THE GREEN PATH TO GROWTH

Syllabus:

GS-3:

  • Environment and related issues
  • Measures to tackle climate change

Why in the News?

  • India aims to achieve Viksit Bharat (Developed India) by 2047 and net-zero emissions by 2070.
  • Achieving both goals simultaneously requires a balance between economic growth and environmental sustainability. The 2025 Raisina Dialogue highlighted the need to align green policies with economic growth strategies.

THE GREEN PATH TO GROWTH

Risks of a Carbon-Intensive Economy

  • GDP Loss Due to Climate Change – If climate risks remain unaddressed, India could face a GDP loss of 2.5-4.5% by 2030, increasing to 10% by 2050 due to extreme weather events.
  • Declining Labor Productivity – Rising temperatures and extreme heat stress could lead to economic losses of $220 billion annually by 2030, as heatwaves reduce outdoor working hours and efficiency.
  • Export Penalties from Carbon Taxes – If Indian industries fail to decarbonize, carbon penalties imposed by global importers could result in export losses of $150 billion per year by 2040.
  • Dependence on Imported Energy – With 85% of crude oil and 50% of natural gas being imported, India remains highly vulnerable to global energy price fluctuations and supply chain disruptions.
  • Agricultural Disruptions and Food Security Risks – Climate change could reduce agricultural productivity, leading to a 2.8% loss in GDP by 2030, threatening rural incomes and food security.

Green Growth as an Economic Opportunity

  • Massive Job Creation Potential – According to the World Economic Forum, India’s green economy can generate 50 million jobs by 2070, offering employment opportunities in clean energy and sustainability sectors.
  • Significant Economic Gains – Green growth has the potential to add $1 trillion to India’s GDP by 2030, increasing up to $15 trillion by 2070 through sustainable industrial and energy transformations.
  • Technological Innovations Driving Growth – Investment in green hydrogen, battery storage, and carbon capture technologies will accelerate industrial progress while reducing environmental impact.
  • Enhanced Energy Security – Reducing reliance on imported fossil fuels will protect India’s economy from price volatility, ensuring long-term stability in energy supply and national security.
  • Health and Environmental Benefits – Green growth policies will reduce air pollution, lower disease burdens, and enhance workforce productivity, leading to long-term economic and social benefits.

Strengthening Renewable Energy and Infrastructure

  • Expanding Solar and Wind Energy Capacity – Achieving India’s 500 GW renewable energy target by 2030 requires major investments in solar, wind, and hybrid power projects.
  • Modernizing Power Grids for Energy Efficiency – Strengthening transmission infrastructure will help integrate large-scale renewable energy sources into the grid, reducing wastage and enhancing reliability.
  • Encouraging Public-Private Partnerships – Greater collaboration between government agencies and private investors is essential to mobilize capital and develop large-scale green energy projects.
  • Investing in Energy Storage Solutions – Large-scale battery storage and pumped hydro projects are necessary to ensure uninterrupted renewable energy supply during low production periods.
  • Advancing Carbon Capture Technologies – Developing Carbon Capture, Utilization, and Storage (CCUS) systems will help industries transition towards cleaner operations while maintaining productivity.

Challenges in Balancing Growth and Sustainability

  • Slowing Economic Growth – India’s GDP growth has witnessed a slowdown, making the target of Viksit Bharat by 2047 more challenging while increasing the pressure to accelerate industrialization.
  • High Dependence on Fossil Fuels – More than 55% of India’s electricity comes from coal, and demand is not expected to peak until 2030-2035, creating sustainability concerns.
  • Industrial Emissions and Carbon Footprint – India’s manufacturing sector, a major contributor to economic growth, remains heavily carbon-intensive, leading to higher emissions and climate-related risks.
  • Investment Deficit in Green Energy – The transition to renewable energy requires at least $290 billion in investments by 2030, which remains a major hurdle due to financial constraints.
  • Short-Term Economic Pressures – Policymakers are prioritizing immediate economic growth over sustainability, leading to a potential trade-off between short-term expansion and long-term environmental stability.

 Supporting Farmers and MSMEs for Green Transition

  • Promoting Climate-Resilient Agriculture – Farmers need access to drought-resistant crops, precision farming technologies, and sustainable irrigation systems to withstand climate-induced uncertainties.
  • Providing Green Finance for MSMEs – Small and medium enterprises require affordable credit, tax incentives, and subsidies to adopt eco-friendly manufacturing processes and sustainable technologies.
  • Implementing Carbon Pricing Mechanisms – Carbon pricing and emissions trading schemes will encourage industries to transition towards lower emissions while generating revenue for green projects.
  • Developing Green Skill Training Programs – Investing in training programs for farmers and MSME workers in renewable energy, sustainable agriculture, and green manufacturing is essential for transition.
  • Enhancing Subsidies for Green Innovations – Direct government support for solar-powered irrigation, biogas plants, and circular economy initiatives can accelerate sustainability adoption at grassroots levels.

Managing Economic Disruptions from Green Transition

  • Just Transition for Coal-Dependent States – Regions reliant on coal need worker reskilling programs, economic diversification plans, and financial assistance for transitioning to cleaner industries.
  • Compensation Models for Affected Regions – High-growth green sectors should financially support coal-dependent states through revenue-sharing mechanisms to ensure equitable economic transition.
  • Investment in Low-Carbon Growth Sectors – Encouraging capital flow into electric vehicles, hydrogen fuel production, and sustainable urban infrastructure will mitigate disruptions from fossil fuel phaseouts.
  • Ensuring Policy Stability for Investors – A clear and consistent regulatory framework will enhance investor confidence in green sectors, ensuring long-term financial support for sustainability projects.
  • Phased Transition to Avoid Economic Shocks – Gradual decarbonization strategies must balance economic stability and environmental sustainability, preventing abrupt industrial slowdowns and job losses.

 Role of International Collaboration and Innovation

  • Strengthening Global Climate Partnerships – India must engage in joint research, technology sharing, and investment collaborations with leading global players to advance green innovations.
  • Developing Green Bond Markets – Expanding sustainable finance instruments like green bonds and blended financing models will help attract international capital for renewable energy projects.
  • Enhancing Workforce Training and Skill Development – The renewable sector will need 7 million skilled workers by 2030, requiring collaborative training initiatives with global institutions.
  • Leveraging Cutting-Edge Technologies – Investing in AI-powered energy management, smart grids, and next-generation battery technologies will accelerate India’s green transition.
  • Strengthening Multilateral Cooperation for Climate Finance – International development banks like the World Bank and IMF can provide financial guarantees to de-risk investments in high-growth green sectors.

Conclusion

A well-planned green growth strategy is essential for India to achieve its Viksit Bharat and net-zero goals simultaneously while ensuring long-term economic resilience. A comprehensive and inclusive policy framework is required to balance short-term economic needs with long-term sustainability commitments.

Mains Practice Question

How can India achieve high economic growth while ensuring environmental sustainability? Suggest key policy measures to integrate green growth into development planning. (250 words)