India's G20 Presidency Delineating Economic and Emissions Growth and Promoting Energy Transition

G20 presidency serves as a big opportunity for India, to raise this challenge that emerging markets face, around delinking economic and emissions growth and promoting energy transition, and garnering suitable solutions from the global community in terms of finance and technology. Towards this, it may focus on scaling up risk mitigation mechanisms, financing mechanisms, Just Transition, integrating a risk-return-impact lens, and creating an enabling ecosystem. This insightful article by Namita Vikas looks further into each of these areas.

- Namita Vikas

India has taken over the presidency of the G20, the world’s most influential multilateral forum, at a time the global economy is undergoing VUCA (short for volatility, uncertainty, complexity, and ambiguity) with multiple headwinds. To mitigate these times, governments, corporates and financiers globally are driving post-pandemic recovery, stabilizing disruptions to global supply chain which have occurred due to conflicts, adapting to the climate crises, ensuring a just energy transition and avoiding social unrests due to income inequality.

At the same time, India faces a paradox. Its latest data shows that while it contributed little to greenhouse gas (GHG) emissions historically, this grew three times from 1991 to 2019, double the global average. Moreover, amongst the G20 nations, it ranked 3rd in emissions/GDP intensity (Figure 1). Given the investible life left in its coal power assets, complex production processes in hard-to-abate sectors that are tough to alter with current technologies, and new technologies yet to be fully tested and commercialized, its emissions are expected to continue rising until they peak around 2040–2045. This is in line with the expected trajectory of emissions reduction highlighted by India during COP26. Until then, it does need to drive its economic growth to improve per capita income and quality of life of millions, not to mention drive energy access to a scale that leads to productive economic activities, while at the same time balance this with development that is sustainable and environmentally prudent. For this, delinking its economic growth from emissions growth and arriving at a climate-smart economic growth model is imperative, thus acting as a precedent for other emerging markets globally on similar trajectories.