India: Dimensions and Dilemmas of Low Carbon Development2050.nies.go.jp/cop/cop13/presentation/Shukla_COP13.pdf · Indian Institute of Management, Ahmedabad, India India: Dimensions

Indian Institute of Management, Ahmedabad, India

India: Dimensions and Dilemmas of Low Carbon Development

Presenter:Professor P.R. ShuklaIndian Institute of ManagementAhmedabad, India

COP13/CMP3 Side EventLow-Carbon Asia: How to Align Climate Change and Sustainable Development?Organized by National Institute of Environment Studies and Ministry of Environment, JapanBali, Indonesia, December 8, 2007.


Key Dilemma: Alternate Paradigms

Two Visions of Low Carbon SocietyAchieving Stabilization of GHG Concentration by:

1.Climate Centric Actions at the MarginMargin of the Conventional Development PathPolicies: Global Carbon Price over Conventional Development Path

2.Aligning Climate Actions with the Mainstream Mainstream Development ActionsPolicies: Sustainable Development Path + Stabilization

What path shall best deliver national development goals while fulfilling international commitments?


LCS Dimensions: Operational StrategyEconomic GrowthIncremental Investment in climate actions

• Mitigation• Adaptation

Climate change related Technologies• R&D/ IPR• Technology transfer

Climate change Risks• Adaptation costs• Insurance

Equity/ Fairness of global climate regimeMechanisms/ Instruments to manage climate change

• Direct (Climate) vs. Indirect (Development)• Market vs. CC + Non-Market


India: Demographic TransitionPopulation (Million)

Labor Force (Million)

358

555

849

1183

14491593

0

400

800

1200

1600

1950 1970 1990 2010 2030 2050

133210

360

595

795915

0

200

400

600

800

1000

1950 1970 1990 2010 2030 2050

Year: 2000 Pop: 1021 Million

Pop: 1593 MillionYear: 2050

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

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

2.22%

2.15%

1.67%

1.02%

0.47%

2.30%

2.74%

2.54%

1.46%

0.70%

Growth Rate

Growth Rate


Drivers of Economic GrowthHuman 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??


Energy DilemmaPe

rcen

tage

of P

rimar

y En

ergy

Con

sum

ptio

n

0%

20%

40%

60%

80%

1952 1960 1970 1980 1990

TraditionalBiomass

Nuclear

How to transit to Modern Biomass?

Food Security?

Fuel Supply?Waste disposal?

Safety?

En. Security: +Ve

2001

Hydro

Coal

Oil

Gas

Domestic Resource: +ve

Direct Employment: +ve

Energy Security: -ve

Foreign Exchange: -ve

Geopolitical Risk: High

Foreign Exchange: -ve

Regional water disputes?

Indirect Benefits


Transition to LCS:India Analysis


Analytical Framework & Base ScenarioBase Scenario Assumptions

1. 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. 4.7 W/m2 Radiative Forcing

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

AIM CGE Model

ANSWER-MARKALModel

AIM SNAPSHOT ModelEnd

Use

Dem

and

Mod

el

AIM

Strategic Database

(SDB

)

Integrated Modelling FrameworkDATABASES

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

AIM CGE Model

ANSWER-MARKALModel


Use

Dem

and

Mod

el

AIM

Strategic Database

(SDB

)

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

AIM CGE Model

ANSWER-MARKALModel


Use

Dem

and

Mod

el

AIM

Strategic Database

(SDB

)

Integrated Modelling Framework

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


Low Carbon Society Scenarios

India: LCS Scenario Assumptions1. LCS Scenarios assume 550 ppmv CO2e

Concentration (or 480 CO2 Concentration2. 3.4 W/m2 (or 2 to 3o centigrade temperature

increase with 50:50 probability)3. Two pathways of LCS produce identical

cumulative CO2 emissions from 2005 to 20504. LCS Vision 1 scenario has same GDP and

Population as for the Base Case5. LCS Vision 2, i.e. ‘Sustainability’ scenario


Low Carbon Society Transitions

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2010 2020 2030 2040 2050

Mill

ion

Ton

CO

2

OthersDevice Efficiency

Renewable Energy

Electricity (Fuel Switch)

CCS

Carbon Tax 7 22 40 67 100$/tCO2

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

OthersCCSTransport ModeUrban PlanningConsumptionRecyclingMaterial SubstitutionsAppliance EfficiencyRenewable Energy Building

Electricity (Fuel Switch)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mill

ion

Ton

CO

2Renewable Energy Renewable

LCS transition with conventional path and carbon price

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

LCS by aligning climate actions with sustainable development actions

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


Demand Reduction & Substitution

0

100

200

300

400

500

600

700

2000 2010 2020 2030 2040 2050

Dem

and

(Mill

ion

Ton)

