He said work is also unlderway with a multilateral development bank to prepare cost estimates for India’s transition to net-zero emissions.
Chief Economic Adviser Anantha Nageswaran said on Thursday that the energy transition imposes high costs on developing countries, which are struggling with the dual challenges of poverty reduction and economic growth.
He said work is also underway with a multilateral development bank to prepare cost estimates for India’s transition to net-zero emissions.
“Countries are currently struggling with two dual challenges: poverty reduction and economic growth. And on top of that, climate change and the energy transition create additional burdens, especially in a post-Covid context where we are talking about a stalled recovery and high debt burdens,” he said.
For Economic and Social Progress on a paper recently published by him and Andhra Pradesh Finance Minister Gulzar Natarajan. “The cost of capital in hard currency has increased by 400 to 500 basis points over 12 to 20 months over the past two years, and as a result the energy transition incurs three costs: Financial costs associated with Investment cannot be recovered. , production costs increase due to rising fuel costs and the higher cost of new energy sources as they replace existing sources,” he said.
“We can only have two out of these three – if you want to maintain financial stability and sustainability while achieving net zero, I think you have to forget about economic competitiveness. But if you want to maintain net zero and economic competitiveness, tax incentives must be applied,” he said.
India has announced a target to achieve net zero emissions by 2070 and meet 50% of its electricity needs from renewable energy sources by 2030. On the implementation of estimates for the transition to energy net zero emissions, Nageswaran said: “…and we have some of the first or early drafts of such reports from one of the multilateral development banks…the numbers are all over the place.” Global. So, at the Indian level, what is the requirement for us to move to net zero, this is an ongoing exercise… it is a joint exercise,” he said.
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