At the 2021 United Nations Climate Change Conference (COP26) in Glasgow, Prime Minister Narendra Modi announced that India would achieve net-zero carbon emissions by 2070. However, India is currently short of meeting this goal, as its solar power capacity is less than two thirds of what it expected to have by the end of 2022. The primary reason for this slow growth is India’s insistence on boosting the domestic manufacturing of renewable energy while making this transition. Though some are skeptical about India's motivations for and commitment to its green energy transition, growing domestic manufacturing is essential for making India’s development journey sustainable.
When talking about climate change and green energy, developed countries often fail to consider that developing countries cannot easily embark on energy transitions. Energy transitions can impede economic growth and progress made towards sustainable development, which simultaneously tackles poverty and the climate emergency. For India, sticking to sustainable development is more important than ever right now. Not only is its population set to overtake that of China in the next few weeks, but 65 percent of the population is also under thirty-five years old, 7.5 percent of which is unemployed. India’s growing population and a lack of jobs has created an ever-growing poverty problem—16.4 percent of India's population earns less than two U.S. dollars per day. The most efficient way for India to tackle poverty and the climate emergency together is to boost domestic manufacturing by developing clean energy supply chains in the country in order “to have the capacity of installation that India is projecting” in the long run.
Unlike other developing countries such as China, India has historically invested in skill-intensive areas rather than labor-intensive areas for its economic growth. While uncommon, this strategy has allowed India to fully utilize its comparative advantage in technical education. By focusing on education and providing technical assistance to countries in the form of both unconventional exports and aid, India has been able to grow its economy, albeit at a much slower rate than fully manufacturing-based economies like China.
While India has invested in manufacturing since its independence in 1947, it could stand to do more, especially if it wants to create more jobs and create them fast.
Manufacturing industries create and provide high-wage jobs to both skilled and unskilled workers. When the economy is growing, these industries also provide education to unskilled workers, enabling them to earn higher wages. A common worry about manufacturing jobs is that rapid technological advancement might slow these jobs as artificial intelligence (AI) takes over unskilled labor, making domestic manufacturing growth seem unsustainable in the long run. In reality, skilled jobs within manufacturing will become even more important as technology will need to be monitored and regulated. Furthermore, industries will have more resources to invest into human capital as AI integration into jobs increases efficiency. With the correct policies, jobs will not only grow, but India can create jobs that increase the living standard of its population.
Domestic manufacturing can also contribute to environmental sustainability. One way for India to ensure that its green energy transition is as green as possible is to develop domestic supply chains for its green energy needs. Building manufacturing industries for renewable energy—such as solar power and green hydrogen—will reduce carbon emissions generated from the process of importing and exporting fossil fuels and technology needed for green energy. Therefore, while investing in domestic manufacturing might make India's green energy transition lag behind the target for a few years, doing so will help India make that transition sustainably.
Building manufacturing capacity is also key for India given the current global political climate. Russia’s invasion of Ukraine and the possibility of a Chinese invasion of Taiwan has sent the United States and certain European Union countries back towards an era of protectionism, especially where energy is considered. Due to the key role that energy plays in economic and social development and India’s tricky geopolitical location, reducing dependence on the United States, China, and Russia for its energy needs is important for India.
Despite skepticism regarding India’s net-zero carbon emissions goal, India’s current policies of encouraging domestic manufacturing with a slow but steady green energy transition may in fact help the country tackle climate change while staying on track to meet its sustainable development goals.
Zainab Irfan is a junior at St. Olaf College and an intern for India, Pakistan, and South Asia at the Council on Foreign Relations.