Climate Change and Environment 2022-23 | Indian Economy for UPSC CSE PDF Download

 Page 1


CHAPTER
07
Climate change is primarily attributed to disproportionately high cumulative emissions, 
both historical and high per capita annual emissions of greenhouse gases (GHGs) of 
the developed countries. The global nature of the problem makes India one of the most 
vulnerable regions despite having contributed only about 4 per cent in the cumulative 
global emissions (for the period 1850-2019) and maintaining its per capita emission 
at far less than the world average. While India is less responsible for the high stock 
of emissions, however, it has consistently engaged in demonstrating global leadership 
towards adopting various measures and ensuring a low-emission growth pathway with a 
commitment to the net-zero emissions goal by 2070. 
India has integrated the development goals with ambitious climate action goals, be it in 
the form of augmented solar power capacity (installed), higher energy saving targeting 
notified in P AT cycle-VII, improved green cover facilitated by Green India Mission, among 
other targeted Government actions. As part of dedicated efforts to preserve ecosystems, 
India now has 75 Ramsar sites for wetlands, in addition to various regulatory and 
promotional measures to protect and conserve mangroves. Continued river conservation 
and rejuvenation efforts are underway through Namami Gange and National River 
Conservation Plan (NRCP).
In August 2022, the country updated the Nationally Determined Contributions (NDCs) 
in line with the Hon’ble PM’s vision expressed in the 26th meeting of the Conference 
of Parties of UNFCCC. In terms of transition to renewable energy sources, India has 
already achieved its target of 40 per cent installed electric capacity from non-fossil fuels 
ahead of 2030. It has advanced the target to 50 per cent, which shall also translate to a 
significant reduction in the average emission rate. The National Hydrogen Mission and 
Green Hydrogen Policy have been introduced to enable India to be energy independent by 
2047. Its pivotal role is also reflected in India’s Long Term Low Emissions Development 
Strategy (LT-LEDS). 
The availability of adequate and affordable finance remains a constraint in India’ s climate 
actions. The country has so far largely met its requirements from domestic sources only. 
Finance is a critical input for its climate actions. Therefore, the country has scaled up its 
efforts towards mobilising private capital, including through sovereign green bonds, to 
meet climate action goals. A framework for the latter has been issued in compliance with 
International Capital Market Association (ICMA) Green Bond Principles (2021).
India’s initiatives on the international stage have been noteworthy. The country has 
actively engaged in global actions by championing the formation and strengthening of 
various intergovernmental organisations. 
CLIMATE CHANGE AND 
ENVIRONMENT: PREPARING 
TO FACE THE FUTURE
Page 2


CHAPTER
07
Climate change is primarily attributed to disproportionately high cumulative emissions, 
both historical and high per capita annual emissions of greenhouse gases (GHGs) of 
the developed countries. The global nature of the problem makes India one of the most 
vulnerable regions despite having contributed only about 4 per cent in the cumulative 
global emissions (for the period 1850-2019) and maintaining its per capita emission 
at far less than the world average. While India is less responsible for the high stock 
of emissions, however, it has consistently engaged in demonstrating global leadership 
towards adopting various measures and ensuring a low-emission growth pathway with a 
commitment to the net-zero emissions goal by 2070. 
India has integrated the development goals with ambitious climate action goals, be it in 
the form of augmented solar power capacity (installed), higher energy saving targeting 
notified in P AT cycle-VII, improved green cover facilitated by Green India Mission, among 
other targeted Government actions. As part of dedicated efforts to preserve ecosystems, 
India now has 75 Ramsar sites for wetlands, in addition to various regulatory and 
promotional measures to protect and conserve mangroves. Continued river conservation 
and rejuvenation efforts are underway through Namami Gange and National River 
Conservation Plan (NRCP).
In August 2022, the country updated the Nationally Determined Contributions (NDCs) 
in line with the Hon’ble PM’s vision expressed in the 26th meeting of the Conference 
of Parties of UNFCCC. In terms of transition to renewable energy sources, India has 
already achieved its target of 40 per cent installed electric capacity from non-fossil fuels 
ahead of 2030. It has advanced the target to 50 per cent, which shall also translate to a 
significant reduction in the average emission rate. The National Hydrogen Mission and 
Green Hydrogen Policy have been introduced to enable India to be energy independent by 
2047. Its pivotal role is also reflected in India’s Long Term Low Emissions Development 
Strategy (LT-LEDS). 
The availability of adequate and affordable finance remains a constraint in India’ s climate 
actions. The country has so far largely met its requirements from domestic sources only. 
Finance is a critical input for its climate actions. Therefore, the country has scaled up its 
efforts towards mobilising private capital, including through sovereign green bonds, to 
meet climate action goals. A framework for the latter has been issued in compliance with 
International Capital Market Association (ICMA) Green Bond Principles (2021).
