India s Actions and Perspectives on Climate Change

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1 India s Actions and Perspectives on Climate Change Prodipto Ghosh, Ph.D Distinguished Fellow The Energy & Resources Institute, New Delhi Sydney: 13 November 2008

2 The Energy Challenge Some 600 million fellow Indians, c. 10% of global population, live without electricity! Traditional biomass is the primary cooking fuel for over 700 million Indians 34.7% and 79.9% population below income level of $1 and $2 a day respectively Lack of access to commercial energy leads to Illiteracy, Gender Inequality/Disempowerment, High IMR and MMR, Poor Health & and hence a low HDI India s per capita commercial energy consumption is about 20% of the world average, 4% that of the US and 28% that of China Sustained GDP growth of 8-9% a year will enable India over the next 25 years to lift the bottom 40% of her citizens to an acceptable level of economic & social well being this will 2 require provision of modern energy to them

3 Energy is Critical For Development and Improving HDI Per capita energy consumption (kgoe) 9,000 7,500 6,000 4,500 3,000 1,500 0 Bangladesh India Brazil China Malaysia Denmark UK Japan Norway USA Canada HDI kgoe HDI Linear (HDI ) 3 3

4 Some Key Climate Change Related Policies and Actions Integrated Energy Policy, 2006: Key GHG related Provisions: Energy efficiency in all sectors Emphasis on mass transport Emphasis on renewables including biofuels and fuel plantations Accelerated development of nuclear and hydropower Technology Missions for Clean Energy Focused R&D on several climate change related technologies 4

5 Some key policies and actions Reforming Energy Markets (Electricity Act 2005, Tariff Policy 2003, Petroleum & Natural Gas Regulatory Board Act, 2006, etc.): Remove entry barriers and raise competition in exploration, extraction, conversion, transmission & distribution of primary and secondary energy Institute price reform. Full competition at point of sale. Net back pricing for non-traded energy if domestic market not competitive Tax reform to promote optimal fuel choices. Augment and diversify energy options, sources and energy infrastructure: Feed-in tariffs for renewables (solar, wind, biomass cogen) Strengthen or introduce independent regulation 5

6 Some key policies and actions Rural Electrification Policy 2006: Promotes renewable energy technologies where grid connectivity is not possible or cost-effective Energy Conservation Act, 2001: Aims to reduce specific energy consumption in different sectors, and sets up a specialized Bureau of Energy Efficiency to institutionalize energy efficiency measures, monitoring, and measurement at plant and macro-levels 6

7 Some key policies and actions New and Renewables Energy Policy, 2005: Promotes dependence on sustainable, renewable energy sources, accelerated deployment of renewables through indigenous design, development and manufacture Biodiesel Purchase Policy: Mandates biodiesel procurement by petroleum cos. 7

8 Some key policies and actions Ethanol Blending of Gasolene: Mandates 5% blending of ethanol with gasoline from 1 January 2003 in 9 States and 4 Union Territories Energy Conservation Building Code, 2006: Mandatory energy efficiency code for all building with > 500 kva connected load or conditioned floor area > 1000 m2 8

9 Some key policies and actions Bachat Lamp Yojana: Country-wide programme for replacement of incandescents by CFLs in households using CDM credits to equate purchase price; safe collection and disposal of used CFLs 50,000 MW Hydroelectric Initiative, 2003: 162 hydel projects have been identified for project preparation and implementation Several others: Promotion of solar thermals, solar PVs, wind, biomass gasifiers, biogas and manure management, promotion of fuel cells, energy recovery from urban wastes, etc. 9

10 Have these policies had any effect? 10

11 India s Decreasing Energy Intensity Energy intensity of GDP (kgoe/$ 2000 PPP) based on IEA data TPES (kgoe)/gdp ($2000 PPP)

12 Specific Energy Consumption in Integrated Steel Plants G Cal / tcs % reduction in SEC from to Actual impact higher as share of D/R rising Source: Steel Authority of India Ltd. 12

13 13 Source: BEE, 2007

14 14 Source: BEE, 2007

15 Trends in Energy Consumption of Ammonia & Urea Plants World s Best: 7.0 Gcal/ton of Ammonia Gcal/ton % REDUCTION 26% REDUCTION 9.3 India s Best: 7.2 Gcal/ton of Ammonia FAI Target: 6.5 Gcal/ton of Ammonia AMMONIA UREA Already average of top 25% ammonia plants more efficient than world s top 25% plants Source: Fertiliser Association of India (FAI) 15

