Macroeconomic assessment of India’s development and mitigation pathways

International audienceAlthough a rapidly growing economy, India faces many challenges, including in meeting the Sustainable Development Goals of the United Nations. Moreover, post-2020 climate actions outlined in India’s Nationally Determined Contribution (NDC) under the Paris Agreement envision development along low-carbon emission pathways. With coal providing almost three-quarters of Indian electricity, achieving such targets will have wide-ranging implications for economic activity. Assessing such implications is the focus of our research. To do so, we use a hybrid modelling architecture that combines the strengths of the AIM/Enduse bottom-up model of energy systems and the IMACLIM top-down economy-wide model. This hybrid architecture rests upon an original dataset that brings together national accounting, energy balance and energy price data. We analyse four scenarios ranging to mid-century: business-as-usual (BAU), 2°C, sustainable 2°C and 1.5°C. Our 2°C pathway proves compatible with economic growth close to the 6% yearly rate of BAU from 2012 to 2050, at the cost of reduced household consumption but with significant positive impact on foreign debt accumulation. The latter impact stems from improvement of the trade balance, whose current large deficit is the primary cause of high fossil fuel imports. Further mitigation effort backing our 1.5°C scenario shows slightly higher annual GDP growth, thereby revealing potential synergies between deep environmental performance and economic growth. Structural change assumptions common to our scenarios significantly transform the activity shares of sectors. The envisioned transition will require appropriate policies, notably to manage the conflicting interests of entrenched players in traditional sectors like coal and oil, and the emerging players of the low-carbon economy