India’s Decarbonisation Landscape

• India’s decarbonisation landscape is transforming, with ₹20,000 crore for carbon capture, utilisation and storage (CCUS) aligning climate ambition, industrial realism, growth, and net-zero commitments.

Need for Decarbonisation of the Indian Economy

• Climate Vulnerability: India is among the most climate-vulnerable nations; extreme events like the 2023–25 heatwaves and recurrent floods have caused billions in economic losses.
• Energy Dependence: India imports nearly 85% of its crude oil and over 50% of its gas needs, exposing the economy to global price shocks.
• Industrial Competitiveness: The EU’s Carbon Border Adjustment Mechanism (CBAM) will impose carbon-linked tariffs on steel and cement exports, necessitating low-carbon production.
• Public Health Costs: Air pollution contributes to over 1.6 million premature deaths annually in India, largely linked to fossil fuel combustion.
• Economic Sustainability: India requires an estimated $10 trillion investment by 2070 to achieve net-zero, making early decarbonisation economically prudent and growth-aligned.

Major Government Schemes for Decarbonisation

1. National Green Hydrogen Mission: ₹19,744 crore initiative targeting 5 MMT green hydrogen production by 2030 to decarbonise hard-to-abate sectors.
2. Carbon Credit Trading Scheme (CCTS): Establishes a compliance carbon market covering 490 entities to incentivise verified emission reductions.
3. Perform, Achieve and Trade (PAT): Market-based efficiency mechanism that reduces industrial emissions, avoiding ~110 million tonnes of CO₂ annually.
4. PM E-DRIVE Scheme: Aims to accelerate nationwide EV adoption, expand charging infrastructure, and build a self-reliant electric mobility ecosystem.
5. PM Surya Ghar Muft Bijli Yojana: Expands rooftop solar adoption, targeting 1 crore households to cut emissions and electricity cost.

Key Challenges

• High Transition Costs: Net-zero transition may require investments exceeding $10 trillion by 2070, straining public finances and private capital.
• Technological Gaps: Limited domestic capacity in green hydrogen electrolysers, CCUS, and battery storage increases import dependence.
• Coal Dependence: Coal still accounts for nearly 70% of electricity generation, complicating a rapid phase-down of fossil fuels.
• Industrial Constraints: Hard-to-abate sectors such as steel and cement lack cost-effective, low-carbon alternatives at a commercial scale.
• Regulatory Uncertainty: Evolving carbon markets and climate policies create compliance ambiguities for industry and investors.

Current Affairs A-Z @50% OFF

Strategic Decarbonisation Measures

• Carbon Reform: Introduce absolute emission caps with price floors. E.g., the EU Emissions Trading System (EU ETS) maintains price stability through market mechanisms.
• Storage Scaling: Expand Battery Energy Storage Systems (BESS) and ancillary markets; India’s 30 GWh BESS VGF scheme supports grid stability alongside solar and wind parks.
• Finance Blending: Use sovereign green bonds and multilateral funds. E.g., India has issued green bonds worth over ₹72,000 crore since FY23 to finance low-carbon infrastructure.
• Green Procurement: Mandate low-carbon material use. E.g., the UK’s Buy Clean initiative promotes green steel and cement in public projects.
• Just Transition: Reskill coal workers and repurpose mines; Germany’s Ruhr region transition model diversified its coal economy into services and technology sectors.

India’s decarbonisation must convert ambition into structural transformation, because as the UN warns, “There is no Plan B because there is no Planet B,” making sustainable growth India’s only viable future.

Reference: Hindustan Times

PMF IAS Pathfinder for Mains – Question 565

Q. India’s decarbonisation pathway represents a structural economic transformation rather than a mere environmental commitment. Critically analyse the structural constraints and policy architecture required for a growth-oriented low-carbon transition. (250 Words) (15 Marks)

Approach

• Introduction: Write a brief introduction about India’s decarbonisation pathway.
• Body: Write how the decarbonisation pathway represents a structural economic transformation rather than a mere environmental commitment, then mention structural constraints and policy architecture required for a growth-oriented low-carbon transition.
• Conclusion: Emphasis on a coordinated approach and green finance to achieve the growth-oriented low-carbon transition.