Landmark deal will usher in an era of sustained financial and technological cooperation and offer plenty of new opportunities for investors.
The robust US-India Climate and Clean Energy Agenda 2030 partnership has raised major expectations around the international community that the coming decade will see sustained financial and technological cooperation between the world’s largest and oldest democracies to help slash greenhouse gas emissions.
Indian Prime Minister Narendra Modi last week announced the India-US climate and clean energy partnership to help mobilise investments, and enable green collaborations. “As a climate-responsible developing country, India welcomes partners to create templates of sustainable development in India. These can also help other developing countries, who need affordable access to green finance and clean technologies,” PM Modi said at the virtual Leaders' Summit on Climate hosted by the United States. “That is why President Biden and I are launching the 'India-US climate and clean energy Agenda 2030 partnership'. Together, we will help mobilise investments, demonstrate clean technologies, and enable green collaborations,” he added.
While India ranks third, behind the US and China, on the list of countries responsible for the highest carbon emissions, yet its per capita CO2 emissions are less than 60% of the global average.
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Moreover, over 80% of India’s electricity comes from burning coal, oil and biomass, as per to a report from the International Energy Agency (IEA). Energy use has doubled since 2000, and power generation currently accounts for more than half of the country’s CO2 emissions. The IEA predicts that the growth in India’s demand for energy will outpace any other nation until at least 2040.
And it’s not just economic growth that’s driving India’s energy demand. The IEA says the country will be home to 270 million more people over the next 20 years. Housing this growing population will increase demand on carbon-intensive industries like cement and steel, according to the World Economic Forum.
There are therefore several key aspects to the Indo-US bilateral pact that could be transformative for energy-intensive sectors in India, starting with renewable power expansion to 450 GW. With open source technologies, India could incorporate innovative materials and processes to decarbonise industry, transport and buildings, apart from power.
That’s the reason why, terming the threat of climate change as a "lived reality" for millions of people in the world, PM Modi said India's lifestyle is rooted in sustainable traditional practices and despite the county's development challenges, it has taken many bold steps on clean energy.
"Our ambitious renewable energy target of 450 Gigawatts by 2030 shows our commitment. Despite our development challenges, we have taken many bold steps on clean energy, energy efficiency, afforestation and bio-diversity," PM Modi said. "Humanity is battling a global pandemic right now and this event is a timely reminder that the grave threat of Climate Change hasn't disappeared. It is a lived reality for millions around the world," he added.
The Indian PM also noted that India’s per capita carbon footprint is 60 percent lower than the global average because its lifestyle is still rooted in sustainable traditional practices.
Against that backdrop, the partnership aims to mobilize finance and speed clean energy deployment; demonstrate and scale innovative clean technologies needed to decarbonize sectors including industry, transportation, power, and buildings; and build capacity to measure, manage, and adapt to the risks of climate-related impacts.
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“The Partnership will proceed along two main tracks: the Strategic Clean Energy Partnership and the Climate Action and Finance Mobilization Dialogue, which will build on and subsume a range of existing processes,” the US State Department said in a post-summit statement. “Through this collaboration, the United States and India aim to demonstrate how the world can align swift climate action with inclusive and resilient economic development, taking into account national circumstances and sustainable development priorities.”
Noting that both the US and India have set ambitious 2030 targets for climate action and clean energy, it further added: “In its new nationally determined contribution, the United States has set an economy-wide target of reducing its net greenhouse gas emissions by 50–52 percent below 2005 levels in 2030. As part of its climate mitigation efforts, India has set a target of installing 450 GW of renewable energy by 2030.
Through the Partnership, the United States and India are firmly committed to working together in achieving their ambitious climate and clean energy targets and to strengthening bilateral collaboration across climate and clean energy.”
With this win-win game, India and US are thus all set to streamline sustainable development, boost employment, clean up the environment and help the international community emerge healthier and cleaner from the pandemic – offering a plethora of opportunities in green tech and clean energy sectors. And those are opportunities no investor around the world would want to miss out on.