Prabhakar A.R. Bende, Former Managing Director, MP Power Transmission Company Limited, MP Power Generating Company Limited
Global warming has started to exhibit its adverse impact across the globe. The deleterious effects of climate change on different sectors of society are increasingly visible globally. The threat is expected to grow, most likely in a non-linear way, until the world successfully transitions to a net zero economy – which is one of humankind’s greatest challenges.
Global greenhouse gas (GHG) emission sources can be grouped primarily into fi-ve broad economic sectors: energy, transportation, agriculture, industry and buildings. The electricity and transportation sectors together account for about half of the global emissions, and that is why the main focus is on transitioning these two economic sectors from fossil fuel to renewables in order to reach net zero.
After the establishment of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, the first breakthrough with regard to the abatement of climate change was the Kyoto Protocol in 1997. This was followed by the Doha Amendment in 2012, the COP21 Paris Climate Agreement in 2015 and the COP26 Glasgow Climate Pact in 2021. The next summit on climate change, COP27, is scheduled for November 6-18, 2022 at Sharm El-Sheikh, Egypt.
The objective of the Kyoto Protocol is to achieve “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”. It has enabled developed countries to agree on a collective reduction of GHGs by 5.2 per cent below 1990 levels, between 2008 and 2012. The Doha Amendment, which was to decide the targets for the second phase (2013-20), set the goal of reducing GHG emissions by 18 per cent compared to 1990 levels for participating countries. India, accounting for about 4.1 per cent of emissions, was the 62nd country to ratify the amendment among 145. Although the emission reduction results were encouraging – given that, between 1990 and 2012, participating countries reduced their CO2 emissions (excluding other GHGs) by 12.5 per cent, which was well above the 2012 target of 4.7 per cent – there was an overall increase of about 40 per cent in total global emissions between 1990 and 2010.
The historic Paris Agreement of 2015 (COP21) is a legally binding international treaty on climate change, adopted by 196 countries. It set out a global framework to avoid dangerous climate change by limiting global warming to well below 2 °Celsius above pre-industrial levels, and pursuing efforts to limit it to 1.5 °Celsius. It marked the beginning of a shift towards a net zero emission world. Developed countries were urged to support developing nations with $100 billion annually till 2020, to help address the impact of climate change.
The 26th conference of the UNFCCC (COP26) took place at Glasgow in 2021, bringing together 120 world leaders. It achieved significant success in moving towards net zero. The Paris Agreement goal of limiting the increase in global average temperature was reaffirmed. An action plan was drawn for the decade ending in 2030, with the goal of abating GHG emissions by 45 per cent to reach net zero by mid-century. The pact called on all countries to formulate stronger national action plans and nationally determined contributions (NDCs) by September 2022. The most revolutionary decision in Glasgow was a provision calling for the phase-down of coal power and phase-out of inefficient fossil fuel. Even though these two key issues are the main drivers of global warming, they had never been mentioned explicitly in any decision made at the UN climate talks before. A new “Glasgow Dialogue” was launched to discuss arrangements for the funding of activities to avert, minimise and address loss and damage associated with the adverse effects of climate change. China announced its plan to achieve net zero by 2060, while India set the target for 2070. So far, 52 countries have submitted their NDCs to the UNFCCC, subsequent to the Glasgow summit.
Some significant developments outside these treaties were also seen on issues such as deforestation, methane, transport and energy. These are critical contributors to GHG emissions. A Global Methane Pledge was signed by 103 countries, including 15 major emitters, to restrict methane emissions by 30 per cent by 2030 compared to 2020 levels. A move towards decarbonisation of road transport, which accounts for about 14 per cent of emissions, was also formulated.
At COP26, 46 countries signed the Global Coal to Clean Power Transition Statement, promising to accelerate the transition from unabated coal power generation, and to cease the issuance of permits for new coal-fired projects. This was a positive step towards accelerating the process of phase-down of coal power generating plants.
