Crucial Issues for an Effective Climate Policy in India

Transcription

1 Crucial Issues for an Effective Climate Policy in India P.R. Shukla Indian Institute of Management Ahmedabad, India Subash Dhar UNEP Risoe Centre Roskilde, Denmark 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, 21

2 Agenda 1. Drivers 2. Vision & Scenarios 3. Modeling & Base Case Projections 4. Stabilization Challenge 5. Crucial Issues 6. Conclusions

3 Demographic Drivers Population (Million) Year: 2 Pop: 121 Million % % Male Female % % 2.15% Growth Rate Age Age 15-6 years Yrs Male Female Labor Force (Million) % % 2.54% Growth Rate % % Age 15-6 years Age Population (million) Yrs Population (Million) Year: 25 Pop: 1593 Million Male Female Male Female Population (Million) Population (million)

4 Human Capital R&D Drivers of Economic Growth High Labor Supply Increasing Education Migration (intra & inter county) 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??

5 Base Scenario GDP Base Year 25= Annual Growth Rate 25-5: 7.3% Annual Growth Rate 25-32: 8% GDP US $/person Per Capita Income Base Case Assumptions: Summary 1. GDP Ann. Growth Rate: 7.2% from Economy: 24 times larger than Population 2: 121 Million 25: 1593 Million ppmv CO2e Concentration Stabilization (or 55 CO2) 4. Radiative Forcing: 4.7 W/m2

6 Visions & Scenarios

7 Conventional Climate Centric Paradigm Aim Drivers Interventions Target Allocation of Rights Carbon Market Universal Participation Market Structure/ Rules Global Greenhouse Gas Concentration Stabilization Technologies Remove Market Barriers Cooperative R&D Tech Transfer Stabilization at Minimum GDP Loss Competition/ Trade Energy Resources Energy-Mix Mandates Modify Preferences Forecasting

8 Sustainable Development&Climate Paradigm Aim Drivers Interventions Targets Innovations Technological Social/Institutional Management National Socio-economic Objectives and Targets Low Carbon Society Co-benefits Sustainability Aligning Markets Win/Win Options Shared Costs/Risks Long-term Vision Avoid Lock-ins Global Climate Change Objectives and Targets Modify Preferences Back-casting

9 Sustainable Development & Climate Paradigm 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 Δt3 O C Δt2 O C Geography Level Global Regional National Local Global Regional National Local

10 Modeling & Base Case Scenario

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

12 National Analysis: MARKAL & End Use Models Base Scenario: Growth of Economy and Population From 25-25: Annual Economic Growth: 7.2% Annual Population Growth:.9% Absolute Growth in 25 over 25 Economy 23 times Population 1.56 times Mtoe 3,5 3, 2,5 2, 1,5 1, Other Renewables Nuclear Hydro Gas Oil Coal Commercial Biomass Non Com Biomass Energy Million Ton CO2 8, 7, 6, 5, 4, 3, 2, Carbon Emissions 5 1,

13 2 O C Stabilization Challenge

14 Global & National Analysis: GCAM & AIM/CGE Base Case Scenario: INDIA Unconventional oil Renewable Nuclear INDIA: Carbon Emissions Mtoe 3 2 Coal 1 Gas Oil Electricity Production (in EJ) and CCS Share (in %) Scenario GDP Loss for India 45 ppmv (2 deg C) Total Electricity Production (in EJ) Coal w/ccs BAU 45 ppmv 55 ppmv 45 ppmv BaU % ppmv (3 deg C) (% share) Gas w/ccs (% share) Biomass w/ccs 55 ppmv 45 ppmv 55 ppmv 45 ppmv % share) 55 ppmv

15 Mitigation Options: Conventional 8, Million Ton CO2 6, 4, Fossil Switch Baseline Emissions Other CCS Device Efficiency Nuclear 2, Emissions (for 2 O Target) Renewable Carbon Price ($) Technology Co-operation Areas Energy Efficiency Wind/Solar/Biomass/Small Hydro Nuclear/CCS Conventional Approach: transition with conventional path and carbon price High Carbon Price Climate Focused Technology Push Top-down/Supply-side actions

16 Mitigation Options: Sustainability 8, Million Ton CO2 6, 4, Fossil Switch CCS Transport Reduced Consumption Recycling Material Substitutions Device Efficiency Renewable Energy 2, Emissions (for 2 O Target) Building Carbon Price ($) Technology Co-operation Areas Transport Infrastructure Technologies 3R, Material Substitutes, Renewable Energy Process Technologies Urban Planning, Behavioral Changes Sustainability Approach: aligning climate and sustainable development actions Low Carbon Price Bottom-up/Demand-side actions Behavioural change Diverse Technology portfolio

