Towards A Green Economy

The transition towards a Green Economy presents a tremendous scope for India to not only achieve the SDGs and advance its lowcarbon development objective but also with a vision for an ‘inclusive green economy’. A look at some of the issues, challenges and opportunities present in the sector.

Prof S Janakarajan

President, South Asia Consortium for Interdisciplinary Water Resources Studies (SaciWATERs), Hyderabad

The UN organizations have been extensively discussing green economy. For achieving growth and development, there is competition within the country between the states and also between countries. However, growth should not come at the cost of sustainability. We have to think of feeding about 800 billion people in the world. If we don’t ensure international biodiversity and food security, feeding these people will become a huge challenge. For transitioning towards green economy, we must sustain life systems on the earth and convert to low carbon economy, thus making the planet more livable, sustainable, renewable and friendly towards life systems. That’s the core of the green economy. The most important aspect is to work towards rebuilding, rehabilitating, recovering and restoring the health of planet earth, as we have contributed to a great damage to our planet.

Caring for the biosphere and atmosphere

15 years ago, the concept of green economy did not exist. But today, everybody is talking about greening. This has major implications for the entire biosphere and atmosphere, healthy lifestyles, biodiversity, food security and protection from disasters. Biosphere includes lithosphere, hydrosphere and also the soil systems. Prioritization and implementation of the green economy initiatives need more attention; more so, in the Western Europe, North America, Russia, Japan, China and India. The 17 Sustainable Development Goals (SDGs) of the UN provide clear cut pathways towards achieving green economy. SDG 7 focusses on affordable and clean energy; SDG 11 on sustainable cities and communities; SDG 12 on responsible production and consumption pattern and SDG 13 on climate action.

India’s strides in wind and solar

To make energy transition to renewable energy such as solar, onshore and offshore wind power and green hydrogen, we require investments. India had the set the target of installing 175 GW of wind and solar energy by 2022. Though we are slightly behind target, we are expanding pretty rapidly in energy generation from wind and solar, which is a laudable achievement. India now stands fourth in the world in installed renewable capacity—fifth in solar and the fourth in wind. India has set a target of achieving domestic renewable energy of 450 GW by 2030. 40% of India’s cumulative electric power installed capacity will come from non-fossil fuel-based energy by 2030. Now 70% of our energy is generated from coal, which is fossil-based but we have to reduce it.

Secondly, India wants to reduce the emission intensity of its GDP by 33 to 34% of the 2005 level by 2040. Is it achievable? India will create an additional carbon sink of 2.3 to 3 billion tonnes of CO₂ equivalent to additional forest cover. These are tough targets but let’s look at them positively.

Challenges from green hydrogen

Green hydrogen is now widely talked about globally and the Government of India is quite serious about using it as a source of energy. The union cabinet has recently allowed an outlay of Rs.19,744 crore towards the National Green Hydrogen Mission. It means that India wants to be a global hub for production, utilization and export of green hydrogen. The green hydrogen policy aims to generate 5 million tons of green hydrogen annually from 2030 onwards, which is the quantity of hydrogen consumed by the industry today. Green hydrogen is produced by splitting the water (H2O) into hydrogen and water. For that, we need electrolysers of 32 GW capacity; it will consume 150 million litres of potable water. We must set up 90 GW of solar or wind power to feed the electrolysers, which in turn would need 3,40,000 hectares of land. If we use regular energy for powering the electrolysers, it will not be green anymore. The benefit of using green hydrogen is that we can avoid 30 to 40 million tons of CO₂ emission and also purchase of 60,000 crores of LNG. But how is that going to be possible and do we need green hydrogen at all are the questions that come up, more so because hydrogen storage is hazardous and its distribution through a leak-proof pipe system and end-use acceptance are further challenges.

The higher growth rates and India’s vision of $5 trillion economy are based on the usage of conventional carbon-based energy. When we switch to renewable energy, there can be a conflict with this target of $5 Tn economy. Indian economy is growing at a much faster rate compared to most of the world economies. We are growing at 7 to 8% and expect further growth, which means we are going to use more energy. According to the International Energy Agency, India’s energy demand will go up by 3% annually. The International Energy Agency also predicts that coal based energy generations will go up from 240 GW to 2000 GW in 2030.

Making agriculture efficient

Substantial energy can be saved by making the Indian agricultural practices more efficient. At the moment, Indian agriculture is extremely inefficient. If we make it more efficient, we can reduce a lot of methane emission and also electricity use for agricultural purposes. When we shift to electric vehicles, we still use the fossil energy to recharge batteries. The batteries’, being hazardous, disposal becomes a challenge. More people switching to electric vehicles will increase traffic congestion. So we must shift towards public transport.