India’s initiatives on the international stage have been noteworthy. The country has 
actively engaged in global actions by championing the formation and strengthening of 
various intergovernmental organisations. 
CLIMATE CHANGE AND 
ENVIRONMENT: PREPARING 
TO FACE THE FUTURE
217 Climate Change and Environment: Preparing to Face the Future
Introduction
7.1 Climate change is the long-term change in temperature and weather patterns that can 
occur due to natural reasons, but since the beginning of the industrial revolution in the 19
th
 
century, it has been predominantly due to anthropogenic activities. GHG emissions remain in 
the atmosphere for tens to hundreds of years, trapping the sun’s heat from escaping. While 
within limits, these make our earth more habitable, allowing for salubrious weather conditions, 
the enhanced emissions have led to rising temperatures with the potential to bring about sea 
level rise, change monsoon cycles and impact land systems. 
7.2 GHG emissions are the most significant threat to humanity and the inescapable reality the 
world faces. Action to reduce carbon emissions and adapt to the changing climatic conditions are 
required urgently as the world has already started to experience its consequences. For instance, 
it is estimated that by 2030, about 700 million people worldwide will be at risk of displacement 
by drought alone (U.N. SDG Portal). Thus, global warming is a reality, and so is climate change. 
Nor is there much doubt that human activity is primarily responsible for it this time, although 
climate change occurred in the distant past even when Planet Earth was scarcely populated. 
7.3 Despite agreement on the above, there can still be much divergence about what comes next 
and what to do about it when it comes to climate change. Much of the global angst associated 
with climate change is about the emission of GHGs and carbon, in particular. The more GHGs 
are emitted, the more they stay trapped in the atmosphere, accelerating global warming. Hence, 
the argument goes that if some of the cataclysmic consequences are to be avoided, then global 
warming must be arrested, slowed and, if possible, reversed. One way to strive for it is to reduce 
emissions of GHG, including carbon. Many nations pledge to reduce their net emission to zero 
by 2050. Some wish to achieve it by 2060 and by 2070.
Figure VII.1: Net Zero Pledges of countries (the Year pledged is on top of the bars)
 
2060 
2030
2035
2040
2045
2050
2055
2060
2065
2070
Pledged Net-zero Year 
2050 
2070 
2053 
2045 
Source: Emissions Gap Report 2022, UNEP
Page 3


CHAPTER
07
Climate change is primarily attributed to disproportionately high cumulative emissions, 
both historical and high per capita annual emissions of greenhouse gases (GHGs) of 
the developed countries. The global nature of the problem makes India one of the most 
vulnerable regions despite having contributed only about 4 per cent in the cumulative 
global emissions (for the period 1850-2019) and maintaining its per capita emission 
at far less than the world average. While India is less responsible for the high stock 
of emissions, however, it has consistently engaged in demonstrating global leadership 
towards adopting various measures and ensuring a low-emission growth pathway with a 
commitment to the net-zero emissions goal by 2070. 
India has integrated the development goals with ambitious climate action goals, be it in 
the form of augmented solar power capacity (installed), higher energy saving targeting 
notified in P AT cycle-VII, improved green cover facilitated by Green India Mission, among 
other targeted Government actions. As part of dedicated efforts to preserve ecosystems, 
India now has 75 Ramsar sites for wetlands, in addition to various regulatory and 
promotional measures to protect and conserve mangroves. Continued river conservation 
and rejuvenation efforts are underway through Namami Gange and National River 
Conservation Plan (NRCP).
In August 2022, the country updated the Nationally Determined Contributions (NDCs) 
in line with the Hon’ble PM’s vision expressed in the 26th meeting of the Conference 
of Parties of UNFCCC. In terms of transition to renewable energy sources, India has 
already achieved its target of 40 per cent installed electric capacity from non-fossil fuels 
ahead of 2030. It has advanced the target to 50 per cent, which shall also translate to a 
significant reduction in the average emission rate. The National Hydrogen Mission and 
Green Hydrogen Policy have been introduced to enable India to be energy independent by 
2047. Its pivotal role is also reflected in India’s Long Term Low Emissions Development 
Strategy (LT-LEDS). 
The availability of adequate and affordable finance remains a constraint in India’ s climate 
actions. The country has so far largely met its requirements from domestic sources only. 
Finance is a critical input for its climate actions. Therefore, the country has scaled up its 
efforts towards mobilising private capital, including through sovereign green bonds, to 
meet climate action goals. A framework for the latter has been issued in compliance with 
International Capital Market Association (ICMA) Green Bond Principles (2021).
India’s initiatives on the international stage have been noteworthy. The country has 
actively engaged in global actions by championing the formation and strengthening of 
various intergovernmental organisations. 
