Table of Contents
THE CONTEXT: The recent heatwave has underscored the urgent risks posed by climate change, emphasizing the critical role of the Conference of Parties (COP) in addressing these challenges. With 2023 confirmed by the World Meteorological Organization as the warmest year on record, attention has turned to high-emission sectors like power and industry. India is under heightened scrutiny as the third-largest carbon emitter, particularly in energy, steel, cement, chemicals, and refineries.
ISSUES:
- Transition Risks: Entities face transition risks, including policy, regulatory, technology, market, reputation, and legal. Technological risk is highlighted as the major immediate challenge for entities voluntarily adopting green technology.
- Investment Needs: Achieving India’s climate goals will require substantial investments. Specifically, an estimated Rs 11-12 lakh crore is needed for renewable energy (RE) power investments until 2030, along with Rs 5-6 lakh crore for transmission infrastructure and storage capabilities.
- Renewable Energy Supply: Ensuring a round-the-clock supply from RE sources is crucial due to their intermittent nature. This can be achieved through hybrid RE projects (wind and solar) complemented with energy storage systems.
- Carbon Capture Utilisation and Storage (CCUS): The installation of CCUS is essential for hard-to-abate sectors like steel and cement. The cement sector will need significant CCUS capacity to reduce emissions, with an estimated capital cost of Rs 1,600-1,800 crore.
- Green Hydrogen Mission: The National Green Hydrogen Mission aims to use green hydrogen in refining, chemical, and fertilizer sectors, as well as in transport. The capital expenditure for this initiative is projected to be about Rs 8-9 lakh crore.
- Government Support: Government support is critical to accelerate the technology transition in high-carbon-emitting sectors. This support could include policy interventions, subsidies, duty exemptions, or tax benefits, potentially forming part of the policy agenda post-election.
THE WAY FORWARD:
- Enhanced Investment in Renewable Energy and Infrastructure: Increase Financial Support and Incentives: The government should improve financial support for renewable energy projects through subsidies, tax incentives, and low-interest loans. Germany has successfully increased its renewable energy capacity through feed-in tariffs and other financial incentives, making it a global leader in renewable energy adoption.
- Development and Implementation of Carbon Capture, Utilization, and Storage (CCUS) technologies: The government should incentivize the adoption of CCUS technologies in sectors like cement and steel. This can be achieved through grants, subsidies, and public-private partnerships to reduce the high capital costs associated with CCUS. Norway has invested heavily in CCUS technology, with the Longship project serving as a model for large-scale carbon capture and storage, demonstrating the feasibility and effectiveness of such technologies.
- Support for Green Hydrogen Initiatives: Increase funding and support for green hydrogen projects, including research and development, pilot projects, and infrastructure development. Encourage the use of green hydrogen in refining, chemical, and fertilizer sectors and transportation. The EU has set ambitious targets for green hydrogen production and use, providing substantial funding and creating a regulatory framework to support the hydrogen economy.
- Strengthening Energy Storage Solutions: Promote the development of hybrid renewable energy projects (combining wind and solar) with integrated energy storage systems to ensure a reliable and round-the-clock power supply. The world’s largest lithium-ion battery, located in South Australia, has proven the effectiveness of large-scale energy storage in stabilizing the grid and supporting renewable energy integration.
- Policy and Regulatory Reforms: Develop and enforce policies that mandate emission reductions, provide clear guidelines for green technology adoption, and offer incentives for compliance. This includes carbon pricing mechanisms, stricter emission standards, and support for green job creation. California’s cap-and-trade system has successfully reduced greenhouse gas emissions by setting a cap on total emissions and allowing companies to trade emission allowances, providing a financial incentive to reduce emissions.
THE CONCLUSION:
While several entities in high-carbon emitting sectors voluntarily adopt green practices, government support remains crucial to accelerate the technological transition in these hard-to-abate industries. Policy interventions, subsidies, duty exemptions, or tax benefits could significantly aid this transition. Such measures will likely be a key focus of the policy agenda following the upcoming elections.
UPSC PAST YEAR QUESTIONS:
Q.1 The adoption of electric vehicles is rapidly growing worldwide. How do electric cars contribute to reducing carbon emissions, and what are their key benefits compared to traditional combustion engine vehicles? 2023
Q.2 Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will shifting subsidies from fossil fuels to renewables help achieve the above objective? Explain. 2022
Q.3 Describe the significant outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are India’s commitments at this conference? 2021
MAINS PRACTICE QUESTION:
Q.1 Examine the role of government initiatives in facilitating India’s transition to green energy, particularly in high carbon-emitting sectors such as power, steel, and cement. Discuss the challenges these sectors face in adopting green technologies and the potential impact of government support on accelerating this transition.
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