Scenarios, Modelling and Analysis of Low Carbon Society for India P.R. Shukla Indian Institute of Management Ahmedabad, India Presented in the 13th AIM International Workshop Tsukuba, Japan, February 17-18, 28
Base Scenario
Demographic Drivers Population (Million) Year: 2 Pop: 121 Million 16 12 1183 1449 1.2% 1593.47% Male Female 8 4 358 555 2.22% 849 1.67% 2.15% Growth Rate Age Age 15-6 years 18-62 Yrs Male Female 195 197 199 21 23 25 8 6 4 2 2 2 4 4 6 6 8 8 Population (million) Population (Million) Labor Force (Million) Year: 25 Pop: 1593 Million 1 8 6 4 2 36 915 795.7% 595 1.46% 2.54% Growth Rate 21 2.74% 133 2.3% 195 197 199 21 23 25 Age 15-6 years Age 18-62 Yrs Male Female M ale Female 8 6 4 2 2 4 6 8 Population (Million) 8 6 4 2 2 4 6 8 Population (million)
Drivers of Economic Growth Human Capital R&D 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 4 35 3 25 2 15 1 5 Savings Rate?? 37 35. 33. 32 24.6 22.8 2.6 198 199 2 21 22 23
Base Scenario GDP Base Year 25=1 25 2 15 1 Annual Growth Rate 25-5: 7.3% Annual Growth Rate 25-32: 8% GDP US $/person 12 1 8 6 4 Per Capita Income 5 2 25 22 235 25 2 21 22 23 24 25 Base Case Assumptions: Summary 1. GDP Ann. Growth Rate: 7.2% from 25-5 25 Economy: 24 times larger than 25 2. Population 2: 121 Million 25: 1593 Million 3. 65 ppmv CO2e Concentration Stabilization (or 55 CO2) 4. Radiative Forcing: 4.7 W/m2
LCS Scenarios: Alternate Paradigms Scenarios: Two Visions of Low Carbon Society Achieving Stabilization of GHG Concentration by: 1.Climate Centric Actions at the Margin of the Conventional Development Path Policies: Global Carbon Price over Conventional Development Path 2.Aligning Climate Actions with the Mainstream Development Actions Policies: Sustainable Development Path + Stabilization What path shall best deliver national development goals while fulfilling international commitments?
Modeling
Integrated Modeling Framework Integrated Modelling Framework DATABASES Socio-Economic, - Technologies, Energy Resources, Environmental Constraints AIM CGE Model End Use Demand Model ANSWER-MARKAL Model AIM SNAPSHOT Model AIM Strategic Database (SDB)
Base Scenario Analysis
Energy and Carbon: Base Case Assumptions 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 M toe 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, 25 21 215 22 225 23 235 24 245 25 2 25 21 215 22 225 23 235 24 245 25 Annual Improvement From 25-25: Energy Intensity: 3.14 (%) Carbon Intensity: 3.7 (%) Decarbonization of Energy: -.7 (%) Results: Energy and Carbon Intensity Ratios: 25 over 25 Energy Intensity:.249 Carbon Intensity:.257 Decarbonization of Energy: -3.1 (%)
Investment in Energy: Base Case Energy Investments (21-23) 6 175 26 335 44 Investment (US $ Billion) 4 2 17 14 83 11 71 51 7 42 251 32 197 127 21-15 215-2 22-25 225-3 Share of Energy Investments (21-23) $ 1173 billion $ 1173 billion Oil & Oil Gas & Gas 21% 21% Coal Oil & Gas Power Coal Coal 4% 4% Power Power 75% 75%
LCS Scenario Analysis
LCS Scenarios: Alternate Paradigms Scenarios: Two Visions of Low Carbon Society Achieving Stabilization of GHG Concentration by: 1. Climate Centric Actions at the Margin of the Conventional Development Path Policies: Global Carbon Price over Conventional Development Path 2. Aligning Climate Actions with the Mainstream Development Actions Policies: Sustainable Development Path + Stabilization What path shall best deliver national development goals while fulfilling international commitments?
