Supporting India's Recovery and Growth: Can It Be Green?

Junaid Kamal AhmadIndia Country Director,

World Bank Group

Important conclusions

• Economic growth in India is already decoupled from green house gas emission

• If fully implemented, the development programs of India will help the world secure its climate transition

• India will achieve its Paris NDC commitments

• Investment in human development – health, education, and social protection – is building resilience and is consistent with the Paris Agreement.

• It is in the interest of the world to partner with India’s development transition. 2

From a “lending” to a “leveraging”

Bank: crowd in private finance

Derisking development: WBG approach

IBRD-MIGA-IFC

Key shift for the World Bank: to address Climate finance

I. India: Size, Scale, and Diversity

Surface Area (Square km)

3.3 million7th in the World after Russia, Canada, US, China, Brazil, Australia

Population 1.34 billion 2nd in the World

Gross Domestic Products

US$ 2.6 trillion7th in the World after US, China, Japan, Germany, UK, and France

Number of Languages

4474th in the World; Hindi 43.6%, Bengali 8%, Marathi 6.9%, Telugu 6.7%, Tamil 5.7%,

Number of Ethnic Groups

more than 2,000

with all major religious groups

India Matters to the WorldPivotal to success of global development goals

5 INDIA SYSTEMATIC COUNTRY DIAGNOSTIC: A PREVIEW

India is Still Relatively Young

Median Age: 28.7 years old

141st Oldest in the World Median Age: 48.6 years

2nd Oldest in the World

India: If the States were countries….

State/Country Income per capita (USD;

current prices) Population # of poor

Poor share of state population

Bangladesh 1,698 161,356,039 39,209,517 24.3

Nagaland 1,606 2,099,000 376,000 17.9

Tripura 1,558 3,975,000 524,000 13.2

Rajasthan 1,541 75,333,000 10,292,000 13.7

West Bengal 1,453 97,456,000 18,498,000 19.0

Chhattisgarh 1,392 28,384,000 10,411,000 36.7

Odisha 1,310 44,861,000 13,853,000 30.9

Madhya Pradesh 1,286 79,936,000 23,406,000 29.3

Jammu and Kashmir 1,282 13,854,000 1,327,000 9.6

Meghalaya 1,257 3,413,000 361,000 10.6

Assam 1,150 33,905,000 10,127,000 29.9

Jharkhand 1,074 36,712,000 12,433,000 33.9

Manipur 1,008 3,294,300 1,022,000 31.0

Uttar Pradesh 912 220,836,000 59,819,000 27.1

Bihar 599 115,437,040 35,815,000 31.0

Total for Indian states above: 759,495,340 198,264,000

II. India Needs

Economic Growth

India Has a Strong Record of Growth and Poverty Reduction

10 INDIA SYSTEMATIC COUNTRY DIAGNOSTIC: A PREVIEW

0

2

4

6

8

10

Annual GDP per capita growth, 2010-2015 (%)China 46.1

21.3

34.7

14.1

0

10

20

30

40

50

1993 1996 1999 2002 2005 2008 2011

Population below poverty line (%)

India

India Needs to Recover: COVID-19’s Impact has been devastating

• 34 million infected; 469 thousand died (Japan: 1.7 million infected; 18 thousand died)

• Most tragic during the 2nd wave in May-June 2021• Over 400,000 new cases a day• Over 4,000 death a day

• 2020-2021 Economic Contraction: 8%

• Unemployment rate shot-up from 5.27% (2019) to 7.11% (2020)

• Severe learning losses (=future productivity losses) due to school closure

• Billion plus vaccinated (at least one dose)

III. If India’s Growth Path Is Not Green…

India is low per capita but already the 3rd

largest CO2emitter

What if India + Indonesia grow to the level of China today?

