Crucial Issues for an Effective Climate Policy in India - … Issues for an Effective Climate Policy in India ... Rajkot ChiptunGuhagar Solapur ... Ahmedabad, India Train Corridors

Indian Institute of Management, Ahmedabad, India

Crucial Issues for an Effective Climate Policy in India

P.R. ShuklaIndian Institute of ManagementAhmedabad, India

Presented at International Workshop on, “Reconciling Domestic Energy Needs and Global Climate Policy: Challenges and Opportunities for China and India.”Palazzo Querini Stampalia,Venice, Italy, March 15, 2010

Subash DharUNEP Risoe CentreRoskilde, Denmark


Agenda

1. Drivers

2. Vision & Scenarios

3. Modeling & Base Case Projections

4. Stabilization Challenge

5. Crucial Issues

6. Conclusions


Demographic DriversYear: 2000 Pop: 1021 Million

80 60 40 20 0 20 40 60 80

Age

Population (million)

Female Male

15 -

60 y

ears

0

Male Female

18-6

2 Yr

s

80 60 40 20 20 40 60 80Population (Million)

Age

Pop: 1593 MillionYear: 2050

80 60 40 20 0 20 40 60 80

Age

Populat ion (mil l ion)

Female Male

15 -

60 y

ears

Male Female

18-6

2 Yr

s80 60 40 20 0 20 40 60 80

Population (Million)

Age

Population (Million)

358

555

849

1183

14491593

0

400

800

1200

1600

1950 1970 1990 2010 2030 2050

2.22%

2.15%

1.67%

1.02%

0.47%

Growth Rate

Labor Force (Million)

133

210

360

595

795915

0

200

400

600

800

1000

1950 1970 1990 2010 2030 2050

2.30%

2.74%

2.54%

1.46%

0.70%

Growth Rate


Drivers of Economic Growth Human Capital

⎯ High Labor Supply ⎯ Increasing Education ⎯ Migration (intra & inter county)

R&D⎯ Increasing Government/ Private Expenditure⎯ International Knowledge Flows ⎯ R&D Collaborations

Technology⎯ Infrastructures⎯ Learning, transfers, deployment

Behavioral Changes⎯ High Savings Rate⎯ Changing Lifestyles

Governance⎯ Institutions⎯ Laws⎯ Policies

Savings Rate

20.622.8

24.6

33.035.0

32

0

5

10

15

20

25

30

35

1980 1990 2000 2010 2020 2030

4037??


Base Scenario GDP

0

5

10

15

20

25

2005 2020 2035 2050

Bas

e Ye

ar 2

005=

1

Annual Growth Rate 2005-50: 7.3%Annual Growth Rate 2005-32: 8%

GDP

0

2000

4000

6000

8000

10000

12000

2000 2010 2020 2030 2040 2050

US

$/pe

rson

Per Capita Income

Base Case Assumptions: Summary1. GDP

• Ann. Growth Rate: 7.2% from 2005-50• 2050 Economy: 24 times larger than 2005

2. Population • 2000: 1021 Million• 2050: 1593 Million

3. 650 ppmv CO2e Concentration Stabilization (or 550 CO2)4. Radiative Forcing: 4.7 W/m2


Visions & Scenarios


Conventional Climate Centric Paradigm

Carbon Market

Technologies

Energy Resources

Universal Participation

Market Structure/ Rules

Allocation of Rights

Modify Preferences

Competition/ Trade

Energy-Mix Mandates

Tech Transfer

Cooperative R&D

Remove Market Barriers

TargetInterventionsDriversAim

Forecasting

Stabilization at Minimum GDP Loss

Global Greenhouse Gas

Concentration Stabilization


Sustainable Development&Climate Paradigm

Low Carbon Society

Innovations

Co-benefits

Sustainability

Technological

Social/Institutional

Management

Modify Preferences

Avoid Lock-ins

Long-term Vision

Win/Win OptionsShared Costs/Risks

Aligning Markets

National Socio-economic

Objectives and Targets

Global Climate Change

Objectives and Targets

TargetsInterventionsDriversAim

Back-casting


Sustainable Development & Climate Paradigm

Stabilization Scenarios with Global Targets

Baseline Paradigm

StabilizationTargets

Scenarios

Geography Level

2.66.0 5.0 Radiative Forcing Target W/m2

Global Regional National

4.5 2.66.0 5.0 4.5

Global Global Regional NationalGlobalLocal Local

Conventional Sustainability

Δt 4 to 6OC Δt 3 to 5OC

Δt 3OC

Δt 2OC


Modeling & Base Case Scenario


Integrated Modeling Framework

DATABASES-Socio-Economic, Technologies, Energy Resources, Environmental Constraints

