How India can Reach Net Zero: A Strategy for 2025–35

This paper assesses the feasibility of India achieving its stated objective of getting to net zero carbon emissions by 2070 and outlines a possible strategy for the next 10 years consistent with this goal. It recommends a combination of price-based measures and several sector-specific interventions. The ideal price-based measure would be a carbon tax. This may not be feasible for various reasons, but in its absence a well-designed emissions trading system, as described in the paper, could make a major contribution in reducing emissions. On sectoral interventions, the critical areas over the next 10 years would be (i) accelerated expansion of various forms of renewable energy capacity, which will require several policy changes, (ii) electrification of transport, and (iii) a shift from private to public transport in urban areas and from road to rail for freight. Action will also be necessary in other sectors such as industry, agriculture, and buildings, but a detailed strategy for these may take more time to put in place. Since responsibility for action in all these areas is spread across different ministries in the central government and, in many cases, state governments, evolving an internally consistent and cost-effective strategy will present a major challenge. There is a case for setting up a high-level commission chaired by the Prime Minister to approve a national strategy. The paper estimates that the additional investment needed to make this transition will be about 2 per cent of India’s GDP by 2030, much of which will have to come from additional public and private savings. In this context, some form of carbon pricing would help generate additional revenue.

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