Double dividend strategy for clean development: Allocating consumption based environmental responsibility of coal production amongst Indian states

Transcription

1 Double dividend strategy for clean development: Allocating consumption based environmental responsibility of coal production amongst Indian states Policy Simulations with E-3 India 25 th IIOC, Atlantic City, USA Presenter Surabhi Joshi

2 Indian Energy Scenario India needs to carter growing energy needs of more than 1.3 billion sustainably Power generation in India is predominantly coal based (6.1 %) Ratification to UNFCCC s Paris Agreement bring obligations in the form of INDCs for emission reduction India targets to add 175 GW grid connected renewables by 222 a major driver for GHG emission reduction National Energy Policy (NEP, 216) proposes an initiative towards greater contributions of renewables in the Indian energy mix 58.4 % by 227

3 The Indian Predicament Coal is a critical sector in Indian economy and shares strong linkages with other major sectors in the economy The existing coal reserves overlap dense forest reserves and opening coal blocks has greater environmental impacts Major coal bearing states of India are characterized by low economic growth and poor development trajectory. Quality of life of the population in the states is compromised due to huge environmental burden of coal mining process. The coal phase out needs to be coupled with systematic incentives for structural change into coal bearing states Overall efficiency improvement in production processes across states would need to critically hem-in initiatives for transitions to clean developmental pathway

4 Allocating Consumption based Environmental responsibility High GDP High Emission States Gujarat Haryana Madhya Pradesh Rajasthan Uttar Pradesh (estimated in terms of Carbon emission (Th Ton) / capita consumption (M INR) ) Coal Bearing States Chhattisgarh Jharkhand Madhya Pradesh Orissa West Bengal (88.8% of total coal reserve) Coal Bearing States High GDP High Emission States (

5 Designing an intervention CARBON TAX 4 INR/ Ton of Carbon 25% (Recycle Towards VAT Reduction) State with High GDP & High emission per capita consumption 5% 25% Coal Bearing State 25% (Recycle Towards VAT Reduction) 5% 25% 2% Exogenous investment to specific sectors ( Forestry & Logging, manufacturing, Tourism & Hoteling) 5% (Energy Efficiency investment)

6 SCENARIO SUMMARY CBS CBS CBS Coal/Electricity Efficiency VAT HH Exogenous Investment in sector Carbon Tax Scenario1 of INR 4 on HGHE 5% 25% 2% (Forestry) Scenario2 5% 25% 2% (Manufacturing) HGHE Coal/Electricity Efficiency CBS VAT HGHE Exogenous Investment 5% 25% 2% (Forestry) 5% 25% 2% (Manufacturing) Scenario3 5% 25% 2% (Trade & Hotels) 5% 25% 2% (Trade & Hotels)

7 E3 India Model :Tool Components IDIOM Instructions Scenarios Assumptions Variables (over 14) Model Text File Inputs Model Policy Inputs Model Exogenous Assumptions Output Variables Editable.idiom text files preloaded

8 Impact Simulation New Policy Interventions Designing a balanced Policy which reduces the carbon intensity across the growth path but also leads to better developmental outcome Output Variable : RGDP, REMP, RCO 2, RFU, RSC Scenario Edited Inputs : Introduction of 4 Rs / Kton Carbon Tax on High GDP, High emission states (HGHE) I. Recycle 25 % to HGHE states for VAT reduction II. Add 25% to VAT reduction in coal bearing states Idiom Edited Scenarios : I. 2% recycled into exogenous investment into three representative sectors (Manufacturing, Tourism & Hotel & Forest & Logging ) II. 5% recycle into efficiency improvement for coal / Electricity inputs

9 GDP Impacts (Million Rs (21) price) Coal Bearing States 6 5 MANUFACTURING baseline MAN C MAN ELECT FORESTRY & LOGGING BASELINE COAL ELECTRICITY 5 4 TOURISM baseline TOU C TOU ELCT

10 Regional Total Consumption Expenditure (M INR 21 price) Coal Bearing States 12 MANUFACTURING 12 FORESTRY 3 TOURISM baseline Manu C Manu Elect baseline FORESTRY C FORESTRY ELECT baseline TOU C TOU ELCTRIC

11 MANUFACTURING Employment Impacts (Thousands) Coal Bearing States FOREST & LOGGING TOURISM baseline MANU COAL MANU ELECT -3 baseline FOREST COAL FOREST ECLECTRIC -8 baseline TOUCOAL TOUELCTRIC

12 Emission for CO 2 in Thousand Ton of Carbon Coal Bearing States MANUFACTURING FORESTRY TOURISM baseline Man Coal Manu- ELECT -5-6 baseline FOREST COAL FOREST ELECTRIC baseline TOU COAL TOU ELCTRIC

13 1 MANUFACTURING Regional Total Fuel Use (Th Toe) Coal bearing States 1 FOREST 1 TOURISM baseline MANU COAl MANU ELECT -15 baseline FORESTECLECTRIC; sum of RTI FORESTCOAL; sum of RTI baseline TOUCOAL; sum of RTI TOUELCTRIC

14 Efficiency in Coal Scenario Coal Bearing States REMP MANU -COAL GDP CO2 REMP HOTEL-COAL GDP REMP CO2 FORESTRY -COAL GDP CO2 RSC RFU RSC RFU RSC RFU

15 Efficiency in Electricity Scenario coal bearing states MANU-ELECTRICITY HOTEL- ELECTRICITY FORESTRY-ELECTRICITY REMP GDP 1 CO2 REMP GDP CO2 REMP GDP CO2 RSC RFU RSC RFU RSC RFU

16 Development Impacts Composite Economic, Social & Environmental Score MANU C HOTEL E.6 FORS C.4.2. FORS E HOTEL C MANU E

17 Conclusions Exogenous investment in service based industry i.e. Tourism and Hotels leads to better developmental outcome under both coal and electricity efficiency scenario for coal bearing states Electricity efficiency scenario indicates reduction in employment and regional consumption expenditure The efficiency in coal sector prolongs the coal centric growth trajectory for India A balanced policy intervention would thus be needed to ensure that costly lock ins of capital and natural resources along the developmental path is effectively avoided

18 Thankyou!