- Maddy Nair
A Massive Blow: Does the Adani Group's Recent Controversy Hurt India's Net-Zero Targets?
The 2021 COP26 conference saw Indian Prime Minister Narendra Modi pledge to cut emissions to net zero by 2070. While this was the first time the country had made such a promise, it did not match with the summit’s overall aim for countries to reach such a goal by 2050. The U.S. and EU countries, for example, aimed for net zero emissions by 2050 in line with COP26 goals, while Asian superpower China promised net zero by 2070. Despite small criticism from certain parties, India’s leader was generally commended for his stance as it showed that the country with the third-largest carbon dioxide emissions in the world was committed to change.
Soon after the pledge, analysts at the Centre of Social and Economic Progress spoke up in support of Modi as they claimed the period between 2065 and 2070 was a fair target for the nation. In a detailed plan submitted to the United Nations, India explained key measures they would be taking to help cut down on the use of fossil fuels and slow global warming. The plan’s overarching component, however, was "LiFE - Lifestyle for Environment.” According to spokespeople, “LiFE” promoted a mass movement which emphasized a "healthy and sustainable way of living based on traditions and values of conservation and moderation.” Some experts, however, saw this to be a direct contradiction with India’s goals of economic and business development. With private consumption taking up more than half of India’s GDP, it is hard to reconcile its financial with its environmental goals.
According to experts, India would require a $10 trillion dollar investment to achieve their goal of net-zero. With money being the key to their green-energy dreams, it is no surprise that one of Asia’s wealthiest men would be a crucial step in the plan. Gautam Adani — chairperson and founder of the Adani Group — until recently held the spot of the richest man in Asia after making much of his money from shipping and mining. His rise in the industry is also largely due to his close ties with Narendra Modi, with commentators describing their relationship as the “the closest relationship a politician can have with a business owner.” On January 24th, however, short-seller firm Hindenburg Research published a report accusing Adani’s conglomerate of fraud and stock manipulation. While the Adani Group has since responded to these claims by calling them “baseless” and as an attack on “the country of India,” the organisation has suffered major losses with a $100 billion drop in its valuation. Adani himself has since dropped out of the list of the world’s top 20 wealthiest individuals.
Adani’s loss in wealth is of major concern to India's net-zero plans as he had previously pledged $70 billion to green energy efforts, concentrated on solar panels, wind energy, and hybrid renewable power generation. With a fall in the Adani Group’s stock valuation, investors began to lose confidence. One of the first of these was TotalEnergies. The French oil and gas group has come out with a statement that their $4 billion investment into a green hydrogen project with the Adani Group will be put on hold until there is more clarity into the situation. Despite this, however, a spokesperson of the Adani Group has reassured investors that there would be no change in the company's “energy transition plans.” While it is still too early to say how the company’s issues will impact the nation’s net-zero target, others in the field believe it could be a chance for other organizations to step up and take charge. One of these organisations could be the Reliance Group, which belongs to the richest man in India, Mukesh Ambani. The Reliance Group announced early last year that it planned on allocating nearly $80 billion into green energy projects in the western state of Gujarat. If these plans are held to the standard promised, it could still mean that the COP26 pledge is reached.