Climate goals must align with growth
India will prioritise climate adaptation efforts to safeguard its rapid economic expansion, even as decreasing global financial commitments for climate action may force developing nations to rework their targets, according to the Economic Survey tabled in Parliament on Friday.
The survey highlighted that India’s adaptation expenditure rose to 5.6% of GDP in FY22 from 3.7% in FY16, underscoring the growing focus on building resilience against climate impacts as the country pursues its goal of becoming a developed nation by 2047.
“In India’s case, most capacity additions to coal-fired power plants were made only in the 2010s. There is no valid economic rationale for shutting down coal plants, leaving huge investments underutilised and stranded and without a dependable alternative in place,” the survey stated.
The document criticised developed nations’ recent actions that prioritised energy security over climate goals. It pointed to the European Union’s €10 billion investment in liquefied natural gas infrastructure and additional €1.5-2 billion for securing oil supplies under its REPowerEU plan. The survey also highlighted the US approval of its largest oil drilling project in Alaska, which would produce 628.9 million barrels of oil and generate 260.79 million metric tons of carbon dioxide equivalent emissions.
“Actions speak louder than words, with the biggest beneficiaries of carbon-intensive growth over several centuries holding on to fossil fuels even as they would want the developing countries to take up the less efficient, costlier and riskier options,” it noted.
Coal’s crucial role in India’s sustainable development was emphasized, with the survey noting that 88% of US coal-fired capacity was built between 1950 and 1990, while the UK relied completely on coal in its early development days.
The survey warned that the new global climate finance target of $300 billion annually by 2035, agreed at COP29, falls far short of the estimated requirement of $5.1-6.8 trillion by 2030. This “significant misalignment” with the Paris Agreement’s goals may force countries to rework their climate targets ahead of COP30 in 2025.
“It is out of sync with the needs of the critical decade when action is required to keep the temperature goals of the Paris Agreement within reach,” the survey said, adding that developed countries were falling short of their Nationally Determined Contributions by about 38%.
Domestic resources have primarily funded India’s climate action, with public sector playing a central role amid “highly inadequate” international funding flows. The survey noted this could affect resources for meeting development challenges and compromise international climate partnerships.
The document emphasised that accomplishing India’s net-zero emissions goal by 2070 requires addressing key challenges in renewable energy deployment, including battery storage technology limitations, grid infrastructure needs, and access to critical minerals.
For medium-term energy security, the survey recommended maximizing efficiency of existing fossil fuel resources while developing low-emission technologies like Advanced Ultra Super Critical power plants, which can reduce emissions by 11% compared to super-critical plants.
“To strengthen its renewable energy initiatives, India must prioritise investment in extensive grid infrastructure improvements and the secure sourcing of critical minerals necessary for this transformative shift,” the survey said.
The document’s warnings come as India aims to increase its non-fossil fuel electricity capacity to 50% by 2030 from the current 46.8%. The country has already established 213,701 megawatts of installed electricity generation capacity from non-fossil fuel sources.
Looking ahead to COP30 in Brazil this November, the survey indicated that the funding shortfall may lead to a reworking of climate targets. “Considering that domestic resources will be the key to action, resources for meeting development challenges may be affected, undermining progress toward sustainable development objectives and compromising the integrity of international climate partnerships,” it concluded.
While experts said that the disappointing outcome of COP29 has meant that tougher targets need to be set nationally, others said the survey highlighted India’s strong overall economic position, which will help achieve the Nationally Determined Contributions (NDC) targets by 2030.
“With COP29 delivering a disappointing outcome on climate finance, developing countries are being forced to fight climate change largely on their own, despite scant resources. This comes at a time when developed nations are abdicating responsibility in mitigation — exemplified by the US quitting the Paris Agreement and introducing policies that support fossil fuel expansion. Demands for tougher targets via NDCs this year need to consider this harsh reality,” said Trishant Dev, programme officer (climate change), Centre for Science and Environment.
Dhruba Purkayastha, director, Growth and Institutional Advancement, CEEW said: “The Economic Survey presents a picture of India’s strong overall economic position. Key indicators, including continued growth, low current account deficit, a well-capitalised banking system, and steady gross fixed capital formation, point to this strength. The structural shifts underway in the Indian economy further support the nation’s trajectory toward becoming a developed country… Given this positive economic backdrop, India is well-positioned to achieve its NDC targets before 2030. The Economic Survey’s emphasis on shifting public policy focus toward climate adaptation is both timely and contextually relevant. This guidance is expected to catalyse a much-needed shift in public finance toward adaptation and resilience measures, particularly in the face of increasingly frequent and severe climate-related disasters.”