Economic Growth and Environmental Constraints – Watts Up With That?


From RealClear Energy

By Tilak K. Doshi & C. S. Krishnadev
August 25, 2021

As we approach the UN climate body’s Conference of Parties (COP26), to be held in Glasgow in November, the drive by the UN’s climate body to push the world’s major developing countries to adopt increasingly ambitious “decarbonization” policies as part of the Paris Agreement has intensified. U.S. climate envoy John Kerry called on China—the world’s largest emitter of greenhouse gases (GHGs), by far—to do more. Referring to China’s “staggering amount of fossil fuel use,” China’s Nationally Determined Commitments (NDC) to peak its carbon dioxide (CO2) emissions by 2030 under the Paris Agreement and its more recent promise of “carbon neutrality” by 2060 are not enough, according to Kerry.

As the world’s third-largest emitter of GHGs, India is under similar diplomatic and political pressure in international forums dominated by the EU, as well as the U.S. Biden administration, which have made climate policy a centerpiece in their international relations. Despite having the sixth-largest economy in the world—with a burgeoning middle class and world-leading industries, ranging from software services to pharmaceuticals—India still remains a poor country.

With a gross national income per capita of $1,900 in 2020, India is in the group of countries ranked as “lower middle income.” For comparison, the world average is $11,550; China’s is somewhat lower than the world average, at $10,610; and the high-income countries earned a per-capita GNI of $46,040. India’s per-capita consumption of electricity was estimated at just over 850 KWh at the beginning of 2020, or just 7.3% of U.S. per-capita consumption and 20% of China’s average. A recent survey found that 13% of India’s households lack access to grid electricity.

India’s economy is heavily dependent on fossil fuels—particularly coal. In 2020, fossil fuels accounted for almost 90% of the country’s primary energy consumption, and coal alone accounted for almost 55%. Coal is the mainstay of India’s power sector, accounting for just over 72% of total power generation in 2020. Renewable energy (which includes solar, wind, and modern biofuels but excludes hydro) accounted for less than 10%.

Wind and solar power generation have grown rapidly but from small bases. Solar generation grew in during 2009–19 by an impressive 90% compound annual rate, with an absolute increase of 46 terawatt hours (TWh). Wind grew by almost 15% annually, with an increase of 44 TWh over the same period; coal, accounting for the bulk of power generation, as already noted, grew by an annual 6.3%. Given the size of its contribution to total power generation, however, it accounted for an increase of 514 TWh. Unsurprisingly, coal will continue to play a major role in India’s rapid electrification to support robust economic growth. Indeed, while India plans significant renewable energy investments, its mainstay will include a major push in coal, oil, and natural gas utilization to support continued economic growth ambitions.

India’s ambitions for expanding the role of renewable energy have been a staple in the mass media, and recent headlines hailed the country’s achievement in having reached renewable energy capacity of 100 GW, making it the world’s fourth-largest in installed “green” capacity. On India’s 75th Independence Day (August 15), Prime Minister Modi tweeted in caps: “INDIA HAS SET THE GOAL OF 450 GW OF RENEWABLE ENERGY FOR 2030. OUT OF THIS, WE HAVE ALREADY ACHIEVED 100 GW TARGET WELL WITHIN SCHEDULE.” Big business in India also announced plans for large investments in the sector. Reliance Industries pledged to invest ₹75,000 crore (approximately US$10 billion) in “clean energy,” becoming the latest Indian oil company to announce a major push into renewable projects, including solar cells, hydrogen, fuel cells, and battery grids.

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