International funding was instituted at COP21 to achieve the transition from coal to clean energy, halt forest loss, and transition the transport sector to zero emissions. Over $20 billion in international funding was mobilised for a just and inclusive transition from coal to clean energy, including $8.5 billion for the South Africa Just Energy Transition Partnership; $2 billion towards climate investment funds, accelerating coal transition and renewable energy integration programmes; and $10 billion to bring reliable renewable electricity to a billion people by 2030, thus eliminating 4 billion tonnes of CO2 emissions. Twelve developed countries pledged to provide $12 billion in public climate finance from 2021 to 2025 for the new Global Forest Finance Pledge. The ambitious action plan to accelerate the transition of the transport sector to 100 per cent zero emission brought together 35 countries, six major automobile manufacturers, 28 fleet owners, and 15 financial institutions and investors, to work together on achieving this goal. Financial backing plans were also put in place to support vulnerable countries in adapting to these impacts and minimising or preventing loss and damage.
The developed countries, as part of the Paris Climate Agreement, had agreed to provide $100 billion in annual assistance until 2020 to aid developing countries in acquiring non-GHG emitting industrial processes and technologies, but as per an independent report, only a fraction of this has materialised.
The major GHG emitting nations have the onus of restoring the environment to what it was in the pre-industrial period. The five major GHG emitting countries (China, the USA India, Indonesia and Russia) are together responsible for over half the global emissions, and along with other industrial nations, need to make greater contributions to mitigate climate change.
China’s updated NDC goals aim to have CO2 emissions peak before 2030, and achieve carbon neutrality before 2060. The country has also pledged to lower CO2 emissions per unit of GDP by over 65 per cent from the 2005 level, to increase the share of non-fossil fuels in primary energy consumption to around 25 per cent, to increase the forest stock volume by 6 billion cubic metres from the 2005 level, and to bring its total installed capacity of wind and solar power to over 1,200 GW by 2030. In order for China to achieve its 2030 goals, the minimum share of non-fossil fuel power needs to rise to about 40 per cent by 2030 from 28.2 per cent in 2020.
The US president signed the Inflation Reduction Act in August 2022, the most ambitious and potentially stimulating climate policy. It sets a goal for the country to reduce net GHG emissions to 50-52 per cent below 2005 levels by 2030. The associated package includes $369 billion of climate and energy spending and tax credits to promote clean energy generation, electrification, green technology retrofits for homes and buildings, greater use of clean fuels, environmental conservation, and wider adoption of electric vehicles (EVs). The US has set a goal of achieving 100 per cent carbon pollution-free electricity by 2035, and net zero by 2050. It will also invest in innovation to deploy affordable, reliable and resilient clean technologies and infrastructure.
India’s first NDC was submitted to the UNFCCC in October 2015, pledging reduction in the emissions intensity of its GDP by 33 to 35 per cent by 2030, and the creation of an additional carbon sink of 2.5-3 billion tonnes (bt) of CO2 equivalent by increasing forest and tree cover by 2030. At COP26, India pledged to achieve net zero emissions through “Panchamrit”, a fivefold strategy aimed at (i) raising the non-fossil fuel-based energy capacity to 500 GW by 2030, (ii) meeting 50 per cent of its energy requirements through renewable energy sources by 2030, (iii) reducing the total projected carbon emissions by 1 bt between 2021 and 2030 (iv) reducing the carbon intensity of the economy to less than 45 per cent by 2030, and (v) becoming a carbon-neutral country and achieving net zero emissions by 2070. In order to achieve these goals, it is necessary for the country to shift its power generation towards clean energy and distance itself from fossil fuel-based transportation, along with measures in other sectors.
As of July 2022, the country has achieved 168 GW of non-fossil capacity, including nuclear power. The National Electric Mobility Mission Plan 2020, which aims to enhance national fuel security, alleviate adverse environmental impacts from road transport and boost the domestic manufacturing capabilities of EVs, is a step in the right direction. The Indian Parliament, in August 2002, passed the Energy Conservation (Amendment) Bill, 2022. The main focus of the bill is on deploying renewable energy sources, introducing the national carbon market, realising carbon trading, and authorising the utilisation of non-fossil fuel energy resources to achieve decarbonisation and the Sustainable Development Goals as outlined in the Paris Agreement.
