India’s robust economic growth over the past few decades has been a matter of global recognition. However, this rapid growth has often been associated with increasing stress, particularly through rising greenhouse gas (GHG) emissions. This raises concerns about the sustainability of India’s growth trajectory and its potential impact on climate change.
| Note: The 2023-24 Economic Survey of India makes an important claim: that India has decoupled its economic growth from GHG emissions. |
Relation between Environment Degradation and Economic Growth
- Historically, economic growth has been closely linked to environmental degradation because industries, transportation, and energy use drive both growth and emissions.
- However, as the global climate crisis intensifies, achieving economic growth without exacerbating environmental damage has become a critical goal, with sustainability now taking center stage.
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Understanding Decoupling
- Decoupling refers to reducing or eliminating the connection between economic growth and environmental harm, particularly GHG emissions.
There are two main types of decoupling:
- Absolute Decoupling: This is the ideal scenario where an economy grows while emissions decline. It represents a sustainable balance where living standards improve without increasing environmental harm.
- Relative Decoupling: This occurs when the economy and emissions both grow, but the economy grows at a much faster rate than emissions. While it signals progress, emissions still rise, which means the environmental pressures persist, albeit less intensively.
| Significance of Decoupling:
Decoupling economic growth from emissions is crucial for sustainable development for several reasons:
- A Path to Green Growth: It provides a way to achieve prosperity without worsening the climate crisis. Nations can improve living standards, address energy poverty, and foster economic opportunities while curbing emissions growth.
- A Middle Ground in the Green Growth vs. Degrowth Debate:
- Proponents of green growth believe that technological innovation and sustainable practices can reduce environmental harm while maintaining economic expansion.
- Advocates of degrowth, on the other hand, argue that economic growth itself drives ecological degradation and that reducing consumption is essential.
- Decoupling offers a balanced approach, acknowledging the need for growth in developing countries like India where green growth is required as millions still face low living standards and energy poverty.
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Analysis of the Economic Survey claim
- Economy-Wide Trends: Between 2005 and 2019, India’s GDP grew at an impressive compound annual growth rate (CAGR) of 7%, while emissions increased at a much slower CAGR of 4%. This indicates relative decoupling, where emissions are increasing but at a slower pace than economic growth.
- Since 1990, India’s GDP has grown at a much higher pace than the GHG emissions. Sector-Specific Insights: Agriculture and manufacturing, major contributors to emissions in India, have shown similar trends. By comparing the growth rate of sectoral Gross Value Added (GVA) to the sectoral emission growth rate, it appears that both sectors have achieved relative decoupling.
Long Road Ahead
India’s relative decoupling is a commendable achievement but falls short of absolute decoupling, which poses significant challenges due to the following reasons:
- Developing Country Dynamics: As a developing nation, India is still in the process of industrialization and urbanization. This results in increasing energy demands, which are often met by fossil fuels, leading to a rise in GHG emissions. Emissions are expected to peak only after significant economic and developmental milestones are achieved.
- Lack of Energy Efficiency: Energy efficiency improvements across industries, transport, and households remain inadequate. Outdated infrastructure, inefficient technologies, and limited awareness contribute to higher energy consumption and emissions, particularly in high-growth sectors like manufacturing and transport.
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| Global Comparison: Many developed countries have achieved some degree of absolute decoupling, but this has often come after decades of high emissions during their industrialization phase. |
As India has made ambitious climate commitments under the Paris Agreement, including achieving net-zero emissions by 2070. Achieving absolute decoupling is critical for meeting these goals and ensuring long-term environmental sustainability.
Policy Recommendations for Achieving Absolute Decoupling
To progress toward absolute decoupling, India must adopt policies and initiatives that support both economic growth and environmental preservation:
- Accelerating Renewable Energy Adoption: Expand solar, wind, and other renewable energy projects to reduce reliance on fossil fuels.
- Promoting Energy Efficiency: Improve energy efficiency in industries, transport, and households to lower emissions.
- Encouraging Green Manufacturing: Support industries in adopting cleaner production techniques and low-carbon technologies to mitigate emissions.
- Enhancing Sustainable Agriculture: Promote climate-smart agricultural practices to reduce emissions from this key sector.
- Strengthening Climate Policies: Enforce stricter regulations on emissions while incentivizing businesses to adopt sustainable practices.
- Investing in Research and Innovation: Foster innovations in green technology to decouple growth from environmental harm effectively.
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Conclusion
India’s claim of relative decoupling reflects progress but also highlights the challenges ahead. While economic growth outpacing emissions growth is a positive sign, the ultimate goal of absolute decoupling remains a distant but necessary target. Sustainable development demands that India continue its efforts to integrate economic policies with climate action, ensuring prosperity for its people and a healthy planet for future generations.
December 9, 2024
