COP27: The challenges ahead to achieve net-zero carbonization

THE UNITED NATIONS’ ANNUAL CLIMATE CHANGE CONFERENCE (COP27)

INTRODUCTION

?The world is at a pivotal point in determining the future of the planet. On November 6, 2022, the UN annual climate change conference (UNFCCC but popularly known as COP27) commenced in Sharm el-Sheikh, Egypt. The key aim of ensuring full implementation of the?Paris Agreement COP27?was centered on the themes of decarbonization, the energy transition, innovative solutions, pro-climate finance, nature and biodiversity, and more. Though leaders focused on accelerating the net-zero transition, for the full agenda and got up to speed on the latest insights on climate change, sustainability, and the net-zero transition. To ensure a truly inclusive COP, digital participation has been enabled to complement the physical COP negotiations. A multitude of events is webcasting.

Detailed discussions at COP27 began near the end of a year that has seen devastating floods and unprecedented heat waves, severe droughts, and formidable storms, all unequivocal signs of the unfolding climate emergency. At the same time, millions of people throughout the world are confronting the impacts of simultaneous crises in energy, food, water, and cost of living, aggravated by severe geopolitical conflicts and tensions. In this adverse context, some countries have begun to stall or reverse climate policies and doubled down on fossil fuel use. COP27 is also taking place against the backdrop of inadequate ambition to curb greenhouse gas emissions. According to the UN’s Intergovernmental Panel on Climate Change, CO2 emissions need to be cut by 45% by 2030, compared to 2010 levels to meet the central Paris Agreement goal of limiting temperature rise to 1.5 degrees Celsius by the end of this century. This is crucial to avoid the worst impacts of climate change, including more frequent and severe droughts, heatwaves, and rainfall.

A report?published by UN Climate Change ahead of COP27 shows that whilst countries are twisting the curve of global greenhouse gas emissions sliding, efforts lack adequate limit global temperature rise to 1.5 degrees Celsius by the end of the century. Since COP26 in Glasgow, only 29 out of 194 countries submitted tightened national plans. With the Paris Rulebook basically resolved to COP26 in Glasgow last year, the litmus test of this and every future COP is how far deliberations are accompanied by action. Everybody, every single day, everywhere in the world, needs to do everything they possibly can to avert the climate crisis,” said UNCC Executive Secretary Simon Stiell. “COP27 sets out a new route for a new era of application: where outcomes from the formal and informal process truly begin to come together to drive greater climate growth and accountability for that progress,”.

Three critical arears at COP 27

The UNCC Executive Secretary in his opening address requested governments to focus on three critical areas at COP27. The first is a transformational shift to the implementation of the Paris Agreement and settling the discussions into a concrete plan of action. The second is cementing progress on the critical workstreams of mitigation, adaptation, finance, and loss and damage, to advance steps to address adequate finances especially to deal with the impacts of climate change. The third is advancing the release of the principles of transparency and accountability throughout the UN Climate Change process.

COP27 Presidency vision based on human needs

Sameh Shoukry, Egyptian Minister of Foreign Affairs and COP27 President said: “We’re gathering this year at a time when global climate action is at a watershed moment. Multilateralism is being challenged by geopolitics, spiraling prices, and growing financial crises, while several countries battered by the pandemic have barely recovered, and severe and depleting climate change-induced disasters are becoming more frequent.” Further, the Egyptian COP27 Presidency has delineated an ambitious vision for this COP that puts human needs at the heart of our global efforts to address climate change. The Presidency intends to focus the world’s attention on key elements that address some of the most fundamental needs of people everywhere, including water security, food security, health, and energy security. COP27 initiates a unique opportunity in 2022 for the world to unite, to make multilateralism work by reestablishing trust and coming together at the highest levels to increase our ambition and action in fighting climate change. COP27 must be remembered as the ‘Implementation COP’ – the one where we restore the grand bargain that is at the centre of the Paris Agreement.”

HIGHLIGHTS OF COP27 AND TAKE AWAY

After a procedural opening to enable work to begin quickly, Monday and Tuesday were devoted to the World Leaders Summit with the presence of Royalty and more than 100 Heads of State or Government. The World Leaders Summit provides all Heads of State or Government with a chance to set the stage for COP27. These two days included the?Sharm el-Sheikh Climate Implementation Summit?and will feature important?High-Level Side Events.???

