Climate action: Aim for leadership of a race to the top
is chief advisor, India, Environmental Defense Fund.
Aprofoundly consequential shift is emerging in the global narrative on climate action. The prevailing themes of denial and blame are being replaced (albeit, slowly) with a far more useful one. That of a race to the top among countries and corporations. This race has its roots in a realization of the strategic and economic opportunity in sustainability.
In a sense, China sparked off the race through a concerted push for solar panel manufacturing, electric vehicle technology and critical minerals sourcing way before the rest of the world. More recently, this has manifested in green subsidies and infrastructure in the US through the recently passed Inflation Reduction Act and massive European efforts for greener domestic industries. There is good reason for excitement over India’s participation in this global endeavour. The country needs growth and needs it to be sustainable—and therein lies how it is taking a role that would place it front and centre in this race to the top.
There are four broad themes. First, massmarket solutions that achieve scale by tackling the middle of the pyramid rather than just the top. Second, scalable innovations in an Indian context. Third, solutions that leapfrog conventional high-emission modes of growth. And last, business benefits from sustainability. Each of these enable us to conceive of green growth.
India’s electric vehicle (EV) sector is a great example of mass-market innovation. While Western automakers are revving up large high-end EVs, India is quietly taking a lead in segments that could prove far more useful to global mobility: affordable city cars, e-scooters and 3-wheelers for passengers and last-mile freight. Of the 1.5 million EVs sold here last year, most were 2- and 3-wheelers. Companies such as Tata Motors are aiming at the middle rather than the top, with e-cars at a price point of ₹12 lakh.
On developing scalable solutions, energy offers an interesting example. On the production side, India has set a target of half of all energy from renewable sources by 2030. With over 180GW of renewable capacity already installed, we see real progress towards India’s 500GW goal. However, making energy consumption more efficient is an even more exciting part of our journey.
Ceiling fans are a prime example. Control of room temperature is needed in many parts of India, but many people cannot afford air conditioners. Through made-for-India innovation, innovators have adapted legacy ceiling-fan technology to reduce energy use by two-thirds, with only a marginal increase in price, resulting in a market placed at nearly ₹4,000 crore.
As for leapfrogging, India has shown its capacity for it in many fields. Hundreds of millions started directly with mobile phones, for example, helping India avoid heavy investment in telecom landlines. Hundreds of millions jumped over bricks-and-mortar bank branches straight to mobile banking apps. India is now going to be both a source of climate innovation for the world and a market for clean solutions, often by leapfrogging centralized fossil power. LED bulbs are an illustration of this. The humble light bulb had barely seen any change in technology for decades till LEDs came along. These last longer and use less energy. As their prices began to reduce, India’s aggregate demand soared, thanks partly to public procurement, manufacturing incentives and aggressive promotion. This is now a ₹15,000 crore-peryear market and many homes have transitioned from no electricity straight to energyefficient LED bulbs.
On the business case for action, an interesting twist has been emerging. In trying to address climate change, one often runs into the barrier of a green premium. This is the additional cost for a lowemission alternative to the prevailing product or manufacturing process. The broad hope has been that technological advances and economies of scale will bring down this premium to more viable levels. The twist is that businesses in India are also discovering a green bonus to be obtained from sustainability. The best example of this is cement. Indian cement is regarded as the greenest
The old adage of ‘doing well by doing good’ should serve India well and turbocharge New Delhi’s geopolitical influence. Our participation in this race is good for India as well as the planet. in the world. The most successful companies have 85% of their raw material as fly ash, which is otherwise a waste product from thermal power plants, and 60% of their cement is made using renewable energy, as estimated. Their manufacturing processes are 25% more energy efficient than those of other producers. This is good both for their financials and the environment. Such trends are bound to show results in other sectors as efficiency and circularity are increasingly integrated with business models.
India is an active participant in this race to the top and could well become a world leader in several critical areas, like recycling, bringing down the price of green hydrogen and the use of data technology for climate action in rural zones. As India embarks on its audacious vision of becoming the world’s first major economy to industrialize without carbonizing, we need to move even faster in the race. Our efforts need to be buttressed by catalysing India’s climate tech ecosystem, so that we have a funnel of innovations to fuel our economic emergence.
The old adage of “doing well by doing good” should serve India well and turbocharge the country’s geopolitical influence. India’s participation in this race is good for the country as well as the planet.