17 Co-benefits of Energy Choices Co-benefits of South-Asia Integrated Energy-Water Market Benefit (Saving) Cumulative from 21 to 23 $ Billion % GDP Energy 6 Exa Joule CO 2 Equiv. 5.1 Billion Ton 28.8 SO 2 5 Million Ton 1.3 Total Bahrain Qatar!. Iran United Arab Emirates!. Uzbekistan Tajikistan Turkmenistan!. Herat!. Afghanistan Chotila Ѻ Ѻ Oman Legend Important Places Existing Gas Pipelines Ѻ Gas Pipelines under construction Proposed Gas Pipelines Existing LNG terminals Proposed LNG terminals Existing Gas Basin Saudi Arabia Yemen Somalia South-Pars Bandar-e-Abbas Iranshahar!. Delaram Proposed Gas Basin!.!. Kandhar!.!. Khuzdar Quetta Karachi Pakistan!. Nangal Ludhiana BathindaSangrur Ambala Multan Panvel Pune Maldives Sonipat Delhi Faridabad Mahesana Kalol Ujjain Jhabua NadiadAnand Rajkot Bharuch Olpad Surat Valsad Dadra ChiptunGuhagar Ratnagiri F Gadag Kochi Bareilly Nepal Shahjahanpur Auraiya Kanpur Gwalior Jagdishpuri Jhansi Kota Vijaypur Guna Solapur India Nellore F Palmaner Hassan Chennai Mangalore Chittoor Bangalore Coimbatore Tiruchchirappalli Kayankulam Tutikorin Sri Lanka Kokinada Vijaywada Patna Gaya Vishakhapattnam China Bhutan Dispur Bangladesh Kolkata Myanmar (Burma) Laos Thailand Indonesia Malaysia 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)

18 Implications for Primary Energy Mix Energy Mix in 25 Primary Energy Demand (Mtoe) 1,6 1,2 8 4 Base LCS_CT LCS_SS Total Energy Demand (Mtoe) Base 2825 LCS_CT 2945 LCS_SS 227 Coal Oil Gas Nuclear Hydro Renewable

19 Additional Renewable Energy (in Sustainability Scenario over Base Case) Increase over Base Case (Mtoe) Hydro Solar Wind Bio-energy

20 Primary Energy & Carbon Price 25 Carbon Price 2 Price (US $/tco2) O C Conventional Mitigation Scenario 2 O C Sustainability Scenario Base Scenario

21 Crucial Issues

22 National Climate Change Action Plan 8 National Missions: 1. Solar Energy (1 MW PV/yr; 1 MW Thermal by 217) 2. Enhanced energy efficiency (1 MW saving by 212) 3. Sustainable habitat 4. Water Sector (2% 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

23 Infrastructures to Overcome Lock-ins - 1 Coal by Wire Gas Demand for Power Generation Base CR CBW Bcm

24 Infrastructures to Overcome Lock-ins - 2 Train Corridors Rajasthan Haryana Haryana Dadri Uttar Pradesh Sustainable modal shift Efficient logistics Infrastructures investments Associated development Gujarat Madhya Pradesh Technologies for Train Corridors J.N.Port Maharashtra

25 Sustainable Low Carbon Cities Ahmedabad (29) Pop 5.5 Mil AMC (New boundary AMC ) (Old boundary ) GHG Emissions/reductions (mt- C2) % BaU 235 LCS Mitigation Contributions Transport Efficiency Industry Efficiency Building Efficiency Fuel Switch Energy Service demand Coal + CCS Emissions 7 Mt CO BaU 235 LCS Sectoral CO2 Emissions ( mt CO2) Freight Transport Passenger Transport Industry Commercial Residential Value in 25 = BAU 235 LCS Passenger Transport Demand Energy Demand GHG Emissions

26 Demateralization 7 Demand (Million Ton) 4 Conventional Development 3 2 Sustainable Society Conventional Development 15 1 Sustainable 5 2 Society Conventional Development 4 Sustainable Society Paper Cement 8 5 Demand (Trillion Lumen hrs) Demand (Million (Million Ton) Ton) Demand 6 Demand (Million Ton) 1 Steel Steel Lighting 2 Conventional Development Sustainable 1 Society

27 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

28 Conclusions

29 Developing Country Scenarios US Secretary of State Hillary Clinton As told to CNN's Fareed Zakaria in an interview "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"

30 Co-benefits & Technology Choices Technologies 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

31 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

32 Thank You