India is the third largest carbon emitter in the world. India’s per capita energy consumption at 25 GJ, however, represents approximately a quarter of the energy required for a decent quality of life. The global trajectory to a low carbon economy that limits global warming induced climate change needs to be balanced with the developmental needs of developing countries, including India. This calls for innovative and affordable solutions.
Indian businesses are already cognisant of the risks of climate change, including adverse implications for corporate reputation including customer rejection of products and services of companies that do not demonstrate progressive environmental credentials. The economic loss in excess of $2 billion caused by the Chennai floods of 2015, an extreme climate event, the second costliest insurance event in India’s history, brought home to corporate India the possible adverse impacts of climate change.Smart businesses are seeing the opportunities in an increasingly fragile environment. They are creating new products and services, such as drought and pest resistant crops, micro irrigation solutions, big data based smart grid solutions, and renewable energy systems. Enlightened companies are also embracing the concept of the circular economy, where resources are circulated within the system releasing minimal waste into the biosphere, and focusing on sustainable supply chain management; for instance, Jaguar Land Rover’s REALCAR (REcycled ALuminium CAR) project reclaims over 50,000 tonnes of aluminium – the weight of 200,000 XE body shells in one year.
The government, meanwhile, is putting in place regulatory frameworks to measure and monitor consumption and emission. In February 2017, the Securities Exchange Board of India (SEBI) suggested that the top 500 companies adopt Integrated Reporting on a voluntary basis from FY 2017-18. The report of the Task Force on Climate-related Financial Disclosure set up by the Financial Stability Board advocates that businesses disclose material climate-related risks in their financial filings, and Indian companies like Tata Steel are already making such disclosures.
A huge body of research by public policy institutes is also emerging to offer pathways to a low carbon future. The Energy Transitions Commission is exploring how we can accelerate change towards low-carbon energy systems that enable robust economic development and limit the rise in global temperature to well below 2°C. The Commission forecasts progress on four dimensions: One, decarbonisation of power, combined with extended electrification. Two, decarbonisation of difficult to electrify activities, through routes such as fuel substitution, carbon capture and storage or use, and product substitution. Three, acceleration in the pace of energy productivity improvement, including the shift towards more service-based and digital economies, more efficient urban design, and the development of a circular and sharing economy. And finally, optimisation of fossil fuel use.
The state of the environment calls for a collaborative approach from all stakeholders. With proactive governance and enlightened corporate leadership, we may just win the battle against climate change.
Mukund Govind Rajan is chairman – FICCI Environment Committee