Asia Society Policy Institute: Getting India to Net Zero
To date decarbonisation pathways analyses in India have focused on energy and technology transitions. This analysis for Asia Society Policy Institute complements the literature and supports policymakers by shedding light on socioeconomic opportunities, trade-offs and policy implications from different pathways for India towards net zero emissions.
The results show that the most ambitious decarbonisation pathway could boost India’s GDP by up to 7.3% and create up to 20m additional jobs. However, a large amount of investment will be required and there will be winners and losers.
This report provides economic analysis to support the high-level Policy Commission of Asia Society Policy Institute in providing guidance and advice to India on the net zero transition.
The analysis aims to identify the impacts and benefits of decarbonisation under different policy combinations and ambition levels, as well as the potential synergies and/or trade-offs between decarbonisation and development goals.
Using the global E3ME model five core scenarios with different levels of decarbonisation ambition were modelled, complemented by sensitivities around policy choices.
- India’s current Nationally Determined Contribution (NDC) targets, set in 2015, are likely to be met early within the next few years through current policies. More ambitious and additional policies are needed to deliver long-term net zero emissions targets.
- The most ambitious decarbonization goals (2050 net zero) could boost India’s economy by 7.3% ($470bn) in GDP terms and create almost 20m additional jobs by 2032.
- India would require over $10trn of additional investment compared to the baseline to deliver net zero emissions by 2070 and over $13.5trn to reach carbon neutrality earlier than 2050 and to maintain it.
- When the transition is funded domestically, Indian households are on average worse off. Household consumption is reduced by up to $165bn by 2060 due to higher product prices and taxes, including carbon taxes to finance additional investments.
- To achieve a more rapid and just transition in India, a combination of policies will be needed, not just regulation or carbon pricing alone.
- Carbon revenues or other tax raising mechanisms can be used to fund green investments. International support would free up domestic finance for development, poverty reduction and management of social impacts and mitigate the negative impacts on households.
- Policies to support reskilling and upskilling of the workforce across all economies would allow workers to take full advantage of new employment opportunities that arise in a low-carbon economy.