CLIMATE CHANGE AND 
ENVIRONMENT: PREPARING 
TO FACE THE FUTURE
217 Climate Change and Environment: Preparing to Face the Future
Introduction
7.1 Climate change is the long-term change in temperature and weather patterns that can 
occur due to natural reasons, but since the beginning of the industrial revolution in the 19
th
 
century, it has been predominantly due to anthropogenic activities. GHG emissions remain in 
the atmosphere for tens to hundreds of years, trapping the sun’s heat from escaping. While 
within limits, these make our earth more habitable, allowing for salubrious weather conditions, 
the enhanced emissions have led to rising temperatures with the potential to bring about sea 
level rise, change monsoon cycles and impact land systems. 
7.2 GHG emissions are the most significant threat to humanity and the inescapable reality the 
world faces. Action to reduce carbon emissions and adapt to the changing climatic conditions are 
required urgently as the world has already started to experience its consequences. For instance, 
it is estimated that by 2030, about 700 million people worldwide will be at risk of displacement 
by drought alone (U.N. SDG Portal). Thus, global warming is a reality, and so is climate change. 
Nor is there much doubt that human activity is primarily responsible for it this time, although 
climate change occurred in the distant past even when Planet Earth was scarcely populated. 
7.3 Despite agreement on the above, there can still be much divergence about what comes next 
and what to do about it when it comes to climate change. Much of the global angst associated 
with climate change is about the emission of GHGs and carbon, in particular. The more GHGs 
are emitted, the more they stay trapped in the atmosphere, accelerating global warming. Hence, 
the argument goes that if some of the cataclysmic consequences are to be avoided, then global 
warming must be arrested, slowed and, if possible, reversed. One way to strive for it is to reduce 
emissions of GHG, including carbon. Many nations pledge to reduce their net emission to zero 
by 2050. Some wish to achieve it by 2060 and by 2070.
Figure VII.1: Net Zero Pledges of countries (the Year pledged is on top of the bars)
 
2060 
2030
2035
2040
2045
2050
2055
2060
2065
2070
Pledged Net-zero Year 
2050 
2070 
2053 
2045 
Source: Emissions Gap Report 2022, UNEP
218 Economic Survey 2022-23
7.4 However, this is where things begin to get interesting. Science is not very clear on 
whether further emission reduction would necessarily guarantee a stoppage or reversal of global 
warming.  The reason being much carbon dioxide and other GHGs have already been emitted 
over the last two and half centuries of industrialisation-led economic growth in today’s advanced 
nations, principally in North America and Europe. The share of developing countries in the 
stock of GHGs (usually measured as carbon dioxide equivalent) has been minimal compared to 
developed countries. This is corroborated by the Inter-Governmental Panel on Climate Change 
(IPCC), which highlights that the challenges faced due to global warming are mainly due to 
cumulative historical and current GHG emissions of developed countries. The impact of the 
accumulation would also be iniquitous, with the developing countries not only bearing the brunt 
of climate change but also constrained by their capacity to respond to its challenges. The IPCC’s 
Sixth Assessment Report (AR6) notes that high human vulnerability global hotspots are found 
particularly in West, Central & East Africa, South Asia, Central, and South America, Small 
Island Developing States, and the Arctic. 
7.5 Further, as per the report, Asia is most vulnerable to climate change, especially to extreme 
heat, flooding, sea level rise, and erratic rainfall. Ironically, the burden of adaptation is highest 
for those who have contributed the least to global warming. That unfortunate inevitability means 
that the stock of GHGs in the atmosphere may have already set a train of events that future 
emission reduction could do very little to stop or reverse. 
7.6 Even if the answer to this question is unclear or unknown, some correctly argue that not 
doing whatever we can to make the planet more liveable and less dangerous may amount to 
criminal negligence. The problem is that the people and nations making this argument have their 
priorities correct for themselves but not for the countries yet to climb the ladder of prosperity. 
It is an enduring principle of economics that resources have competing uses and that there are 
always trade-offs. 
7.7 Today’s developing nations are therefore caught in the horns of a dilemma. How much 
resources to devote to bread-and-butter developmental priorities and to adapting to the already 
changing climate, and how much to dedicate to mitigating emissions of GHGs? Today’s 
developed nations have prospered through the unrestricted use of fossil fuels, including coal, 
crude oil, and natural gas. It is theoretically elegant to argue that switching to renewable or non-
fossil fuel energy would generate investments and jobs. Still, it seldom works out so smoothly 
in practice. 
7.8 For example, China has declared that future energy supplies, including alternative ones, 
must be secured first before dispensing with existing energy sources. Countries might find 
themselves not scrapping coal-fired power plants, and the alternatives may be held up either 
due to a lack of technology, financial resources, skilled and trained human resources, or some 
combination of all three. Countries have also learnt that the jobs that are likely to be created in the 
so-called ‘green economy’ are tilted towards skill and technology-intensive than in traditional 
industries.
1
 One may also argue that it may be easier to speak of retraining and relocating people 
than actually doing so.