Some of the key events

A number of key Ministerial and other events around current climate change efforts took place during the COP. These include a first ministerial round table on pre-2030 ambition and continued discussions on the global stocktake – a process for countries and stakeholders to observe their collective making progress toward meeting the goals of the Paris Agreement compared to the present scenario. These discussions got underway at the Bonn Climate Change Conference in June 2022 and picked up from the point which was unresolved at COP27.?Jointly, all events provide Ministers and participants with a space to have frank and open discussions on progress made to date. A High-Level Segment mostly attended by Ministers will take place in the second week of the COP, from 15-18 November 2022.

The strategy of climate action

Climate Action undertaken by a diversity of stakeholders working to support the implementation of the Paris Agreement was exhibited during the entire COP27. The COP27 Presidency hosted a series of events in thematic days from 9-17 November which will highlight practical solutions to the challenge of climate change and explore approaches to immediately scale up the implementation of these solutions in key sectors with all stakeholders. Under the guidance of two high-level climate Champions., Nigel Topping (UK) and Mahmoud Mohieldin (Egypt) progress, plans, and targets for a range of sectors and initiatives were presented in dozens of events in the Climate Action Zone in COP. These events are focused on the overarching theme of turning climate pledges into climate action in pursuit of net-zero emissions, enhanced resilience for the most vulnerable, and aligning financial flows with these goals. Further, UNFCCC supported sectoral initiatives in sectors such as sports, fashion, tourism, events, and aviation and will announce higher ambition and increased collaboration to align these sectors with the 1.5-degree Celsius target of the Paris Agreement.

?UNDER THE BANNER TOGETHER 4 TRANSPARENCIES

In collaboration with a wide range of stakeholders, UNCC is coordinating a series of special events at COP27 in Sharm el-Sheikh under the banner “Together 4 Transparency”. This two-week series from 8–17 November will feature a wide range of activities and events covering all aspects of transparency of climate action and support. It will celebrate achievements made over the past 30 years, showcase successes and best practices, and pave the way for the full implementation of the Enhanced Transparency Framework (ETF) of the Paris Agreement. Regular reporting by countries of transparent information on greenhouse gas emissions and removals, climate actions and results achieved, as well as the level of support needed and received from all governments, is essential to measure progress towards the Paris Agreement goal of holding the rise in the global average temperature to as close to 1.5 °C as possible above pre-industrial levels. Transparency also helps build mutual trust and accountability and encourages countries to increase their climate ambition over time and track global progress toward the Paris Agreement goals. It also gives governments the information they need to track the implementation of national climate action plans (NDCs), and empowers them to make more informed decisions, set meaningful targets, and attract financial, technological, and capacity-building support, particularly for developing countries. The series?opened with a special ceremony on 8 November, feature a high-level event on 10 November, and wrap up with a closing ceremony on 17 November. Events will be organized in three tracks: an evolving transparency landscape, transparency perspectives, and catalysts for developing country implementation.

Background on Transparency

The foundations of the current transparency framework date back almost 30 years. Across the evolving measurement, reporting, and verification (MRV) arrangements, countries have gained considerable experience in reporting, including in-depth knowledge on domestic greenhouse gas emissions and removals, actions to reduce emissions and adapt to climate change impacts, as well as means of implementation. The experiences gained from the MRV arrangements under the convention have helped governments transition to the Enhanced Transparency Framework under the Paris Agreement, under which countries are required to submit their first Biennial Transparency Report by the end of 2024. Enhanced support should be ensured for developing countries to participate in the ETF.

?Real World Actors Share Progress and Strengthen Resolve at Opening of Global Climate Action Agenda at COP27

Businesses, investors, cities, states, regions, and civil society are powering rapid changes in the real economy and already seeing the benefits. COP27 President Shoukry announced the?Sharm el-Sheikh Adaptation Agenda?– a comprehensive, shared agenda to rally global action around 30 adaptation outcomes that are needed to address the adaptation gap and achieve a resilient world by 2030. To take stock of progress, the High-Level Champions will publish the Yearbook of global climate action 2022.?

