Economic Survey and Budget: Global Approach to Climate Change and India’s Perspective
Kartavya Desk Staff
Syllabus: Environmental pollution and degradation, Environmental impact assessment, Conservation, and climate change.
- •Source: PIB, IE*
Context: The Economic Survey 2023-24 highlights the flaws in the current global approach to climate change, emphasizing the need for developing countries to adopt a localized perspective in their climate strategies.
Definition and Historical Instances
The current global approach to climate change predominantly focuses on reducing carbon emissions through renewable energy adoption, energy efficiency, and cutting methane emissions. Historically, this approach has been shaped by developed nations, often neglecting the socio-economic and geographical challenges faced by developing countries like India.
How the global approach to climate change is flawed:
Aspect | Issue
Inadequate Funding | Only USD 100 billion was pledged by developed countries till 2020, far short of the approximately USD 6 trillion which developing countries need by 2030 to meet half of their climate targets.
Ignoring Per Capita Emissions | Developing countries like India, despite having low per capita emissions and a minimal cumulative historical contribution to global emissions (4% from 1850-2019), are urged to take greater responsibility for emissions reduction.
Overestimating Risks | The global approach often overestimates the risks associated with nuclear energy, which is one of the cleanest and safest options. Public fear, fueled by rare accidents like Chernobyl and Fukushima, hinders its broader adoption.
High-Energy Technologies | Developed countries are increasing their energy infrastructure to support energy-intensive technologies such as artificial intelligence, which exacerbates energy demand and emissions.
Overconsumption | Developed nations focus on substituting means to achieve high consumption rather than addressing the root cause of overconsumption, leading to higher fossil fuel usage despite climate change mitigation goals.
Example of Overconsumption | Meat Production: Developed countries’ practices threaten food security and degrade resources by creating ‘food-feed competition.’ Traditional farming in developing nations reduces costs and balances the natural cycle, freeing arable land to combat global hunger.
Resource-Intensive Renewables | Transitioning to renewable energy involves significant environmental costs due to the extraction of rare earth metals required for solar panels and wind turbines. This process is often destructive and energy-intensive, contradicting the objectives of clean energy.
Intermittent Renewable Sources | Renewable energy sources like solar and wind are intermittent, requiring substantial storage capacities to ensure a stable power supply. This necessitates additional resource extraction for battery production, further impacting the environment.
Financial Burden on Developing Countries | Developing countries face a significant financial burden in transitioning to cleaner energy sources. The limited financial support from developed nations makes it challenging for countries like India to invest in the necessary clean energy infrastructure and technology.
Lack of Holistic Approach | The current global strategy primarily focuses on technological solutions without addressing lifestyle changes and reduced consumption in developed countries, which are essential for sustainable climate action.
Housing | Western nucleated families lead to urban sprawl and high environmental costs. Vs India: Traditional multi-generational households in India promote sustainable living with local materials, natural ventilation, and lower resource use, benefiting the elderly and reducing energy consumption.
India: Traditional multi-generational households in India promote sustainable living with local materials, natural ventilation, and lower resource use, benefiting the elderly and reducing energy consumption.
India’s Climate Action Progress
• Carbon Sink: India has created a carbon sink of approximately 1.97 billion tonnes of CO2 equivalent between 2005 and 2019, with plans to add an additional 2.5 to 3.0 billion tonnes by 2030 through enhanced forest and tree cover.
• Emissions Intensity Reduction: India aims to reduce the emissions intensity of its GDP by 45% by 2030 from the 2005 level.
• Mission LiFE: Focuses on behavioral changes among individuals to combat climate change, promoting mindful consumption over overconsumption.
Benefits and Drawbacks of India’s Climate Actions
Benefits:
• Sustainable Development: Integrating traditional farming practices and multi-generational households promotes sustainable living and reduces environmental costs.
• Economic Growth: Investing in renewable energy and energy efficiency projects can drive economic growth while reducing emissions.
Drawbacks:
• Financial Burden: The transition to cleaner energy sources requires significant investment, which is challenging given the current financial support from developed nations.
• Technological Challenges: Renewable energy sources like solar and wind are intermittent and require substantial storage capacities, which are resource-intensive.
Suggested Actions
• Develop a Climate Finance Taxonomy: As announced in the Union Budget 2024-25, this system will classify sustainable investments, guiding investors and banks to direct capital towards impactful climate adaptation and mitigation projects.
• Promote Small-Scale Renewable Projects: Focus on small-scale solar and wind projects suited to India’s unique context, improving energy efficiency in industries, and promoting sustainable agricultural practices.
• Advocate for Equitable Climate Policies: Push for more equitable climate policies that hold developed nations accountable for their historical emissions and current consumption patterns.
About Climate Finance Taxonomy (presented in Union Budget for 2024-25)
Definition: A classification system identifying which parts of the economy can be marketed as sustainable investments, guiding investors and banks to direct funds toward impactful climate change solutions.
Purpose: Taxonomies set standards for classifying climate-related financial instruments (e.g., green bonds) and serve other uses like climate risk management, net-zero transition planning, and climate disclosure.
Global Adoption: Countries such as South Africa, Colombia, South Korea, Thailand, Singapore, Canada, Mexico, and the European Union have developed taxonomies.
Significance:
• Aids countries in transitioning to a net-zero economy by ensuring economic activities align with science-based transition pathways.
• Promotes climate capital deployment and reduces greenwashing risks.
• Enhances capital availability for climate adaptation and mitigation, helping countries like India achieve climate commitments and green transitions.
Way Forward:
The Economic Survey 2023-24 and the Union Budget 2024-25 emphasize that:
• India’s climate strategy must balance developmental goals with meaningful climate action.
• India’s strategy should focus on sustainable development practices, individual responsibility, and equitable climate policies.
• India needs to advocate for climate justice, ensuring that global strategies are accommodative of its unique socio-economic context.
About Mission LiFE:
Conclusion:
By promoting sustainable consumption and leveraging its position in the Global South, India can push for a more equitable and effective global climate strategy.
Mains Links:
Write a note on Life mission and how it will help reduce global carbon emissions.