Financial Gap Hinders Indian Adoption of Low-Carbon Technologies, says Harvard Professor Vikram Gandhi

The financial gap remains a significant obstacle for Indian corporations in adopting essential low-carbon technologies, said Vikram Gandhi, Professor of Business Administration at Harvard Business School. Speaking at the BT INDIA@100 event, held at Bharat Mandapam in New Delhi, during a session titled "Development While Decarbonising: India’s Path to Net Zero," he highlighted the need for substantial financial support to bolster India's climate strategy.

"While multilateral development banks and Northern governments have shown positive gestures, their financial contributions are still far from sufficient for meaningful climate action," Gandhi noted. This shortfall is critical for India's ambitious target of achieving net zero carbon emissions by 2070 as per the 2015 Paris Agreement. This goal requires an annual investment of approximately $240 billion, totaling $10 trillion.

Gandhi stressed the importance of innovation and strategic partnerships, suggesting that both public and private sectors must collaborate. "Creation of new financial instruments and fostering foreign investments in sustainable projects could be pivotal steps forward," he said. Drawing from his experience as the founder of impact investing platform Asha Impact and senior advisor to the Canada Pension Plan Investment Board, he emphasised the need for a multi-faceted approach to overcome these challenges.

Currently contributing 7.5% of global CO2 emissions and facing pressing issues like job creation, skilling, and poverty alleviation, India is at a crucial juncture where economic growth must align with sustainability. Highlighting the dual challenge, Gandhi remarked, "This is not just a climate challenge but an economic opportunity."

India's climate vulnerabilities are stark, with 75% of districts and 95% of coastal regions identified as hotspots for extreme climate events by the Council on Energy, Environment, and Water (CEEW) in Delhi. The disproportionate impact on lower socioeconomic groups underscores the urgency for comprehensive climate action. Gandhi likened the climate challenge to transformative but costly shifts, such as the Industrial Revolution, urging businesses to view sustainability as a monumental investment opportunity rather than a costly obligation.

He pointed to frequent urban floods and pervasive pollution as clear indications of the environmental crises stemming from mismanaged shared resources. Emphasizing the need for long-term planning, Gandhi warned of the "tragedy of the horizons," where the delayed effects of climate change result in a lack of urgency from governments and corporations.

Despite the grim outlook, Gandhi remains optimistic. "Proactively investing in sustainable practices and digitization can yield substantial long-term benefits," he advised. Drawing parallels to innovations from the early 2000s, he suggested that integrating climate-aware strategies into investment portfolios could mitigate risks and leverage opportunities within the growing green economy.

With an ambitious goal of net-zero emissions by 2070, Gandhi concluded, "We need a mix of immediate initiatives and long-term strategic plans to achieve this goal. This is a decisive period for India, and our actions today will pave the way for a sustainable future."