Eco-Innovations for Low Carbon Society: A Macro Perspective on Measurement in Emerging Economies

Transcription

1 Eco-Innovations for Low Carbon Society: A Macro Perspective on Measurement in Emerging Economies P.R. Shukla Indian Institute of Management Ahmedabad, India Presented in OECD Global Forum on Environment:: On Eco-Innovations Organized by OECD Environment Directorate Paris, November 4, 2009

2 Presentation Agenda 1. A Perspective on Measuring Innovation Frontier of Low Carbon Development in Emerging Economies 2. Scope & Scale of Innovations in Mitigation: The Case of India 3. Measuring Impacts & Adaptation Costs: The Case of Long-life Assets 4. Conclusions: Measuring Eco-Innovation Policies

3 Co-Benefits of Innovations 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 Mitigation Choices deliver multiple dividends Significant co-benefit opportunities exist in developing countries Mitigation Assessment should measure all costs and benefits Utility Function

4 Aligning Climate Change & Development Aligning near-term development targets and actions with long-term climate policies: MDGs / National development targets Agreed goals under extant international agreements Developing resilience to Vulnerabilities and Adapting to changing Climate Parameters MDG, India s National Targets and Climate Change MDG and global targets India s National plan targets Climate Change Interface Goal 1: Eradicate extreme poverty and hunger Targets: Halve, between 1990 and 2015, the proportion of people with income below $1 a day and those who suffer from hunger Goal 7: Ensure environmental sustainability Targets: Integrate SD principles in country policies/ programs to reverse loss of environmental resources Target: Halve by 2015 the proportion of people without sustainable access to safe drinking water Double the per capita income by 2012 Reduce poverty ratio by 15% by 2012 Contain population growth to 16.2% between Increase in forest cover to 25% by 2007 and 33% by 2012 (from 23% in 2001) Sustained access to potable drinking water to all villages by 2007 Electrify 80,000 additional villages by 2012 via decentralized sources Cleaning of major polluted rivers by 2007 & other notified stretches by 2012 Higher income enhances access to services, food, fuel, information, an enhances mitigative and adaptive capacity Higher climate variability would enhance risks to meet the goal Enhanced sink capacity, reduced GHG and local emissions; lower fossil imports; reduced pressure on land, resources and ecosystems Higher adaptive capacity to from enhanced supply of water, health & education in rural areas

5 A Sustainability Framework Sustainability Domains Domain Typologies Key Elements (Examples) Actions/Instruments (Examples) How to sustain & enhance capital stocks in interest of present & future generations? Capital Stocks Natural Man-made Human Social Natural Resources, Ecology Buildings, Infrastructures Education, Health Institutions, Social Networks Conservation, Tax Design, Standards Investments, Access Awareness, Media How do human and natural systems evolve? How do they interact? Systems Human (e.g. Food System) Natural (e.g. Environment) Diets, Technologies Climate Change, Bio-diversity Water Management, Trade Cap & Trade, Eco-funds What are the drivers of key socio-politicoeconomic development processes? Processes/ Institutions Globalization Urbanization Industrialization Trade, Migration Urban Planning, Regulations Industry Structure, Innovation Market Reforms, Tariffs Zoning, User Charges Competition, R&D How can preferences be shaped & aligned with sustainability goals? Preferences Public Private/Personal Community Rights, Equity, Public Goods Lifestyle, Savings Norms, Customs, Traditions Social Security Choices, Freedoms Dialogue, Media

6 Development Perspectives Aim Drivers Interventions Target Allocation of Rights Global Greenhouse Gas Concentration Stabilization Carbon Market Technologies Universal Participation Market Structure/ Rules Remove Market Barriers Cooperative R&D Tech Transfer Stabilization at Minimum GDP Loss Conventional Climate Centric Paradigm Competition/ Trade Energy Resources Energy-Mix Mandates Modify Preferences Forecasting Aim Drivers Interventions Targets Sustainable Development and Climate Paradigm Low Carbon Society Innovations Co-benefits Sustainability Technological Social/Institutional Management Aligning Markets Win/Win Options Shared Costs/Risks Long -term Vision Avoid Lock -ins National Socio-economic Objectives and Targets Global Climate Change Objectives and Targets Modify Preferences Back-casting

7 End Use Demand Model Integrated Modeling Framework Integrated Modelling Modeling Framework DATABASES Socio-Economic, - Technologies, Energy Energy Resources, Resources, Environmental Constrai nts GCAM/AIM-CGE AIM CGE Model ANSWER-MARKAL Model AIM SNAPSHOT AIM ExSS Model Global SDB AIM Strategic Database (Technology (SDB) Database)

8 Scope & Scale of Innovations in Mitigation: The Case of India

9 Global Climate Stabilization Scenarios Scenarios Stabilization Scenarios with Global Targets Baseline Paradigm Conventional Δt 4 to 6 O C Sustainability Δt 3 to 5 O C Stabilization Targets Radiative Forcing Target W/m2 Δt 3 O C Δt 2 O C Geography Level Global Regional National Local Global Regional National Local

10 Mtoe Million Ton CO2 Emissions Assessment and Mitigation Target Base Scenario: Growth of Economy and Population From : Annual Economic Growth: 7.2% Annual Population Growth: 0.9% Absolute Growth in 2050 over 2005 Economy 23 times Population 1.56 times 3,500 3,000 2,500 2,000 Other Renewables Nuclear Hydro Gas Oil Coal Commercial Biomass Non Com Biomass Energy 8,000 7,000 6,000 5,000 4,000 Carbon Emissions 1,500 3,000 1,000 2, , Global Stabilization Target: 2 O C

