Why in the News
The United Nations Environment Programme (UNEP) has warned that the world could cross 1.5°C of warming within a few years, renewing calls for faster decarbonisation, or cutting carbon out of the economy. India’s choices remain open, because much of the housing, industry, power networks and cities it needs is unbuilt.
Why is India’s unbuilt capital stock an advantage?
- What it is: Carbon lock-in happens when long-lived buildings, plants and grids fix their emissions for decades. It is like house wiring: cheap to get right before the walls go up.
- Choice, not inheritance: Much of India’s future capital stock, the buildings, factories and networks an economy runs on, is still unbuilt, so today’s standards set future emissions.
- Scale still to come: NITI Aayog estimates that 86% of India’s 2070 building stock is still unbuilt, so rising steel, cement and power demand is not only a burden.
- The takeaway: India must invest anyway, so the test is to avoid locking in inefficient assets wherever cleaner technology is mature.
Why is fixing old buildings harder than building new ones well?
- Advanced economies: The International Energy Agency (IEA) estimates that about 80% of the buildings advanced economies will use in 2050 already exist.
- European Union: In the EU, 85% of buildings predate 2000, leaving slow renovation as the main fix.
- India’s opening: Building efficiency in from the start spares India stranded assets, plants retired before their working life ends, and costly retrofits.
Where does implementation lag in buildings and power?
- Codes already exist: The Energy Conservation Building Code (ECBC) 2017 sets energy-saving standards for commercial buildings, so the gap is implementation.
- Building code adoption: The Bureau of Energy Efficiency (BEE) reports that 27 States have notified the ECBC, but only 21 have made it part of their law.
- Newer codes: BEE has since issued the Energy Conservation and Sustainable Building Code (ECSBC) 2024 for commercial and office buildings and the Eco-Niwas Samhita 2024 for homes.
- Transmission lag: The grid has lagged renewable growth; the IEA estimates bottlenecks have held back about 60 GW of capacity.
Should India mandate green technology or create a market for it?
- Unproven technology: The Ministry of Steel accepts that hydrogen-based green steel is not yet viable here, and NITI Aayog sees carbon capture, trapping emitted carbon dioxide, in cement as further off.
- Risk of mandates: Mandates could raise costs and lock firms into processes that later prove uneconomic. Flexibility has value as technology evolves.
- Public buyers: Governments, Indian Railways and the National Highways Authority of India (NHAI) buy steel and cement in bulk, creating a market for cleaner materials.
- Green-steel tenders: India has a green-steel taxonomy that classifies steel by emissions, and the Ministry of Steel has proposed pooling public purchases into competitive tenders.
- Thresholds, not routes: Tenders could cap emissions intensity, emissions per tonne, without prescribing the method, and tighten caps as the green premium, the extra cost of cleaner output, falls.
Challenges
- Costly capital: The IEA estimates India’s cost of capital, what developers pay to raise funds, for grid-scale renewables is about 80% higher than in advanced economies.
- Front-loaded costs: Clean infrastructure costs more upfront, so costly finance can make a viable project uneconomic.
- Public balance-sheet risk: Cheaper public finance for unproven technology shifts risk onto the government’s books.
Way Forward
- Codes in permits: States should embed building codes in building permits, occupancy certificates and grid connections, so non-compliance carries a cost.
- Grid ahead of demand: Plan transmission and storage with, or ahead of, new generation as transport, cooling and industry electrify.
- Carbon market alignment: Align tender caps with emissions-intensity targets under the Carbon Credit Trading Scheme (CCTS), India’s compliance carbon market.
- De-risked finance: Use payment-security mechanisms, partial credit guarantees or concessional debt to cut borrowing costs and cover off-taker risk, a power buyer defaulting.
Conclusion
India’s long-run emissions depend less on how much it builds than on the standards fixed into what it builds now. Whether States, grid planners and public buyers act before this capital is built is the test to watch.
Key numbers
- Floor space: about 18 billion square metres (2020) to 42 billion (2070).
- Steel and cement: crude-steel capacity about 200 million tonnes (2024-25) to a 300 million tonne target (2030-31); cement about 427 million tonnes (2024) to 660 million (2030).
- EU building stock: around three-quarters perform poorly on energy efficiency; about 1% renovated each year.
- Planned generation additions: roughly 590 GW between 2023 and 2032 (Ministry of Power).
Matching Previous Year Question
“No direct PYQ traced in the provided files. Thematic PYQ: [2025, GS1, 10 marks] How are climate change and the sea level rise affecting the very existence of many island nations? Discuss with examples.”
