Climate Investment Opportunities in India’s Cooling Sector

Abstract

India, recognizing the complex challenges of rising temperatures, was one of the first countries in the world to develop a comprehensive Cooling Action Plan in 2019. The India Cooling Action Plan (ICAP) sets out a long-term vision of ensuring sustainable cooling and thermal comfort for all while securing environmental and socio-economic benefits. The ICAP recognizes that cooling is a cross-sectoral challenge, and that sustainable delivery of cooling is needed to deliver climate-resilient economic growth. To help India achieve the ICAP’s bold vision while identifying entry points for World Bank sectoral engagement, the Bank commissioned a study in December 2020, with the aim of identifying practical ways to Support the Implementation of the ICAP, including via identification of the role of concessional finance in delivering cooling solutions. Following a consultation process involving over 20 different stakeholders from academia, industry, thinktanks and the Government, the study found that over the next few decades, the projected growth of cooling-related sectors will result in an exponential rise in cooling and refrigerant demands, and energy consumption in all sectors. This will be matched with an increase in GHG emissions, projected to double by 2027. It concludes that India’s cooling strategy can help mitigate risks of heat on lives and livelihoods, lower carbon emissions, and position India as a global hub for green cooling manufacturing. Additionally, India’s long-term food security and public health security depend on a reliable cold chain network. Unlocking opportunities to create a sustainable cooling strategy will also help India in its post-COVID recovery by boosting investments, creating jobs, reducing emissions, and securing the supply chains of medical care products, health infrastructure, as well as food products. The study includes a series of roadmaps designed to help achieve sustainable cooling in key ICAP thematic areas, i.e., Space Cooling in Buildings, Cold-Chain and Refrigeration (Agriculture and Health), Passenger Transport Air-Conditioning and Refrigerants. The study finds that concessional finance by multilateral development banks, financial institutions and the private sector will play a key role in helping India develop financial instruments and innovative models to accelerate the adoption of sustainable cooling measures. These innovative financial instruments will be crucial to develop and transform the cooling market in India.