Economic Survey 2025 | India’s net zero goal hinges on investment, minerals

New Delhi: India needs to adopt a strong strategy to integrate climate considerations across sectors, with sufficient financing options and targeted policy measures to tackle climate change, according to the Economic Survey 2024-25.

To achieve the goal of net zero emissions by 2070, India will need to prioritise investment in extensive grid infrastructure improvements and the secure sourcing of critical minerals necessary for this transformative shift, the survey said.

But while highlighting India’s progress in building renewable energy capacity, the survey said effectively harnessing and scaling these resources remained challenging due to a lack of viable storage technologies and limited access to essential minerals.

The Economic Survey said India needed to follow a multi-faceted approach tailored to regional specificities, covering policy initiatives, sector-specific strategies, development of resilient infrastructure, research and development, and securing financial resources for adaptation efforts.

To bolster economic growth, India needs to integrate its climate adaptation plans across agriculture, urban areas, coastal regions, water management, energy transition, and green investment, according to the Economic Survey, which Union finance minister Nirmala Sitharaman tabled in Parliament on Friday.

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India’s total expenditure related to climate adaptation increased to 5.6% of its gross domestic product (GDP) in 2021-22 from 3.7% in FY16, according to the country’s Initial Adaptation Communication that was submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2023. 

The adaptation communication outlines a country’s priorities, implementation and support needs, and plans and actions.

The 29th session of the annual climate conference, or the Conference of the Parties (COP), last year saw rich nations commit to mobilising $300 billion annually by 2035 for the global fight against climate change. But this mobilisation target is a fraction of the estimated requirement of $5.1-6.8 trillion by 2030, which disproportionately places the burden of addressing climate change on nations that have not historically contributed to the crisis, the Economic Survey said.

The target also falls short of developing countries’ Nationally Determined Contributions (NDCs) by about 38% and may lead to a reworking of the climate targets, the survey added.

“A lack of commitment and insufficient delivery of the means of implementation, as mandated in the Paris Agreement, will make the low-carbon transition in developing countries more challenging,” the Economic Survey said.

Resources for meeting development challenges may be affected, undermining progress toward sustainable development objectives and compromising the integrity of international climate partnerships, according to the survey.

Also read | India's farm sector grapples with falling yields to climate change

India on the right track

The Economic Survey added that India was inching closer to its NDC target, which are commitments by countries to reduce emissions. 

As of November, India’s installed electricity generation capacity of 213,701 megawatts from non-fossil fuel sources accounted for 46.8% of its total capacity, positioning the country on path to achieve its updated NDC target of reaching 50% by 2030. 

The survey added India has a low per capita carbon emission and was on a development pathway that not only ensures affordable energy security but also job creation, economic growth, and ultimately environmental sustainability.

The survey also recognized the importance of thermal power in India’s sustainable development pathway, and emphasized the need to promote the efficient use of coal by utilising super critical, ultra-super-critical, and the recently developed advanced ultra super critical technologies in coal-based power plants to reduce emission intensity.

The survey also focused on nuclear energy as an efficient, low-emissions source of energy and a reliable alternative to fossil fuels. 

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But the survey also called for investments in research and development related to battery storage technologies, as well as the recycling and sustainable disposal of waste associated with renewable energy systems.

The survey added that the India-led global movement—Lifestyle for Environment (LiFE)— can yield substantial co-benefits, including reducing inequalities in energy consumption, mitigating air pollution, achieving cost savings, and enhancing overall well-being and health. 

These measures could save consumers around $440 billion globally through reduced consumption and lower prices by 2030, it added.