India used 2% of COVID-19 stimulus funds on green projects, spent more on coal subsidies: Study

Stimulus funds gave countries an opportunity to push toward greener economies. Yet, many governments have failed to make the switch, the authors said in their report

By Rohini Krishnamurthy
Published: Friday 04 March 2022
India channelled almost $14 billion to bolster its coal, according to a new study published in Nature. Photo: iStock_

India spent two per cent of its COVID-19 relief package on green projects such as electrifying vehicles, making buildings more energy-efficient and installing renewables between 2020 and 2021, a new study estimated.

A higher sum — about 10 per cent — was diverted to activities likely to increase greenhouse gas (GHG) emissions, the report published in Nature added.

“Specifically, the (Indian) government has provided substantial support for the coal industry throughout the pandemic, from subsidies for the coal mining industry to delaying air pollution controls on coal-fired power plants,” co-author Scot Miller, an assistant professor of environmental health and engineering at Johns Hopkins University, told Down To Earth.

Months after the first lockdown in 2020, the Centre announced an economic package worth Rs 20 lakh crore to support the economy battered by the pandemic. It amounted to nearly 10 per cent of the country’s gross domestic product. The following year, the Centre rolled out a second relief package of Rs 6.28 crore.

Like India, other nations earmarked stimulus funds. “Some countries and politicians were promising to ‘build back better’ and the idea of a green New Deal became an increasingly popular slogan,” Miller added.

Miller and his colleagues tracked the stimulus spending of the G20 group, of which India is a member. G20 economies — consisting of 19 countries and the European Union — account for more than 80 per cent of global emissions and 85 per cent of global economic activity. Next, they classified measures according to their likely impacts on GHG emissions.

The researchers saw that the G20 group channelled at least $1.4 million to support healthcare systems, wages, welfare and climate action.

Of this, only six per cent of the stimulus spending was dedicated to projects that cut emissions. And of this, only about 27 per cent would directly reduce GHG emissions, the analysis stated.

The remaining (72 per cent) measures such as subsidies for biofuel producers in Brazil or funding in Germany to help build electric vehicle charging stations would have indirect effects.

Some countries invested more in green projects than others. These include South Korea and the European Union — which set aside more than 30 per cent of their packages for such measures. Following them are Brazil, Germany, Italy and France.

The United States, Russia, Japan and the United Kingdom were the worst performers, spending less than five per cent of their relief package on green projects.

Source: Johns Hopkins University

The vast majority of recovery spending — 91 per cent — had nothing to do with lowering GHG emissions.

The remaining three per cent of stimulus funding went into emission-releasing activities like subsidising the coal industry. India, South Africa and China are examples of countries looking to coal.

Stimulus funds gave countries an opportunity to push toward greener economies. Yet, many governments have failed to make the switch, the authors said in their report.

India’s performance

India channelled almost $14 billion to bolster its coal, including modernising mining infrastructure, attracting private-sector investment and reducing coal prices.

Miller, however, added that the Centre had provided some support for battery and solar manufacturing.

At the 26th Conference of Parties to the United Nations Framework Convention on Climate Change (CoP26), India said it would go Net Zero by 2070.

Additionally, the country listed four other climate targets with a deadline of 2030: Installing 500 gigawatt of non-fossil energy, achieving 50 per cent of the country’s energy requirements from renewables, reducing 45 per cent carbon intensity and lowering the total projected carbon emission by one billion tonnes.

“These 2030 climate goals are coming faster and sooner than we think and we can’t put off thinking about climate change until the pandemic is over,” Miller added.

It is disheartening that many investments are taking the business-as-usual approach, Navroz K Dubash, professor at Centre for Policy Research, said. He was not involved in the study,

“This could be because most counties have not internalised climate change as part of governance,” he said. The Union finance ministry, for instance, has not been taking climate change into account while making investment decisions, he added.

Moving forward, Dubash suggested that India should also focus on building climate-resilient infrastructure.

It should not only be about choosing between solar or coal. Designing cities to withstand high-intensity weather events is crucial, he said.

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.