Building the consensus for a net-zero economy

India's political economy needs to be prepared to manage the disruptions that are inevitable in this coming transition

- Arunabha Ghosh

Is India's political economy ready for a low-carbon transition? India is now repeatedly buffeted by extreme weather thanks to the climate crisis, which is costing lives, impoverishing livelihoods, and damaging economic output from crops to infrastructure. At the same time, the energy transition is increasingly visible—from the rising sales of electric vehicles to new schemes for solar deployment to announcements about green hydrogen, and more recently, green steel. However, a shift to net-zero industries, cities, states, and the economy is a call for an economic transformation. To sustain this multi-decadal marathon, India needs domestic consensus for the economy, society and politics.

Extreme weather events are categorized for disaster management rather than the need for economic resilience. Repeated shocks—droughts, floods, cyclones—are compounded in two ways. One, their frequency and intensity are on the rise. Two, they are impacting the same regions, creating multi-hazard vulnerability. Indian states will face fiscal limitations in responding to repeated shocks. Disaster risk mitigation (not just disaster management) is now an imperative. Climate risk is a macroeconomic risk. It will also cause social disruption, forcing internally displaced migration, and testing the resilience of vulnerable communities and the adaptive and fiscal capacity of the State, especially local administrations.