India: Dimensions and Dilemmasof Low Carbon Development
Presenter:
Professor P.R. Shukla
Indian Institute of Management
Ahmedabad, India

COP13/CMP3 Side EventLow-Carbon Asia: How to Align Climate Change and Sustainable Development?
Organized by National Institute of Environment Studies and Ministry of Environment, JapanBali, 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:
1.Climate Centric Actions at the Margin of theConventional Development PathPolicies: Global Carbon Price over Conventional Development Path2.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 Strategy
 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)

1449

800

4000555
358

1950

2.15%

1.67%

Age

849

Growth Rate

1990

2010

2030

2050

Female

M ale

2.22%

1970

Female

Male

1.02%

18-62 Yrs

1200

0.47%

15 - 60 years

1183

Pop: 1021 Million

1593

Age

1600

Year: 2000

6060

80
80

4040

20
20

02020

4040

6060

8080

Populatio n ( million)
Population(Million)

Labor Force (Million)

Year: 2050

1000

915
795

800

Female

Male

0.70%

M ale

2.54%
Growth Rate

210
133

2.74%

18-62 Yrs

Age

Age

360

400

2.30%
808001950

Female1.46%
15 - 60 years

595
600

200

Pop: 1593 Million

1970

1990

2010

2030

2050

Indian Institute of Management, Ahmedabad, India

60
60

4040

2000
2040
2040
20
Population (Million)
P opulat ion (m illion)

60
608080Drivers of Economic Growth

Human Capital⎯⎯
⎯



R&D⎯
⎯
⎯



⎯

Infrastructures
Learning, transfers, deployment

Behavioral Changes⎯⎯

Increasing Government/ Private Expenditure
International Knowledge Flows
R&D Collaborations

Technology⎯High Labor Supply
Increasing Education
Migration (intra & inter county)

High Savings Rate
Changing Lifestyles

Governance⎯⎯⎯Institutions
Laws
Policies

Indian Institute of Management, Ahmedabad, India

Savings Rate??

403735.0

35
33.0

3230
24.625

22.8
20.6

2015
10501980

1990

2000

2010

2020

2030

Energy Dilemma
Percentage of Primary Energy Consumption

80%

How to transit toModern Biomass?

60%

Food Security?

TraditionalBiomass
40%

Domestic Resource: +ve

Coal Direct Employment: +ve
Oil
20%
Fuel Supply?
Waste disposal? Nuclear
Safety?

0%
1952

1960

1970

1980

1990

Energy Security: -ve
Foreign Exchange: -ve

En. Security:+VeGeopolitical Risk: HighGas Foreign Exchange: -veHydro
2001

Regional water disputes?
Indirect Benefits

Indian Institute of Management, Ahmedabad, India

Transition to LCS:
India Analysis

Indian Institute of Management, Ahmedabad, India

Analytical Framework & Base Scenario
Base Scenario Assumptions

Integrated Modelling Framework
DATABASES
Socio-Economic,
Technologies, Energy Resources, Environmental Constraints

1. GDP•Ann. Growth Rate: 7.2% from 2005-50•2050 Economy: 24 times larger than 2005ANSWER-MARKAL
Model

AIM SNAPSHOT Model

2. Population

AIM Strategic Database(SDB)

End Use DemandModel

AIM CGE Model•2000: 1021 Million•2050: 1593 Million

3. 650 ppmv CO2e Concentration
Stabilization (or 550 CO2)
4. 4.7 W/m2 Radiative Forcing

GDP

25

Annual Growth Rate 2005-50: 7.3%
Annual Growth Rate 2005-32: 8%

10000

20

US $/person

Base Year 2005=1

Per Capita Income

12000

15

108000
6000
4000
2000

50
2005

02020

2035

Indian Institute of Management, Ahmedabad, India

2050

2000

2010

2020

2030

2040

2050

Low Carbon Society Scenarios
India: LCS Scenario Assumptions
1. LCS Scenarios assume 550 ppmv CO2eConcentration (or 480 CO2 Concentration
2. 3.4 W/m2 (or 2 to 3o centigrade temperature
increase with 50:50 probability)
3. Two pathways of LCS produce identicalcumulative CO2 emissions from 2005 to 2050
4. LCS Vision 1 scenario has same GDP andPopulation as for the Base Case
5. LCS Vision 2, i.e. ‘Sustainability’ scenario

Indian Institute of Management, Ahmedabad, India

Low Carbon Society Transitions
LCS transition with conventional pathand carbon price

7,000
OthersDevice Efficiency• High Carbon Price• Climate Focused Technology Push
• Top-down/Supply-side actions

Renewable Energy

5,000Electricity (Fuel Switch)

4,000
CCS

3,000
2,000
1,00002000Carbon Tax$/tCO2

2010

20202030

2040

2050

7224067100

7,000
6,000

LCS by aligning climate actions withsustainable development actions• Low Carbon Price• Bottom-up/Demand-side actions• Behavioural change• Demand-side technology pull
• Diverse Technology portfolio