16 The fossil fuel CO2 intensity of the Indian economy in 2004 was the same as Japan; better than Germany! 250% 200% 150% 100% 50% 0% US China Russia Japan India Germany Canada UK RoK Italy S Africa CO2 2004/GDP in 2000$ at PPP % of US France Iran GDP in 2000$ at PPP per Capita % of US Australia Mexico Saudi Arabia Ukraine Spain Brazil Data: Growth and CO2 Emissions How do different countries fare? : Roger Bacon and Soma Bhattacharya: World Bank, 2007: Indonesia 16

17 However, India s main problem with respect to Climate Change is Adaptation! 17

18 Adaptation to Climate Change India is historically vulnerable to climate variability: floods, droughts, vector borne disease, cyclones, ocean storm surges, etc. For over 6 decades, India has had large, nationally funded programmes to address climate variability and disasters. 18

19 Percent Expenditure Years Expenditure on adaptation as % of total Govt. expenditure Expenditure on adaptation as % of GDP India s fiscal expenditures on programs directly related to adaptation to climate variability was 2.63% of GDP in ! This is more than its annual defence expenditure. 19

20 Do differences in per-capita incomes alone explain the differences in per-capita emissions between developed and developing countries? 20

21 GHG emissions depend upon lifestyles! India s low per-capita GHG emissions are only partly due to poverty. A significant part is due to inherently sustainable lifestyles that do not change significantly as people become better-off! Some international comparisons illustrate the point: 21

22 CO 2 emission from food sector--from Field (production) to Table (processed food)-excluding cooking Production related CO2 emission (tonne CO2/million kcal of food energy) Processing related CO2 emissions (tonne CO2/million kcal of food energy) Total CO2 emissions (tonne CO2/million kcal of food energy) ton CO2/m kcal of food energy India China United Kingdom Germany Netherlands Australia United States Source: TERI analysis (various data sources) 22

23 Municipal solid waste Average rate of recycling (%) (excl. re-use) US Germany Japan India GHG emissions from waste (gm/ 000$GDPppp) USA UK Germany India 23 Source: TERI Analysis, based on National Communications of different countries

24 Estimated CO 2 emissions from passenger transport (gm/passenger-km) India EU (15 countries) USA Source: TERI Analysis, various data sources 24

25 Per-capita consumption of construction materials per-unit of inhabited land area (thousand tonnes/capita/sq. kilometres) Aluminium Cement Steel India Japan EU-15 USA 25

26 The Global Regime: The Way Forward 26

27 Present day per capita CO 2 emissions - those at the top of the curve want the ones at the bottom to take action to combat climate change! Cumulative per capita emissions from 1850 to 2004 for UK and USA is 1100 tons! For India it is 23 tons! 27 27

28 India s Perception: Climate Change negotiations are primarily economic negotiations, to determine future global economic patterns. They are being driven by developed countries to limit the strategic and economic space of key developing countries. 28

29 Costs of climate change: Nick Stern s proposal Prof Nick Stern of UK states that 1%- 2% of GDP invested today would tackle climate change and calls for immediate action. Stern uses a near zero intergenerational discount rate. While this itself is not in keeping with usual economics theory, he does not use the same principle intra-generationally? Why? because, it will lead to the equal per-capita paradigm? 29 29

30 Costs of climate change: Nick Stern s proposal Stern has brought in a concept of developed countries taking responsibility for mitigation, quite different from taking action within their borders. In-fact, an interpretation of his work, not disputed by him, would have all mitigation take place basically within the borders of developing countries. Using current technologies, costs of mitigation in developing countries can be extraordinarily high

31 Costs of GHG Mitigation MARKAL model estimates of costs of GHG abatement Cumulative incremental investment requirements in India: % Cumulative incrementalinvestment requirements (Bilion US$) % -3.9% -6.0% -7.9% -9.7% % 60% 40% 20% 0% -20% Change in cumulative CO 2 emissions from baseline (%) Year SMEs Power Renewable Biodiesel Res & Com Emissions Red Total For 9.7% GHG reduction from a business-as-usual scenario, the cumulative (undiscounted) incremental investment involved would be US$ 2.53 Trillion! The net cumulative economic loss is US$ 180 billion! Source: TERI Analysis 31 31