If we have dedicated bus lanes, then people will be tempted to use the public transport. That is the best way to reduce CO₂ emission. China and many European countries are shifting towards bicycles. There are extremely well made bicycles available. If we have dedicated bicycle lanes, people would like to go by bicycle. Now we are scared to ride a bicycle on the road, as we can be hit by any class of vehicle. These are unconventional methods and ways of looking at greening and transitioning towards green economy.

Waste management

Waste management is another serious issue. We generate huge biomedical waste, solid waste, debris from buildings, industrial waste, liquid waste and other kinds of waste. These wastes generate quite a lot of methane. Our solid waste tradition has gone up by 20% because of online purchases that use so much of packing materials. With higher growth rates, we will also end up using more natural capital, land and water. Domestic sewage problem and unscientific disposal of industrial solid waste effluent can also create serious problems. While working on infrastructure development, we encroach water bodies and create further problems. It is also important that we work on more responsible production and consumption. SDG 12 says that we must work on making every industrial unit energy positive and water positive. They should generate their own energy and use their own water.

The sunlight and the rain that falls on your roof and plot of land are your resources. Use them to the greatest and be kind to mother earth. That’s the easiest way to move towards green economy.

Dr Shankar M Venugopal

Vice President, Mahindra & Mahindra Ltd

Does green and economy go together? That’s a very first question that many of us may have. The other day, I thought of taking my cycle out and going to work. I happen to live in the same campus and my home is just ten minutes away from my office. So cycling is possible.

Green economy an oxymoron?

When I said this to my neighbour, he looked at me very disapprovingly and sent me a WhatsApp forward. It said that a cyclist does not contribute to the economy in any way. He doesn’t buy a car, has no car loan, doesn’t buy fuel, doesn’t pay road tax or parking fee. If there is somebody who can do more damage to the economy, it is the guy who walks. On the contrary, if you look at fast food outlets, they create a big impact on the economy, because people eat junk food, they fall sick, buy medicines, go to doctors and the economy booms. This is really put in a humorous way but it’s supposed to make us think. I come from the world of mobility, where unless we move things and people, there is no economic growth. We have to do it in a responsible way, where there is no tailpipe emission and it is energy efficient. I work for Mahindra, so I’m very excited about building electric vehicles where there is no emission. There are still problems to be solved with EVs as Prof Janakarajan pointed out. How do we solve them?

Almost every week, I have to go from Bangalore to Chennai and back. For the last few weeks, I have been using the Vandhe Bharat Express. Train, I think is the greenest way to go. I am also able to work during those four hours of travel. It’s pretty nice. But it’s a fundamental change and it needs a mind shift to see is there an alternative to traveling. In tourism, there are virtual things that are coming up with AR, VR and metaverse.

The world is one

Six months ago, I was in Delhi. Almost every house has multiple air conditioners. Even during the night time, when I stepped out, it was pretty warm outside, like the day in Chennai. For the person inside the house, it’s very cool and comfortable. But for the person outside, it is horrible. That’s what happens, when it comes to green. When we talk about green economy, one thing that we should remember is the phrase Vasudhaiva Kudambakkam, which means the whole world is one family. Whatever we do, we are all connected. There is no way one can avoid the butterfly effect. We need to understand that it’s a system level problem that we are trying to solve. It’s not a local problem. What happens in one end of the globe is definitely going to affect something at the other end. 

The lithium story

Coming back to the electric mobility, one thing that have all recognised is that we cannot continue to use coal powered electricity to charge electric cars. We’re looking at solar and wind in a very big way. But the catch is that solar or any renewable needs storage. You need a battery, typically a lithium ion battery to store the energy and you need the same battery also for the electric vehicles. Certainly, there is double the demand for lithium ion batteries.

There are only four places in the world where lithium is available in plenty—Argentina, Bolivia, Chile and Australia. China is not there in this picture. All that China has is a long term trade agreement with these countries to process lithium and make batteries. For a vehicle which needs instant energy, lithium battery makes a lot of sense. There could be alternatives soon, but today, that’s the best. This is the story around lithium. We need to mitigate some of the supply risk around lithium before we start scaling it up.

The second point is in terms of battery wastage, because battery has a finite life. There are multiple things that people are trying to do around this. One is what we call a second life of the battery. Once the battery health deteriorates to less than 80%, it can be used for the home inverter kinds of applications and it can serve for another five to six years in a home inverter.

