The Climate Change Battle Can’t Be Won Without Industry Action

Context: A shift to clean energy is welcome, but Indian industry needs deep decarbonization over the next 30 years to make a difference.

Background:

• Fragility of the seemingly invulnerable and adaptable business sector has been witnessed recently in the following two events:
  • A ship in the Suez Canal blocked traffic for a week, delaying $9 billion of goods each day.
  • A pandemic originating in Wuhan led to the world economy contracting by 3.5% and 255 million jobs lost in 2020.
• Thus, this requires industry to be adaptable in the context of growing concerns of climate change since, evidently, more than 90% of this emission reduction comes from heavy industries.

Steps taken by India industries: In battle against climate change –

• Acknowledging the concern: Climate Trends’ recent survey of 400 large and small businesses in Maharashtra found that more than 70% believe climate change is affecting their profit, material supply, and expenditure.
  • Top Indian companies estimate the financial impact of climate risks at more than ?7 trillion, with an average risk of ?92 billion per company, according to a 2021 report by CDP India.
• Adoption of voluntary commitments: Including targets for renewable energy, energy efficiency, electric mobility, greenhouse gas emission reduction, and internal carbon pricing to help achieve these targets.
  • World Resources Institute India and Confederation of Indian Industry (CII) find that the existing climate commitments of just 50 leading Indian companies can reduce the country’s total greenhouse gas emissions by almost 2% below national projections for 2030.

Way Forward: Steps towards deep decarbonization of industry -

• Electrify energy use and switch fuel use to hydrogen: Need for technology advancement like in manufacturing hydrogen from electrolysis rather than fossil fuels.
  • New national mission on green hydrogen can help reduce costs and create a reliable supply infrastructure for this critical technology.
  • It has the potential to reduce a billion tonnes (bt) of CO₂ emissions by 2050 (current emissions are 2.8 bt).
• Increase the energy efficiency of industrial equipment: Micro, small and medium enterprises (MSMEs) that have the potential to become energy-efficient but lack the capital to upgrade.
  • Energy efficiency can save around 250 million tonnes of India’s emissions by 2050.
• Increase material efficiency, product longevity and re-use: Replace use of fossil fuels in materials, implement the concept of circular economy etc.
  • India reduces more than 300 million tonnes of carbon dioxide by 2050.
• Invest in carbon capture utilization and storage: Because not all process emissions can be eliminated.

Conclusion: As the world adopts stronger climate policies, proactive measures by Indian corporates can help them tap new markets and prepare for the economy of the future.