Eyes now on Viksit, net zero later: Can India achieve high-income status by 2047 without compromising on climate promises?

Stanford, California: India's Viksit Bharat ambition to become a high-income economy by 2047 is bold. The economy grew by 7.8% in the April-June quarter. But that result is also a warning: 7.8% is the average rate World Bank estimates India must sustain for more than 2 decades to achieve its ambition. There is little room for costly distractions.

Regrettably, the promise of Viksit Bharat is threatened by a climate promise to go net zero by 2070. These work at cross-purposes, with one promising Indians more opportunities, the other more costs and lower growth. For India's future good, the immense trade-offs should be recognised.

NITI Aayog's 11-volume report, 'Scenarios Towards Viksit Bharat and Net Zero', reveals the staggering cost for India to embrace ambitious climate goals. It estimates that reaching carbon neutrality by 2070 will cost India $8.1 tn in additional investments. This is equivalent to giving up current GDP for 2 yrs - or 4% of current GDP every year for half a century.

Although the reports never compare the full $8.1 tn additional investment requirement with India's current GDP, it bears comparing: India spends 4.1% of its GDP annually on education from kindergartens to university. Green policies would spend more than all education every year for two generations. India spends 3.3% of GDP on health, from neonatal and maternal survival to cancer and heart disease treatments. Green policies would seize more than that every year for the foreseeable future.

Moreover, this cost is likely to be underestimated. The report acknowledges that net zero will lead to soaring energy costs that will reduce growth. Economics generally show such knock-on costs to be substantial.

A 2023 Climate Change Economics study, 'Net Zero Emissions of Greenhouse Gases By 2050: Achievable and at What Cost?' shows that net zero, although modelled by 2050, could end up costing India more than half of annual GDP, with the average over the second half of the century far above 20% a year.

Green campaigners suggest that such expenses are justified. But this is propaganda. Climate change is one problem among many to be fixed in the 21st c. But it often skews news reporting. While heatwaves grab headlines, epidemiological data shows they are India's smallest temperature killer. Extreme cold kills even more every year, and in total, heat kills less than 90,000 annually whereas cold kills over 6 lakh people each year.

In the UN Climate Panel's middle-of-the-road scenario, the average Indian will be 791% as rich by the end of the century as today. Climate change will be a net problem, but will cause the average Indian to feel 'only' 770% as rich by 2100. It's a problem but not the end of the world.

Even if India managed net zero by 2070 at eye-watering costs, it would deliver almost no climate benefits. Take the total Indian emissions from current policy and net-zero policy and run them in the UN's climate model Magicc. Even by century's end, the global temperature difference will be a near-immeasurable 0.16° C.

It is likely that any net-zero policy with such minuscule benefits will be rejected when the costs become too obvious, as is starting to happen in Europe and elsewhere. Moreover, achieving high-income status by 2047 will require immense economic focus and favourable winds. A permanent bloodletting of 4% of GDP will jeopardise this.

Aiming for high-income status will deliver benefits. Higher incomes will, for instance, allow more people to afford better AC, helping with climate change and saving lives. Crucially, it will also allow more people to afford better heating in cold weather.

That's why India should focus on Viksit Bharat. It will be achieved through many individually smart policies. Extreme climate policies might shave a tiny fraction off distant future risks, but better healthcare can deliver immediate and massive results at much lower costs.

Investing $3.2 bn (under 0.1% of GDP) in 1 hr-a-day tablet-based learning tools could help primary school kids triple learning. Studies conclusively show this could boost long-term incomes by $210 bn, equivalent to 5% of India's GDP.

India should pursue Viksit Bharat with full force. Invest in highly efficient policies to unleash growth. Prosperity first. That's the smart and empowering path to take.