Can COP29 Help In Expediting Renewable Growth In India?

Can COP29 Help In Expediting Renewable Growth In India?

The convergence of global leaders, policymakers, and pro-climate groups in Baku, Azerbaijan, for the annual Conference of Parties (COP29) is likely to expedite the energy transition globally. It is more pertinent to the Global South including India which has been demanding fair access to the Climate Fund, as committed by developed countries for pro-climate activities.

The developed countries earlier had pledged Rs $100 billion for the developed countries during the Kyoto COP and reiterated it during the Paris COP. Notwithstanding the criticism of inadequate disbursement of the same to the developing countries to expedite climate mitigation measures (like deployment of renewables) and adaption, the latest COP29 at Baku will work towards revising the quantum of global climate fund under the new initiative called New Collective Quantified Goal (NCQG).

The Indian government earlier this year had stated that the developed countries need at least $1 trillion of climate finance per year. This is against the backdrop of several reports that indicate a shortfall of funds for countries like India, needed to achieve their Nationally Determined Contributions (NDCs). In its updated NDC, submitted to the United Nations Framework For Convention on Climate Change (UNFCCC) has committed to ensure that 50% of its total installed capacity will come from non-fossil fuel sources. India has planned to go net zero by 2070.

Estimates from the International Energy Agency (IEA) said that investments in the renewable energy sector have increased to $68 billion in 2023, which was 40 percent more than the average between 2016-20. However, estimates claim that India will need annual investments of anywhere between $20 billion to $27 billion until 2030 to meet its target.

India’s investments in renewable energy are now only going to increase. For example, the latest National Electricity Plan (Transmission), released last month talked about the need for an investment of Rs 9.15 lakh crore by 2032 for the central and state transmission projects. A good number from this will be required for the preparedness to make the grid robust to ensure the evacuation of 500 GW of renewable energy by 2030. Investments in new technologies batteries and Pumped Hydro Projects (PSPs) will also increase the demand to make variable renewable energy more reliable. Reports indicate that there are disparities in renewable energy investments with countries like India, receiving lesser investments at the global levels.

“Although the investment in renewable energy is growing, regional disparity is widespread. For instance, China, the European Union, and the United States attracted 84% of the total renewable energy investments in 2023. Brazil and India, combined, received over 6% of the total renewable energy investment in the same year. Investments in most other regions remained below the desired levels,” a latest report from IEEFA said.

The new COP29 has raised hopes of a wider global Climate Finance Budget which can see the expedition of the fund and technology transfer to countries like India. While Prime Minister Narendra Modi and Environment Minister Bhupendra Yadav have decided not to attend the COP29, other delegates from the countries have talked about the need for a clear definition of ‘Climate Finance’ in Baku COP29.

Besides, the global commitments for more funds under NCQG, the country is also likely to see the signing of bilateral tries for financing and technology transfer for expediting the growth of renewable energy in the country.

Moreover, another interesting thing to watch at the COP29 will be the establishment of a robust carbon market under Article 6. The creation of the same could also help in better investments in renewable energy projects in India, considered as one of the climate mitigation measures.

As per reports, despite the ambitious net-zero targets in India, the country has been only attracting around $50 billion annually for climate-related investments. This comprises public funding, private capital and others. 85% of this comes from domestic sources alone.