By Amit Sinha
India has been invited this year to join the meeting of the G7 leaders taking place in Germany later this month. The invitation itself is a historic moment. It comes at a time when a global energy crisis is looming alongside a rapidly shrinking window of time to cut emissions in line with keeping global temperature rise below 1.50C.
We will be watching the negotiations closely. Business houses such as the Mahindra Group have been working for several years to decarbonize their own operations and supply chains. We look up to the global leadership to shape policy to further accelerate action on this front.
Science-based emission reduction targets aligned with the Paris Agreement gave us, and thousands of other companies, a useful framework to understand how and where we need to reduce emissions. Deep decarbonization can help businesses operate in a way which enables the planet to thrive. Mahindra Group for example has both short-term and long-term targets and milestones we are working towards.
Since vehicles are a large part of our business, we are building a portfolio of electric vehicles (EVs), both in the passenger and commercial sectors. We also now have a portfolio of solar power related businesses, covering utility-scale solar, distributed solar, and solar asset management.
Electric vehicles will be a critical element of the global climate solution. In India, they are expected to make the air cleaner and reduce the negative effects of air pollution. For the climate, while the benefits of making an EV transition are significant, they are also a little more complex to achieve. And this is where strong policy action by G7 leaders will help the EV transition reach its full potential in limiting climate change.
An average petrol car produces about 35 tonnes of greenhouse gas emissions in its lifetime. Based on the current power grid in India, which is powered by over 75% coal, the lifecycle emissions for an average electric vehicle are expected to be 30% lower, about 25 tonnes. However, if India’s grid were to be powered by 100% renewable electricity, emissions per vehicle would drop down to around 7 tonnes—that’s 80% lower than a regular petrol car of today. It’s possible to reduce the ‘embedded’ emissions—those produced in the manufacture of the car—even further by using greener, lighter, or recycled materials.
G7 leaders would do well to ensure rapid and simultaneous transformation of the transportation and energy systems to make the most of the benefits that clean power and transport technologies have to offer. EV technology is coming of age and renewable technology is already affordable. Fossil fuel prices are currently high; therefore, consumers are choosing to make the transition to electric vehicles. As people increasingly consider making this switch, a renewable energy system to power the grid would amplify the climate benefits of doing so. The latest IPCC report makes it abundantly clear that there is no margin for error or excuse for delay on moving away from fossil fuels.
Therefore, I urge G7 leaders to be courageous and give the private sector the clarity it needs. Give us specific milestones for the transformation of our economic systems in line with halving global emissions by 2030. Clear signals like these will enable the private sector to confidently increase the pace and scale of redirecting resources and capital towards electric vehicles and clean energy. We need both transformations to happen equally fast if we are to successfully limit global temperature rise to 1.5ºC.
The decisions taken by G7 leaders will have knock on effects well beyond their own national boundaries. Climate change is a global problem and needs global solutions. Companies like ours in emerging markets can be nimble and adaptive, and with the right economic signals give us the confidence to continue investment at scale.
India is home to many global supply chain companies. It is therefore in the interest of all G7 nations, and the major companies headquartered there, to urgently create regulatory and financial frameworks that encourage the flow of capital to scaling up the clean energy and transport systems everywhere in the world. This will help multinationals reach their own climate targets right across their supply chains and prevent catastrophic global warming.
There are numerous benefits of a clean energy system in a nation like India. Firstly, it will help achieve its own climate goals. It will further increase the country’s appeal to multinational customers seeking suppliers. It will generate new jobs in the clean energy sector, reduce pollution and, critically, bring the hope of a more stable future in which global temperature rise has been limited to within manageable levels.
This is the moment for G7 leaders to be on the right side of history; to steer the ship towards a future of clean power and transport where future generations can thrive.
(The author is the President, Group Strategy of Mahindra Group. Views express are personal)