1 World Economic Outlook, October 2021, Ch.1 World Economic Outlook, October 2021: Recovery During A Pandemic (imf.org)
Page 4


CHAPTER
07
Climate change is primarily attributed to disproportionately high cumulative emissions, 
both historical and high per capita annual emissions of greenhouse gases (GHGs) of 
the developed countries. The global nature of the problem makes India one of the most 
vulnerable regions despite having contributed only about 4 per cent in the cumulative 
global emissions (for the period 1850-2019) and maintaining its per capita emission 
at far less than the world average. While India is less responsible for the high stock 
of emissions, however, it has consistently engaged in demonstrating global leadership 
towards adopting various measures and ensuring a low-emission growth pathway with a 
commitment to the net-zero emissions goal by 2070. 
India has integrated the development goals with ambitious climate action goals, be it in 
the form of augmented solar power capacity (installed), higher energy saving targeting 
notified in P AT cycle-VII, improved green cover facilitated by Green India Mission, among 
other targeted Government actions. As part of dedicated efforts to preserve ecosystems, 
India now has 75 Ramsar sites for wetlands, in addition to various regulatory and 
promotional measures to protect and conserve mangroves. Continued river conservation 
and rejuvenation efforts are underway through Namami Gange and National River 
Conservation Plan (NRCP).
In August 2022, the country updated the Nationally Determined Contributions (NDCs) 
in line with the Hon’ble PM’s vision expressed in the 26th meeting of the Conference 
of Parties of UNFCCC. In terms of transition to renewable energy sources, India has 
already achieved its target of 40 per cent installed electric capacity from non-fossil fuels 
ahead of 2030. It has advanced the target to 50 per cent, which shall also translate to a 
significant reduction in the average emission rate. The National Hydrogen Mission and 
Green Hydrogen Policy have been introduced to enable India to be energy independent by 
2047. Its pivotal role is also reflected in India’s Long Term Low Emissions Development 
Strategy (LT-LEDS). 
The availability of adequate and affordable finance remains a constraint in India’ s climate 
actions. The country has so far largely met its requirements from domestic sources only. 
Finance is a critical input for its climate actions. Therefore, the country has scaled up its 
efforts towards mobilising private capital, including through sovereign green bonds, to 
meet climate action goals. A framework for the latter has been issued in compliance with 
International Capital Market Association (ICMA) Green Bond Principles (2021).
India’s initiatives on the international stage have been noteworthy. The country has 
actively engaged in global actions by championing the formation and strengthening of 
various intergovernmental organisations. 
CLIMATE CHANGE AND 
ENVIRONMENT: PREPARING 
TO FACE THE FUTURE
217 Climate Change and Environment: Preparing to Face the Future
Introduction
7.1 Climate change is the long-term change in temperature and weather patterns that can 
occur due to natural reasons, but since the beginning of the industrial revolution in the 19
th
 
century, it has been predominantly due to anthropogenic activities. GHG emissions remain in 
the atmosphere for tens to hundreds of years, trapping the sun’s heat from escaping. While 
within limits, these make our earth more habitable, allowing for salubrious weather conditions, 
the enhanced emissions have led to rising temperatures with the potential to bring about sea 
level rise, change monsoon cycles and impact land systems. 
7.2 GHG emissions are the most significant threat to humanity and the inescapable reality the 
world faces. Action to reduce carbon emissions and adapt to the changing climatic conditions are 
required urgently as the world has already started to experience its consequences. For instance, 
it is estimated that by 2030, about 700 million people worldwide will be at risk of displacement 
by drought alone (U.N. SDG Portal). Thus, global warming is a reality, and so is climate change. 
Nor is there much doubt that human activity is primarily responsible for it this time, although 
climate change occurred in the distant past even when Planet Earth was scarcely populated. 
7.3 Despite agreement on the above, there can still be much divergence about what comes next 
and what to do about it when it comes to climate change. Much of the global angst associated 
with climate change is about the emission of GHGs and carbon, in particular. The more GHGs 
are emitted, the more they stay trapped in the atmosphere, accelerating global warming. Hence, 
the argument goes that if some of the cataclysmic consequences are to be avoided, then global 
warming must be arrested, slowed and, if possible, reversed. One way to strive for it is to reduce 
emissions of GHG, including carbon. Many nations pledge to reduce their net emission to zero 
by 2050. Some wish to achieve it by 2060 and by 2070.
Figure VII.1: Net Zero Pledges of countries (the Year pledged is on top of the bars)
 
2060 
2030
2035
2040
2045
2050
2055
2060
2065
2070
Pledged Net-zero Year 
2050 
2070 
2053 
2045 
Source: Emissions Gap Report 2022, UNEP
218 Economic Survey 2022-23
7.4 However, this is where things begin to get interesting. Science is not very clear on 
whether further emission reduction would necessarily guarantee a stoppage or reversal of global 
warming.  The reason being much carbon dioxide and other GHGs have already been emitted 
over the last two and half centuries of industrialisation-led economic growth in today’s advanced 
nations, principally in North America and Europe. The share of developing countries in the 
stock of GHGs (usually measured as carbon dioxide equivalent) has been minimal compared to 
developed countries. This is corroborated by the Inter-Governmental Panel on Climate Change 
(IPCC), which highlights that the challenges faced due to global warming are mainly due to 
cumulative historical and current GHG emissions of developed countries. The impact of the 
accumulation would also be iniquitous, with the developing countries not only bearing the brunt 
of climate change but also constrained by their capacity to respond to its challenges. The IPCC’s 
Sixth Assessment Report (AR6) notes that high human vulnerability global hotspots are found 
particularly in West, Central & East Africa, South Asia, Central, and South America, Small 
Island Developing States, and the Arctic. 
