Dedicating a separate section, the Economic Survey 2021 underlined the need to include climate change and sustainable development in policy planning. While it lauded the commitments made by India at COP26 global climate conference, the Survey also made a note about the pace of investment in net-zero emission planning.
“India’s climate vision is also integrally linked to India’s vision of development that foregrounds the goals of poverty eradication and guaranteeing basic well-being as an immediate necessity to meet the challenge of global warming,” said the Survey.
It said the two main pillars for mitigation action to achieve net-zero carbon ambition are transition to clean and renewable sources of energy and storage of this energy. With regards to the same, the Survey said it is essential to determine the pace at which the country shifts away from conventional fossil-fuel based sources.
“The pace will determine the extent and mix of investment in renewable sources of energy. With the developed countries as frontrunners of net-zero emission plans, it is important to avoid the risk of being a late comer,” it said.
The Survey, climate financing will be the key for achieving the climate change mitigation targets set by India. At COP26, India committed to becoming a net-zero carbon economy by 2070. Among key commitments were renewable energy capacity of 500 Gw; sourcing 50 per cent energy requirement from non-fossil fuel sources, a reduction of 1 billion tonnes in projected emissions; a 45% carbon intensity cut over 2005 levels; and Indian Railways becoming a net-zero company. All these commitments have the target year of 2030.
Climate change-related financial risks pose both micro and macro prudential concerns, the Survey said. It cited the new division set up by the Reserve Bank of India (RBI) – ‘Sustainable Finance Group’ (SFG). The SFG will be coordinating with, and participating in issues relating to sustainable finance or climate risk, with the international standard setting / co-operation bodies, other central banks, other financial sector regulators and the Government of India.
“There is a greater thrust on climate action following the announcement of India’s target of becoming Net Zero by 2070. Climate finance will remain critical to successful climate action by developing countries, including India,” said the Economic Survey.
At the domestic front, the Survey noted augmenting finance for sustainable development and investing in resilience for sustainable development, as two key policy themes for tackling climate change related impact. It cited the Task Force on Sustainable Finance has been set up by the Department of Economic Affairs, Ministry of Finance and RBI decision to join the Central Banks and Supervisors Network for Greening the Financial System (NGFS) as two key developments on this front.
On the international stage, the Survey highlighted the several initiatives India has taken with regards to climate change mitigation and adaptation measures. This includes the International Solar Alliance, Coalition for Disaster Resilient Infrastructure and Leadership Group for Industry Transition.
At the state level, the Survey highlighted the need for ground water resource management. “States/UTs need to improve management of its ground water resources through improving its recharge and by stemming its over-exploitation, and to prevent the critical and semi-critical assessment units from further worsening,” it said.
With regards to resource management, the Survey laid emphasis on recycle and reuse. Inelastic supply of minerals is already increasing the prices of minerals which is likely to shoot up even further in the future, the Survey said. Thereby, it said, R&D should be encouraged to ensure effortless switch to renewable sources of energy. This may also include focus on developing technology that recycles, reuses and repurposes minerals.