32 Requirements of developing countries The main requirement of developing countries is to have the necessary economic space to be able to grow so as to be able to provide its citizens a better life. PM statements: Every citizen of this planet must have an equal share of the planetary atmospheric space. Long term convergence of per capita emissions is, therefore, the only equitable basis for a global compact on climate change

33 The time is not ripe for developing countries to take quantitative targets, as these would be counterproductive on their development processes. PM at the Heiligendamm meeting, 8 June 2007 Sustained and accelerated economic growth is, therefore, critical for all developing countries and we cannot for the present even consider quantitative restrictions on our emissions PM at MEM in Toyako, 9 th July

34 The Way Forward: India s Perspectives Shared vision for long-term cooperative action and long-term global goal for emissions reductions must necessarily include the basis for allocations of GHG emissions entitlements across Parties, and the time-frame in which the entitlements would be realized Developed countries need to commit to deep, long-term, legally binding GHG reductions, consistent with the espoused level and time-frame of GHG stabilization 34

35 The Way Forward High per-capita GHG emissions in developed countries are the inevitable outcome of unsustainable lifestyles, comprising unsustainable patterns of production and consumption. These need to be addressed in the future regime Technology is the key to global GHG stabilization: Only 3 primary energy flows can fully replace fossils fuels use: nuclear (inc. fast breeder ), solar, and biomass => Need vastly enhanced emphasis on R&D to reduce costs to a level competitive with fossil fuels 35

36 The Way Forward Global Venture Capital Fund for supporting R&D in clean energy technologies and adaptation technologies to support collaborative R&D projects between institutions in developed and developing countries Revisiting TRIPS agreements on IPRs to parallel that for pharmas, to enable regulated license fees for ESTs to facilitate competitive procurement 36

37 The Way Forward Resources for Adaptation would be of same order of magnitude as for GHG mitigation, need to go beyond extending 2% levy on CDM to all flexibility mechanisms Strengthening/reform of CDM to reduce transaction costs and enable SMEs sector to move to sustainability 37

38 The Way Forward Avoided deforestation and sustainable forest management, afforestation, and reforestation must be treated symmetrically in climate change regime Bottom-line: We are determined that India s percapita GHG emissions are not going to exceed those of developed countries even while pursuing policies of development and economic growth, Dr Manmohan Singh, Prime Minister, Heilengandam,

39 India s National Action Plan on Climate Change 39

40 National Action Plan on Climate Change NAPCC document released by PM on 30 th June, 2008 Comprehensive framework with stamp and support from the PM s Council on Climate Change in the form of a NAP on CC Relates to sustainable development, co- benefits to society at large, focus on adaptation, mitigation, and scientific research 40 40

41 Principles of NAPCC Protecting the poor through an inclusive and sustainable development strategy, sensitive to climate change Achieving national growth and poverty alleviation objectives while ensuring ecological sustainability Efficient and cost-effective strategies for end-use Demand side management Extensive and accelerated deployment of appropriate technologies for adaptation and mitigation New and innovative market, regulatory, and voluntary mechanisms for sustainable development Effective implementation through unique linkages with civil society, LGUs, and public-private partnerships

42 Eight National Missions of NAPCC National Solar Mission National Mission for Enhanced Energy Efficiency National Mission on Sustainable Habitat National Water Mission National Mission for Sustaining the Himalayan Ecosystem National Mission for a Green India National Mission for Sustainable Agriculture National Mission on Strategic Knowledge for Climate Change 42 42

43 Other Initiatives Choice of GHG mitigation technologies Super critical technologies Integrated gasification Combined Cycle Natural gas based power plants Closed cycle 3 stage nuclear power Hydro power Other renewable technologies- (RETs for power, RETs for transportation, grid connected systems) 43 43

44 Other Initiatives Disaster management response to extreme weather events- Infrastructure design, communication networks, protection of coastal areas, health care services, capacity building at regional/state level International cooperation Technology transfer Financing flows, Clean Development Mechanism Enhanced cooperation 44 44

45 45

India s position in the Climate Change negotiations. Prodipto Ghosh, Ph.D Distinguished Fellow The Energy & Resources Institute May 2014

India s position in the Climate Change negotiations Prodipto Ghosh, Ph.D Distinguished Fellow The Energy & Resources Institute May 2014 Key Issue: India s Energy Challenge Some 470 million Indians, c.