As COP-27 gets underway, the international spotlight returns to climate change. This year, the summit has been partly overshadowed by the major geopolitical currents in the world. Unfortunately, international cooperation on climate is taking a backseat to the major power geopolitics. However, it is absolutely imperative that nations around the world, including India, keep up the momentum in their respective net-zero transition journeys.
While India’s focus at COP-27 remains on holding the West accountable for low-cost climate finance and technology transfer, we must also continue to develop a self-sufficient plan.
Some key elements of a multi-stakeholder plan are already visible. One, large Indian companies have announced major investments in technologies such as green hydrogen, electric vehicles, and solar power. Adani Group and Reliance, two of India’s largest conglomerates, have committed to investing tens of billions of dollars in renewable energy over the next few years. At the same time, many large corporations, including ITC, Infosys and Mahindra and Mahindra, have committed to net-zero targets within the next ten to twenty years.
Two, the government is also bringing enabling policies to encourage adoption of these technologies. Besides various PLI schemes to encourage private investments, it is also undertaking initiatives such as the issuance of sovereign green bonds to facilitate cheaper financing for green projects. The government is also promoting a healthy and sustainable way of life fbased on traditional Indian values of conservation and moderation through a mass movement for ‘LIFE’ – ‘Lifestyle for Environment’ as a key measure to address the demand-supply equation. Simultaneously, Indian philanthropists and global foundations are stepping in to assist India’s most vulnerable communities in developing climate resilience and adaptation plans.
But India’s emerging strategy has a major gap that needs to be addressed urgently. Many Indian companies are making significant investment plans but the startup ecosystem is largely missing from the picture. The climate technology puzzle for India cannot be solved by these big corporations alone. They cannot, and should not be expected to, cover all areas of scientific research and technological innovation required to transform India into a green superpower.
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Climate tech innovations
Climate technology now extends beyond electric mobility, solar and wind energy, and green hydrogen. Smart grid technologies, energy efficiency in buildings, bio-technology, agri-technology, space and satellite technology, data analytics, carbon capture, storage and utilisation (CCUS), waste management and utilisation, alternative materials, and many other sub-sectors are included.
These emerging areas of climate tech innovation have become a big emphasis for entrepreneurs around the world. Many governments, private players, and investors (private equity and venture capital firms) are heavily investing in many of these technologies. According to a BloombergNEF report climate-tech companies focused on climate tech innovation raised $165 billion in 2021 across private and public markets, with the energy and transportation sectors each attracting roughly $68 billion, followed by agri-tech receiving $15 billion. However, less than $2 billion of the nearly $27 billion invested in climate tech by venture capital firms globally in the first half of 2022 went to Indian startups.
To achieve the lofty goal of becoming a green superpower, India must incorporate its thriving startup ecosystem into its climate strategy. Only then will we be able to move beyond our current focus on a few technologies – green hydrogen, solar and wind power, and electric mobility – and become a significant early leader in other emerging areas of climate technology.
The Indian startup ecosystem now includes a large community of high-quality technology entrepreneurs who, in terms of vision, ambition, understanding and execution, can compete with the best entrepreneurs globally. Moreover, we have a vibrant ecosystem of risk-taking venture capital and angel investors across the country, ranging from large VC and PE firms to various angel investor syndicates. Several successful technology startups in India have scaled up to become viable, profitable multi-billion dollar businesses in recent years.
Both technology entrepreneurs and venture capitalists from the internet startup ecosystem must be encouraged to launch and support climate technology startups in India. Of course, some exciting, innovative climate tech startups are emerging in India already, but we are lagging behind our counterparts in the US and Europe.
However, there are some significant differences between internet technology and climate technology that must be considered. For example, unlike the internet technology space, climate technology startups will need access to core scientific research and innovative R&D to serve as the foundation for their products and services. Therefore, we must focus on linking our startup community with the climate research community to enable this cross-pollination, and also significantly bolster our R&D capabilities.
R&D parks, incubators and accelerators with the requisite lab infrastructure, talent, mentorship, and industry linkages must dot the various cities and universities of India. These research centres must also establish strong collaboration ties with their counterparts in other parts of the world, specifically the US, the UK, Europe and Asia. Various stakeholders – corporates, central and state governments, foundations, philanthropists, venture capital and PE firms, and others – must come together to support these research centres. Corporate R&D spending, whether through internal research teams or through these centres, could be pushed in the same way that mandatory CSR spending for corporations is.
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India’s focus on emerging waves
Finally, the bottom-up research and startups that emerge from this approach would perfectly complement the top-down sustainability push being made by governments and large corporations in the fields of green hydrogen, solar and wind power, and electric mobility.
Apart from funding large projects in these areas, funding from other countries and sources must also flow into India’s climate tech research and startup ecosystem. Currently, India is largely seeking low-cost project financing from the West. However, it could use its G-20 presidency this year to encourage G-20 countries to direct substantial funding toward India’s climate research and startup ecosystem, in addition to facilitating collaboration between the various research ecosystems. This must become a key agenda item for India at the G-20 and other international platforms.
As I have argued in my recent book, The Great Tech Game, India must focus on emerging waves of technological innovation rather than chasing the tail of the previous wave. Climate technology is one of those emerging technological waves. India will do well to follow up its Startup India movement now with a whole-of-society Climate India movement.
Anirudh Suri is non-resident scholar at Carnegie India and a technology venture capitalist. Views are personal.
The article is part of a series examining the geopolitics of technology, which is the theme of Carnegie India’s seventh Global Technology Summit (29 November to 1 December), co-hosted with the Ministry of External Affairs. Click here to register. ThePrint is the digital partner. Read all articles here
(Edited by Tarannum Khan)