As discussions surrounding the economic impact of climate change gain momentum against the backdrop of COP28 UAE, the pervasive figure of a $35 trillion loss for the Indian economy by 2070 due to climate inaction has become a focal point of attention. The repercussions are particularly pronounced in the mid-term, with estimated economic losses surpassing $6 trillion in present value terms by 2050. This amount equates to around 6 per cent of India's gross domestic product (GDP) for that year alone. The annualised impact over the 30-year period leading up to 2050 would average 3 per cent of GDP per year.
These numbers, drawn from Deloitte's "India's Turning Point" 2021 report, find an echo in the latest Currency & Finance 2022-23 report by the Reserve Bank of India's (RBI) Department of Economic and Policy Research (DEPR). According to it, the escalating impact of climate change, driven by rising temperatures and shifting monsoon patterns in India, could exact a toll of 2.8 per cent on the country's GDP, profoundly affecting the living standards of almost half of its population by 2050.
The DEPR report cautions that in the absence of sufficient mitigation policies, India faces the prospect of annual GDP loss to the tune of 3 per cent to 10 per cent by 2100 due to the effects of climate change. These projections collectively stress on the urgent need for comprehensive strategies to address and mitigate the economic repercussions of environmental shifts.
Meanwhile, the Deloitte report surmises that the Indian GDP stands to gain $11 trillion by 2070 if it commits hard to rapid decarbonisation.
While the dominant discourse on climate change rightfully centres around the imperative shift to greener energy alternatives, it is equally crucial to recognise the significance of eco-friendly solutions driven by cutting-edge technologies. As humanity navigates the digital age, the intersection of innovation and sustainability becomes a noteworthy focus.
Is Technology Really Helping?
Information technology and the larger tech sector are undeniably the biggest pushers of sustainability goals which are geared toward the larger picture of climate change mitigation. And yet, they still have issues dating back to the Y2K era, including concerns over energy consumption, greenhouse gas emissions and electronic waste disposal. Notably, the disposal of e-waste in developing countries, including India has amplified environmental damage.
In the calendar year 2020-2021, India managed to process 3,40,000 tonne of electronic waste (e-waste). According to the Central Pollution Control Board (CPCB), the annual generation of plastic waste is on the rise, increasing by 3 per cent. Interestingly, the generation of e-waste surpasses this rate, reaching 7,10,000 tonne in 2018-19 and escalating further to 10,14,000 tonne in 2019-20. This indicates a yearly growth of 31 per cent.
However, a paradigm shift is possibly underway. Recent innovations in artificial intelligence (AI), the Internet of Things (IoT) and blockchain showcase the sector's potential for positive change. AI, when integrated with wireless communication technologies, optimises bandwidth and energy consumption, significantly reducing the carbon footprint of the telecom sector.
"In order to fulfil the aspirations of the Global South, climate finance and technology are essential." – Prime Minister Narendra Modi, at the COP28 Presidency's session on Transforming Climate Finance on 1 December, 2023
A 2021 World Economic Forum & PwC report highlights the transformative potential of digital technologies in automating and enhancing the efficiency of industrial, manufacturing and agricultural processes. It says that systems based on AI could play a pivotal role, projecting a potential 4 per cent reduction in global emissions by the year 2030. Similarly, AI can contribute to energy-efficient practices in smart cities. Blockchain applications, particularly in supply chain management and agriculture, promise enhanced sustainability as well.
"If we examine the global and Indian efforts toward achieving net zero, the technologies currently known and available cover only about half of what is required. The remaining 50 per cent of necessary technologies are either in the conceptual or prototyping stage. While some examples exist, a significant portion has yet to reach commercial scale. This underscores the imperative for increased focus on research and development to bring forth innovations that can be both built and commercialised at scale,” says Viral Thakker, Partner and Leader Sustainability and Climate, Deloitte (South Asia).
Indian tech giants like Infosys, Wipro, and HCLTech are actively pursuing ambitious net-zero targets. Meanwhile, global tech firms such as SAP and Bosch, with significant operations in the country, are not only aligning with similar objectives but are also setting even more ambitious sustainability targets for their operations in India.
Numerous startups such as Kheyti and Takachar, solely focused on environment-related endeavours, are also pushing the envelope through innovation with technology.
However, numerous experts surveyed in the Indian sustainability space told BW Businessworld that the central discourse on climate change should prioritise discussions about energy transition rather than stressing on technologies solely aimed at mitigating or reducing emissions and carbon footprint. Their rationale is rooted in the recognition that the predominant challenge arises from the continued reliance on conventional energy sources as nation’s energy consumption continues to grow and is expected to be on an upward trajectory for decades to come.