India has taken major steps and put climate change at the center of its policies since 2021, after being a signatory country to the Paris Agreement (an international treaty on climate change which has been adopted by 196 countries at COP 21 in Paris.)
The Agreement is considered as the landmark in the multilateral climate change process as for the first time in history, there has been a legal and binding agreement wherein all nations are obliged to undertake ambitious efforts to combat climate change and adapt to its effects. This agreement came into force on 4th November, 2016.
Implementation of the Agreement:
The Agreement works on a 5 (five) year repetitive cycle of increasingly ambitious climate actions carried out by the signatory countries. Under the Agreement, the 196 signatory countries were initially required to submit their plans for climate action known as Nationally Determined Contributions (NDCs) by the year 2020. The signatory countries were also required to specify in their NDC, the required action that they shall take in order to reduce their Green House Gas Emission (GHGE). The signatory countries were supposed to build up resilience to adapt to the impacts of rising temperatures and to frame long-term low greenhouse gas emission development strategies (LT-LEDS), although the latter is not mandatory in nature.
The Agreement also provided for the setting up of a framework for financial, technical and capacity building support for developing countries who require it, as large-scale investments are required to significantly reduce emissions. The agreement also established a technology framework for fully realizing technology development and transfers for both improving resilience to climate change and reducing GHGE. The agreement placed great emphasis on climate-related capacity-building for developing countries and requests all developed countries to enhance support for capacity-building actions in developing countries.
Under the Paris Agreement, the signatory countries were also required to establish an Enhanced Transparency Framework (ETF) by the year 2024 and shall report transparently on actions taken and progress in climate change mitigation, adaptation measures and support provided or received. International procedures for the review of the aforementioned submitted reports have been established.
Pursuant to the signing of the Paris Agreement, more and more countries, regions, cities and companies are establishing carbon neutrality targets. The sectors that have noticed the most dynamic shift is the power and transportation sectors and this in turn has created many new business opportunities for early movers. It is estimated that by 2030, zero-carbon solutions could be competitive in sectors representing over 70% of global emissions
India being the third-largest carbon emitter after China and the United States, with per capita emission rates being around seven times lower than that of the U.S., is set to bring about radical changes in its environmental policies by cutting down almost half of the amount of GHGE produced for every dollar of its economic activity by the end of 2030. As under its NDC, India has committed to reduce emissions intensity of its economy by least 46 to 48% from its 2005 levels.
The renewal energy target has been enhanced to 450GW and the country has pledged to increase the share of non-fossil fuel sources in its energy generation capacity to at least 60%. India is making efforts to achieve net-zero by 2050 to limit the rise in the overall temperature to “under 1.5 degrees C” as suggested by the Intergovernmental Panel on Climate Change (IPCC).
At the recent United Nation Climate Change conference in Glasgow in October 2021, India listed out five commitments to address climate change and announced that it shall achieve the target of net zero emission by the year 2070 with 500GW of non-fossil energy capacity and fulfilling 50% of energy requirements from renewable energy sources by 2030. India also launched One Sun, One World, One Grid, International Solar Alliance and Coalition for Disaster Resilient Infrastructure (CDRI) for combatting climate change on an international level.
India, after making the bold announcement of its plans for the year 2030, asked developed nations to take concrete actions to mitigate GHGE from all sources and has anticipated support from developed nations in terms of finance and technology.
Further, India now ranks amongst the top 10 countries in the climate change performance index for the first time. With all that being said, India is well on track to exceed its 2030 targets for the reduction of emission intensity and share of non-fossil fuel based electricity generating capacity set in its current NDC and is the only G20 country set to achieve it.
India has implemented rules and policies to assist in achieving its ambitious goals for climate change. Market regulator SEBI has launched the Business Responsibility and Sustainability Report (BRSR) and these guidelines have tried to address the issue of green-scenarios for the top 1000 listed companies, however there is a clear need for a deeper understanding of risk management to support the transition to a low carbon or net-zero economy.
Climate change is a social responsibility and in spite of several hindrances, India is seen as a strong contender in achieving its climate change goals in pace with the likes of developed nations. Now the government, corporate entities and regulators must ensure that the transition to clean energy takes place through the development and implementation of sustainable investment policies.