Country Name

GNI/Capita (PPP current international $)

CO2 Emission 2018

Current Rank

CO2 Emission when India+Indonesia grow to China's level

Projected Rank

% increase in CO2 Emission

China 16,180 10,313,460 1 10,313,460 1 0%

United States 66,060 4,981,300 2 4,981,300 3 0%

India 6,920 2,434,520 3 5,692,274 2 134%

Russian Federation 27,550 1,607,550 4 1,607,550 4 0%

Japan 43,880 1,106,150 5 1,106,150 5 0%

Germany 57,410 709,540 6 709,540 7 0%

Korea, Rep. 43,100 630,870 7 630,870 8 0%

Iran, Islamic Rep. 12,920 629,290 8 629,290 9 0%

Indonesia 11,910 583,110 9 792,168 6 36%

Canada 49,990 574,400 10 574,400 10 0%

Total 23,570,190 27,037,002 15%

Total Emissions would peak significantly earlier, and come down to about 17% below today’s level by 2050 (MtCO2e)*

Emission reduction in 2050 would be largely due to green electricity, electric vehicles, and green hydrogen (MtCO2e)

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

2020 2025 2030 2035 2040 2045 2050

BAU IPS ADS

Accelerated decarbonization would see emissions peak around 2030s and bend the curve to 17% below today’s level by 2050, mainly thanks to green electricity, electric vehicles and green hydrogen

Important conclusions

• Economic growth in India is already decoupled from green house gas emission

• If fully implemented, the development programs of India will help the world secure its climate transition

• India will achieve its Paris NDC commitments

• Investment in human development – health, education, and social protection – is building resilience and is consistent with the Paris Agreement.

• It is in the interest of the world to partner with India’s development transition. 16

Seen through the lens of WBG Partnership• The Country Partnership Framework (CPF) presented to the WBG Board

supports the development programs of India. – Growth, poverty, sustainability– The CPF is fully aligned with the Paris Agreement– The State Partnerships important for the Paris Agreement

• The WBG portfolio is aligned and consistent with the Paris Agreement– Each WBG project is measured in terms of contribution to climate mitigation and

adaptation – called “climate co-benefits”– The India portfolio’s climate co-benefit metrics are higher than the WBG corporate

commitments made to the Board. (FY 17-21 39% vs. 30%)

• Investment in human development – health, education, and social protection – focuses on building resilience and is also consistent the Paris Agreement.

17

Portfolio: the largest program of the World Bank

By Number of Projects By Commitment Volume ($ millions)

Agriculture, 15

Transport, 10

Water, 10

Energy, 10

Educaton, 9

Urban, 11

Health Nutrition & Population, 9

Governance, 6

Climate & Disaster, Risk Mgmt, 6

Social Protection, 4

Environment, 3

Finance, Competitiveness &

Innovation, 2

Povery, 1

Agriculture, $3,226

Transport, $2,639

Health Nutrition & Population, $2,506

Water, $2,473

Energy, $2,449

Educaton, $2,102

Social Protection, $1,700

Urban, $1,594

Climate & Disaster, Risk Mgmt, $1,322

Finance, Competitiveness & Innovation, $625

Environment, $248 Governance, $178

Povery, $30

Total: 96 Projects Total: $21,092 million

1. MDBs track climate co-benefits using a harmonized methodology

o Joint MDB Working Groups refine the methodology, periodically

2. Only actions that directly promote mitigation and/or adaptation count

o Relevant sub-components/ prior actions/ disbursement linked indicators

3. Mitigation: activities that reduce, limit, or sequester GHG emissions

o Energy efficiency; Efficient public transport; Climate-smart agriculture; Forests

4. Adaptation: activities that reduce vulnerability

o Climate risk-informed urban planning

o Social safety nets that target groups affected by climate change

o Disaster risk financing for climate-induced disasters (floods, droughts)

How are climate finance/co-benefits calculated?

India: Examples of FY 21 Projects with Climate Co-benefits

Project Name

Total

IBRD+IDA

($M)

CCB

Adaptation

($M)

CCB

Mitigation

($M)

CCB (%) CCB ($M)

Kerala Solid Waste Management

Project105 13 92 100% 105

Second Dam Rehabilitation and

Improvement Project250 69 168 95% 237

Resilient Kerala Program (PforR) 125 92 3 76% 95West Bengal Inland Water

Transport, Logistics and Spatial

Development

105 14 61 72% 75

Social Protection DPO (CCRISP) 500 60 108 34% 168

BIG PROJECTS:

SHIFTING THE CARBON TRAJECTORY

2

• Water: Ganga, Dam Safety, Swacch Bharat

• Transport: EDFC, Rural Roads

• Renewable Energy : 500 GW!