The COP26 and COP27 Presidents, the UNFCCC Executive Secretary, and the UNCC High-Level Champions for COP26 and COP27, Nigel Topping and Dr. Mahmoud Mohieldin, opened ?the Global Climate Action Agenda at COP27 with their event “Making Good On Promises." Forming part of the Sharm el-Sheikh Implementation Summit, the COP27 High-Level Event on Climate Action includes Sameh Shoukry, COP27 President, Minister of Foreign Affairs of the Arab Republic of Egypt; UN Climate Change Executive Secretary, Simon Stiell; as well as industry, cities and civil society leaders, such as Sophia Kianni and Yuriko Koike. At the event, COP27 President Shoukry?announced the Sharm el-Sheikh Adaptation Agenda to enhance resilience for 4 billion people living in the most climate-vulnerable communities by 2030. The Adaptation Agenda is the first comprehensive global plan to rally both State and non-State actors behind a shared set of 30 Adaptation Outcomes that are required by 2030 across food and agriculture, water and nature, oceans and coastal, human settlements and infrastructure systems as well delivery across key enablers of as planning and finance.

In step with COP27’s focus as the ‘Implementation COP’, the event also explores how non-State actors are ‘making good on promises to achieve a resilient, net zero future. It is staged in the wake of several reports on the state of climate action, which starkly convey the need to address the current implementation gap with honesty, delivery, and accountability. To take stock of progress towards this, the champions released their ?“ Yearbook of Global Climate Action 2022”. The Yearbook reports annually on the progress of non-State entities towards their climate goals and is proof that – while obstacles remain – businesses, investors, cities, states, and regions are building resilience and powering rapid changes in the real economy.

The latest edition of the Yearbook demonstrates that there are signals of change, despite the finding that the world is nowhere near on track toward a 1.5°C goal. Action by businesses, investors, cities, states, regions, and civil societies continue to increase, with 34 Race to Resilience partners from 139 countries taking action to build the resilience of 2.9 billion people, while 26 Race to Zero partners have mobilized more than 11,000 non-State actors from 116 countries taking action to halve global emissions by 2030 and achieve net zero by mid-century at the latest.?

What’s more, there is evidence that climate action is becoming better distributed across the globe, with the?Global Climate Action Portal?recording a jump of 78% in actors from Asia-Pacific and 67% from Africa. These figures have been boosted by this year’s three Regional Climate Weeks, which?induced approximately 8,000 participants after a return to an in-person format in 2022. To drive regional action deeper, the Champions?also used their opening event to preview results from the five Regional Finance Forums, , organized by the COP27 Presidency, UN Regional Commissions, and the Champions, to accelerate finance to projects in developing economies that reduce emissions, adapt to the impacts of climate change, build climate resilience, and advance the 2030 Sustainable Development Goals. A full analysis of the 100+ projects presented at the Forums launched to coincide with Finance Day, but key findings will be presented in today’s event of what is already a $120 billion investment opportunity, which is growing exponentially.

If this COP is about implementation, it must also necessarily focus on accountability, in order to fully address the finance and implementation gaps at the speed and scale required. Today’s Yearbook – capturing the vast array of non-State action under the Marrakech Partnership – is one way of holding all actors to account for the promises they have made. Accordingly, it will serve as a vital contribution to both the Global Stocktake?and the work of the two High-Level Expert Groups on Net-Zero Emissions Commitments of Non-Zero Emissions Commitments of Non-State Entities?and the High-Level Expert Group on Climate Finance.

UN Climate Change Executive Secretary, Simon Stiell, said: “Building confidence in a faster pathway to solutions means raising ambitions, scaling projects, and channeling more money to developing nations. I am delighted therefore to see that this Yearbook of Global Climate Action highlights what needs to happen to reach the 1.5 °C Paris goal, and its goal of resilience.”

UN?Climate Change High-Level Champion for COP26, Nigel Topping, said: “Businesses, investors, cities, states, regions and civil society are powering rapid changes in the real economy and already seeing the benefits, the imperative to go faster has never been stronger. Governments should be encouraged by this progress and respond by creating the conditions to collaborate with non-State actors so we can all go further. While the progress is extraordinary, especially when we look at the transformation of the energy and transport sectors, non-State actors must double down and deliver in response to heightening impacts.”

UN Climate Change High-Level Champion for COP27, Dr. Mahmoud Mohieldin, said: “It is imperative to accelerate global climate action through emissions reduction, scaling-up adaptation efforts and enhancing flows of appropriate finance. This has to occur within a more comprehensive agenda for sustainable development that addresses poverty, hunger, and unemployment and enhances women's empowerment. The implementation of urgent, ambitious, impactful and transformative action is necessary to support vulnerable communities, achieve a resilient future and carbon neutral transformation, in the context of just transition.”

