India: Dimensions and Dilemmas of Low Carbon Development Presenter: - PowerPoint PPT Presentation

India: Dimensions and Dilemmas of Low Carbon Development Presenter: Professor P.R. Shukla Indian Institute of Management Ahmedabad, India COP13/CMP3 Side Event Low-Carbon Asia: How to Align Climate Change and Sustainable Development? Organized by National Institute of Environment Studies and Ministry of Environment, Japan Bali, Indonesia, December 8, 2007. Indian Institute of Management, Ahmedabad, India

Key Dilemma: Alternate Paradigms Two Visions of Low Carbon Society Achieving Stabilization of GHG Concentration by: Margin of the 1.Climate Centric Actions at the Margin Conventional Development Path Policies: Global Carbon Price over Conventional Development Path Mainstream 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 Institute of Management, Ahmedabad, India

LCS Dimensions: Operational S trategy � Economic Growth � Incremental Investment in climate actions • Mitigation • Adaptation � Climate change related Technologies • R&D/ IPR • Technology transfer � Climate change Risks • Adaptation costs • Insurance � Equity/ Fairness of global climate regime � Mechanisms/ Instruments to manage climate change • Direct (Climate) vs. Indirect (Development) • Market vs. CC + Non-Market Indian Institute of Management, Ahmedabad, India

India: Demographic Transition Population (Million) Year: 2000 Pop: 1021 Million 1593 1600 1449 0.47% Female 1183 Male 1.02% 1200 849 1.67% Age 15 - 60 years Female 800 18-62 Yrs Male Age Growth Rate 555 2.15% 358 400 2.22% 0 1950 1970 1990 2010 2030 2050 80 80 60 60 40 40 20 20 0 20 40 60 80 0 20 40 60 80 Population (million) Population (Million) Labor Force (Million) Year: 2050 Pop: 1593 Million 1000 915 Female 795 Male 0.70% 800 Male Female 1.46% 595 Age 600 15 - 60 years 18-62 Yrs 2.54% Age 360 400 Growth Rate 210 2.74% 200 133 2.30% 80 60 40 20 0 20 40 60 80 80 60 40 20 0 20 40 60 80 0 Population (Million) 1950 1970 1990 2010 2030 2050 Population (million) Indian Institute of Management, Ahmedabad, India

Drivers of Economic Growth � Human Capital High Labor Supply ⎯ Increasing Education ⎯ Migration (intra & inter county) ⎯ � R&D Increasing Government/ Private Expenditure ⎯ International Knowledge Flows ⎯ R&D Collaborations ⎯ � Technology Infrastructures ⎯ Savings Rate ?? Learning, transfers, deployment ⎯ 40 37 35.0 35 � Behavioral Changes 33.0 32 30 High Savings Rate 24.6 ⎯ 25 22.8 Changing Lifestyles ⎯ 20.6 20 � Governance 15 10 Institutions ⎯ 5 Laws ⎯ Policies 0 ⎯ 1980 1990 2000 2010 2020 2030 Indian Institute of Management, Ahmedabad, India

Energy Dilemma 80% Percentage of Primary Energy Consumption How to transit to Modern Biomass? 60% Food Security? Traditional Biomass 40% Domestic Resource: +ve Coal Direct Employment: +ve Energy Security: -ve Oil 20% Foreign Exchange: -ve En. Security: +Ve Fuel Supply? Geopolitical Risk: High Nuclear Waste disposal? Gas Safety? Foreign Exchange: -ve Hydro 0% Regional water disputes? 1952 1960 1970 1980 1990 2001 Indirect Benefits Indian Institute of Management, Ahmedabad, India

Transition to LCS : India Analysis Indian Institute of Management, Ahmedabad, India

Analytical Framework & Base S cenario Integrated Modelling Framework Integrated Modelling Framework Base Scenario Assumptions DATABASES DATABASES DATABASES Socio-Economic, Technologies, Energy Resources, Environmental Constraints Socio-Economic, Technologies, Energy Resources, Environmental Constraints Socio-Economic, Technologies, Energy Resources, Environmental Constraints - - - 1. GDP • Ann. Growth Rate: 7.2% from 2005-50 • 2050 Economy: 24 times larger than 2005 AIM CGE Model AIM CGE Model AIM CGE Model 2. Population AIM Strategic Database AIM Strategic Database AIM Strategic Database • 2000: 1021 Million End Use Demand End Use Demand End Use Demand ANSWER- MARKAL ANSWER- MARKAL ANSWER- MARKAL • 2050: 1593 Million Model Model Model Model Model Model (SDB) (SDB) (SDB) 3. 650 ppmv CO2e Concentration Stabilization (or 550 CO2) AIM SNAPSHOT Model AIM SNAPSHOT Model AIM SNAPSHOT Model 4. 4.7 W/m2 Radiative Forcing GDP Per Capita Income 12000 25 Annual Growth Rate 2005-50: 7.3% Annual Growth Rate 2005-32: 8% 10000 20 Base Year 2005=1 US $/person 8000 15 6000 10 4000 2000 5 0 0 2000 2010 2020 2030 2040 2050 2005 2020 2035 2050 Indian Institute of Management, Ahmedabad, India