On November 26, 2022, India updated its first NDC. In the updated version, India pledged to adopt a climate-friendly and cleaner path than that followed by others at a corresponding level of economic development; reduce the emissions intensity of its GDP by 45 per cent by 2030 from the 2005 level; achieve about 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030 with the help of transfer of technology and low-cost international finance including from the Green Climate Fund; create an additional carbon sink of 2.5-3 bt of CO2 equivalent by introducing additional forest and tree cover by 2030; adapt to climate change by enhancing investments in development programmes in sectors vulnerable to climate change, particularly agriculture, water resources, the Himalayan region, coastal regions, health and disaster management in order to mobilise domestic and new and additional funds from developed countries to implement the mitigation and adaptation actions in view of the resource required and the resource gap; build capacities; create a domestic framework and international architecture for quick diffusion of cutting-edge climate technology in India and for joint collaborative R&D for such future technologies. The updated NDC reads, “To put forward and further propagate a healthy and sustainable way of living based on traditions and values of conservation and moderation, including through a mass movement for ‘LIFE’ – ‘Lifestyle for Environment’ – as a key to combating climate change.” India’s move is a step towards the long-term goal of reaching net zero by 2070.
Indonesia has set a target of achieving 23 per cent renewable energy use by 2025 and 31 per cent by 2050. Its updated national climate commitment to the UNFCCC was submitted in July 2021, pledging an unconditional reduction of 29 per cent of its GHG emissions to below the business-as-usual scenario by 2030, or a conditional 41 per cent reduction subject to availability of international support for finance, technology transfer, and development and capacity building. The country also plans to have its GHG emissions peak in 2030 and reach net zero by 2060 or sooner.
The Russian Federation submitted its NDC in December 2021, announcing a target of reduction in GHG emissions by 2030 to 70 per cent compared to the 1990 level. It was also declared that a global reduction in GHG emissions would be achieved by increasing the peaceful use of nuclear energy in 12 developing countries, including Egypt, Jordan, Nigeria, Uzbekistan, Bangladesh, Armenia, Iran, India and China.
A Mckinsey Global Institute study published in The Business Times estimates that spending on physical assets on the road to net zero will reach about $275 trillion by 2050, or $9.2 trillion per year on average. These capital expenditures can lead to reduced costs through reduced fuel consumption, improved material and energy efficiency, and lower maintenance costs.
Having nuclear power in the energy mix is a recognised necessity for reaching net zero by 2050. The global installed nuclear generating capacity is expected to increase from 399 GWe in 2014 to 612 GWe in 2040, with nuclear electricity generation increasing from 2,535 TWh to 4,357 TWh.
A carbon-neutral world is not an impractical dream. It is achievable through a universal transformation of energy and land use systems, and the global economy. As the world moves to a low-carbon economy, the transition risks shall have significant financial and economic impacts, and hence need to be addressed globally. There are also concerns regarding policy execution by governments, as many developing countries are prone to policy changes and delays.
The invasion of Ukraine by Russia also poses an indirect threat to global climate goals, as in retaliation against sanctions Russia has cut its natural gas exports to Europe by more than 50 per cent. This required several European countries to return to coal-fired power plants as a temporary move to conserve their reserves of natural gas. The impact of the Russia-Ukraine conflict poses great concerns for the world economy and thus the net zero goal.
COP27 is expected to bring governments together to formulate a solution for accelerating global climate action, creating adaptation strategies and enhancing the flow of proper finance. COP27 will be an opportunity to showcase global unity against an existential threat that can be overcome through coordinated efforts and effective implementation. Urgent action is required to avoid exacerbating social, economic and environmental threats by strengthening the implementation of climate change response, with the aim of creating a resilient planet.