Million Ton CO2

Million Ton CO2

6,000

5,000
4,000

OthersCCS
Transport Mode
Urban Planning
Consumption
Recycling
Material Substitutions
Appliance Efficiency
Renewable Energy
Building

3,000
2,000
1,00002000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Indian Institute of Management, Ahmedabad, India

Electricity (Fuel Switch)

Demand Reduction & Substitution
700

1000

Steel
Steel

600

CementDemand (Million Ton)

Demand (Million(Million Ton)Ton)
Demand

800
500
400

Conventional
Development

300
200
Sustainable
1000
2000
2000

Society
2010
2010

2020
2020

2030
2030

2040
2040

Conventional
Development

400
Sustainable
Society

200

0
2000

2050
2050

Paper

40600

2010

2020

3000
Demand (Trillion Lumen hrs)

Demand (Million Ton)

25
Conventional
20

Development

15
10
Sustainable
50
2000

Society
2010

2020

2030

2040

Indian Institute of Management, Ahmedabad, India

2050

2040

2050

Lighting

35
30

2030

2000
Conventional
Development
Sustainable

1000

Society02000

2010

2020

2030

2040

2050

Base Case

1,000

Conventional Dev. + Tax
Sustainability

Mtoe

800

Total Energy Demand

Share of Renewable

Base
C+T
Sust.

Base
C+T
Sust.

24 %
34 %
47 %

R
enewabl1,200s

Energy Mix in 2050

3004 Mtoe
2945 Mtoe
2004 Mtoe

600
400

Indian Institute of Management, Ahmedabad, Indiaomas
Bi

Nuc

lee

aro
ydr
H

asilO

G

C

oal200CO2 Emissions & Price Trajectories
CO2 Emissions: Global and India
7
Base Case assumes global
650 ppmv CO2e stabilization

5
India Base Case

4

India Carbon Tax(550 ppmv CO2e)

32Global Base Case

102000

CO2 Price120550 ppmv CO2e2010

2020

2030

2040

2050

Price CO2 (US $/tCO2)

Index 2000 =1

6100
Conventional
Society80
60
40

Sustainable Society

20
Base Case
02010

Indian Institute of Management, Ahmedabad, India

2020

2030

2040

2050

Resolving Dilemmas:
Sustainable Transition to LCS

Indian Institute of Management, Ahmedabad, India

Mitigation Commitment: Dilemma
15

India: Projections

USARussia

Japan

UK

S Africa

India: Projections

5Per Capita Income

Per Capita Emissions

10000

4tCO2/person

US $/person

China

USAUK

Japan

Germany

0S Africa

0Russia

5Brazil

10000

Brazil10IndiatCO2 / person

20000

China

Per Capita CO2 Emissions

2030000

India

US$/person (PPP)Per Capita Income
40000

12000

2004

25Germany

2004

50000

8000
6000
4000

3212000
02000

2010

2020

2030

2040

Indian Institute of Management, Ahmedabad, India

2050

02000

2010

2020

2030

2040

2050

Income Effect and Co-benefits
Emissions and Income
14

SO2 Emissions in BAU

12

8000

10
6000

8

CO2 Emissions in BAU

64000

42000

0

LCS CO2 Emissions
100

200

400

800

1600

22400

0

SO2 Emissions (Million TSO2)

Co-benefits: SO2 Emissions
14

GDP Per Capita 2000 = 100

Base Case

12Million tSO2CO2 Emissions (Million TCO2)

10000

Conventional Path +High Carbon Price1086Sustainable Development +Low Carbon Tax

420
2000

Indian Institute of Management, Ahmedabad, India

2010

2020

2030

2040

2050

Co-benefits of Regional Co-operation
MDG 1: Eradicate extreme poverty and hunger, MDG 7: Environmental Sustainability
Uzbekistan

!!..

Iran
Iran

Afghanistan!!..

KandharKandhar

Pakistan
Pakistan

Proposed LNG terminals
Existing Gas Basin㫞!.

Sonipat!.
SonipatDelhi!. !.
Delhi!. !. Bareilly!.
Nepal
Faridabad!. Bareilly!. !.
Nepal
Faridabad
Shahjahanpur!.
Shahjahanpur
Lucknow!.
Lucknow
Kanpur!. !.
.
!
.
!
Gwalior!. Kanpur!. Jagdishpuri!. !.
GwaliorJagdishpuriPatna!.
!.
!.
Jhansi!.
Patna!.
Kota!.
Jhansi!.
!.
Kota
Gaya!.
!.
Vijaypur!.
Gaya!.
Vijaypur!.
Himmatnagar
Himmatnagar
Mahesana!. !.
Ujjain!.
Mahesana!. !.!. !. Jhabua!.Ujjain
Wankaner
India
Chotila!.
!. Wankaner
India!.!. Jhabua!.
ChotilaRajkot!. !.Vadoadra!.
Rajkot!. !. !.Vadoadra
Dahej!. !.
Dahej!.!.
HaziraHaziraValsad!. !.
Valsad!.

