Chairman of the Asia Region, McKinseyIndia - the world's fifth largest greenhouse gas producer - has much to lose from global warming. The country faces a real dilemma; on one hand, India needs to tap its rich coal reserves to help address an acute power shortage, with regular power outages putting a potential break on more rapid economic growth - but with a 7000-km long coastline, two-thirds of its population dependent on predominantly rain-fed agriculture and its most populous states crisscrossed by glacier-fed rivers, India is particularly exposed to rising sea levels, changing monsoon patterns and other possible consequences of global warming. Even so, India can still gain from the low carbon economy, at the very least, India (in common with other developing economies) might argue for accelerated technology transfer around "clean" energy sources such as photovoltaic and perhaps civil nuclear technology. India also has an opportunity to develop national competitive advantage for a low carbon world. Despite the power shortages, central government is taking a lead - targeting 10 percent of generation from renewable sources over the next five years and it has provided tax incentives to help drive investment. Several states are taking on the challenge - Tamil Nadu already has over 3,000 MWs of installed wind capacity.
This has helped support several dynamic Indian companies which are already in the forefront of renewable energy research, such as Suzlon, who has rapidly grown into the fourth largest (and by far the most profitable) supplier of wind turbines globally. Suzlon combined India's cheap labor, plentiful steel and light engineering skills base with a detailed understanding of local wind conditions to meet the local demand created by the government's incentive scheme. More recently, the company has tapped new markets in the United States and China, in the process delivering a 400 percent return to shareholders to create one of India's most recent billionaires in the form of owner-manager Tulsi Thanti. In the last year the company has moved its headquarters from Pune to Amsterdam to focus on global customers and dramatically expand its supply network. By building its national infrastructure with low carbon economics in mind, India might also leapfrog western economies, most of which will face a difficult period of adjustment. As well as making good sense from an environmental perspective, this could actually boost India's economic growth and development.