7.5 Further, as per the report, Asia is most vulnerable to climate change, especially to extreme 
heat, flooding, sea level rise, and erratic rainfall. Ironically, the burden of adaptation is highest 
for those who have contributed the least to global warming. That unfortunate inevitability means 
that the stock of GHGs in the atmosphere may have already set a train of events that future 
emission reduction could do very little to stop or reverse. 
7.6 Even if the answer to this question is unclear or unknown, some correctly argue that not 
doing whatever we can to make the planet more liveable and less dangerous may amount to 
criminal negligence. The problem is that the people and nations making this argument have their 
priorities correct for themselves but not for the countries yet to climb the ladder of prosperity. 
It is an enduring principle of economics that resources have competing uses and that there are 
always trade-offs. 
7.7 Today’s developing nations are therefore caught in the horns of a dilemma. How much 
resources to devote to bread-and-butter developmental priorities and to adapting to the already 
changing climate, and how much to dedicate to mitigating emissions of GHGs? Today’s 
developed nations have prospered through the unrestricted use of fossil fuels, including coal, 
crude oil, and natural gas. It is theoretically elegant to argue that switching to renewable or non-
fossil fuel energy would generate investments and jobs. Still, it seldom works out so smoothly 
in practice. 
7.8 For example, China has declared that future energy supplies, including alternative ones, 
must be secured first before dispensing with existing energy sources. Countries might find 
themselves not scrapping coal-fired power plants, and the alternatives may be held up either 
due to a lack of technology, financial resources, skilled and trained human resources, or some 
combination of all three. Countries have also learnt that the jobs that are likely to be created in the 
so-called ‘green economy’ are tilted towards skill and technology-intensive than in traditional 
industries.
1
 One may also argue that it may be easier to speak of retraining and relocating people 
than actually doing so.
1 World Economic Outlook, October 2021, Ch.1 World Economic Outlook, October 2021: Recovery During A Pandemic (imf.org)
219 Climate Change and Environment: Preparing to Face the Future
7.9 Nobel Laureate Thomas Schelling (2005) argued that the most effective way to combat 
climate change was to let nations grow first
2
:
“If per capita income growth in the next 40 years compares with the 40 years just past, 
vulnerability to climate change should diminish, and the resources available for adaptation 
should be greater. I say this not to minimise concern about climate change but to anticipate 
whether developing countries should make sacrifices in their development to minimise the 
emission of gases that may change the climate to their disadvantage. Their best defence against 
climate change may be their own continued development.”
7.10 That economic growth would enable resource generation will come as no surprise to 
students of corporate finance. Companies generate profits and internal resources and thus fund 
their investments. For companies worldwide, the single biggest source of finance for their capital 
investments is their own resources before they turn to markets. That would work for nations too. 
7.11 Another reason why it is a realistic proposition is that securing funding from either 
developed nations or multilateral organisations is rather difficult. Public finances in developed 
countries are stretched and do not seem to have the intent to mobilise adequate resources for 
climate action in developing countries. They also do not have the appetite to provide additional 
capital to multilateral institutions for them to be able to lend more or mobilise greater resources. 
Further, the willingness and incentives-alignment of the private sector to undertake long-
gestation projects are questionable at best or non-existent at worst. 
7.12 Lastly, it does not seem so strange or irresponsible that developing countries must put 
their own growth and development aspirations ahead of their global climate obligations when 
one considers that developed countries set aside their obsessive concerns about climate change 
and global warming to burn more coal to generate electricity this year. Aiming to reduce their 
dependence on Russian crude oil and natural gas, countries in Europe had to switch to coal to 
keep their homes warm and well-lit
3
. The behaviour of European nations in 2022, eminently 
understandable, demonstrates the return of energy security as a prime requirement for countries. 
Therefore, it stands to reason that it would be no different for developing economies too.
7.13 Earlier in the year, the OECD and the Social Economics Lab at Harvard teamed up 
to understand why policies to address climate change have been difficult to implement and 
surveyed over 40,000 respondents across 20 of the world’s most carbon-emitting countries 
(representing 72 per cent of global CO
2
 emissions). The findings were striking
4
. In general, 
citizens in developed countries expressed considerable reluctance to change their lifestyles and 
habits with respect to driving, flying and eating that would contribute to reduced emissions. 
