Carbon Emissions
Rising demand to hinder India's progress to lower carbon emissions - Moody's
This story was originally published at 16:32 IST on 17 October 2024
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NEW DELHI – Even as India has made rapid progress in increasing its renewable energy sources, the country's fast-growing economy and expanding population will continue to drive up greenhouse gas emissions, Moody's Ratings said Thursday. Rising demand in the economy risks hindering India's progress in moving away from traditional sectors that have high carbon dioxide emissions, Moody's said in a report.
India has committed to achieve net-zero carbon emissions by 2070 and aims to have more than 50% cumulative electric power installed capacity from non-fossil fuel resources by 2030. According to Moody's, India is very likely to meet the 2030 target, even as it will require $190 billion-$215 billion of investment over the next seven years.
"A sizeable pipeline of announced projects will keep rated renewable power companies' financial leverage high over the next 2-3 years, a credit negative," the rating agency said.
Emissions of carbon-intensive businesses are likely to increase as they are focused on meeting growing demand, Moody's said. Companies will also slow down their investment in new green technologies in the absence of stringent regulations or affordable green alternatives, Moody's said. This will also limit market acceptance of green products such as electric vehicles and could lead to higher exposure to carbon transition risks if policy tries to catch up later.
"The government's ability to attract private investment and address negative spillovers from decarbonisation, including job losses in legacy industries, will determine whether India's credit exposure to carbon transition and social risks rises further," the rating agency said. End
Reported by Shubham Rana
Edited by Avishek Dutta
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