This month, India will formally publish a new climate target under the Paris Agreement. The long-awaited second Nationally Determined Contribution will commit that half of India’s electricity generation capacity will be “non-fossil” — solar, wind, nuclear and hydropower — by 2030. In addition, its emissions intensity of GDP (i.e. emissions per unit GDP) will reduce by 45 percent between 2005 and 2030.
Is the new NDC sufficiently ambitious to address the climate crisis? There are three ways of looking at that question – by comparing it to (1) India’s first NDC, (2) its “business-as-usual” emissions trajectory, and (3) the temperature goals of the Paris Agreement.
The Paris Agreement requires countries to submit NDCs every five years. Article 4 requires each NDC to represent a “progression” beyond a country’s current NDC. This “ratchet” mechanism nudges countries to continually improve their self-determined ambition. India published its first NDC when it joined the Agreement in 2015. It targeted a 35 percent reduction in emissions intensity of GDP and 40 percent of generation capacity to be non-fossil by 2030.
From that perspective, India’s second NDC is a progression beyond its 2015 ambition. However, India’s 2015 NDC also contained a target to create new forest cover capable of absorbing 2.5 billion tons of carbon from the atmosphere by 2030. That target looks like it has been dropped from the new NDC altogether, likely because there was little clarity on its actual scope and because India was unlikely to meet it.
This hints at a more fundamental question regarding NDCs — do they represent countries’ climate ambitions or are they simply a re-statement of their “business-as-usual” emissions trajectory? In 2020, India’s Central Electricity Authority projected that non-fossil capacity would constitute 64 percent of power generation capacity by 2030. The new 50 percent target is hence an uncomfortable fit with the Paris Agreement requirement that NDCs should reflect a country’s “highest possible ambition.”
Similarly, India’s energy intensity of GDP is already falling and will likely reduce – assuming no new policies — by 47 percent by 2030 (relative to 2005). The reduction may range from 36 to 53 percent, depending on how much industrial energy consumption rises, and whether this demand can be met through renewables. But it is an open question whether the new NDC target departs significantly from business-as-usual.
Finally, the overall aim of the Paris Agreement is to keep warming to “well below 2°C above pre-industrial levels” and “pursue efforts to limit the temperature increase to 1.5°C.” In 2018, the Intergovernmental Panel on Climate Change clarified that staying within the 1.5 degree Celsius temperature threshold required a 45 percent reduction in global emissions between 2010 and 2030; staying within 2 degrees Celsius requires a 25 percent reduction over the same period.
Both of India’s NDCs allow a rise in emissions over the coming eight years – from around three gigatons of carbon dioxide equivalent in 2021 to over four gigatons in 2030. This is because an emissions intensity target allows emissions to grow, as long GDP grows faster. Similarly, committing to increase the share of non-fossil energy allows fossil energy capacity to grow, as long as it is outpaced by renewable capacity additions.
Unlike the Kyoto Protocol, the Paris Agreement does not specify each country’s fair share of emissions reductions. Some analysts assess that meeting the 1.5 degrees Celsius target requires India’s emissions to plateau soon. Others, accounting for India’s low historic and per capita emissions, see it as one of the few countries that can increase emissions over the coming decade, while developed countries should be nearing zero emissions.
In the absence of an agreed formula, India’s 2030 target may not be highly ambitious, but it is within the requirements of the Paris Agreement. This approach reflects negotiating realities baked into the Agreement and the United Nations Framework Convention on Climate Change process.
Firstly, the NDC process was set up to trade “ambition-for-ambition.” At present, no large economy has submitted an NDC that matches their fair share. Secondly, OECD countries have badly underperformed their Paris pledge to mobilize $100 billion a year in climate finance for developing countries. Actual climate finance needs today are closer to $1.5 trillion a year.
The International Energy Agency estimates that decarbonizing India’s energy will cost $1.4 trillion over the next two decades – the Prime Minister explicitly mentioned a trillion dollar need in Glasgow last year. Briefing the press on the new NDC, the government noted that “India’s climate actions have so far been largely financed from domestic resources.” Reading between the lines, there is little inclination to commit to additional ambition before receiving commitments on additional international finance.
In an ideal world, developed countries’ NDCs would include commitments on new and additional climate finance broken down by target year, sector and possibly region. Apart from emissions reduction targets, developing countries’ NDCs would include reliable assessments of the additional cost of implementing energy transition policies and green infrastructure projects in key sectors, as well as adaptation measures needed to protect the most vulnerable. Unfortunately, this level of coordinated specificity is lacking (and often actively resisted at negotiations).
In this context, the new NDC mostly represents a willingness to continue negotiating. New Delhi’s desired end result is unclear. It could seek a bespoke finance-for-policy package similar to South Africa’s announcement in Glasgow last year. It may be inclined to negotiate a climate finance framework under the auspices of the G20 (which it will chair in 2023). Whether this NDC helps or hinders those efforts remains to be seen.