AIM CGE Model

ANSWER-MARKALModel

AIM SNAPSHOT ModelEnd

Use

Dem

and

Mod

elA

IM Strategic D

atabase(SD

B)

Integrated Modelling FrameworkDATABASES

AIM SNAPSHOT ModelEnd

Use

Dem

and

Mod

elA

IM Strategic D

atabase(SD

B)

DATABASESSocio-Economic, Technologies, Energy Resources, Environment

AIM CGE/GCAM

ANSWER-MARKALModel

AIM ExSSEnd

Use

Dem

and

Mod

el

AIM

(SDB

)(Strategic D

atabase)


National Analysis: MARKAL & End Use Models

From 2005-2050:Annual Economic Growth: 7.2%Annual Population Growth: 0.9%

Absolute Growth in 2050 over 2005Economy 23 timesPopulation 1.56 times

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mto

e

Other RenewablesNuclearHydroGasOilCoalCommercial BiomassNon Com Biomass

Energy

Base Scenario: Growth of Economy and Population

Carbon Emissions

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mill

ion

Ton

CO

2


2OC Stabilization Challenge


Global & National Analysis: GCAM & AIM/CGEBase Case Scenario: INDIA

0

1000

2000

3000

4000

5000

6000

2005 2020 2035 2050 2065 2080 2095

Mto

e

OilGas

Coal

Nuclear

Renewable

Unconventional oil

BaU

INDIA: Carbon Emissions

%

GDP Loss for India

0

1

2

3

4

5

6

7

8

2005 2020 2035 2050 2065 2080 2095

450 ppmv (2 deg C)

550 ppmv (3 deg C)

Electricity Production (in EJ) and CCS Share (in %)

5.543.190.710.00550 ppmv% share)

11.8310.675.720.00450 ppmvBiomass w/CCS

2.852.751.630.00550 ppmv(% share)

4.035.065.380.00450 ppmvGas w/CCS

29.0821.316.200.00550 ppmv(% share)

33.3836.2029.710.00450 ppmvCoal w/CCS

61.9139.5810.512.55550 ppmv

67.3543.8610.782.55450 ppmv

65.4343.1412.432.55BAU Total Electricity Production(in EJ)

2095206520352005Scenario

5.543.190.710.00550 ppmv% share)

11.8310.675.720.00450 ppmvBiomass w/CCS

2.852.751.630.00550 ppmv(% share)

4.035.065.380.00450 ppmvGas w/CCS

29.0821.316.200.00550 ppmv(% share)

33.3836.2029.710.00450 ppmvCoal w/CCS

61.9139.5810.512.55550 ppmv

67.3543.8610.782.55450 ppmv

65.4343.1412.432.55BAU Total Electricity Production(in EJ)

2095206520352005Scenario


Mitigation Options: Conventional

0

2,000

4,000

6,000

8,000

2000 2010 2020 2030 2040 2050

Mill

ion

Ton

CO

2Other

CCS

Device EfficiencyNuclear

Renewable

Fossil Switch

Emissions (for 2O Target)

Baseline Emissions

Carbon Price ($) 20 87 136 20052

Conventional Approach: transition with conventional path and carbon price

• High Carbon Price• Climate Focused Technology Push• Top-down/Supply-side actions

Technology Co-operation Areas• Energy Efficiency• Wind/Solar/Biomass/Small Hydro• Nuclear/CCS


Mitigation Options: Sustainability

Sustainability Approach: aligning climate and sustainable development actions

• Low Carbon Price• Bottom-up/Demand-side actions• Behavioural change• Diverse Technology portfolio

Technology Co-operation Areas• Transport Infrastructure Technologies• 3R, Material Substitutes, Renewable Energy• Process Technologies• Urban Planning, Behavioral Changes

0

2,000

4,000

6,000

8,000

2000 2010 2020 2030 2040 2050

Mill

ion

Ton

CO

2

CCSTransport Reduced ConsumptionRecyclingMaterial SubstitutionsDevice Efficiency

Renewable Energy

Building

Fossil Switch

Emissions (for 2O Target)

