The first high-level meeting of India-EU Track II dialogue saw discussions around possible areas of collaboration towards a low-carbon transition and a way to mobilise climate finance for enabling this transition across energy, industry and transport sectors.
The first high-level meeting of the India-EU Track II dialogue jointly curated by TERI, Institute for Sustainable Development and International Relations (IDDRI) along with European Climate Foundation (ECF) took place successfully on May 31, 2021. The meeting was attended by over 30 experts representing leading think tanks, industry and academia from India and the EU, who have been instrumental in driving climate action in both regions.
The objective of the meeting was to discuss various transition pathways for low-carbon development in both the regions. Since COVID-19 has had a significant impact on the national and global economy, it is essential to establish a focused recovery out of the pandemic which is both sustainable and resilient. This is key in charting out a pathway and planning long-term strategies to reach low-carbon development in the future, while simultaneously working towards implementation of the ambitious Nationally Determined Contributions by 2030.
In this regard, the meeting was structured into two focused sessions:
- Assessing the current green recovery pathway in both regions and possible areas of collaboration towards a low-carbon transition; and
- Means of mobilising climate finance for enabling low-carbon transition across key sectors including energy, industry and transport.
Following are some of the key takeaways from the meeting:
- Co-operation between both regions, especially in terms of sharing best practices, technological innovation and mobilising low-cost finance can enable both regions to ‘build back better’. An essential aspect of the recovery process is that the green-ness or sustainability of the recovery will depend on all stakeholders embedding it in their recovery plans. This will require active engagement among different actors in both regions to identify low-carbon development options with due consideration of the principle of equity.
- Another area of cooperation between the two regions is on industry transition and exploring options for decarbonizing harder-to-abate sectors (such as steel, cement, petrochemicals, etc.). The two regions could work on shared research, development and early commercialization efforts, e.g. use of green hydrogen (at a competitive prices) to replace fossil fuels especially within in hard-to-abate sectors, and for use in high-temperature applications.
- The common ground across all these themes was the access to low-cost finance, which is particularly challenging for developing economies such as India. Measures discussed during the meeting to mobilise low-cost finance include: aligning efforts to develop a robust taxonomy, enabling policy and governance framework, addressing debt constraints, curating innovative financial instruments to de-risk long term climate investments, especially in sectors such as infrastructure.
In view of the rich discussions which took place, the following outcomes were identified and agreed upon:
- Development of thematic working groups to provide deep dives into specific themes which contribute to increasing climate action in both regions.
- As a next step, the following working groups are envisaged to focus on specific areas of cooperation:
- Industry transition:This working group will focus on means of initiating a low-carbon transition across several sectors, especially for the hard-to-abate sectors such as steel and cement.
- Finance:This group will focus on identifying innovative instruments to lower the cost of borrowing for developing regions, de-risking long-term climate investment and mobilising private investments through aligned taxonomies.
Other topics for future consideration include energy policies and taxation, just transition for carbon-intensive sectors or regions, and adaptation to climate impacts.