Four years ago, when I visited India, it was very clear to me that the direction of travel was towards a high renewable energy-based economy. There was recognition of the goals of sustainable development, and a mission to provide access to energy for all. The world saw this combining of economic development and environmental sustainability as an ambitious and challenging task.
I have seen enormous progress on each visit to India I have made since. There is now a consensus that a low-carbon growth strategy must be embedded in the fundamentals of development policy. During the UN's 2018 annual climate meeting in Katowice, Poland, India's Environment Minister, Dr Harsh Vardhan, indicated that India could potentially achieve its 2015 Paris agreement commitments ahead of time.
India is at the higher end of the scale in terms of performance on reducing carbon emissions. It is implementing one of the most ambitious renewable energy programmes in the world, as a result of sustained leadership on large scale renewables deployment. In fact, the National Electricity Plan now foresees 275 GW by 2027, much ahead of the 175 GW by 2030 noted in India's climate commitments. No country of India's size and low income per capita has done so much to bring the costs of renewables down, or to position itself to leapfrog into a cleaner electricity system so early in its development pathway.
The conditions are ripe for more action on reducing energy-related emissions and setting the course for long-term decarbonisation of the economy. The transition away from high emitting systems has multiple benefits, including access to faster and better quality of electricity, energy access for the remotest and unserved parts of the country, more jobs in the sunshine sectors, and better air quality - the missing fundamental. Seizing these opportunities will require a combination of concrete and long term policies on low carbon infrastructure development, structural reforms, and business plans that support such an orientation. Yet I am optimistic that India can achieve these goals to be able to reap the rewards of sustainable development as it embarks on a unique trajectory in the next decade.
Internationally, India has a role to play inspiring collaborative climate action by demonstrating leadership at home and abroad. For example, the International Solar Alliance (ISA), launched in 2015 together with France, is a major effort to bring India on the world solar stage. The ISA brings together 'solar rich' countries lying within the tropics, and can be a major a step in the right direction to build capacity. ISA's aim is to help member countries increase their installed solar capacity and mobilise a trillion dollars in finance by 2030. Solar water pumps for farmers, solar power plants - this can be game changing. ISA is now an international framework with 121 member countries and many of these countries could learn from the Indian example.
Wind and solar are the cheapest source of new electricity in India now, even cheaper than coal. The shift away from coal given these economic factors has been notable - over 24GW of coal power projects in the last year and 500GW in the last 9 years have been canceled - has given an impetus to the renewables sector.
Coal extraction and transportation is increasingly becoming a more capital-intensive process. Coal power plants also add to air pollution, causing costly health impacts and therefore requiring stricter emission norms. This makes an already costly energy source more expensive. These reasons have been further driving investment away from coal projects and towards solar and wind.
Those who have already invested in coal power projects now find it difficult to keep these assets profitable, and risk being termed non-performing assets. For investors and investment institutions that plan to invest in the energy sector, identifying these risk early on and adapting to it could help avoid further stranded assets problem, which has now become a global phenomenon.
Along with financial stress, another major challenge for India is to deal with the rising air pollution. Decarbonisation offers a solution not just for tackling climate change but also for reducing air pollution across urban and rural India. The value of transitioning to low carbon pathways should hopefully allow India to solve the complex problem of air pollution.
Stepping up action on climate change should continue to address the needs of the poor and the most vulnerable, who are least responsible for climate change, but must also ensure that public health benefits come to its citizens in a rapidly developing landscape. Doing so in a way that doesn't put further stress on air, land and water, will only be possible through adopting sustainable and low carbon development pathways.
To achieve the next wave of energy transformation, India could benefit from multilateral climate efforts, as it sits at the core of nations willing to show leadership despite their challenges. India can set a unique example for the world to emulate. In the years to come, the course India charts to achieve these targets will define pathways for other countries to follow. If it can achieve its climate and development goals with the constraints and challenges it faces, both of resources and time, then many other countries in the world can follow this example and take bold action.
(Laurence Tubiana is CEO, European Climate Foundation and Former French ambassador for international climate negotiations in connection with the 2015 COP21 Climate Change Conference in Paris.)
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