Policies to implement carbon pricing have not been easy in all European countries. France tried 
and retreated in 2018. Switzerland’s proposal was defeated in a referendum in 2021. 
2 Thomas C. Schelling (1992): ‘Some economics of global warming’, American Economic Review, March 1992 Some Economics of Global 
Warming on JSTOR 
3 ‘Germany Revives Coal as Energy Security Trumps Climate Goals’, Bloomberg, 22 December 2022 (https://www.bloomberg.com/news/
articles/2022-12-22/germany-returns-to-coal-as-energy-security-trumps-climate-goals) 
4 ‘Fighting Climate Change: International Attitudes Toward Climate Policies’, NBER Working Paper No. 30265, September 2022 (https://
www.nber.org/papers/w30265) 
Page 5


CHAPTER
07
Climate change is primarily attributed to disproportionately high cumulative emissions, 
both historical and high per capita annual emissions of greenhouse gases (GHGs) of 
the developed countries. The global nature of the problem makes India one of the most 
vulnerable regions despite having contributed only about 4 per cent in the cumulative 
global emissions (for the period 1850-2019) and maintaining its per capita emission 
at far less than the world average. While India is less responsible for the high stock 
of emissions, however, it has consistently engaged in demonstrating global leadership 
towards adopting various measures and ensuring a low-emission growth pathway with a 
commitment to the net-zero emissions goal by 2070. 
India has integrated the development goals with ambitious climate action goals, be it in 
the form of augmented solar power capacity (installed), higher energy saving targeting 
notified in P AT cycle-VII, improved green cover facilitated by Green India Mission, among 
other targeted Government actions. As part of dedicated efforts to preserve ecosystems, 
India now has 75 Ramsar sites for wetlands, in addition to various regulatory and 
promotional measures to protect and conserve mangroves. Continued river conservation 
and rejuvenation efforts are underway through Namami Gange and National River 
Conservation Plan (NRCP).
In August 2022, the country updated the Nationally Determined Contributions (NDCs) 
in line with the Hon’ble PM’s vision expressed in the 26th meeting of the Conference 
of Parties of UNFCCC. In terms of transition to renewable energy sources, India has 
already achieved its target of 40 per cent installed electric capacity from non-fossil fuels 
ahead of 2030. It has advanced the target to 50 per cent, which shall also translate to a 
significant reduction in the average emission rate. The National Hydrogen Mission and 
Green Hydrogen Policy have been introduced to enable India to be energy independent by 
2047. Its pivotal role is also reflected in India’s Long Term Low Emissions Development 
Strategy (LT-LEDS). 
The availability of adequate and affordable finance remains a constraint in India’ s climate 
actions. The country has so far largely met its requirements from domestic sources only. 
Finance is a critical input for its climate actions. Therefore, the country has scaled up its 
efforts towards mobilising private capital, including through sovereign green bonds, to 
meet climate action goals. A framework for the latter has been issued in compliance with 
International Capital Market Association (ICMA) Green Bond Principles (2021).
India’s initiatives on the international stage have been noteworthy. The country has 
actively engaged in global actions by championing the formation and strengthening of 
various intergovernmental organisations. 
CLIMATE CHANGE AND 
ENVIRONMENT: PREPARING 
TO FACE THE FUTURE
217 Climate Change and Environment: Preparing to Face the Future
Introduction
7.1 Climate change is the long-term change in temperature and weather patterns that can 
occur due to natural reasons, but since the beginning of the industrial revolution in the 19
th
 
century, it has been predominantly due to anthropogenic activities. GHG emissions remain in 
the atmosphere for tens to hundreds of years, trapping the sun’s heat from escaping. While 
within limits, these make our earth more habitable, allowing for salubrious weather conditions, 
the enhanced emissions have led to rising temperatures with the potential to bring about sea 
level rise, change monsoon cycles and impact land systems. 
7.2 GHG emissions are the most significant threat to humanity and the inescapable reality the 
world faces. Action to reduce carbon emissions and adapt to the changing climatic conditions are 
required urgently as the world has already started to experience its consequences. For instance, 
it is estimated that by 2030, about 700 million people worldwide will be at risk of displacement 
by drought alone (U.N. SDG Portal). Thus, global warming is a reality, and so is climate change. 
Nor is there much doubt that human activity is primarily responsible for it this time, although 
climate change occurred in the distant past even when Planet Earth was scarcely populated. 
7.3 Despite agreement on the above, there can still be much divergence about what comes next 
and what to do about it when it comes to climate change. Much of the global angst associated 
with climate change is about the emission of GHGs and carbon, in particular. The more GHGs 
are emitted, the more they stay trapped in the atmosphere, accelerating global warming. Hence, 
the argument goes that if some of the cataclysmic consequences are to be avoided, then global 
warming must be arrested, slowed and, if possible, reversed. One way to strive for it is to reduce 
emissions of GHG, including carbon. Many nations pledge to reduce their net emission to zero 
by 2050. Some wish to achieve it by 2060 and by 2070.
