India’s carbon output could be halved at cost of $1.1 trillion, says report

India would need to spend up to $1.1 trillion (£666bn) on energy-efficient and renewable power technologies to halve its carbon emissions by 2030, according to a new study released yesterday.

India’s greenhouse emissions will rise from 1.6 billion tons in 2005 to up to 6.5 billion tonnes by 2030, the McKinsey & Co report estimated. However, comprehensive measures to improve transport infrastructure and agricultural practices, combined with greater use of energy-saving and clean energy technologies, could reduce greenhouse gas growth to an output of 2.8 billion tonnes by 2030, says the global consultancy firm.

“Our analysis suggests that incremental capital of about €600bn to €750bn ($874bn to $1.1tn) would be needed between 2010 and 2030, even after accounting for steep declines in the cost of emerging technologies such as solar power,” the study authors said. The amount is equal to about 1.8 to 2.3 per cent of India’s GDP during the period.

The report, Environmental and Energy Sustainability: An Approach for India, identified clean power and energy-efficiency measures as having the largest potential impact on emissions, with the capability to reduce CO2 output 28 to 34 per cent by 2030.

Other significant areas were green transport, sustainable urban and rural housing, and improved agriculture and forestry practices, which could collectively reduce emissions by an estimated 22 to 26 per cent by 2030.

“Considering that 80 per cent of the India of 2030 is yet to be built, the country may have a unique opportunity to pursue development while managing emissions growth, enhancing its energy security and creating a few world-scale clean technology industries,” the study says.

It emphasised the need for national policies to be swiftly executed, as “long-term planning and timely action will be critical... even a five-year delay in making the necessary investments could result in a loss of one-fourth of the identified abatement potential”.

While the costs to implement the necessary measures was high, the country could realise financial benefits by becoming a global leader in the emerging clean tech sector, given its engineering strengths and low-cost manufacturing base, the report said.

Clean coal, solar energy, smart grids and energy-efficient building technologies were areas in which India could pioneer new knowledge and gain intellectual property rights, the study authors believe.

The report comes as India, the world’s fourth-largest polluter, comes under increasing pressure to set emissions targets in the run-up to the UN climate change talks in Copenhagen in December.

India last week released a report based on five independent studies which forecast that carbon dioxide emissions will rise to between four billion and 7.3 billion tonnes by 2031. The government emphasised the fact that estimated per capita carbon output in 2031 would be lower then the per capita global average in 2005.