Steel

Conventional Development

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

200

400

600

800

1000

Dem

and

(Mill

ion

Ton)


Sustainable Society

0

200

400

600

800

1000

Dem

and

(Mill

ion

Ton)


Sustainable Society

Dem

and

(Tril

lion

Lum

en h

rs)

0

1000

2000

3000


Sustainable Society

Lighting

2000 2010 2020 2030 2040 20500

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

Cement

2000 2010 2020 2030 2040 2050


Energy Mix in 2050

200

400

600

800

1,000

1,200

Coal

Oil

Gas

Hydro

Nuclea

r

Biomas

s

Renew

able

Mto

e

Base Case

Conventional Dev. + Tax

Sustainability

Share of Renewable

Base 24 %C+T 34 %Sust. 47 %

Total Energy Demand

Base 3004 MtoeC+T 2945 MtoeSust. 2004 Mtoe


CO2 Emissions & Price Trajectories

0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

Inde

x 20

00 =

1

India Base Case

India Carbon Tax(550 ppmv CO2e)

550 ppmv CO2e

Global Base Case

Base Case assumes global 650 ppmv CO2e stabilization

CO2 Emissions: Global and India

Base Case

Conventional Society

Sustainable Society

0

20

40

60

80

100

120

2010 2020 2030 2040

Pric

e C

O2

(US

$/tC

O2)

2050

CO2 Price


Resolving Dilemmas:Sustainable Transition to LCS


Mitigation Commitment: Dilemma

0

10000

20000

30000

40000

50000

Indi

a

Chi

na

Bra

zil

Rus

sia

S A

fric

a

Ger

man

y

Japa

n

UK

USA

US$

/per

son

(PPP

)Per Capita Income

2004

0

5

10

15

20

25

Indi

a

Bra

zil

Chi

na

Ger

man

y

S A

fric

a

UK

Japa

n

Rus

sia

USA

tCO

2/ p

erso

n

Per Capita CO2 Emissions2004

0

2000

4000

6000

8000

10000

12000

2000 2010 2020 2030 2040 2050

US

$/pe

rson

Per Capita IncomeIndia: Projections

0

1

2

3

4

5

2000 2010 2020 2030 2040 2050

tCO

2/pe

rson

Per Capita EmissionsIndia: Projections


Income Effect and Co-benefits

0

2

4

6

8

10

12

14

2000 2010 2020 2030 2040 2050

Mill

ion

tSO

2

Base Case

Sustainable Development + Low Carbon Tax

Conventional Path + High Carbon Price

Co-benefits: SO2 Emissions0

2000

4000

6000

8000

10000

100 200 400 800 1600 2400

GDP Per Capita 2000 = 100

CO

2 Em

issi

ons

(Mill

ion

TCO

2)

0

2

4

6

8

10

12

14

SO2

Emis

sion

s (M

illio

n TS

O2)

CO2 Emissions in BAU

LCS CO2 Emissions

SO2 Emissions in BAU

Emissions and Income


Legend

upto 500501 - 10001001 - 15001501 - 20002001 - 50005001 - 10000More than 10000

Major Rivers

!(

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Capacity (MW)!(

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China

Iran

Pakistan

Afghanistan

Thailand

Oman Myanmar (Burma)

Nepal

Laos

Turkmenistan Tajikistan

Bangladesh

Bhutan

Sri Lanka

Cambodia

Uzbekistan

Vietnam

United Arab Emirates

Malaysia

Yemen

IndonesiaMaldives

Legend

upto 500501 - 10001001 - 15001501 - 20002001 - 50005001 - 10000More than 10000

Major Rivers

!(

!(

!(!(!(!(!(

Capacity (MW)!(

!(

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Proposed Existing

Legend

upto 500501 - 10001001 - 15001501 - 20002001 - 50005001 - 10000More than 10000

Major Rivers

!(

!(

!(!(!(!(!(

Capacity (MW)!(

!(

!(!(!(!(!(

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China

Iran

Pakistan

Afghanistan

Thailand

Oman Myanmar (Burma)

Nepal

Laos

Turkmenistan Tajikistan

Bangladesh

Bhutan

Sri Lanka

Cambodia

Uzbekistan

Vietnam


Malaysia

Yemen

IndonesiaMaldives

Co-benefits of Regional Co-operationCoCo--benefits of Southbenefits of South--Asia Asia

Integrated EnergyIntegrated Energy--Water MarketWater Market

0.031050 Million TonSO2

0.98359Total

0.08285.1 Billion TonCO2 Equiv.

0.8732160 Exa JouleEnergy

% GDP$ BillionBenefit (Saving) Cumulative from 2010 to 2030

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)

MDG 1: Eradicate extreme poverty and hunger, MDG 7: Environmental Sustainability

!.!. !.!.

