Happy Monday and welcome to today’s edition of Lights On, with this week’s key stories on energy and climate change in South Asia.
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The cost of net zero
A parliamentary panel on finance warned that India will need between $50 and $100 billion a year in addition to the current investments in order to deliver its net zero targets by 2070. Currently, the panel’s chair Jayant Sinha told Reuters, companies are investing between $65 and $100 billion per year to address their carbon emissions problem. "We almost have to double private sector capex in India to be on a net zero trajectory," Sinha told the news wire.
These latest findings only add to India’s green sector’s long standing financial woes. When it comes to private investment, in particular from foreign businesses, investors remain hesitant. Experts chalk this up to policy uncertainty and poor quality products, which dampen interest in an otherwise very promising market.
India launches first green bond
Perhaps as an attempt to address this chronic lack of funding, India is issuing its first green bond, hoping to raise the equivalent of $2 billion for sustainable initiatives. By putting their money in green bonds, investors know it will be spent for climate and environment-friendly projects, and will accept a lower interest rate - known as ‘greenium’ - for the privilege of doing the right thing. This model is convenient for the government, which borrows on the cheap, but has also faced a lot of scrutiny in other countries for alleged greenwashing. And we know that India’s corporates are not exactly immune from greenwashing problems.
‘Oil proof’ the economy, says central bank
The Reserve Bank of India (RBI), which regulates the country’s banking sector, has stressed in a new study that after last year’s geopolitical turmoil India should strive to become energy independent, to protect its economy from oil price fluctuations. India imports 96 percent of its oil, making it susceptible to shocks when the fuel’s price changes very suddenly. “The need for oil-proofing the Indian economy – its financial and real sectors, from shocks or adverse geopolitical events cannot be overstated,” the paper says. “[...] This calls for rapid investments in other alternative energy sources for which India has the potential of being self-sustainable.”
The gas economy that never was
India is also falling behind on its goal of reaching 15 percent of natural gas in the energy mix by 2030, up from 6 percent in 2017, when Prime Minister Modi announced the target. Natural gas is seen in India as a desirable alternative to more polluting fuels, including those traditionally used in kitchens such as kerosene or coal, which are responsible for dangerous indoor air pollution. But according to the rating agency Fitch progress has been modest, due in part to the high prices of the fuel that, without robust emissions regulations, remains second choice to cheaper and more polluting alternatives.
Aid for reconstruction
A UN conference last week saw an outpouring of finance to help flood-stricken Pakistan rebuild after the disaster that affected over 30 million people. The Islamic Development Bank pledged $4.2 billion, the World Bank promised $2 billion and $1 billion will come from Saudi Arabia. However, Pakistan estimates it will need $16.3 billion for flood relief only, and that’s without counting the economic woes that preceded the floods and prompted the country’s ongoing energy crisis.
Malaria is making a comeback
As the climate warms, scientists in the Himalayan nation warn that the increased presence of mosquitoes throughout the year may hinder the country’s efforts to eradicate malaria. In a new paper, doctors in Bhutan explain that the spread of water-borne diseases such as gastrointestinal parasites and viruses rides on rising temperatures, and the same risks are present for vector borne diseases like malaria. Bhutan has already revised its deadline to eliminate the disease from the country twice, first in 2018 and then in 2020 - but the goal is still a long way away.
On Twitter this week
JOSHIMATH FOLLOWUP THREAD:
Let’s not be mistaken - Joshimath has been brought down by ENGINEERS! ‘Brought down’ because there is no scope of repair, no reverse gear, ENGINEERS because they have a schewed understanding of geology & geography, in their education or practice.January 11, 2023
Research and further reading
- Report: IEA’s Energy Technology Perspectives 2023 - This much awaited report from the International Energy Agency looks at the global supply chains for the future clean energy economy - what is made where, and how it moves around the world. It finds that China dominates renewable technology production in most key sectors including solar panels, wind, EV batteries, electrolysers and heat pumps. A competitor hard to beat.
- Opinion: Time for a moratorium on dam building in the Himalayas? - The author pieces together the history of Joshimath’s fragile geology and how dam development may have sent it off kilter, a cautionary tale for the entire region slated as a hotspot for hydropower growth.
- Long read: How India Became the Most Important Country in the Climate Fight - Even though this piece doesn’t add much to the old question of how renewable development coexists with a coal dominated economy, it’s nice to see India’s energy story making the headlines of an international publication. As the Time journalist says, “it’s become clear that India will soon be the most important country in the climate change effort.”
- Analysis: Misreading Climate Change in Bangladesh - An important piece on how the changing water landscape of the Bay of Bengal is too often squarely attributed to climate change without understanding its natural variability. Failing to capture the complexity of the coastal landscape, the author says, can in turn hinder adaptation efforts and exacerbate environmental degradation.
- Explainer: An explainer on Sovereign Green Bonds - If you want to know more about this week’s green finance news, check out this accessible explainer on what green bonds are and how India plans to use them.
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