Figure VII.1: Net Zero Pledges of countries (the Year pledged is on top of the bars)
 
2060 
2030
2035
2040
2045
2050
2055
2060
2065
2070
Pledged Net-zero Year 
2050 
2070 
2053 
2045 
Source: Emissions Gap Report 2022, UNEP
218 Economic Survey 2022-23
7.4 However, this is where things begin to get interesting. Science is not very clear on 
whether further emission reduction would necessarily guarantee a stoppage or reversal of global 
warming.  The reason being much carbon dioxide and other GHGs have already been emitted 
over the last two and half centuries of industrialisation-led economic growth in today’s advanced 
nations, principally in North America and Europe. The share of developing countries in the 
stock of GHGs (usually measured as carbon dioxide equivalent) has been minimal compared to 
developed countries. This is corroborated by the Inter-Governmental Panel on Climate Change 
(IPCC), which highlights that the challenges faced due to global warming are mainly due to 
cumulative historical and current GHG emissions of developed countries. The impact of the 
accumulation would also be iniquitous, with the developing countries not only bearing the brunt 
of climate change but also constrained by their capacity to respond to its challenges. The IPCC’s 
Sixth Assessment Report (AR6) notes that high human vulnerability global hotspots are found 
particularly in West, Central & East Africa, South Asia, Central, and South America, Small 
Island Developing States, and the Arctic. 
7.5 Further, as per the report, Asia is most vulnerable to climate change, especially to extreme 
heat, flooding, sea level rise, and erratic rainfall. Ironically, the burden of adaptation is highest 
for those who have contributed the least to global warming. That unfortunate inevitability means 
that the stock of GHGs in the atmosphere may have already set a train of events that future 
emission reduction could do very little to stop or reverse. 
7.6 Even if the answer to this question is unclear or unknown, some correctly argue that not 
doing whatever we can to make the planet more liveable and less dangerous may amount to 
criminal negligence. The problem is that the people and nations making this argument have their 
priorities correct for themselves but not for the countries yet to climb the ladder of prosperity. 
It is an enduring principle of economics that resources have competing uses and that there are 
always trade-offs. 
7.7 Today’s developing nations are therefore caught in the horns of a dilemma. How much 
resources to devote to bread-and-butter developmental priorities and to adapting to the already 
changing climate, and how much to dedicate to mitigating emissions of GHGs? Today’s 
developed nations have prospered through the unrestricted use of fossil fuels, including coal, 
crude oil, and natural gas. It is theoretically elegant to argue that switching to renewable or non-
fossil fuel energy would generate investments and jobs. Still, it seldom works out so smoothly 
in practice. 
7.8 For example, China has declared that future energy supplies, including alternative ones, 
must be secured first before dispensing with existing energy sources. Countries might find 
themselves not scrapping coal-fired power plants, and the alternatives may be held up either 
due to a lack of technology, financial resources, skilled and trained human resources, or some 
combination of all three. Countries have also learnt that the jobs that are likely to be created in the 
so-called ‘green economy’ are tilted towards skill and technology-intensive than in traditional 
industries.
1
 One may also argue that it may be easier to speak of retraining and relocating people 
than actually doing so.
1 World Economic Outlook, October 2021, Ch.1 World Economic Outlook, October 2021: Recovery During A Pandemic (imf.org)
219 Climate Change and Environment: Preparing to Face the Future
7.9 Nobel Laureate Thomas Schelling (2005) argued that the most effective way to combat 
climate change was to let nations grow first
2
:
“If per capita income growth in the next 40 years compares with the 40 years just past, 
vulnerability to climate change should diminish, and the resources available for adaptation 
should be greater. I say this not to minimise concern about climate change but to anticipate 
whether developing countries should make sacrifices in their development to minimise the 
emission of gases that may change the climate to their disadvantage. Their best defence against 
climate change may be their own continued development.”
7.10 That economic growth would enable resource generation will come as no surprise to 
students of corporate finance. Companies generate profits and internal resources and thus fund 
their investments. For companies worldwide, the single biggest source of finance for their capital 
investments is their own resources before they turn to markets. That would work for nations too. 
7.11 Another reason why it is a realistic proposition is that securing funding from either 
developed nations or multilateral organisations is rather difficult. Public finances in developed 
countries are stretched and do not seem to have the intent to mobilise adequate resources for 
climate action in developing countries. They also do not have the appetite to provide additional 
capital to multilateral institutions for them to be able to lend more or mobilise greater resources. 
Further, the willingness and incentives-alignment of the private sector to undertake long-
gestation projects are questionable at best or non-existent at worst. 
