India under pressure to fight climate change over environmental concerns

Indian companies and authorities are coming under pressure to step up efforts to fight climate change amid rapidly rising concerns about the implications of carbon emissions for the economy, following the revelation that India is one of the three worst offending countries when it comes to environmental performance.

“The issue is very critical to Indian economy,” says Dr Satish Modh, the director of the VES Institute of Management in Mumbai. “Farming cannot be just viewed as an agricultural activity, it provides inputs to many industries.”

In the country's latest economic survey, advisors made climate change a central part of the key document produced for the Indian government by its chief economic advisor Arvind Subramanian, warning incomes in the farming sector could plummet by up to a quarter because of the effects of climate change. It highlighted that farming revenues have already stagnated over the past four years because of poor monsoon rainfall and the sector has been “in crisis”.

The government has estimated extreme weather events in India cost the country $10 billion a year. Agriculture is critical to the country's economy. It accounts for 16 per cent of India's GDP and 49 per cent of the population are dependent on agriculture for their livelihoods, according to the economic survey.

“Poor agricultural performance can lead to inflation, farmer distress and unrest, and larger political and social disaffection - all of which can hold back the economy,” according to the document. It warns that climate change could reduce annual agricultural incomes by an average of 15 per cent to 18 per cent, and by up to 25 per cent in unirrigated areas.

The findings follow India dropping 46 notches from 2016 to rank 177 out of 180 countries in the environmental performance index released by the World Economic Forum in Davos last month. Indian Prime Minister Narendra Modi, speaking in Davos, stressed that climate change was one of “the biggest threats” globally.

The effects of carbon emissions have become increasingly visible in New Delhi, with air pollution levels reaching alarming levels, at a peak towards the end of last year, forcing residents to stay indoors or only venture out wearing masks. The capital's air quality in November exceed 450 on the air quality index, on which anything over 100 is considered unhealthy, according to the Central Pollution Control Board.

Under the Paris global climate agreement, India has committed to generate at least 40 per cent of the country’s electricity from non-fossil sources in an effort to tackle climate change. Thirteen of the world’s 20 most polluted cities are in India, according to the World Health Organization.

The Indian government is now focused on growing the renewables sector, setting targets to generate 175 gigawatts from renewable energy sources by 2022, with solar power accounting for the majority of the mix, a target of 100GW, followed by wind power as the next largest source.

An expanding economy, urbanisation, and a focus on growing manufacturing activities are all contributing to India's expanding energy needs. The growth of the country makes India the third-largest carbon emitter after the United States and China.

“There's a lot of policies that are being made to overcome the challenges climate change, but in terms of implementing those policies, I don't think enough is being done on a ground level,” says Mahesh Rathod, the managing director of Tailwind Trade and Investment, based in Mumbai. “Unless stakeholders start working on those, things are looking very difficult. It's very important that we address this issue of climate change because a large chunk of India's population is dependent on agriculture and climate change will have a direct impact. It's very important that India's addresses this challenge in front of the nation very seriously, with very clear and long-term milestones.”

A boost to growth levels is vital to create more jobs, and anything that is a threat to economic prosperity is a major concern. India's economic expansion is expected to have slowed to a four-year low of 6.5 per cent in the current financial year to the end of March, according to the Central Statistics Office.

Still what is promising is some of India's biggest companies are leading the way when it comes to making efforts to tackle climate change.

Indian IT giant, Infosys is aiming to get all of its energy from renewable sources and be carbon neutral by 2018. It is the first Indian company to join the global RE100 campaign because of its commitment to use 100 per cent renewable energy for all of its electricity.

“Becoming carbon neutral is a very important goal for the company,” says Bose Varghese, the head of green initiatives at Infosys. “We are convinced that global warming and climate change are the biggest threats of the century.”

The company says its energy efficiency drive has translated to millions of dollars of savings.

Mahindra, a major Indian conglomerate which manufactures vehicle, is also taking a raft of initiatives to reduce its production of greenhouse gases, including increasing its use of renewable energy.

Mahindra says that it is the first Indian company to launch its own carbon pricing programme, a measure that has been adopted by a number of multinationals globally, including Google and Unilever.

“The more India invests on climate change today, the more developed it will be tomorrow,” says Zuzer Lucknowala, the director of Party Cruisers, one of the biggest wedding and events companies based in Mumbai. “Understanding climatic change is complex” for businesses, as companies try to focus on generating profits and grapple with other more direct economic factors.

“The Indian government will have a critical role to play in these challenges and providing a greener environment.”

Mr Rathod says that small and medium sized companies in particular are in industries that generate a lot of pollution and “need support and education” from the government to make changes.

“A lot of companies in India can't afford it and they need support when it comes to getting out of these old processes,” he says. “You need to have a solution for them.”

There have been some concerns that perhaps not enough is being done at all levels to address the issue.

In India's Union Budget, presented by finance minister Arun Jaitley on Thursday, climate change was something that was largely neglected, despite the emphasis of the Budget in helping India's rural and farming communities, ahead of general elections in 2019.

However, with awareness of the potential economic impact and the discussion around climate change rapidly gathering pace in India, calls for steps to address the issue are only set to increase, leading to mounting pressure for swift action by businesses and the government.