The conclusion of COP29 in Baku, Azerbaijan marks a pivotal moment in global climate governance, with implications that resonate deeply for India. As a rapidly developing country grappling with the twin challenges of sustaining economic growth and mitigating climate vulnerabilities, India’s response to the COP29 outcomes will have a meaningful impact on its trajectory in the field of environmental, social and governance (ESG).
Environmental lens: accelerated decarbonization and resilience
Carbon markets: balancing opportunity and integrity
Progress in refining Article 6 mechanisms for international carbon trading presents substantial economic opportunities for India. Reports from the ICRA show that India’s voluntary carbon markets could generate $1.6 billion annually by 2030. However, achieving this will require addressing persistent risks around the environmental integrity of carbon credits.
India must establish transparent and rigorous governance frameworks for validating carbon offsets to avoid the pitfalls of ‘phantom credit’ plaguing global markets.
Fossil Fuel Dependence: Finding a Just Balance
India’s dependence on coal, which has contributed to 72% of energy generation by 2023, poses a pressing challenge in aligning with global decarbonization goals. The country’s position at COP28, advocating a “phasing out” rather than a “phasing out” of fossil fuels, remains a contentious issue.
From an ESG perspective, the ‘Just Transition’ framework should be central. States like Jharkhand and Chhattisgarh, where coal supports the livelihoods of millions of people, need comprehensive transition plans. This includes worker retraining, alternative employment and financial support for communities affected by the decommissioning of coal-fired power stations. TERI estimates that achieving net zero by 2070 will require an investment of $15 trillion in renewable energy and grid modernization.
Adaptation financing: from obligations to implementation
With an estimated annual adaptation need of $206 billion by 2030, India’s climate resilience efforts depend on equitable access to adaptation finance. The operationalization of the Loss and Damage Fund agreed at COP28 will be closely scrutinized.
India’s agricultural economy, which has suffered losses of ₹22,000 crore by 2023 due to the monsoon deficit, underlines the need for robust adaptation initiatives. Scaling up the National Climate Change Adaptation Fund (NAFCC) and integrating climate-smart agricultural practices will be critical.
Social lens: inclusive development and climate equality
Community-based policies for climate equality
India’s energy transition must prioritize the social dimension by ensuring inclusivity and equality. 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 behavior change, but these need broader integration with grassroots programs. Addressing gender disparities, especially in rural areas where women often bear the brunt of the impacts of climate change, will increase social resilience. Encouraging women-led self-help groups to adopt sustainable energy projects or sustainable agricultural practices can serve as scalable models.
Public health and urban resilience
Climate-induced disasters, air pollution and water scarcity have far-reaching consequences for public health. India recorded more than 1.67 million deaths due to air pollution in 2022, representing a crucial social challenge. COP29’s emphasis on urban adaptation strategies offers India an opportunity to embed climate resilience into urban planning.
Governance lens: strengthening institutional frameworks
Accountability in climate finance
Developed countries’ unmet annual commitment of $100 billion, reaffirmed at COP28, highlights governance gaps in global climate finance. India must advocate for accountability mechanisms to ensure timely and adequate financial flows to developing countries.
At the national level, ensuring transparency and accountability in the deployment of climate funds, especially in adaptation and sustainable energy projects, will strengthen India’s governance credibility.
Technology partnerships and capacity building
India’s dependence on imported clean energy technology, such as electrolyzers and lithium-ion batteries, remains a challenge for governance. COP29’s discussions on technology transfer provide an opportunity to bridge this gap. However, India needs to proactively negotiate favorable terms for intellectual property sharing and capacity building initiatives.
Conclusion
The outcomes of COP29 will shape India’s climate strategy for the next decade. By 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 justice 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 the country align its domestic priorities with global commitments while protecting its future generations from the escalating impacts of climate change.
The writer holds a PGDM from XISS and a PhD in Strategic CSR from Santiniketan. He works as a manager at HPPI, New Delhi (opinions are personal).