Carbon Price ($) 15 55 100 11728


Co-benefits of Energy ChoicesCoCo--benefits of Southbenefits of South--Asia Asia

Integrated EnergyIntegrated Energy--Water MarketWater Market

Benefit (Saving) Cumulative from 2010 to 2030

$ Billion % GDP

Energy 60 Exa Joule 321 0.87

CO2 Equiv. 5.1 Billion Ton 28 0.08

SO2 50 Million Ton 10 0.03

Total 359 0.98

Spill-over Benefits / Co-Benefits

• More Water for Food Production (MDG1)

• 16 GW additional Hydropower (MDG1&7)

• Flood control (MDG1&7)

• Lower energy prices would enhance competitiveness of regional industries (MDG1)

¨

!.

!.

!.

!. !.

!.

!.!.!.!.

F

F

Ñº

ÑºÑº

India

China

Iran

Pakistan

Afghanistan

OmanMyanmar (Burma)

Thailand

Nepal

Turkmenistan

Saudi Arabia

Tajikistan

Yemen

Bangladesh

Sri Lanka

Bhutan

Uzbekistan

Somalia

United Arab Emirates

Qatar

Laos

Malaysia

Bahrain

IndonesiaMaldives

Pune

GayaKota

Guna

Gadag

Kochi

Patna

Delhi

Anand

Dadra

SuratOlpad

Kalol

Panvel

Hassan

Dispur

Ambala

Nangal

Kanpur

Jhansi

UjjainJhabua

Valsad

NadiadRajkot

SolapurGuhagarChiptun

Chennai

Nellore

Kolkata

Sangrur

Sonipat

AuraiyaGwalior

Chotila Bharuch

PalmanerChittoor

Kokinada

LudhianaBathinda

Bareilly

Vijaypur

Mahesana

Tutikorin

MangaloreBangalore

Vijaywada

Faridabad

Ratnagiri

Kayankulam

Coimbatore

Jagdishpuri

Shahjahanpur

Vishakhapattnam

Tiruchchirappalli

Herat

MultanQuetta

Khuzdar

Karachi

DelaramKandhar

South-ParsIranshaharBandar-e-Abbas

Legend Important PlacesExisting Gas Pipelines

Proposed Gas PipelinesExisting LNG terminalsProposed LNG terminalsExisting Gas Basin

Gas Pipelines under construction

Proposed Gas Basin¨


Implications for Primary Energy Mix

Energy Mix in 2050

0

400

800

1,200

1,600

Coal Oil Gas Nuclear Hydro Renewable

Prim

ary

Ene

rgy

Dem

and

(Mto

e) Base

LCS_CT

LCS_SS

Total Energy Demand (Mtoe)

Base 2825 LCS_CT 2945 LCS_SS 2207


Additional Renewable Energy

0

100

200

300

400

500

600

700

2020 2030 2040 2050

Incr

ease

ove

r B

ase

Cas

e (M

toe)

Hydro

Solar

Wind

Bio-energy

(in Sustainability Scenario over Base Case)


Primary Energy & Carbon Price

2OC Sustainability Scenario

Base Scenario0

50

100

150

200

250

2010 2020 2030 2040 2050

Pric

e (U

S $/

tCO

2)

2OC Conventional Mitigation Scenario

Carbon Price


Crucial Issues


National Climate Change Action Plan

8 National Missions:1. Solar Energy (100 MW PV/yr; 1000 MW Thermal by 2017)

2. Enhanced energy efficiency (10000 MW saving by 2012)

3. Sustainable habitat

4. Water Sector (20% water use efficiency improvement)

5. Sustaining the Himalayan eco-system

6. A “Green India” (6 Mil. Hectare afforestation; Forest cover from 23 to 33%)

7. Sustainable agriculture

8. Strategic knowledge for climate change


Infrastructures to Overcome Lock-ins - 1

Gas Demand for Power Generation 2010-2030

10

30

50

70

90

2010 2015 2020 2025 2030B

cm

BaseCRCBW

Coal by Wire


Train Corridors • Sustainable modal shift

• Efficient logistics

• Infrastructures investments

• Associated development

Technologies for Train Corridors

Haryana Dadri

J.N.Port

Rajasthan

Maharashtra

GujaratMadhya Pradesh

Haryana

Uttar Pradesh

Infrastructures to Overcome Lock-ins - 2


AMC (Old

boundary)