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F

F

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China

Iran

Pakistan

Afghanistan

OmanMyanmar (Burma)

Nepal

Turkmenistan

Saudi Arabia

Tajikistan

Yemen

Thailand

Bangladesh

Sri Lanka

Bhutan

Uzbekistan


Somalia

QatarBahrain

MalaysiaIndonesia

Maldives

Pune

GayaKota

Gadag

Kochi

Patna

Delhi

Dahej

Panvel

Hassan

Dispur

Ambala

Nangal

Kanpur

Jhansi

UjjainJhabua

ValsadHazira

Rajkot

Solapur

Chennai

Nellore

Kolkata

Sonipat

LucknowGwalior

Chotila

PalmanerChittoor

Kakinada

Bathinda

Bareilly

Vijaypur

Mahesana

VadoadraWankaner

Tuticorin

Mangalore Bangalore

Vijaywada

Faridabad

Ratnagiri

Kayankulam

Coimbatore

Himmatnagar

Jagdishpuri

Shahjahanpur

Vishakhapattnam

Tiruchchirappalli

Herat

MultanQuetta

Khuzdar

Karachi

DelaramKandhar

South-ParsIranshaharBandar-e-Abbas

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China

Iran

Pakistan

Afghanistan

OmanMyanmar (Burma)

Nepal

Turkmenistan

Saudi Arabia

Tajikistan

Yemen

Thailand

Bangladesh

Sri Lanka

Bhutan

Uzbekistan


Somalia

QatarBahrain

MalaysiaIndonesia

Maldives

Pune

GayaKota

Gadag

Kochi

Patna

Delhi

Dahej

Panvel

Hassan

Dispur

Ambala

Nangal

Kanpur

Jhansi

UjjainJhabua

ValsadHazira

Rajkot

Solapur

Chennai

Nellore

Kolkata

Sonipat

LucknowGwalior

Chotila

PalmanerChittoor

Kakinada

Bathinda

Bareilly

Vijaypur

Mahesana

VadoadraWankaner

Tuticorin

Mangalore Bangalore

Vijaywada

Faridabad

Ratnagiri

Kayankulam

Coimbatore

Himmatnagar

Jagdishpuri

Shahjahanpur

Vishakhapattnam

Tiruchchirappalli

Herat

MultanQuetta

Khuzdar

Karachi

DelaramKandhar

South-ParsIranshaharBandar-e-Abbas

!. Important PlacesExisting Gas Pipelines

Proposed Gas Pipelines

º Existing LNG terminals

F Proposed LNG terminalsExisting Gas Basin

Proposed Gas Basin

Gas Pipelines under construction

!. Important PlacesExisting Gas Pipelines

Proposed Gas Pipelines

º Existing LNG terminals

F Proposed LNG terminalsExisting Gas Basin

Proposed Gas Basin

Gas Pipelines under construction

!. Important Places!.!. Important PlacesExisting Gas PipelinesExisting Gas Pipelines

Proposed Gas PipelinesProposed Gas Pipelines

º Existing LNG terminalsº Existing LNG terminals

F Proposed LNG terminalsF Proposed LNG terminalsExisting Gas Basin

Proposed Gas Basin

Gas Pipelines under constructionGas Pipelines under construction


Sustainable Low Carbon Development

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


Conclusions• Development vision matters to LCS transition

• Moving from Margin to Mainstream– Managing climate change at the margin is costly, risky, and unsustainable

– Opportunities to gain multiple simultaneous dividends exist and should be realized

– Mainstreaming would permit adapting policies to changing dynamics and long-term goals

• LCS through Sustainability: The Post-Kyoto Regime– Burden sharing metaphor has posed climate stabilization as a zero-sum game, thus

inviting conflicts.

– Grandfathering not feasible as allocation under ‘Cap and Trade’ regime if emerging economies have to play central role in Climate Regime.

– Sustainability roadmap to LCS provides a practical way-out from:• Climate-centric commitments (as in ‘Grand architecture’) that have prevented cooperation, and

• Non-binding ambiguous and ambitious goals (federalism or ‘Madisonian’ approach) which cannot produce credible and stable policy signals.

– Even in Sustainable Low Carbon Societies, stabilization would still require climate focused policies, both for mitigation (beyond Energy) and adaptation.


Thank you

Documents

India: Dimensions and Dilemmas of Low Carbon Development2050.nies.go.jp/cop/cop13/presentation/Shukla_COP13.pdf · Indian Institute of Management, Ahmedabad, India India: Dimensions