7.12 Lastly, it does not seem so strange or irresponsible that developing countries must put 
their own growth and development aspirations ahead of their global climate obligations when 
one considers that developed countries set aside their obsessive concerns about climate change 
and global warming to burn more coal to generate electricity this year. Aiming to reduce their 
dependence on Russian crude oil and natural gas, countries in Europe had to switch to coal to 
keep their homes warm and well-lit
3
. The behaviour of European nations in 2022, eminently 
understandable, demonstrates the return of energy security as a prime requirement for countries. 
Therefore, it stands to reason that it would be no different for developing economies too.
7.13 Earlier in the year, the OECD and the Social Economics Lab at Harvard teamed up 
to understand why policies to address climate change have been difficult to implement and 
surveyed over 40,000 respondents across 20 of the world’s most carbon-emitting countries 
(representing 72 per cent of global CO
2
 emissions). The findings were striking
4
. In general, 
citizens in developed countries expressed considerable reluctance to change their lifestyles and 
habits with respect to driving, flying and eating that would contribute to reduced emissions. 
Policies to implement carbon pricing have not been easy in all European countries. France tried 
and retreated in 2018. Switzerland’s proposal was defeated in a referendum in 2021. 
2 Thomas C. Schelling (1992): ‘Some economics of global warming’, American Economic Review, March 1992 Some Economics of Global 
Warming on JSTOR 
3 ‘Germany Revives Coal as Energy Security Trumps Climate Goals’, Bloomberg, 22 December 2022 (https://www.bloomberg.com/news/
articles/2022-12-22/germany-returns-to-coal-as-energy-security-trumps-climate-goals) 
4 ‘Fighting Climate Change: International Attitudes Toward Climate Policies’, NBER Working Paper No. 30265, September 2022 (https://
www.nber.org/papers/w30265) 
220 Economic Survey 2022-23
7.14 As though these challenges are not enough, many experts also warn of the availability of 
rare earth elements (REE) and critical minerals (CM) to be the next geopolitical battleground 
as crude oil has been over the last fifty years.
5
 As we are aware, REE and CM are essential for 
generating renewable energy. The problem is that they are produced in a few countries and 
processed in even fewer countries. A globally synchronised energy transition to non-fossil fuels 
might be difficult to pull off if adequate REE and CM are not available. That would leave the 
fossil fuel-based assets stranded for many countries’ economies!
7.15 Jean Pisani-Ferry, associated with the Bruegel Institute and an advisor to the French 
Government, has begun to sound the alarm about climate change’s significant short-run 
macroeconomic costs. Citing him in his article for the International Monetary Fund’s ‘Finance 
and Development’, Daniel Yergin writes
6
,
“The economist Jean Pisani-Ferry, cofounder of Bruegel, Europe’ s leading economic think tank, 
has observed that accelerating the targets for net carbon emission reductions too aggressively 
could create much larger economic disruptions than generally anticipated—what he called 
“an adverse supply shock—very much like the shocks of the 1970s.” Such a transition, Pisani-
Ferry presciently wrote in 2021, just before the current energy crisis began, is “unlikely to be 
benign and policymakers should get ready for tough choices.” He subsequently added, in 2022: 
“Climate action has become a major macroeconomic issue, but the macroeconomics of climate 
action is far from the level of rigour and precision that is now necessary to provide a sound 
basis for public discussions and to guide policymakers adequately. For understandable reasons, 
advocacy has too often taken precedence over analysis. But at this stage of the discussion, 
complacent scenarios have become counterproductive. The policy conversation now needs 
methodical, peer-examined assessments of the potential costs and benefits of alternative plans 
for action.”
7.16 However, whether we like it or not, the climate change issue will be increasingly relevant 
and will occupy the airwaves and the attention of policymakers. Countries, even if they wait 
for financial, technological and human resources for emissions mitigation, have to take action 
to make their people resilient and adapt to climate change. So, actions on multiple fronts are 
needed, including the estimation of resources, lifestyle adjustments etc.
7.17 Here, India, considered to be one of the most vulnerable countries given its long coastline, 
monsoon-dependent agriculture, and large agrarian economy, is one of the leading examples of 
this. It has contributed only 4 per cent (until 2019) to the cumulative global emissions and its per 
capita emission is far less than the world average.
7.18 The fact that climate change is a global phenomenon and requires collective efforts has 
been widely accepted and is the basis of the commitments in the United Nations Framework 
Convention on Climate Change (UNFCCC) and its Paris Agreement. Recognising the 
differentiated responsibility of countries (in view of their role in GHG emissions) and the higher 
developmental needs of the developing countries, they call for a collective action based on the 
5 ‘The new-style energy crisis’, Daniel Yergin interviewed by Project Syndicate, July 2022 (https://www.project-syndicate.org/onpoint/new-
style-energy-crisis-by-daniel-yergin-2022-07) 
6 Daniel Yergin (2022): ‘Bumps in the Energy Transition’, Finance & Development, International Monetary Fund, December 2022 (https://
www.imf.org/en/Publications/fandd/issues/2022/12/bumps-in-the-energy-transition-yergin)