The Governor of Tokyo, Yuriko Koike, said: “There is truly no time to lose when it comes to climate change. All actors, including the national government, local governments, and companies, must immediately accelerate concrete actions. The Tokyo Metropolitan Government is accelerating its efforts to halve carbon emissions by 2030 and to reach zero emissions by 2050, including the mandatory installation of solar power generation equipment and promoting the broader use of green hydrogen. Time to act. Let’s walk together toward a sustainable future for cities and for the world.”

?Climate Pact – Key Outcomes from COP26

?Nations adopted the Glasgow Climate Pact, aiming to turn the 2020s into a decade of climate action and support. The package of decisions consists of a range of agreed items, including strengthened efforts to build resilience to climate change, curb greenhouse gas emissions, and provide the necessary finance for both. Nations reaffirmed their duty to fulfill the pledge of providing 100 billion dollars annually from developed to developing countries. And they collectively agreed to work to reduce the gap between existing emission reduction plans and what is required to reduce emissions, so that the rise in the global average temperature can be limited to 1.5 degrees. For the first time, nations are called upon to phase down unabated coal power and inefficient subsidies for fossil fuels. As part of the package of decisions, nations also completed the Paris Agreement’s rulebook as it relates to market mechanisms and non-market approaches and the transparent reporting of climate actions and support provided or received, including for loss and damage. Below are some more in-depth explanations of a selection of the key outcomes under the Paris Agreement: Finance for climate adaptation, transparency, and market mechanisms and non-market approaches. At COP26, Nations reached new agreements for market mechanisms, essentially supporting the transfer of emission reductions between countries while also incentivizing the private sector to invest in climate-friendly solutions. Simultaneously, Parties decided on non-market approaches enabling stronger cooperation between countries on mitigation and adaptation.

COP26: what did countries agree with regard to market mechanisms and non-market approaches under the Paris Agreement?

Countries agreed to the implementing rules for three instruments that help Parties cooperate to meet their intended emission reductions and adaptation aims as captured in their national climate action plans under the Paris Agreement (Nationally Determined Contributions, or NDCs). The first two of these instruments involve cooperation which will result in the transfer of mitigation of emissions between countries, from the country that achieved the reduction to the country that will acquire that reduction. The instruments are designed to enable and incentivize private sector involvement. Under non-market approaches, countries are enabled to work together to achieve mitigation and adaptation, as well as sustainable development and poverty reduction. Decisions on implementation rules were adopted for all three instruments: Firstly, guidance was adopted for cooperative approaches – where Parties in bilateral arrangements recognize the transfer of emission reductions between them. This enables mitigation programmes like emission trading systems in countries to link to each other, Secondly, rules, modalities, and procedures were adopted for the new UNFCCC Mechanism, which credits emission-reducing activities. This enables a company in one country to reduce emissions in that country and have those reductions credited so that it can sell them to another company in another country. That second company may use them for complying with its own emission reduction obligations or to help it meet net zero, and Thirdly, Parties adopted a work program to support non-market approaches being implemented between Parties. The work program helps different countries and their institutions and stakeholder develop cooperation in a number of areas, such as the development of clean energy sources.

?Final outcome of the Durban Conference on Climate Change

??"The Durban Conference is a turning point in the climate change negotiations as even though developing countries have won victories, these have come after much acrimony and fight. At Durban, the world has agreed to urgent action, but now it is critical that this action to reduce emissions must be based on equity. India's proposal on equity has been included in the work plan for the next conference. It is clear from this conference that the fight to reduce emissions effectively in an unequal world will be even more difficult in the years to come. But it is a conference, which has put the issue of equity back into the negotiations. It is, for this reason, an important move ahead."?

Decision: Form and schedule of future agreement agreed?

The conference finally closed after a grueling night of negotiations. The most contentious issue over the past few days was if the Conference would agree to fast-track work on a legally binding agreement, which would cover all parties. Countries like India were concerned that this move would undermine the principle of equity and differentiation and that they would also be required to take the same level of commitment to reducing emissions as the already industrialized countries. The final decision is carefully crafted to keep in mind these concerns. The Durban conference agrees to launch "a process to develop a protocol, another legal instrument or an agreed outcome with legal force". It agrees that this work should be completed by 2015 so that this new agreement or outcome can be implemented in 2020. Therefore, countries like India, concerned that a new legal instrument, which would require them to take binding commitments, have won a victory.