AMC (New

boundary)

Sustainable Low Carbon CitiesAhmedabad (2009) Pop 5.5 Mil

Sectoral CO2 Emissions ( mt CO2)

0

10

20

30

40

50

60

70

2005 2035 BaU 2035 LCS

Mt C

O2

Freight TransportPassenger TransportIndustryCommercialResidential

0.02.04.06.08.0

10.012.014.016.0

Valu

e in

200

5 =

1

PassengerTransportDemand

Energy Demand GHG Emissions

2005 2035 BAU 2035 LCS

10.2

61.1

20.4

8.6

15.4

6.32.44.33.7

0

10

20

30

40

50

60

70

2005 2035 BaU 2035 LCS

GH

G E

mis

sion

s/re

duct

ions

(mt-

C02

)

Transport EfficiencyIndustry EfficiencyBuilding EfficiencyFuel Switch

Energy Service demand

Coal + CCS

Emissions

Mitigation Contributions

67%


Demateralization

0

200

400

600

800

1000

Dem

and

(Mill

ion

Ton)

Conventional Development

Sustainable Society

0

200

400

600

800

1000

Dem

and

(Mill

ion

Ton)


Sustainable Society

Cement

2000 2010 2020 2030 2040 20500

100

200

300

400

500

600

700

2000 2010 2020 2030 2040 2050

Dem

and

(Mill

ion

Ton)

Steel


Sustainable SocietyD

eman

d (M

illio

n To

n)

0

100

200

300

400

500

600

700

2000 2010 2020 2030 2040 2050

Steel


Sustainable Society100

200

300

400

500

600

700

2000 2010 2020 2030 2040 2050

Conventional DevelopmentConventional Development

Sustainable Society

0

5

10

15

20

25

30

35

40


Sustainable Society

0

5

10

15

20

25

30

35

40


Sustainable Society

0

5

10

15

20

25

30

35

Dem

and

(Mill

ion

Ton)


Sustainable Society

2000 2010 2020 2030 2040 2050

Paper

Dem

and

(Tril

lion

Lum

en h

rs)

0

1000

2000

3000


Sustainable Society

Lighting

2000 2010 2020 2030 2040 2050


Technologies

– Energy: Efficiency, Renewable, Nuclear

– Industrial Process: Cement, Steel, Paper

– Infrastructure: Transport, Pipelines, Electricity T&D, Hydro (+Canals)

– Soft Solutions: Communication

– Conservation/Behavioral: 3R, Material Substitutes

– Planning: Urban design, Industry locations

– End-of-pipe Solutions: CCS


Conclusions


US Secretary of State Hillary Clinton As told to CNN's Fareed Zakaria in an interview http://business.rediff.com/report/2009/aug/11/do-not-follow-us-growth-model-clinton-tells-india.htmhttp://edition.cnn.com/CNN/Programs/fareed.zakaria.gps/

"Although India and China have every right to choose their own path of development, they should not follow the American model in their Endeavour to improve the condition of their citizens, ….“

"Our argument to China and India is: Yes, you have a right to develop and we want you to develop, and in fact, we admire your commitment to eradicating poverty and we want to help you do that. But you can't do it the way we did it, because you will suffer consequences that will undermine your development" …

Developing Country Scenarios


Co-benefits & Technology ChoicesTechnologies delivers multiple dividends

• In developing countries, significant opportunities exist for gaining co-benefits

• Technology Assessment should consider all costs and benefits

“For developing countries, the ‘good news’ is that their environment and natural resources policies are often so bad that there are reforms which would be both good for the economy and good for the environment.”

Joseph Stiglitz


Conclusions

• Integration of Visions, Multiple Objectives and Targets

• Policies to align markets and deliver Co-benefits

• Incentives to induce Behavioral Changes

• Infrastructures to overcome long-term lock-ins

• Global Technology Cooperation Architecture

• Developing National Technology Industry

• Keeping along Long-term Development Vision


Thank You

Documents

Crucial Issues for an Effective Climate Policy in India - … Issues for an Effective Climate Policy in India ... Rajkot ChiptunGuhagar Solapur ... Ahmedabad, India Train Corridors