PORTSMOUTH, Ohio — Discussions between Special Presidential Envoy for Climate John Kerry and Indian Prime Minister Modi have affirmed that the United States and India are committed to the transition to clean energy. On this front, the two global powers plan to collaborate in finance and technology for mutual benefit. Over the course of the next decade, this new partnership on clean energy in the U.S. and India will hopefully demonstrate the successful alignment of sustainable development and economic interest.
An Ambitious Agenda
In April 2021, the U.S. and Indian governments issued joint announcements about the new U.S.-India Climate and Clean Energy Agenda 2030 Partnership. This partnership aims to support clean energy development by:
- Mobilizing finances for the transition to clean energy
- Accelerating the spread of clean energy
- Demonstrating and scaling “innovative clean technologies” across sectors
Both the U.S. and India plan to further develop clean energy technologies in order to meet ambitious 2030 targets for clean energy, in accordance with the Paris Agreement. While the U.S. aims to cut down greenhouse gas emissions, India seeks to install 450 gigawatts of renewable energy sources by 2030. Just one gigawatt equates to more than 3.1 million solar panels or 412 utility-scale wind turbines.
U.S. Investment Interest
This partnership demonstrates a step up in U.S. interest in financing clean energy at home and abroad. Clean energy is a key component of the White House’s International Climate Finance Plan. This plan proposes that, as an economic world power, the U.S. has the ability to organize meaningful financing for existing clean energy technologies and foster new technologies on a global scale.
The U.S. already invests in such development internationally, including the development of new technologies by the Department of Energy. Moving forward, however, the U.S. Department of State will also utilize its diplomatic resources to marshal international support for clean energy, like the new partnership on clean energy in India. Such action uplifts impoverished communities on an international scale, while sustaining the U.S.’s position as a global leader.
The U.S. Department of State further frames clean energy development as an investment in economic resilience to shifting environments. This is particularly relevant in a post-pandemic context, as many countries have the opportunity to grow and improve “through a low-carbon, climate-resilient recovery.”
This international investment is likely to benefit U.S. citizens as well. The plan outlines private investment opportunities in emerging fields around clean technology, such as finance. Moreover, technological exports and services regarding clean energy, in particular, will drive future market growth in the U.S.
Opportunities in India
India’s interest follows similar economic logic. According to the Brookings Institution, India has the opportunity to benefit from clean energy in its economy and public health. Three distinct benefits from a transition to clean energy in India are:
- Cutting down on pollution deaths
- Opening up new job markets in fields related to clean energy
- Gaining energy independence
Just days before the U.S. and India announced the new partnership, the Brookings Institution published a report outlining the benefits of U.S. cooperation on clean energy in India. U.S. clean energy financing through avenues such as USAID and the Development Finance Corporation can assist communities and workers through an otherwise difficult transition to clean energy. Additionally, U.S. financing could assist in the repurposing of outdated energy facilities for new economic ventures in India.
This transition is a potential improvement for India’s economic development. A 2020 study found that non-renewable energy facilities now cost more to run than solar power facilities. In place of these non-renewable energy industries, the Indian government and private entities might invest in “small-scale enterprises, tourism, agro-forestry and even local manufacturing of clean energy products, such as solar panels, inverters, batteries and two- and three-wheeler electric vehicles.” These new industries would make India less reliant on neighbors and rivals for energy equipment and technologies.
Clean energy in the U.S. and India increases both countries’ economic and political benefits. The transition will require close bilateral cooperation on technological innovation and dedicated financial investment in this decade. However, it will not be investors in these sectors alone who will reap the rewards of meeting 2030 clean energy targets. Millions of citizens in both countries will be affected by clean energy goals.
– Mckenzie Howell