Decision: Will equity be the foundation of any agreement?

The conference also agrees that the process should raise the 'level of ambition" so that the world can close the emission gap and keep below the 2°C or 1.5°C average temperature increase. This would keep the world on track from avoiding catastrophic impacts. The key issue is to ensure that equity will be the basis of deciding the emission reduction targets of the future. It is clear from the Durban conference that the industrialized countries would like to negate the principle of equity and sidestep it so that they can shift the burden of transition to the emerging countries that need their right to development. This issue was articulated strongly by India but met with resistance. Now the challenge is to ensure that this remains the foundation of future negotiations as well.? India has managed to bring the issue of equity back on the table. The decision on the Long-Term Cooperative Action (LCA) accepts that the issue of equitable access to sustainable development, as demanded by India, must be debated and reported back to the next COP.??

Decision: Kyoto Protocol's second commitment period agreed upon?

The conference also agreed on the next phase of the Kyoto Protocol -- the only legal instrument in force to combat climate change. It also set a clear target of reductions of 25-40 percent below 1990 levels by 2020 for the group of countries that are collectively known as Annex 1 parties -- listed for their contribution to the stock of greenhouse gases in the atmosphere. This second commitment period under the Kyoto Protocol would begin on January 1, 2013, till December 2017-2020. This is a big victory for the developing countries, which were demanding that this Protocol must continue. The next big challenge will be to ensure that the loopholes -- accounting methods, which allow for double-counting and weak domestic action -- are taken care of and closed.

?Decisions: Green Climate Fund set up, but with no money?

The Green Climate Fund has also been agreed upon. The most contentious issue in the setting up of the fund was its governance and to whom the fund would be accountable. It has been agreed that the fund will function under the conference of parties to the climate convention; it will have 24 members, equally from developed and developing with representatives from small island nations and least developed countries; co-chairs will also be similarly divided. Because of opposition from key developing countries, the World Bank or the Global Environmental Facility have not been charged with the functions of running the fund.? But as the fund has no real or promised money, it will be an empty shell and a shallow victory. The industrialized countries want the private sector to contribute, but nothing is clear, about where the much-needed funds for mitigation and adaptation will come from.

The new imperative for green commodities

?The energy and materials transition is reshaping the strategic toolbox of commodity producers. Seven actions can help them master the transition. Developing and deploying climate technologies is critical for the world’s net-zero agenda. Growth could await businesses willing to innovate quickly and to collaborate across value chains.

?Decarbonizing India: Charting a pathway for sustainable growth

This will be a decisive decade. This will be a decisive decade. With intentional action, India can accelerate decarbonization at scale while pursuing economic growth. With intentional action, India can accelerate decarbonization at scale while pursuing economic growth. At COP26,?India announced its ambition to become a net-zero emitter by 2070—an important milestone in the fight against climate change. Despite low per-capita emissions (1.8 tons CO2), India is the third-largest emitter globally, emitting a net 2.9 gigatons of carbon dioxide equivalent (GtCO2e) every year as of 2019. The bulk of these emissions (about 70 percent) is driven by six sectors: power, steel, automotive, aviation, cement, and agriculture. ?Four cross-cutting decarbonization opportunities: green hydrogen; carbon capture, usage, and storage (CCUS); natural climate solutions; and material circularity. We modeled outcomes on India’s net-zero journey along two scenarios: first, the current line-of-sight (LoS) scenario with current (and announced) policies and foreseeable technology adoption; and second, the accelerated scenario with far-reaching policies like carbon pricing and accelerated technology adoption, including technologies like CCUS.

India has the potential to create 287 gigatons of carbon space for the world.?This amounts to almost half of the global carbon budget for an even chance of limiting warming to 1.5°C. The current pace of emissions intensity reduction is insufficient for India’s emissions curve to bend with the expected growth outlook. In the LoS scenario, India could reduce annual emissions from a historical trajectory of 11.8 GtCO2e to 1.9 GtCO2e by 2070, a 90 percent reduction in economic emissions intensity compared with 2019. It can reach 0.4 GtCO2e by 2050 in the accelerated scenario, with a potential to get to its net zero by 2070 commitment through new technology developments (such as direct air capture) over the next few decades.

