India could gain US$11 trillion by acting on climate change: Report
This can be attained by limiting rising global temperatures and realising the potential to ‘export decarbonisation’
India must act now to prevent the country losing US$35 trillion in economic potential over the next 50 years due to unmitigated climate change, a new report from the Deloitte Economics Institute has showed.
The report, titled, ‘India’s turning point: How climate action can drive our economic future’, also reveals how the country could gain US$11 trillion in economic value instead over the same period, by limiting rising global temperatures and realising its potential to ‘export decarbonisation’ to the world.
“We have a narrow window of time—the next 10 years—to make the decisions needed to alter the trajectory of climate change. No one is immune to the impact of climate change, but for India this is a window of opportunity to lead the way and show how climate action is not a narrative of cost but one of sustainable economic growth,” said Atul Dhawan, Chairperson, Deloitte India.
He noted that as India aspires to be a US$5 Trillion economy, it is not just foreign and domestic investments that will be key in driving growth we must also take this opportunity to align our ambitions with climate choices.
The report states that with no action taken on climate change, the average global temperatures could rise by 3°C or more by the end of this century, making it harder for people to live and work and threatening the progress and prosperity that the nation has enjoyed in recent decades.
Over the next 50 years, the top five most impacted industries in terms of economic activity are expected to incur a significant share of climate-related loss, it points out.
These industries —services (government and private), manufacturing, retail and tourism, construction, and transport — currently account for more than 80 percent of India’s GDP, the report said. Together, they form the basis of the country’s contemporary economic engine.
Deloitte estimates that by 2070, these five industries alone would experience an annual loss in the value added to GDP of more than US$1.5 trillion per year.
Deloitte’s research also shows that if governments, businesses, and communities act boldly and rapidly in the next decade to address climate change, average global temperature rises can be limited to around 1.5°C by 2050 – a scenario that will minimise the impact of climate change for India and the rest of the world.
At the same time, India can achieve significant economic growth by supplying the products, services, and financing the world will need to limit temperature increases, the study mentioned.
India is home to many enterprises that are already world-leading producers of the advanced solutions countries will need to address climate change, it highlighted. These include green hydrogen and negative-emission solutions, both natural and technological.
According to the Deloitte report, accelerated decarbonisation could bring significant benefits to India and the world.
India could use the transition to a low-emission footing to restructure its economy towards growth in advanced industrial sectors, leveraging lower cost clean energy export markets, as the region experiences a rapid increase in energy demand over the coming years, it noted.
The report argues, as a developing nation, India’s transformation to a low-emission footing is likely to be more complex and challenging than much of the rest of Asia Pacific.
It will have to strike a delicate balance between the need for sustained economic development—and the corresponding rise in energy demand—and investing in and transitioning to emerging, low-emission technologies, it adds.