The conclusion of COP29 in Baku, Azerbaijan, marks a critical juncture in global climate governance, with implications that resonate deeply for India. As a rapidly developing nation grappling with the dual challenge of sustaining economic growth while mitigating climate vulnerabilities, India's response to the outcomes of COP29 will meaningfully influence its Environmental, Social, and Governance (ESG) trajectory.
Environmental Lens: Accelerating Decarbonization and Resilience
Carbon Markets: Balancing Opportunity and Integrity
The advancements in refining Article 6 mechanisms on international carbon trading offer India a substantial economic opportunity. Reports by ICRA suggest that India's voluntary carbon markets could generate $1.6 billion annually by 2030. However, achieving this requires addressing persistent risks around the environmental integrity of carbon credits.
India must establish transparent and stringent governance frameworks for validating carbon offsets to avoid the pitfalls of "phantom credits" that have plagued global markets.
Fossil Fuel Dependency: Striking a Just Balance
India's reliance on coal, which contributed to 72% of power generation in 2023, presents a pressing challenge in aligning with global decarbonization goals. The country’s position at COP28 advocating a “phase-down” rather than “phase-out” of fossil fuels remains a contentious issue.
From an ESG standpoint, the “Just Transition” framework must take center stage. States like Jharkhand and Chhattisgarh, where coal sustains millions of livelihoods, require comprehensive transition plans. This includes worker reskilling, alternative employment opportunities, and financial assistance for communities impacted by the decommissioning of coal plants. TERI estimates that reaching net-zero by 2070 will demand a $15 trillion investment in renewable energy and grid modernization.
Adaptation Financing: From Commitments to Implementation
With an estimated $206 billion annual requirement for adaptation by 2030, India’s climate resilience efforts hinge on equitable access to adaptation funding. The operationalization of the Loss and Damage Fund agreed upon at COP28 will be closely scrutinized.
India’s agrarian economy, which suffered losses of ₹22,000 crore due to the 2023 monsoon deficit, underscores the necessity of robust adaptation initiatives. Scaling up the National Adaptation Fund for Climate Change (NAFCC) and integrating climate-smart agriculture practices will be pivotal.
Social Lens: Inclusive Development and Climate Equity
Community-Centric Policies for Climate Equity
India’s energy transition must prioritize the social dimension by ensuring inclusivity and equity. Communities dependent on coal, agriculture, and other climate-sensitive sectors must be at the forefront of policy planning.
Initiatives like Mission Lifestyle for Environment (LiFE) emphasize behavioral change, but these need broader integration with grassroots programs. Addressing gender disparities, particularly in rural areas where women often bear the brunt of climate change impacts, will enhance social resilience. Empowering women-led self-help groups to adopt renewable energy projects or sustainable farming practices can serve as scalable models.
Public Health and Urban Resilience
Climate-induced disasters, air pollution, and water scarcity have far-reaching implications for public health. India recorded over 1.67 million deaths linked to air pollution in 2022, representing a critical social challenge. COP29’s emphasis on urban adaptation strategies presents an opportunity for India to embed climate resilience into urban planning.
Governance Lens: Strengthening Institutional Frameworks
Accountability in Climate Finance
The unmet $100 billion annual pledge from developed nations, reaffirmed at COP28, highlights the governance gaps in global climate finance. India must advocate for accountability mechanisms to ensure timely and adequate financial flows to developing countries.
Domestically, ensuring transparency and accountability in deploying climate funds, particularly in adaptation and renewable energy projects, will bolster India’s governance credentials.
Technology Partnerships and Capacity Building
India’s dependence on imported clean energy technology, such as electrolyzers and lithium-ion batteries, remains a governance challenge. COP29’s discussions on technology transfer offer an opportunity to bridge this gap. However, India must proactively negotiate favorable terms for intellectual property sharing and capacity-building initiatives.
Conclusion
The outcomes of COP29 will define India's climate strategy for the coming decade. Through embedding ESG principles into its commitments and actions, India can position itself as a leader in sustainable development. However, this requires a paradigm shift—from viewing climate action as a cost to recognizing it as an opportunity to unlock economic growth, social equity, and environmental stewardship. India’s journey from Baku must be guided by robust data, innovative governance, and a commitment to inclusive development. Only then can it align its domestic priorities with global imperatives while safeguarding its future generations from the escalating impacts of climate change.
The writer holds a PGDM from XISS and a doctorate in Strategic CSR from Santiniketan. He works as a Manager at HPPI, New Delhi (Views are personal).