LoS scenario reductions are challenging, and accelerated scenario reductions are even more so.?There are emerging tailwinds in the form of reducing costs of renewables and electric vehicles (EVs), and the progressive policies being implemented (for example, the implicit carbon tax on transportation fuels of $140 to $240/ton CO2e) are helping the electrification of mobility. Yet, several other actions with significant scale-up potential are needed. For example, renewable capacity addition needs to increase from ten gigawatts (GW) to 40–50 GW per year; hydrogen cost reduction and a carbon price of $50/ton CO2?are needed by 2030 to make green steel competitive (could lead to 211 metric tons (Mt) of steel capacity being built on the low-carbon hydrogen route instead of the coal route by 2045); battery costs have to decline by 40 percent by 2030 and green hydrogen by two-thirds by 2035; a nationwide rollout of charging infrastructure is needed; farmers have to adopt new practices for rice cultivation; targets for circularity have to be met and higher targets set.

There is an urgency to prepare India for orderly and accelerated decarbonization within the current decade.?Over three-fourths of India in 2050 (and 80-plus percent of the India of 2070) is yet to be built. Developing this robust infrastructure in India will multiply demand across sectors: power (eightfold), steel (eightfold), cement (threefold), auto (threefold), and food (twofold). If policies are set in place to create the right demand signals within this decade, then India could add low-carbon capacities in the next two decades thereafter. For example, a carbon price of $50 per Mt by 2030 makes green steel competitive (could lead to 211 Mt of steel capacity being built on the low-carbon hydrogen route instead of the coal blast furnace route by 2045). India benefits from an orderly transition.?India’s transition from thermal power to renewables is expected to decrease the average cost of power supply from INR 6.15 per kilowatt-hour (kWh) in the financial year 2020 to INR 5.25 per kWh and INR 5.4 per kWh by 2050 in the LoS and accelerated scenarios, respectively.?Sustainable-farming practices could help generate additional farmer income of INR 3,400 per hectare/year in the LoS scenario, which could increase to INR 4,800 per hectare/year in the accelerated scenario. India may save a cumulative $1.7 trillion in foreign exchange, which may otherwise be spent on energy imports until 2070. In addition, India will have the opportunity to build itself right the first time, minimizing asset stranding. Finally, if India can start manufacturing in newer technologies, it has the potential to be a world leader in batteries, electrolyzes, green steel, and other areas.

Energy system shifts.?Fossil fuels, which comprise 75 percent of India’s commercial energy mix today, decline to one-half in the LoS scenario and to one-sixth in the accelerated scenario by 2050. In the accelerated scenario, over 60 percent of India’s refining capacity, 90 percent of its coal mining capacity, and 100 percent of its coal power generation would not be needed. Tax collections from auto fuel could decline to $36 billion by 2050 (from $85 billion currently). Ensuring resources are used appropriately will be vital. For example, the biomass currently being used by households for cooking, which in the future can be used for thermal-power generation, might potentially need to be directed to hard-to-abate sectors like cement. Pressure on land systems.?In the accelerated scenario, growth and decarbonization combined may require 45 million more hectares of land than is available, of which nearly ten million hectares would be needed for renewable power and eight million for carbon sinks and forests. Innovative land optimization techniques such as maximizing barren land use for renewable power, vertical urbanization, and improved agricultural productivity would be needed to ensure sufficient land for decarbonization. Moderate impact on household spending and jobs.?A critical consideration is the impact of the accelerated decarbonization on Indian household spending and jobs. We estimate that by 2040, the increases in housing costs resulting from decarbonization would, for the most part, be balanced by the limited impact on food costs (excluding the impact on yields from direct climate change) and a decrease in the costs of energy and transport, assuming an orderly transition. If the transition is disorderly (that is, if the initiatives are carried out at the wrong time or incorrectly), the economically disadvantaged would suffer a more adverse impact. Accelerated decarbonization could transform over 30 million jobs (24 million new jobs could be created while six million existing jobs could be lost) by 2050. While important, the scale of workforce reallocation may be smaller than that from other macro trends (for example, 60 million new workers entering the workforce by 2030). That said, specific communities (such as coal mining and associated enterprises in Eastern India) could be adversely impacted, requiring support, reskilling, and alternative industrial development in particular areas.