We have companies, which can retrieve almost 90% of the material that goes into a lithium ion battery. One such company is Redwood Materials. There are quite a few companies who have metallurgical processes in place to retrieve and reuse these scarce materials to make fresh batteries. That is possible. That’s a big business opportunity for a country like India, so we can really recycle and reuse these batteries. Traditionally, we are good in materials and metallurgy technologies. This is a strength area for us and we can very well look at it. There’s a lot of money around that.

The third is, just because we have an electric car, the traffic congestion does not come down. It is still there. How can we address this? The electric car will also be a smart and connected car, since it has IoT. It can talk to other cars, to traffic signals, to parking lots, to charging stations and so on. That’s going to solve two big problems. One is to streamline the traffic flow, so that the signals and the vehicles talk to each other and they can plan. Second, the car being connected, it can talk to the charging station and find out the availability of the charging slot. The charging station will also know how much charge is remaining in the battery of the car. The OEM serves like an umbilical cord for all these electric cars, so you will never be alone even on a highway or any new place. You are always connected and there is always help available. So we have to look at electric not as standalone, but as connected and shared mobility.

A shared vehicle can be used for longer hours. That’s faster and better utilization and faster return on investment. That’s why a lot of the shared mobility providers like the Olas and Ubers are very excited about electric. Electric car can also be semi-autonomous where it can drive to some extent by itself and optimize, so you can get better efficiencies.

Think green, speak green, act green

It’s very important for us to look at public transportation and how to make them electric. Sustainable mobility means that it must be sustainable at all levels including design, manufacturing and end of life disposal. India has a true potential to be a global leader, when it comes to green technologies. Green economy is the opportunity that we just cannot afford to miss. For that, we have to think green, speak green, spread the awareness and enable green. We need to practice green habits right from home. All of us have a chance to contribute to this and we can all come up with innovative ideas. I’m sure there are a lot of people who are ready to invest, looking for green technologies and green ideas.

Mr Arjun Bhargava

Consultant, UN Global Compact

Launched in 2000 by former UN Secretary General Kofi Annan, the UN Global Compact was initiated to bring business and the UN together to give a human face to the global market. As a special initiative of the UN Secretary General, the United Nations Global Compact is a call to companies everywhere to align their operations and strategies with 10 principles of the UN Global Compact in the areas of human rights, labour, environment and anti-corruption derived from international agreements and conventions. With more than 17,000 companies, and 3000 non-business signatories based in over 160 countries and 69 local networks, the UN Global Compact is the world’s largest corporate sustainability initiative, uniting business for a better world.

As India transitions to a net zero economy, we have to ensure that we keep people and job creation at the heart of this transition. The green economy focuses on the economy, investment, capital and infrastructure, employment and skills and positive social and environmental outcomes. And therefore, to move towards a green economy, we must ensure that any transition is inclusive.

According to the International Labour Organization,  a ‘Just Transition’ means greening the economy in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no one behind. A Just Transition involves maximizing the social and economic opportunities of climate action while minimizing and carefully managing the challenges, including through effective social dialogue among all groups impacted and respect for fundamental labour principles and rights.

Guidelines for a ‘Just Transition’

To avert catastrophic climate change, we need to halve the global emissions by 2030. If we fail to do so, we will not have a fighting chance of keeping temperature rise to 1.5 degrees and avoid the devastating impacts of climate change. It’s important for companies in the decarbonisation journey to set a science based emission reduction targets in line with climate science. 110 Indian companies from India have either committed to or have set science based targets out of over 4000 globally.

Now, as companies in all sectors work to drastically reduce pollution from fossil fuel use, they must also simultaneously ensure there will be positive impacts for their employees, workers and communities. It’s important to equip labour market to the high level skill sets needed for greener jobs. This includes services that are available and easily accessible to all, including adequate training and professional development services and reskilling workers.

Think lab on ‘Just Transition’

According to the ILO, 25 million new jobs can be created with the loss of only about 7 million. With people at the heart of the transition, we at the UN Global Compact launched a Think Lab on Just Transition at COP 26 in Glasgow. We have brought 27 companies from across the world, in which three are from India, namely ReNew Power, Wipro and the Mahindra Group, along with over 15 civil society and international organizations such as the ILO, International Organization of Employers, the International Trade Union Confederation, among others.

Sustainable development means harnessing opportunities to generate green jobs with decent working conditions, to reskill and upskill the workforce to promote gender and social equity and inclusion, to reduce poverty and to contribute to the Sustainable Development Goals. Just Transition also means fairly managing the transition’s economic and social impacts and risks. This includes risks to business assets and infrastructure, job losses, and decent job deficits, risks to human rights, including land rights and indigenous people’s rights and other negative impacts, especially in society’s most vulnerable groups.

