Report: Is India’s Green Recovery Green Enough ?

Report: Is India’s Green Recovery Green Enough ?

While India has committed more public money than any other economy to date — at least $122 billion — to support the energy sector since the outbreak of the Covid-19 crisis in early 2020, a new report on Monday showed that the government's stimulus is a 'mixed bag' for the country's energy transition. The government of India continues to promote a greener recovery by committing $35 billion (28.5 percent) of the $122 billion in energy-related funding to renewables, almost twice the $18 billion (15 percent) flowing to fossil fuels.

However, the largest proportion of support for energy by far is being spent on policies categorized as 'other energy', some $69 billion (56.5 percent), with little public information available on whether this recovery funding is going to policies that promote sustainable energy, or energy types and sectors with high carbon emissions.

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In a joint report called 'How Green is India's Stimulus for Economic Recovery?', the Institute for Energy Economics and Financial Analysis (IEEFA) and the International Institute for Sustainable Development (IISD) reviewed energy-related policies from the Energy Policy Tracker (EPT) to determine what India can do to promote a greener economy recovery in 2021.

"According to the EPT, India has committed more public money to the energy sector than any other economy globally since January 2020," said lead author Vibhuti Garg, IEEFA Energy Economist, Lead India. "We estimate that around 22 percent of the value of these public money commitments is primarily to deal with the impact of Covid-19 and the rest is to meet the government's ongoing policy objectives on energy security, air pollution, and climate change," Garg said.

India has committed more public money to the energy sector than any other economy. Unsplash

The Energy Policy Tracker (EPT) is a database developed by the IISD and other organizations that use official government sources and other publicly available information to track energy-related Covid-19 recovery policies across major global economies. The EPT, which is updated frequently, last on March 3, shows that 31 major economies have pledged over $686 billion to support energy through new or amended policies since January 2020 (energy-related funding from President Joe Biden's new $1.9 trillion American Rescue Plan is not yet included).

Of this overall amount, $274 billion (40 percent) is committed to fossil fuels, $259 billion (38 percent) to renewable energy, and $153 billion (22 percent) to 'other energy', such as nuclear power, first-generation biofuels or policies that support multiple sources of energy. By comparison, more than half (56.5 percent) of all public money committed to energy in India is supporting 'other energy'.

"We are concerned that India's other energy policies may disproportionately benefit fossil fuels, despite the fact they are not targeted at fossil production or consumption exclusively," said Garg.

At the moment, India's policies for other energy largely support transmission and distribution companies in the power sector. For example, the liquidity support to discoms to build infrastructure, modernize the grid but primarily to settle payment dues to generators will support the dominant fossil fuels generators more than renewable energy.

Also, state-level fuel policies, transport policies, development of power projects, and transmission infrastructure are categorized as other energy. "If a state promotes more incumbent fossil fuels than emerging clean technologies under such programs, it is again likely to benefit the fossil fuel sector more," added Garg. The report points out that India's energy-related commitments in the EPT are only an 'at least' value and could, in fact, be much higher than $122 billion. (IANS/SP)

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