?Large funding needed (3.5–6 percent of GDP), frontloaded, but ‘in the money.’?India may need an estimated $7.2 trillion of green investments until 2050 to decarbonize in the LoS scenario and an additional $4.9 trillion in the accelerated scenario. Fifty percent of the investments needed for abatement between the LoS and the accelerated scenario is in the money, particularly across the renewable energy, auto, and agriculture sectors; other sectors would likely need policy support from the government. The net spend (CAPEX minus OPEX) will need to be frontloaded. As an illustration, net operational savings, of $1.8 trillion would be needed from 2030–40 and $600 billion from 2040–50 between the LoS and accelerated scenarios. All stakeholders need to come together and act now to accelerate India’s decarbonization. The government could provide policy and regulatory support to make projects across sectors economically viable. These could include providing incentives for the use of EVs and fuel cell EVs by balancing taxation, simplifying regulations for authorizing and installing new power and grid installations, creating demand signals for higher-cost green materials like steel, and generating support for localizing electrolyze manufacturing. Support would also be required to ensure a just transition that minimizes impact on low-income households. These actions need to happen in the right sequence to avoid energy shortages, price increases, and transition disorderliness. Achieving technological breakthroughs would require consistent public and private investment. It would also require willingness among business leaders and policy makers to adopt new technologies, for example, long-duration storage technologies to capture the seasonality of renewable sources, advancement in fuel cell technology, and improvements in recycling technologies.

Against this backdrop, we propose the following ten actions to accelerate India's decarbonization: Lay out a detailed medium-term decarbonization plan?with sector-specific priorities and policy frameworks and Accelerate implementation of a compliant carbon market (within three years).?This would also require the creation of demand signals, especially in hard-to-abate sectors, and incentives linked to investments in newer technologies like CCUS, Enable banks to support the transition, catalyzed by a green-transition bank, Accelerate renewable adoption in the power sector, Empower a nodal authority to define a national land-use plan, Create a resilient indigenous manufacturing capability and increase investment in cleantech R&D,?Efforts would be needed to develop local raw-material resources (such as rare earths), secure materials from elsewhere in the world, and produce equipment locally through mechanisms like production-linked incentive (PLI), Evaluate five carbon capture and storage hubs?in Gujarat (Jamnagar), Odisha (Paradeep), Rajasthan (Barmer),Maharashtra (Pune), and Andhra Pradesh (Vizag) potentiality, ?Create a national circularity mission?with recycling hubs in the top 20 Indian cities, Enhance the National Hydrogen Mission?with government, Empower companies to play on the front foot,?evaluating investment opportunities that this green trend will unlock, aligned with India’s national plans or opportunities opened up by decarbonization of other countries (for example, green-hydrogen derivative exports). India needs to take thoughtful actions now to set itself up for an accelerated and orderly transition. Looking beyond the short term and laying the foundation for this transformation within this next decade is imperative for a decarbonized India and world. As net-zero has become an organizing principle for business, executives are on the spot to lay out credibly how they will deliver their transition to net zero while simultaneously building and reinforcing resilience against the certain volatility of ongoing economic and political shock.

CONCLUSION

The path to net zero was always going to be fraught with complexities. Recently, several “weather fronts” have emerged, posing significant challenges to leaders across both the private and public sectors. Physical risks are proliferating. Europe saw a record-breaking heat wave this summer. Floods devastated Pakistan this autumn, and tropical storms raged across Japan, the Koreas, and China. In the United States, Texas saw an unprecedented grid failure in 2021, with a near miss in California this year's energy future; and improving the long-term competitiveness and value creation of the organization is the ability to value carbon with liquidity. Two objectives should be paramount: extend and decarbonize the core business, and build new sustainable businesses in reshaped value chains. Developing and deploying climate technologies is critical for the world’s net-zero agenda. Growth could await businesses willing to innovate quickly and to collaborate across value chains.

?Reaching net-zero emissions?will require an immense effort to invent, refine, and deploy climate technologies: those expressly intended to accelerate decarbonization. The annual production of clean hydrogen, a low-carbon energy carrier, would need to increase more than sevenfold for the world to hit net zero in 2050.?The global capacity of long-duration energy storage, which supports the use of renewable energy, must increase by a factor of 400 by 2040 to help the power sector achieve net zero by that year. A critical prerequisite for the success of many climate technologies—including green methanol and green hydrogen, other synthetic fuels, green steel, and carbon capture—is the buildout of capacity to generate and store renewable electricity.