Indian LCS Scenario Assumptions LCS Scenarios assume 55 ppmv CO2e Concentration (or 47 CO2 Concentration) 3.4 W/m2 (or @ 3 o C temperature increase) Two pathways of LCS produce identical cumulative CO2 emissions from 25 to 25 LCS Vision 1 scenario has same GDP and Population as in Base Case (7.2% from 25 to 5) LCS Vision 2 is a Sustainability driven scenario with population & GDP lower than in Base Case (6.9% from 25 to 5) but include variety of interventions in line with sustainable development paradigm
LCS Dimensions: Objectives/Interventions Economic Development (Quantity and Quality of Growth) Enhanced Investment in climate actions Mitigation Adaptation Climate change Technologies R&D/ IPR Technology transfer Climate change Risks Adaptation costs Climate Goals (e.g. Stabilization @ 45 ppmv CO 2 e or 2 O C) Equity/ Fairness of global climate regime Mechanisms/ Instruments to manage climate change Direct (Climate) vs. Indirect (Development) Market vs. CC + Non-Market
Low Carbon Society Transitions Million Ton CO2 7, 6, 5, 4, 3, 2, 1, Others Device Efficiency Renewable Energy Electricity (Fuel Switch) CCS LCS Vision 1: transition with conventional path and carbon price High Carbon Price Climate Focused Technology Push Top-down/Supply-side actions 2 21 22 23 24 25 Carbon Tax 7 22 4 67 1 $/tco2 LCS Vision 2: aligning climate actions with sustainable development actions Low Carbon Price Bottom-up/Demand-side actions Behavioural change Demand-side technology pull Diverse Technology portfolio Million Ton CO2 7, 6, 5, 4, 3, 2, 1, Others CCS Transport Mode Urban Planning Consumption Recycling Material Substitutions Appliance Efficiency Renewable Energy Building Electricity (Fuel Switch) 2 25 21 215 22 225 23 235 24 245 25
Demand Reduction & Substitution 7 3 Conventional Development 2 Sustainable 1 2 2 Demand (Million Ton) 4 Society 21 21 4 22 22 23 23 24 24 Conventional Development 15 1 Sustainable 5 2 Society 21 22 23 Conventional Development 4 Sustainable Society 2 21 22 3 3 2 6 2 25 25 Paper 35 25 Cement 8 5 Demand (Trillion Lumen hrs) Demand (Million (Million Ton) Ton) Demand 6 Demand (Million Ton) 1 Steel Steel 24 25 23 24 25 Lighting 2 Conventional Development Sustainable 1 2 Society 21 22 23 24 25
Energy Mix in 25 1,2 Base Case Total Energy Demand Share of Renewable 1, 8 Conventional Dev. + Tax Sustainability Base 34 Mtoe C+T 2945 Mtoe Sust. 24 Mtoe Base 24 % C+T 34 % Sust. 47 % Mtoe 6 4 2 Coal Oil Gas Hydro Nuclear Biomass Renewable Sustainable LCS would reduce competition & conflicts for energy resources; thus contributing to peaceful transition to prosperous global socio-economic order in the 21 st Century
Energy and Carbon Intensities 5 4 Base CI CT CI LCS CI 5 4 Carbon Intensities (CI) EI (toe/million INR) 3 2 3 2 CI (tco2/million INR) 1 1 Energy Intensities (EI) 2 21 22 23 24 25
Co-benefits of Regional Co-operation MDG 1: Eradicate extreme poverty and hunger, MDG 7: Environmental Sustainability Co-benefits of South-Asia Integrated Energy-Water Market Benefit (Saving) Cumulative from 21 to 23 $ Billion % GDP 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 Proposed Gas Basin Saudi Arabia Yemenen Somalia South-Pars Bandar-e-Abbas Iranshahar!. Delaram!.!. 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 AuraiyaKanpur 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 Energy 6 Exa Joule 321.87 CO 2 Equiv. 5.1 Billion Ton 28.8 SO 2 5 Million Ton 1.3 Total 359.98 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)
CO2 Emissions & Price Trajectories 7 CO2 Emissions: Global and India 6 Base Case assumes global 65 ppmv CO2e stabilization Index 2 =1 5 4 3 India Base Case India Carbon Tax (55 ppmv CO2e) 2 1 Global Base Case 55 ppmv CO2e 12 CO2 Price 2 21 22 23 24 25 Price CO2 (US $/tco2) 1 8 6 4 2 Conventional Society Sustainable Society 21 22 23 24 Base Case 25
Income Effect and Co-benefits 1 Emissions and Income 14 CO2 Emissions (Million TCO2) 8 6 4 2 SO2 Emissions in BAU CO2 Emissions in BAU LCS CO2 Emissions 1 2 4 8 16 24 GDP Per Capita 2 = 1 12 1 8 6 4 2 SO2 Emissions (Million TSO2) 14 12 Co-benefits: SO2 Emissions Base Case Million tso2 1 8 6 4 Conventional Path + High Carbon Price Sustainable Development + Low Carbon Tax 2 2 21 22 23 24 25
Kaya Analysis of LCS Scenarios D E/D C/E C'/C Total 1% 8% 6% 883% 678% vs 2's 4% 2% % 279% 197% 5% 171% -2% -4% -315% -316% -6% -471% -8% -715% 25 CT Case 25 SS Case
Sustainable Low Carbon Development Aim Drivers Interventions Targets 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
Conclusions Modeling Integrated Modeling System with AIM/CGE, MARKAL & SNAPSHOT models Scenarios Climate Change at Margin versus Mainstream High Carbon Tax versus Sustainable Development Policies Analysis Kaya Identity Factors Technology roadmap to LCS Incentives and Infrastructures for Behavioral Changes Sustainability policies for altering development pathway Climate-centric policies to contribute to cost-effective global stabilization pathway and adaptation
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