CEEW-CEF estimates that in a report titled ‘Investment Sizing India’s 2070 Net-Zero Target’, India will need investment support of $1.4 trillion in the form of concessional finance from developed economies to raise foreign capital that would bridge the gap. is to bridge.
Prime Minister Narendra Modi announced India’s commitment to achieve net-zero emissions by 2070 at the recently concluded Glasgow COP26 climate meeting amid controversy over funding the transition costs of developing economies.
According to the report, the investment is primarily needed to help decarbonize India’s power, industrial and transport sectors. Much of the investment would be needed to replace the power sector, which still relies on coal as the most polluting fuel.
The report said $8.4 trillion would be needed to increase production from renewable energy and associated integration, distribution and transmission infrastructure.
Further decarbonization of this sector will require an investment of $1.5 trillion in the industrial sector to set up green hydrogen production capacity.
“Developed countries must meet tough targets for climate finance in the coming years. On the domestic front, financial regulators like RBI and SEBI need to create an enabling ecosystem to finance India’s transition to a green economy,” CEEW chief executive Arunabha Ghosh said.
“Given the size of the investment required, private capital from institutions, both domestic and international, should form the bulk of the investment, while public money should play a catalytic role by risking investment in existing and emerging clean technologies,” he said.
The concessional finance requirement of $1.4 trillion will not be spread evenly over the five decades until 2070, the study said. The average annual subsidized finance requirement will vary from $8 billion in the first decade to $42 billion in the fifth decade.
According to Vaibhav Pratap Singh, head of program for the report, traditional domestic and foreign sources such as domestic banks and non-banking financial companies (NBFCs), and debt capital markets – both local and international – will not be able to invest extensively. own need. Therefore, access to foreign capital on concessional terms will have to play an important role.”
The study follows CEEW’s study on ‘Implications of a net-zero target for India’s regional energy transition and climate policy’. According to that study, India’s total installed solar power capacity would need to increase to 5,630 GW by 2070.
Coal use, especially for electricity generation, will need to peak by 2040 and reduce by 99% between 2040 and 2060.
In addition, crude oil consumption across all sectors would need to peak by 2050 and fall by 90% between 2050 and 2070. Green hydrogen can contribute to 19% of the total energy needs of the industrial sector.
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