Low Carbon S ociety S cenarios India: LCS Scenario Assumptions 1. LCS Scenarios assume 550 ppmv CO2e Concentration (or 480 CO2 Concentration 2. 3.4 W/m2 (or 2 to 3 o centigrade temperature increase with 50:50 probability) 3. Two pathways of LCS produce identical cumulative CO2 emissions from 2005 to 2050 4. LCS Vision 1 scenario has same GDP and Population as for the Base Case 5. LCS Vision 2, i.e. ‘Sustainability’ scenario Indian Institute of Management, Ahmedabad, India

Low Carbon S ociety Transitions LCS transition with conventional path 7,000 Others and carbon price Device Efficiency 6,000 • High Carbon Price Renewable Energy Million Ton CO2 • Climate Focused Technology Push 5,000 Electricity (Fuel Switch) • Top-down/Supply-side actions 4,000 3,000 CCS 2,000 1,000 0 2000 2010 2020 2030 2040 2050 Carbon Tax 7 22 40 67 100 $/tCO2 7,000 7,000 Others CCS 6,000 6,000 Transport Mode Urban Planning Consumption 5,000 LCS by aligning climate actions with 5,000 Recycling Million Ton CO2 Material Substitutions sustainable development actions Appliance Efficiency 4,000 4,000 • Low Carbon Price Renewable Energy Renewable Energy Renewable Building • Bottom-up/Demand-side actions 3,000 3,000 Electricity (Fuel Switch) • Behavioural change • Demand-side technology pull 2,000 2,000 • Diverse Technology portfolio 1,000 1,000 0 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Indian Institute of Management, Ahmedabad, India

Demand Reduction & S ubstitution 700 700 700 1000 1000 Cement Steel Steel 600 600 600 800 800 500 500 500 Demand (Million Ton) Demand (Million Ton) Demand (Million Ton) Demand (Million Ton) Conventional Conventional Conventional Conventional Conventional Conventional 600 600 400 400 400 Development Development Development Development Development Development 300 300 300 400 400 Sustainable Sustainable 200 200 200 Sustainable Sustainable Sustainable Society Society 200 200 100 100 100 Society Society Society 0 0 0 0 2000 2000 2010 2010 2020 2020 2030 2030 2040 2040 2050 2050 2000 2010 2020 2030 2040 2000 2010 2020 2030 2040 2050 2050 40 40 Paper 3000 Lighting 35 35 35 Demand (Trillion Lumen hrs) 30 30 30 Demand (Million Ton) 2000 25 25 25 Conventional Conventional Conventional Conventional 20 20 20 Development Development Development Development 15 15 15 Sustainable 1000 10 10 10 Society Sustainable Sustainable Sustainable 5 5 5 Society Society Society 0 0 0 0 2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050 Indian Institute of Management, Ahmedabad, India

Energy Mix in 2050 1,200 Total Energy Demand Share of Renewable Base Case 1,000 Conventional Dev. + Tax Base 3004 Mtoe Base 24 % C+T 2945 Mtoe C+T 34 % Sustainability Sust. 2004 Mtoe Sust. 47 % 800 Mtoe 600 400 200 e s l o r l s a i a s l r O a b o d e a G a C y l m c w H u o e N i B n e R Indian Institute of Management, Ahmedabad, India

CO2 Emissions & Price Traj ectories CO2 Emissions: Global and India 7 Base Case assumes global 6 650 ppmv CO2e stabilization Index 2000 =1 5 India Base Case 4 India Carbon Tax 3 (550 ppmv CO2e) 2 Global Base Case CO2 Price 1 120 550 ppmv CO2e Price CO2 (US $/tCO2) 0 100 2000 2010 2020 2030 2040 2050 Conventional Society 80 60 40 Sustainable Society 20 Base Case 0 2010 2020 2030 2040 2050 Indian Institute of Management, Ahmedabad, India

Resolving Dilemmas: S ustainable Transition to LCS Indian Institute of Management, Ahmedabad, India

Mitigation Commitment: Dilemma 2004 2004 25 50000 Per Capita CO2 Emissions Per Capita Income 20 40000 US$/person (PPP) tCO2 / person 15 30000 10 20000 10000 5 0 0 Germany Russia Japan USA Brazil India China S Africa Germany Japan UK Russia UK USA India China S Africa Brazil India: Projections India: Projections 12000 5 Per Capita Income Per Capita Emissions 10000 4 tCO2/person 8000 US $/person 3 6000 2 4000 2000 1 0 0 2000 2010 2020 2030 2050 2040 2000 2010 2020 2030 2040 2050 Indian Institute of Management, Ahmedabad, India