The first two weeks of September saw parts of India’s startup hub, Bengaluru, submerged under water. Excessive rainfall in a La Nina year, coupled with urban expansion built over natural water pools (lakes) resulted in multiple low-lying areas seeing several feet of waterlogging.
The increase in urban population across India has led to changes in land use without considering natural land contours and weather patterns. A similar situation was observed during floods in Chennai and Mumbai in recent years—a clear sign that urban planning and development must take into account nature and climate.
By 2035, India’s urban population is projected to further grow to 675 million (from 483 million in 2020), becoming the second-highest after China. Unlike the West, India and other developing nations do not have the option of curtailing the pace of development. With the end goal of double-digit growth, we will have to continue investing in steel, iron and cement, and consuming energy to power commercial and residential buildings. These sectors also account for nearly one-third of global emissions.
Climate change also increasingly poses an existential threat to cities. It has increased manifold the likelihood of extreme weather events. For instance, the record-breaking heat wave in May in north-west India was made 100 times more likely because of human-induced climate change. We need sustainable cities, which can mitigate further impact of urban settlements on climate, and are climate-resilient to shifting weather patterns.
As our urban population continues to grow, India stands at a unique challenge as well as opportunity. We will have to add net new infrastructure (~$1.4 trillion spends over the next five years), grow manufacturing, use more energy (India’s power demand is expected to grow by 6% this year), increase consumption (our per capita consumption currently is only one-fifth the global average) and bring more people out of poverty and into cities.
At the same time, we must continue to reduce emissions in line with the Panchamrita goals set by the Indian government, and build resilience among the most vulnerable societal segments.
This fine balance of people, profits and planet will necessitate innovative solutions and technology-led models across the economy and across vital sectors like energy, mobility, resources, supply chains and agriculture. India’s track record of technological leapfrogging from cash to digital and fixed-line to 4G, bodes well for our sustainability journey. Climate-tech in India is a nascent and emerging sector; a confluence of smart capital, conducive policy, discerning consumers and cost-effective technology have brought the sector to the forefront. Armed with experience from India’s first internet revolution, the rapidly growing entrepreneurial ecosystem is churning a new set of innovators building for climate.
Climate and sustainability are the next digital, and will have to be embedded into business models. Promising emerging technology-led solutions can aid mitigation, adaptation and resilience. Data models built on climate data and geospatial analytics can enable improved urban planning and weather-readiness. Energy efficiency through smart devices, and improved grid robustness can reduce the energy intensity of residential and commercial buildings. Alternative materials in construction, manufacturing, packaging etc. can help decarbonize vital sectors of the economy. Digitization of supply chains and integrating industry 4.0 and IoT can improve operational efficiencies and eliminate process redundancies. Climate-risk integrated underwriting models in finance and insurance can help accurately price risk and protect wealth. Models around green shared mobility also become important in the urban context. Carbon sequestration can help create permanent stores of carbon, and thus reduce warming.
The scope for climate-tech is far-ranging and wide. The pace of capital for climate must be hastened to boost this momentum. Globally, climate-tech investments account for 14% of venture capital funding, against only ~1.5% in India, with most capital flows in mobility and renewable energy.
Investments in climate-tech solutions across the board are required today to initiate the transition towards planet positivity, and meet 2030 targets of 1 billion tonnes of emissions reduction, 50% renewable energy, 500MW non-fossil energy capacity and 45% reduction in our economy’s carbon intensity. These investments are required across the capital continuum—from lab-scale research and development, early capital for commercialization and market acceptance, as well as growth capital at scale. Continued support for start-ups across policy, capital, and industry can help unlock a sustainable, green future.
Anjali Bansal is the founder of Mumbai-based venture capital firm, Avaana Capital.