Summit Theme Paper: Pathways to 2040 - Collaborate Create Innovate

Creating a Sustainable Economy by 2040

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While a tremendous economic growth expected for India over the next two decades, India is also likely to be faced by an ever increasing demand for all natural resources like energy, water, materials, land and fossil fuels. Economic growth would also result in increased consumption levels leading to increased pollution, increased levels of waste generation, ultimately resulting in higher GHG emissions. This necessitates a need for India to rethink its growth strategy in terms of sustainability to ensure that India can become a sustainable economy by 2040.

In the Indian context, a sustainable economy would refer to an economically viable, environmentally sound and socially responsible economy. As India strives to become a sustainable economy, the economic (GDP) growth needs to be supported through the interplay of three key pillars of Sustainable Production, Sustainable Consumption/Living and Sustainable Livelihoods. The graphic below depicts the pathways under each of the three pillars, which taken together, can lead to the creation of a sustainable economy in India.

Sustainable Production- Need of the hour in India

There has been a recent focus on improving India’s manufacturing capabilities in the last year with the government’s flagship Make in India campaign. The government has rightly identified the manufacturing and industrial sector to be the biggest driver behind India’s economic and social growth in the coming decades if India hopes to maintain an average of 7.5-8.5% growth.This will exert significant impact on the status of the other two pillars of a sustainable economy, namely, sustainable consumption and sustainable livelihoods.

Sustainability in India’s manufacturing sector, or the lack thereof can either propel India to the heights that the government envisions or sink the country into a mess of resource scarcity, pollution and unfulfilled human potential. Thus, this brief focuses on the Sustainable Production aspect to achieve a sustainable economy in India by 2040.

Roadmap for Sustainable Production in the Indian Economy

To determine the high priority industries which are likely to have the maximum impact on overall sustainability in the industry, Sustainability Outlook prepared a framework. This framework examined the various industrial sectors in India and takes into account several parameters like Contribution to GDP, Employment Contribution, Level of Exports and the Necessity Quotient for determination of priority status.

The eight industries which emerged as high priority are:

Primary Focus Industries
Textile
Automotive
Construction
Iron and Steel
Secondary Focus Industries
Electronics and Electrical Equipment
FMCG
Oil and Gas
Metals and Mining

Identifying areas of sustainability interventionsin the high priority focus industries

The table below indicates the extent to which primary resource constraints are likely to impact each of the above identified high-priority sectors.

Degree of impacts of resource constraint on high priority sectors: Sustainability Outlook Analysis

Sectors Primary resource constraints
Energy Water Raw materials
Automotive XXX X XX
Textile XXX XX X
Construction X XX XXX
Metals and Mining XX    
Iron and Steel XXX X XXX
FMCG XX XXX XXX
Electronics and Electrical Equipment XXX XX XXX
Oil and Gas XXX XXX XXX

Deep dive: Critical success factors for sustainability in high priority industries of focus

Sustainability Outlook examined these eight sectors and determined the steps that will be critical to ensuring sustainability in these sectors.

Impacts of High Priority Manufacturing Sectors; Source: Sustainability Outlook Analysis

Sectors Impact of manufacturing/end product use
Environmental pollution (Land, water, noise) GHG emissions (direct / indirect) Employee Health and safety Consumer Health and safety
Automotive Medium High High Low
Textile High High High Medium
Construction Medium Medium Medium Low
Metals and Mining High High High High
Iron and Steel Low High High Low
FMCG Medium Medium Medium High
Electronics and Electrical Equipment Medium Medium Medium Medium
Oil and Gas High High High Medium

Pathways to 2040: Ingredients to scale solutions

Today, in many of these industrial sectors, a significant traction has been seen in moving towards sustainability. The leaders in all these segments have already addressed their low-hanging fruits and are looking towards steps and measures that can drastically impact their resource consumption.

For industrial manufacturing in India to become environmentally sustainable by 2040, new solutions are emerging. These solutions, which will be instrumental for this transition, are common across these manufacturing sectors and are likely to game-changers for industrial resource sustainability over the next few decades.

These are:

  • Use of Alternative Raw Materials
  • Smart IT Tools
  • Improved Process/ Technical Efficiency
  • Waste stream recovery/closed loop systems
Use of alternative raw materials
  • Development of policies and standards to encourage and allow the use of alternative raw materials in manufacturing processes
  • Creation of a market for recycled products by offering tax benefits
  • Demand from supply-chain to use greener raw materials
  • Demand from consumers for products with lower carbon footprint
  • Interventions Industry applicability Technology Segment Market uptake
    New polymer development Textiles, chemicals Emerging Low
    Alternative chemicals Industrial Emerging Low
    Sustainably sourced raw materials Pulp and Paper, Textile New Medium
    Smart IT Tools
  • Regulation mandating real-time online monitoring of inlet and discharge outlets
  • Demand from consumers to track and monitor resource consumption in the supply chain
  • Demand from consumers for Smart Technology that will reduce inefficiencies in the system, leading to significant resource savings
  • Interventions Industry applicability Technology Segment Market uptake
    Energy metering tools Domestic/Industrial New Medium
    Water metering tools Domestic/Industrial New Low
    Process automation and optimization Domestic/Industrial Emerging Low
    Intelligent building design solutions Industrial/Commercial New Low
    Logistics tracking solutions Commercial New Medium
    Data Management Systems Industrial/Commercial New Medium
    Reverse logistics tracking systems Industrial/Commercial Emerging Low

    Apart from the above mentioned ingredients, other factors that will not have a direct bearing on the industrial processes but still be crucial in determining success of these initiatives will be

    • Establish quantified goals for energy, water and waste
    • Monitoring and reporting of successfully designed and implemented ‘Green’ projects.
    • Involvement of employees and educating them regarding pressing environmental problems
    • Make Socially responsible Investments (SRI) to support the cause of environment.
    • Availability of innovative financing mechanisms to support sustainability initiatives, some of which are highly resource intensive and might not be feasible for smaller players
    Waste stream recovery/closed loop systems
  • Policies and legislation enforcing reduction of discharge and waste generation
  • Stringent laws on hazardous waste disposal and landfilling
  • Promotion of use of recycled substances by offering tax benefits
  • Value in waste recovery and recycling acknowledged by manufacturers as resource constraint intensifies
  • Interventions Typical Waste Streams Technology Segment Market uptake
    Gaseous effluent resource recovery Gaseous effluent streams Mature High
    Liquid effluent resource recovery Waste-water, chemicals, process water and solvents New/Emerging Medium
    Solid waste resource recovery Process sludge, slag, fly-ash, residues, process consumable, scrap metal New/Emerging Low
    Waste to energy technologies Agri-waste, Municipal solid waste New/Emerging Low
    Construction and demolition waste recycling Construction and demolition waste Emerging Low
    Zero Liquid Discharge Industrial Emerging Low
    Improved process/technological efficiency
  • Development of international and national benchmarks for resource efficiency of manufacturing processes
  • Goals for improvement of resource efficiency through programs like the PAT Scheme
  • Savings seen as a result of improving water and energy efficiency as these resources get re-priced due to increased demand and stress on resources
  • Interventions Industry applicability Technology Segment Market uptake
    Energy efficient appliances Domestic, Commercial and industrial Mature Medium
    Water efficient appliances Domestic, Commercial and industrial Mature Medium
    Process/machine up-gradation Industrial Mature Medium