• Coastal Zones

• Climate-Smart Agriculture

Big Projects: Shifting the Trajectory

Big Projects

23

FIXING UTLITIES TO

IMPROVE SERVICES & ENHANCE SUSTAINABILITY

3

From building infrastructure …

…to a service delivery focus

Not just access, but also sustainability & quality

(Re)Building Institutions & Enhancing Resource Efficiency

• Shimla Water Utility

• Energy Discom Reforms

• Chennai Bus Corporation (MTC)

Fixing Utilities, Improving Services, Enhancing Efficiency

Shimla, 2018: Water supply crises

26… so, created a corporatized utility

Photo: Pradeep Kumar, The Indian Express (June 3, 2018)

Choking cities … need mobility solutions

27

STATE & CITY PARTNERSHIPS:

TACKLING WICKED MULTI-SECTORAL PROBLEMS

4

• Kerala: Resilient Kerala Initiative

• Punjab: Agriculture-Water-Energy Nexus

• Chennai: Sustainable urbanization (e.g. tackling the flood-

drought cycle)

State & City Partnerships

30

Kerala floods: 2018 (Idukki Dam)

31

Post floods: Rebuilding Kerala Initiative

32

1:

Resilient Recovery Planning

2: Enhance institutional &

financial capacity

Strengthen SDMA

Establish RBMA

Improve Urban Planning

Masala & Diaspora Bonds

3: Resilience in infrastructure &

services

Land & Geospatial Records

Water, Sanitation & Waste Management

Road Transport Sector Modernization

Climate-smart agriculture

CLIMATE & RESILIENCE:

Country Partnership Framework: CPF

5

SCD: Resource Constraints & Climate Impacts

34

LAND WATER AIR

Less land per person than China or Brazil Less water per person than China or Brazil Pollution worse than China or Brazil

• Transport: From roads to a diverse mode mix

• Renewable energy for low-carbon growth

• Resources: Air, Forests, Coastal Zones

• Resilient infrastructure (dams, roads)

• Climate-Smart Agriculture

• Sustainable Urbanization

Overall goal: Supporting India in

acclerating development transitions in key sectors

Climate & Resilience: Embedded across the Portfolio

• Stronger & more resilient health systems

- Better disease surveillance, diagnostics, services

• More inclusive social protection systems

- Pan India & portable, Urban+Rural, Migrants, Informal workers

• Education

- Green schools, climate curriculum, digital revolution

Such sectoral focus are Paris aligned,

but not all count as climate finance/co-benefits

Resilience: Health, Education, Social Protection Systems

From a “lending” to a “leveraging”

Bank: crowd in private finance

Derisking development: WBG approach

IBRD-MIGA-IFC

Key shift: to address Climate finance

VI. How Could Japan Support India’s Green Growth?

• Japan has been the largest and one of the most trusted donors to India

• Japan could assume the leadership position among donors in strengthening the institution, capacity, and system for:

• Infrastructure Investments Program Management

• Service Provisions in Transport, Energy, Water, and Health Care

• Disaster Risk Management

• Japan’s support to India’s Green Growth will benefit the people of Japan and the World, Particularly future Generations

VII. How Could Japan and the World Bank work together and Maximize Synergistic Impact in India?

Co-Financing/Parallel Financing

• Examples: 30 billion yen for “The COVID-19 Crisis Response Support Loan for Social Protection”

Taking Leadership Together

• JICA: Largest Bilateral Donor

• World Bank: Largest Multilateral Donor

Strengthening the Existing Collaborations in:

• Rail Sector

• Health Systems Strengthening

• Disaster Risk Management

VII. Financial Innovation: Equity and Guarantee for Green Growth

• IDA critical for low income countries. Essential

• World Bank’s Lending to India, Indonesia, etc. is limited to $3-4 billion/year as the SBL (Single Borrower Limit)

• To support COVID-19 response, SBL space was exhausted, forcing us to choose between human development or sustainable development

• Investment in World Bank financial equity

• World Bank loans guaranteed by a G7 country like Japan do not count for SBL, thus create more lending space

• The benefits:1) Equity: can be leveraged manifolds 2) Contingent liability – no actual cash flow unless the

borrower defaults3) Recognition – contribution to India’s green growth and

the World’s combat against climate change4) Can take advantage of the World Bank’s knowledge,

financial and fiduciary controls to ensure results

• CoP 26: UK provided $1 billion guarantees for future loans to India.

• Increased support of SDGs.

Thank you, and Q&A