COP26: Unpacking India’s Major New Climate Targets

India made an eagerly awaited announcement of new climate action targets at the COP-26 summit in Glasgow. This included:

• Installing non-fossil fuel electricity capacity of 500 GW by 2030
• Sourcing 50% of energy requirement from renewables by 2030
• Reducing 1 billion tonnes of projected emissions from now till 2030
• Achieving carbon intensity reduction of 45% over 2005 levels by 2030
• Achieving net zero by 2070.

These new pledges go significantly beyond its current nationally determined contribution (NDC) under the Paris Agreement. They will provide an overall guiding signal to every branch of government and regulatory certainty to every sector of industry.

500 GW non-fossil fuel electricity capacity by 2030

India committed to installing 500 GW of non-fossil-based electricity capacity by 2030, in line with its domestic target of building 450 GW of renewable electricity capacity by 2030. India’s total installed capacity is projected to reach 817 GW, according to the Central Electricity Authority. This new target translates to almost two-thirds of the installed capacity in 2030 being non-fossil based, compared with the previous NDC target of 40%. It is a truly ambitious target, which will require India to more than triple the present non-fossil fuel capacity in less than a decade. It will require additional policies as 500 GW is more than what is projected through cost minimization alone (according to the Energy Policy Simulator for India).

More than half this 500 GW capacity may generate variable power (solar and wind). Thus, strengthening grid infrastructure, incorporating larger amounts of storage in the grid, better forecasting and scheduling, and improving financial health of power distribution companies, are all key to ensuring India meet this target in technically and economically efficient ways.

50% electrical energy requirement from renewable energy by 2030

India currently meets about 20% of its electrical energy requirement from renewable energy. The country’s electrical energy requirement is expected to grow about one and a half times in this decade - from 1566 billion units in 2021-22 to 2325 billion units (or terawatt-hours) in 2029-30 according to the Central Electricity Authority. The new 50% target of electricity generated by solar, wind, and hydropower is more ambitious than what would be achieved solely through market factors and falling prices of renewable energy (about 38% according to the Energy Policy Simulator for India). It will require carbon-free electricity standards and significant investments to store and transmit renewable electricity.

Going forward, greater electrification is vital to decarbonize the Indian economy by mid-century – in industry, transport, and buildings – and to produce green hydrogen for harder-to-abate sectors like steel. This target will mean that the electricity for all these applications will come from a cleaner grid. For instance, as the electric vehicle industry grows rapidly, a cleaner grid will reduce both carbon emissions and air pollution from this sector. Similarly, by the time hydrogen electrolysis becomes cheaper in the 2030s, its scaling up will keep pace with the cleaning of the grid.

1 billion tonnes cut in cumulative emissions by 2030

This is the first time India has expressed an absolute emissions reduction target. It is not simple, however, to compare it with projected emissions since there isn’t yet an official projection of India’s future emissions.

In 2016, India’s total greenhouse gas emissions were 2.8 billion tonnes (excluding land use and forestry) according to its third Biennial Update Report. For comparison, the Energy Policy Simulator for India estimates that India’s emissions could grow from 3.3 billion tonnes in 2021 to reach 4.6 billion tonnes in 2030 (excluding land use and forestry) based on current policy and actions in renewable energy, energy efficiency, and electric mobility, and cost-optimisation of technologies in the electricity and transport sectors.

A conservative interpretation of this new target is that the 1 billion tonnes are to be reduced from India’s cumulative emissions over the decade of the 2020s. In this case, the new target would mean reducing cumulative emissions by 2.5%. In terms of India’s additional emissions over the decade of the 2020s, the new target would mean reducing emissions by 15%.

If the new target were interpreted as a billion-tonne reduction in 2030 emissions, it would imply that India’s emissions will grow by only 0.3 billion tonnes over the decade, instead of the projected growth of 1.3 billion tonnes, effectively peaking and flattening out in this decade itself.

The correct interpretation of this target would require knowledge of the right baseline scenario for comparison.

45% lower emissions intensity of GDP by 2030

India's first NDC called for 33-35% reduction of emissions intensity of GDP by 2030 compared to 2005. Today’s announcement increased this target to 45%. The emissions intensity of the Indian economy has been steadily declining due to more renewable energy, improved energy efficiency, and structural shifts towards the services sector. According to India's third Biennial Update Report, by 2016, the emissions intensity of GDP had fallen by 24% compared to 2005. (This estimate excludes agriculture sector emissions). The new target does not give details but is consistent with the ongoing trend and with the other targets announced today. Going from the earlier emissions intensity target of 33-35% to the new target of 45% translates to around 1 billion tonnes of emissions reduction.

Net zero by 2070

Net zero and possible target years for India have been hotly debated in the country over the last year. If today’s announcement refers to net-zero greenhouse gas emissions, it would be very ambitious and more than India’s fair contribution to global efforts to stay within 1.5 degrees Celsius of warming. It would require countering emissions from agriculture and land use, not just emissions from energy and industrial processes.

If it refers to net-zero carbon dioxide emissions, it would still send a strong long-term signal to all sectors of the economy and be compatible with 2 degrees Celsius of global warming. Taken together with the other short-term targets for massive capacity growth in renewable energy, India’s net-zero target will provide regulatory certainty to industry to invest in deep decarbonization, and to India’s growing cities and states to plan net-zero pathways to development.

Views are personal.