The World Must Turn to India

Investing in India’s green transition is smart business.

India finds itself at a crucial crossroads. Over 70% of the world’s carbon budget will be consumed by India alone if it follows the growth and carbon trajectories of China or other developed economies between now and 2050. India is now presented with the greatest opportunity of the century - take the lead on the green transition and catapult its growth.

Despite the global pandemic, the Russian war, and the subsequent energy crisis, India has clearly emerged as a global economic bright spot. While the rest of the world manages sluggish economic growth, India’s 6.5% projected GDP growth rate for 2022 and stable currency, propelled it to the fifth largest economy in the world. This advancement is due to an increase in manufacturing, a prodigious workforce, stronger partnerships with developed economies, and gradually replacing China as the default production hub. Speculation by the US NIA that China is or may weaponise supply chains will likely further diversification out of China (and into India).

However, the reality of climate change poses a significant risk to India’s growth at this crucial juncture. In 2020, India recorded 2.4 tCO2e emissions per capita, about a whopping 25% increase from its previously recorded emissions of 1.96 tCO2e. Annually, India loses about 20 percent of its GDP to land degradation, poor waste management, and air and water pollution, based on figures from both the World Bank and Niti Aayog. Climate change is a $35 trillion risk between now and 2070, based on current assets and replacement costs. This could increase dramatically for India, especially since it is amongst the most vulnerable countries to climate impacts globally.

Left unaddressed, these risks will stop India from realizing its true economic potential.

If India fails to green, India’s emissions would make limiting temperatures to 2℃ or lower unattainable and trigger global tipping points. It is clearly, therefore, in global interests as well to prioritize climate action in India and aid the nation’s transition to a green economy.

India has the key pieces of the puzzle to lead the green transition. It has strong tailwinds owing to the government’s increased focus on sustainable innovation, growing manufacturing capabilities, low-cost technology, and a budding pool of STEM talent. Importantly, investing in India’s climate innovations brings multifold economic returns. India has a projected $11 trillion benefit if the economy attains net zero by 2070.

Green Artha invests in the entrepreneurs, technologies, and business models that will be foundational to India’s green transition. Indian climate technologies are often lower cost, and when the right capital is available, faster to market. We work with startups to develop adaptive business models, appropriate capital structures, and access to capital to accelerate the speed and scale of adoption. Quality and market dynamics suggest that in time these innovations can not only address the global south but the rest of the world.

The world must now look to India. India is uniquely poised to change the trajectory of whether humanity succeeds or fails in confronting climate change. Supporting India-first businesses in their journey toward achieving a sustainable future is clearly critical.