The partner at Dalberg Advisors writes that national and state-level energy plans should collectively bring economic growth, jobs and livelihood opportunities. And financiers have to play a key role in enabling a just transition
India’s farmers, 78 percent of who have small holdings, face challenges such as water scarcity and the threat of unsustainable agricultural practices
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The election heat may have subsided in India, but the scorching heat of climate change is just beginning to sear. Extreme weather events—such as droughts, floods and heatwaves—have become more commonplace, adversely impacting people’s health, productivity and income. These effects are disproportionally felt by vulnerable segments of the population, such as the urban poor and small-holder farmers. Additionally, as India makes strides in its decarbonisation efforts by doubling down on renewable energy, there are growing concerns regarding reliable access and affordability of energy, as well as larger questions of equitable access to economic opportunities, equity and justice. As the unequal impact of climate change becomes increasingly evident, it is crucial to reassess how we implement measures to effectively tackle these concerns.
We need to recognise that the vulnerability of individuals and communities to the impacts of climate change is influenced by the interactions of local, state, and national actors and actions. Therefore, it is essential to take a comprehensive and systems approach. We require policies and implementation measures that aim for transformative adaptation, resilience, and mitigation to fundamentally transition all sectors of our economy. These policies and implementation measures must prioritise people’s lives and livelihoods as a fundamental principle. It is important to consider how this transition can be centered around improving the lives and livelihoods of people.
India has already committed to ambitious decarbonisation targets: Increasing its renewable energy capacity to 500 GW by 2030 and reaching carbon neutrality by 2070. It is now pushing ahead with electrifying all sectors of the economy and greening the electricity, aided by the ramped-up use of green hydrogen and biomass-based fuels.
However, without a people-first approach, decarbonisation and energy transition efforts could negatively impact lives, livelihoods and natural ecosystems. Additionally, fiscal policies (EU’s Green Deal, US’s Inflation Reduction Act and green industries’ subsidies) and trade measures (like the EU’s Carbon Border Adjustment Mechanisms) adopted by developed nations could also have disproportionate and negative impacts on economic growth and livelihoods of the people in India.
India requires hundreds of billions of dollars in investments by 2030 and beyond to meet its solar, wind, hydrogen, bioenergy, and green mobility targets. As these sectors expand, tensions over resources will likely amplify, particularly over land and water, affecting millions of farmers. Despite this, many financiers still view renewable energy as fully sustainable, and continued investments may perpetuate existing socioeconomic inequalities.
(This story appears in the 28 June, 2024 issue of Forbes India. To visit our Archives, click here.)