11 Million Ton CO2 Mitigation Mapping in Alternate Perspectives Million Ton CO2 8,000 6,000 4,000 2,000 Fossil Switch Baseline Emissions Emissions (for 2 O Target) Carbon Price ($) Other CCS Device Efficiency Nuclear Renewable Conventional Approach: transition with conventional path and carbon price High Carbon Price Climate Focused Technology Push Top-down/Supply-side actions Technology Innovation/Transfer Areas Nuclear CCS Renewable Energy - esp. Biomass Sustainability Approach: aligning climate and sustainable development actions Low Carbon Price Bottom-up/Demand-side actions Behavioural change Diverse Technology portfolio Technology Innovation/Transfer Areas Transport Infrastructure Technologies 3R, Material Substitutes, Renewable Energy Process Technologies Urban Planning, Behavioral Changes Renewable Energy Wind, Solar 8,000 6,000 4,000 2,000 Fossil Switch Emissions (for 2 O Target) Carbon Price ($) CCS Transport Reduced Consumption Recycling Material Substitutions Device Efficiency Renewable Energy Building

12 Macro Policy Measurement Indicators Risks Technology Unknowns (e.g. CCS) Energy Security / Energy Access National Competitiveness Costs GDP/ Welfare Loss Co-benefits Environmental (e.g. Air Quality) Development (e.g. Employment)

13 Energy Mix in ,600 Total Energy Demand Primary Energy Demand (Mtoe ) Base (Mtoe) Conventional 1,200 Sustainability Base 2825 Conventional 2945 Sustainability Coal Oil Gas Nuclear Hydro Renewable

14 CO2 Emissions (Million TCO2) Air Quality Co-benefits SO2 Emissions (Million TSO2) Million tso Emissions and Income SO2 Emissions in BAU CO2 Emissions in BAU LCS CO2 Emissions GDP Per Capita 2000 = Co-benefits: SO2 Emissions Base Case 10 8 Conventional Path + High Carbon Price 6 4 Sustainable Development + Low Carbon Tax

15 Measuring Impacts & Adaptation Costs: A Case of Long-life Assets

16 Climate Adaptation of Long-life Assets Long-life assets (e.g. infrastructure) are vital to development Huge investments are being committed in developing countries Most infrastructures are open assets and hence exposed to climate Development policies are correlated to impacts on long-life assets Infrastructures have low autonomous adaptive capacity Infrastructures are seldom assessed for climate impacts/adaptation

17 Case Study: Konkan Railway 760 Kms along Western coastal ghats $745 million project Considered and engineering marvel with: 179 main bridges 1819 minor bridges, 92 tunnels (covering 12% of total route) >1000 cuttings (224 deeper than 12 meters) Longest tunnel is 6.5 Km long Longest bridge is over 2 Km. The pillars of the tallest viaduct bridge are more than 64 meters high.

18 Repair and Maintenance Costs Probability of Occurrence Measuring Impacts, Risks and Costs Rainfall Scenario Increase in Climate Intensity and Variability Increase in mean and variability due to Climate Change Present limate C JAN FEB MAR APR MAY JUN Less number of days with >200 mm rainfall Light and spread-over rain Future Climate Number of days with > 200mm rainfall More number of days with >200 mm rainfall Very high number of days with >200 mm rainfall Heavy and concentrated rain JUL AUG SEP Maintenance Cost Curve OCT NOV DEC (mm/month) Cost with adverse Climate Change and Deforestation Cost with adverse Climate Change Conventional Bath-Tub Curve

19 Project Components Environmental Variables Dependent variables Temperature Rainfall Sea level rise Extreme events Water logging Vegetation growth Land slide Safety/Efficiency Maintenance Traffic volume Konkan Railway: Climate Impact Matrix Environmental Variables Project Components Forcing Variables Temperature L M L -- L L Rainfall L -- M M M H L L M Sea level rise M L M L -- L Extreme events -- L -- M -- M L -- M Water logging L L -- M Vegetation growth L L L -- L -- Land slide M L M L H Safety/Efficiency L -- L M M Maintenance M L H H M Traffic volume L M Key Risk Policy Focus: Managing Landslides

20 Risk Parameters and Eco-innovation Direct Climate Impact Parameters No. of Days with >200 mm rain Indirect Impact Parameters Deforestation in surrounding terrain Variability / Uncertainty Future Climate Change Predictions Regional Development Macro Policies Insurance, Discount rate Adaptation Innovation Microwave Safety Net

21 Conclusions: Measuring Eco-Innovations Policies

22 Measuring Eco-Innovation for LCS MEASUREMENT ISSUES AND PROBLEMS 1. Long Time Frame (e.g. Discount rate) 2. Space (e.g. Global vs. Local) 3. Costs & Benefits (e.g. Direct vs. Indirect) 4. Perspective (Integrative vs. Exclusive) 5. Parameters (Generic vs. Specific)

23 Inputs vs. Output Measures Conduct (Promise) vs. Results (Performance) Under high uncertainty, policy measurements should focus on inputs than outputs For long-term impacts (e.g. climate change), measurement may start with focus on conduct Measure co-benefits; since indirect short-term policy benefits are often more certain (e.g. AQ) Measure portfolio of policies (or actions); since policies may have overlapping costs/benefits (INTEGRATED ASSESSMENT OF POLICIES)

24 Gaps: Policy Needs vs. Information Technology Developments (e.g. Cost trends of renewable, CCS) and R&D response curves Climate Change at low resolution (vital for local innovations/ deployment of adaptation measures) Set of measurable (agreed) indicators that best represent the costs and benefits of policy (e.g. carbon tax) Common trans-country metric (e.g. PPP vs. MER, Statistical Value of Life etc.) Thank you