Why Cutting Carbon Emissions in India and China Will Be Toughest

May 17, 2016, 8:10 PM UTC

Under the Paris Agreement, all countries must commit and adhere to aggressive cuts in carbon emissions. That won’t be easy for any region, but it will be toughest in India and China, the world’s two most populous countries.

As two experts told participants at Fortune‘s Brainstorm E conference on Monday in Carlsbad, Calif., the challenges and opportunities for both are immense.

In India, home to about 1.3 billion people, a push to create jobs in the manufacturing sector will result in massive energy demands. Today, the country is home to about 20% of the world’s population, but only consumes about 6% of available energy. That won’t last long.

“If you fast forward to 2030, India has to create 150 million jobs just to keep the population that’s educated at work,” said TK Kurien, executive vice chairman at Indian IT giant Wipro. “Roughly 100 million of those jobs are going to come from manufacturing.”

China, on the other hand, is shutting down steel plants and trying to move from a manufacturing-centric workforce to a service-oriented society. But its needs are growing too, as more and more of its population enters the middle class. The result? Steel will still be needed, but it might not be manufactured in China.

“Who makes steel in a world that’s decided to be carbon constrained?” said Kate Gordon, vice chair of the Paulson Institute’s climate and sustainable urbanization division. “How do you get the private capital in, particularly for infrastructure that everybody uses and no one wants to pay for?”

There are some bright spots.

“What’s exciting right now to me is what China’s trying to do on renewables,” said Gordon. “There is a lot of work that’s being done to figure out how to integrate renewables into the grid, and that could–if done well—serve as a model [for the rest of the world].”

Providing a model for renewables will become increasingly important as even more people move to urban centers. By 2030, between 60 to 65% of the world’s population will live in cities. India and China will be home to a large portion of those. And that makes carbon cuts an even bigger challenge than it is today.

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