India has pledged to push for increased climate finance for developing nations at the COP27 talks in Egypt Nov. 6-18, while holding its ground on using a mix of new fossil fuel production and low carbon energy sources to drive its own economic growth.
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The country expects to take a leading role at the talks, using the International Solar Alliance (ISA), which it founded in 2015, as the voice of developing nations.
A key clause in its updated National Determined Contribution is to mobilize "new and additional funds from developed countries" to implement mitigation and adaptation actions in view of the resource gap.
"We haven't seen much money yet coming for energy transition from the developed countries," India's Power and New and Renewable Energy Minister RK Singh said Oct. 6 at an ISA event attended by member countries' ambassadors.
Singh said the ISA would "take up the cause" of demanding delivery of the Paris Agreement's $100 billion/yr financing pledge, which was supposed to run from 2020 to 2025 before increasing thereafter.
At COP26 in Glasgow, Indian Prime Minister Narendra Modi said "justice would truly be served" if pressure was put on developed economies to live up to their climate commitments, which should rise to $1 trillion.
"India's position extends to funding for adapting to the impacts of climate change, and more controversially – to compensation for loss and damages from climate events," said Roman Kramarchuk, head of Future Energy Analytics at S&P Global Commodity Insights, citing recent disastrous weather events.
It could also play a key role in other ways, Kramarchuk said.
Amongst the current geopolitical tensions – India is one of the largest economies to have maintained neutrality on Russia's invasion of Ukraine – the country "can potentially provide a bridge for compromises if they so choose," he said.
In terms of investments, even as the rest of the world (including China) has seen a sharp decline in coal's share of new and planned power generating capacity, that same share in India remains high, he said.
Fossil fuel use
Since COP26 India has been pursuing expansive policies across conventional and alternative energy, funding domestic solar, bailing out power distribution companies and developing support mechanisms for hydrogen and carbon markets.
At the same time, it has auctioned coal blocks and offered hydrocarbon blocks for exploration and development with ministers saying economic growth will not be compromised.
"We may be the third largest emitting country in the world, but our position in terms of absolute emissions is far, far lower than others," said RR Rashmi, Distinguished Fellow at The Energy and Resources Institute.
While India had its own growth plan that required a robust energy regime, nevertheless the country had taken measures across transport, manufacturing and power that would reduce climate impacts versus a 'business-as-usual' case, Rashmi said.
"What India is trying to do is turn that growth into green growth," he said.
In a reference scenario, S&P Global Commodity Insights' Global Integrated Energy Model (GIEM) forecasts India's carbon emissions rising from 2.44 billion metric tonnes a year in 2022 to 3.02 billion mt/yr in 2030, before peaking at 3.56 billion mt/yr by 2044-45.
Under GIEM's "Two Degree" scenario, India's emissions would need to peak in 2024 before falling to 2.37 billion mt/yr by 2030.
India's Nationally Determined Contribution, updated in August, aims to cut emissions by 45% by 2030 from 2005 levels, and reach 50% installed generation capacity from non-fossil fuel-based resources by 2030 "with the help of low-cost international finance".
Outside of the NDC, India has set itself a target of 500 GW of renewable capacity by 2030, up from 169.71 GW today.
The long-term goal remains to reach net zero by 2070.
"It is the 2030 target that is a lot more meaningful and impactful. If you leave out 2070 entirely, we see a huge amount of ambition on the domestic front," said Jonathan Kay, Associate at The Asia Group, that works with companies as strategic advisor.
Attaining 500 GW depended on power sector reforms and building a domestic manufacturing base for solar panels, batteries and other componentry, he said.
"Maybe India falls short, but if you want ambition, that's about as ambitious as it gets," Kay said, noting however that an output target for green power rather than one for capacity would have been preferable.
Further, as the world's second largest emitter from coal combustion, India is likely once again to be drawn into any COP27 debate on coal plant closures, Kay said, with pressure to integrate a phase out plan into its NDCs, according to Rashmi.
With a national carbon market likely to be launched in India in 2023, market participants will have one eye on any context coming from COP27 on Article 6 markets.
Article 6 of the Paris Agreement was agreed in Glasgow, so the focus has moved to national implementation of markets designed to allow Parties to support achievement of each other's NDCs, and how these Article 6 markets will co-exist with existing voluntary carbon markets.
On Oct. 6 Power Minister RK Singh said while India would prioritize use of its carbon credits to meet NDC needs, it would not ban the sale of credits abroad. As such, "other countries can look forward to huge quantities of carbon credits being available in India," he said.
"This year the COP meeting is expected to delve deeper into the nuances of Article 6 to drive greater focus on the adoption of Article 6.4, with specifics on how it will interact with the International Voluntary Carbon Market," said Manish Dabkara, CEO of EKI Energy Services and president of the newly formed Carbon Markets Association of India.
The hope is that there will be progress on a policy framework for a carbon credit registry and on a centralized accounting and reporting platform at the supervisory body of the UNFCCC, Dabkara said.