Sorry, Mr. Gates, the Problem Is a Lot Worse Than You Think

The war against climate change can only be won by winning the crucial battle in India.

In a recent interview with NDTV’s Prannoy Roy, Microsoft founder Bill Gates spoke at length on the climate problem facing the world. As Prannoy Roy noted, while the word “billion” is frequently used in conjunction with his fortune, it’s a different “billion” that is keeping Mr. Gates awake at night. It is to do with the billions of carbon emissions that the world emits on an annual basis. While Mr. Gates is optimistic of averting a climate apocalypse, the challenges are great. From our perspective, India is ground zero for the war against GHG spiralling out of control.


Much of the progress achieved in modern civilization has been created primarily by the combustion of fossil fuels marked by the sequential rise in the usage of coal, crude oil and natural gas to power our lives. It is axiomatic that every unit of GDP growth requires a certain unit of energy. Access to affordable high density energy sources has played a crucial role in uplifting the lives of millions of people. The main drawback associated with fossil fuels is the high carbon emissions emitted during their combustion. There is a growing belief in the world that rising carbon emissions are responsible for environmental problems such as global warming, sea level rise and climate change.


Many countries have undertaken pledges at the global level to mitigate the rise in carbon emissions. In December 2015, under the United Nations Framework Convention on Climate Change (UNFCC), 196 countries adopted the Paris Agreement (1). The Paris Agreement’s long-term goal is to limit global average temperature rise to below 2 C (above the levels prevalent in the period before the industrial revolution) and to pursue efforts to limit the increase to 1.5 C.


The European Union, China and 19 other countries have adopted a ‘net-zero’ emissions target (2). The European Union plans to reduce greenhouse gas (GHG) emissions by 55% below their 1990 levels by the year 2030 and become climate or GHG neutral by 2050. China, the largest GHG emitter has set a long-term target of carbon and GHG neutrality by 2060 and will seek to reach peak emissions by 2030. Based on the analysis of each country’s NDCs (National Plans), global GHG emissions are expected to remain within the 55 billion tonnes to 60 billion tonnes range from 2030 to 2050 (3).


Source: Climate Interactive [xlsx spreadsheet]


However, the more ambitious outcomes that require global warming to be within the 1.5 C to 2 C range require steeper declines in emissions from current levels of ~ 55 billion tonnes to a maximum of 22 billion tonnes by 2050. Achieving the above targets will require significant reductions in absolute and per capita GHG emissions from the current levels. Significant reductions will have to come from the largest emitters – China, USA and India.


Source: World Resources Institute, Global Carbon Atlas, Climatescoreboard.org, QASL Estimates for 2018


Majority of the World’s and India’s GHG emissions are contributed by the energy sector.



Within the energy sector, electricity generation which is predominantly coal fired has the largest share.


Source: Climate Watch data


For a country like India, which is still in the developing stage, the challenge is twofold. In addition to providing its large population with access to affordable energy, the focus is also on transitioning to “cleaner” sources of energy. Assuming other countries are able to achieve their NDC’s by the year 2030, the chart below estimates India’s contribution to total GHG emissions at per capita levels equal to that of the World (6.7 tCO2e), China (8.4 tCO2e) and USA (18.2 tCO2e).


Source: World Resources Institute, Global Carbon Atlas, Climatescoreboard.org, QASL Estimates


Clearly, to meet the GHG challenge, India is too large a country to ignore. While India’s share in total global emissions is currently less than 7% and its per capita emissions significantly lower at 2.7 tCO2e, to meet the growth aspirations of millions of its citizens, it is likely to consume a lot higher amount of resources such as steel, cement, electricity and various sources of energy. If India achieves China’s per capita emission levels, world GHG emissions are expected to be at 63 bn tCO2e in 2030; nearly 8 bn tCO2e higher than the target specified in the NDCs (3). If India were to achieve the per capita consumption levels prevalent in USA, Canada or Europe then world GHG emissions are expected to be nearly 18 billion tonnes (32% higher) than the target specified in the NDCs. Digest that – and gulp! Without adequate investments in cleaner sources of energy and new technologies to replace cement or steel as building materials being used in India’s industrialization, India is likely to blow a big hole in the 55 billion tons emissions target by 2030.


The war against climate change can only be won by winning the crucial battle in India. Influencers like Mr. Gates will need to use their vast pools of capital, influence and technology at their disposal and aid India’s transition to a cleaner and more sustainable growth model. And the learnings from the India experiment can quickly be rolled out to Africa and Indonesia, Bangladesh, Vietnam and Cambodia – which are a few steps behind India in the growth / GHG trade-off curve.


As Bill Gates and others have noted, the technology is there – and being perfected. The money? It’s there – a lot of it. The Sovereign Wealth Funds and the pensions control over USD 100 trillion of assets. The world’s wealthy control another USD 100 trillion. If 1% of this USD 200 trillion pool is directed towards India (and, by extension, Africa, Indonesia, Bangladesh, Vietnam and Cambodia) then Mr. Gates’ optimism is well placed. The pandemic from COVID-19 showed that results (of a vaccine) can be delivered quickly. The focus now should be India: allowing the country to develop but with lower GHG. This is the mother of all challenges.


Sources

1) UNFCC - What is the Paris Agreement?

2) WEF - 'Net-zero' emissions: What is it and why does it matter so much?

3) World Resources Institute, Global Carbon Atlas, Climatescoreboard.org, QASL Estimates

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