of total). India is abundant in coal, and the celebrated Hechsher-Ohlin theorem tells us that a country’s competitive advantage should be based on its abundant resource. Adopting a net-zero carbon goal by 2050 would mean abandoning action based on this theorem and, therefore, may be a sub-optimal strategy.

There are many traditional reasons why we should not subscribe to net-zero by 2050. Though India is the third-largest carbon emitter in the world, after China and the US, Indian per-capita carbon emissions are an eighth of those of USA and less than a third of China. The developed countries have used the emissions route to development, while India is still developing. Any pre-mature adoption of the net-zero emissions target will mean that a vast proportion of India’s population would continue wallowing in poverty for generations to come.

Finally, any substantive compensation mechanism from the developed world to the developing world in terms of finances and technology has not materialised. So, it may be unethical for the developed world to insist on premature adoption of net-zero targets by India.

financial express
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