Assessing, preventing and mitigating negative impacts on workers, frontline communities, and enterprises should be an integral component of climate action. So by embedding a just process into the net zero transition, harnessing its social and economic opportunities and fairly managing its impacts on people, a Just Transition facilitates a speedy transition. Moreover, private sector support for a Just Transition benefits people. It also benefits business. Just Transition can help companies reduce risks and costs, enhance productivity, improve stakeholder alignment, including with customers, policymakers and investors and mitigate systemic risks.

Brief for businesses: 7 key actions

In September 2022, the Think Lab on Just Transition launched its first deliverable, The Introduction to Just Transition—A Brief for Businesses, which builds on the ILO guidelines and provides an introduction to the central role of the private sector in ensuring a Just Transition for all. Climate change and climate transition affect geographies, industries, and individual companies in different ways. It’s important to note that the principles of Just Transition are universal. But companies and business functions apply them differently. Our introduction to Just Transition highlights some of these differences and outlines seven priority actions to help all companies understand Just Transition’s principles, identify gaps in current practices, and generate ideas for improving alignment.

1. Make a map of internal touch points and priorities on Just Transition.
2. Set a foundation through robust policies and practices to respect rights at work and other human rights and ensure responsible business conduct.
3. Engage with your worker organizations, governments and all stakeholders affected about these transition plans.
4. Make long-term business plans that integrate these Just Transition principles, mitigate negative impacts and maximize opportunities for your key stakeholders.
5. Take action to carry out Just Transition plans.
6. Partner with governments, employer organizations, regional and sectoral initiatives and across supply chains for more coordinated action.
7. Measure and report actions, challenges and impacts related to Just Transition to promote learning and accountability even with your peers.

India’s Grand Vision

India’s vision is to achieve net zero emissions by 2070. In addition to attaining short-term targets, which include among others increasing renewables’ capacity to 500 GW by 2030, and meeting 50% of energy requirements from renewables, India updated its contribution to the Paris Agreement, which is also called the Nationally Determined Contribution or NDC in August 2022 and has embarked on new initiatives in renewable energy, e-mobility, ethanol blended fuels and green hydrogen as an alternative energy source. Sustainable lifestyles and climate justice to protect the poor and vulnerable from adverse impacts of climate change are also addressed in the NDC.

It is important for the private sector to plan for a people-centered response to support India’s bold and ambitious renewable energy targets and broader climate commitments. Planning for a Just Transition is more critical for some industries, such as those in the energy sector. For example, there’s a need to reskill automotive workers for electric vehicle industry as well.

Climate adaptation

A Just Transition for climate adaptation is also needed as the impacts of climate change are not just. The poorest and already vulnerable and are most affected by these impacts. They also have the least means to adapt and are less likely to benefit from adaptation action due to structural inequalities and limited political and economic capabilities. Climate change exacerbates existing inequalities including those related to gender, income, age and ethnicity.

Historically, adaptation action has been seen as the responsibility of local and national governments. But globalization provides daily examples of how climate adaptation is actually a broader global concern, when floods disrupt the production of semiconductors or the export of minerals and metals; when heat waves and droughts make wheat yields shrink and prices rise. Businesses are directly affected by climate impacts cascading through supply chains.  

Climate change and misguided adaptation action can cause resource scarcity and affect human health, hunger, crop yields and mining and processing facilities. They can jeopardize jobs and livelihoods, exacerbate conflict and cause supply chain disruptions. This is why adaptation action is important for large multinational corporations that aim to achieve a Just Transition. A Just Transition strategy for businesses that integrates climate adaptation; it can help reduce unequal burdens and leave no one behind.

7 ways for climate adaptation

A second business brief titled Just Transition for Climate Adaptation developed by the Stockholm Environment Institute with inputs from partners and company participants in the Think Lab on Just Transition makes recommendations for businesses to achieve a fair and inclusive journey to a net zero and resilient future. This brief also outlines seven recommendations for businesses to achieve a Just Transition for climate adaptation. They are:

1. Integrate social and environmental objectives into business strategy through social dialogue.
2. Build coalitions, including with your competitors, because you face similar challenges.
3. Improve data collection and sharing.
4. Strengthen supply chain resilience.
5. Finance a Just Transition on climate adaptation.
6. Partner with local and regional governments to devise adaptation strategies that advance a Just Transition.
7. Advocate for clear division of responsibilities for a Just Transition and support climate adaptation.

In December, we launched financing a Just Transition, a third business brief, which explores how financial functions within companies and institutions can advance a Just Transition by addressing four core elements of operations & strategy, governance, risk management and metrics & targets.