Karachi.! Karachi!.

United Arab Emirates
United Arab Emirates

NangalNangal!.!.
!.!.
AmbalaBathinda!.!.
MultanBathinda!.!. Ambala
Multan!.

QuettaQuettaKhuzdar!. Khuzdar!.

Iranshahar
Bandar-e-Abbas Iranshahar!.Bandar-e-Abbas !.!.
!.

Bahrain
Bahrain
Qatar
Qatar

Saudi Arabia
Saudi Arabia

Gas Pipelines under construction
Proposed Gas Pipelines
China
Existing LNG terminalsºF

Delaram
Delaram!!..
South-Pars!. South-Pars!.

Important Places
Existing Gas Pipelines!.

Herat
Herat!!..

Co-benefits of South-Asia
Integrated Energy-Water MarketTajikistan

Turkmenistan

Proposed Gas Basin
BhutanBhutanPanvel!.
Pune
Panvel!. !.
Pune!.
Ratnagiri!.
Ratnagiri!.

Cumulative from 2010 to 2030

Bangladesh!.
Bangladesh!.
Myanmar (Burma)
Myanmar (Burma)

ThailandThailand

Nellore!.

Nellore!.
Palmaner
Chittoor!. !.
Chennai!.
Chittoor!.
Mangalore!. Palmaner!.HassanBangalore!. !.
Chennai!.
!.
Mangalore!.
!.HassanBangaloreFF

Coimbatore!.
!.
Tiruchchirappalli
Coimbatore!.
!.
Kochi
!.
Tiruchchirappalli
Kayankulam
Kochi!. !.
Tuticorin!
.
Kayankulam!.
Tuticorin!.

F
F

Maldives
Maldives

Turkmenistan

Uzbekistan!(!(!(!(!(!(!(!(!(!( !(!(!(!(!(!(!(Nepal!(United Arab Emirates!(!(!(!(!(Bhutan!(!((!!(!(!(1001 - 1500!(1501 - 2000!(!(!(Proposed!(!(!(SO250 Million Ton

100.03

Total

359

0.98

• 16 GW additional Hydropower (MDG1&7)!(!(India!(!((!!(!(!(Myanmar (Burma)

Vietnam
Laos!(!(!(!(!(!(!(!( !( !(!(!(!(Thailand

Cambodia!(!(5001 - 10000!(!(More than 10000
Sri Lanka
Maldives• Flood control (MDG1&7)!((!

!(2001 - 5000

Existing0.08!(!(!(Major Rivers!(28!(!(!(!( !(501 - 1000

5.1 Billion Ton• More Water for Food Production (MDG1)!(!( !(Bangladesh!(CO2 Equiv.

!(!(!( !( !( !(!(!(!(!(0.87

Spill-over Benefits / Co-Benefits!(Capacity (MW)!(!(upto 500321

China!( !( !(Legend

60 Exa Joule!(Pakistan

Yemen

Malaysia
Indonesia
Malaysia
Indonesia!( !(IranOman

Sri Lanka
Sri Lanka

Tajikistan

Afghanistan

Energy㫞㫞Gadag!.
Gadag!.

Somalia
Somalia% GDP

Vishakhapattnam!.
Vishakhapattnam!.
Kakinada!. !.
!.
Vijaywada
Kakinada!. !.
!.
Vijaywada

Solapur!.
Solapur!.

ºÑºÑ

Yemen
Yemen

$ Billion

Kolkata!.
Kolkata!.

ÑºÑºÑºOman
Oman

Benefit (Saving)

Dispur!.
Dispur!.

Indonesia

Malaysia

Indian Institute of Management, Ahmedabad, India• Lower energy prices would enhancecompetitiveness of regional industries(MDG1)

Sustainable Low Carbon Development
Aim

Interventions

Drivers

Targets

TechnologicalInnovations

Social/Institutional
ManagementLowCarbonSocietyNational
Socio-economic
Objectives
and Targets

Aligning Markets
Co-benefits

Win/Win Options
Shared Costs/Risks
Long-term Vision
Avoid Lock-ins

Sustainability

Modify Preferences

Back-casting
Indian Institute of Management, Ahmedabad, India

GlobalClimate Change
Objectivesand Targets

Conclusions• Development vision matters to LCS transition• Moving from Margin to Mainstream– Managing climate change at the margin is costly, risky, and unsustainable– Opportunities to gain multiple simultaneous dividends exist and should be realized– Mainstreaming would permit adapting policies to changing dynamics and long-term goals• LCS through Sustainability: The Post-Kyoto Regime– Burden sharing metaphor has posed climate stabilization as a zero-sum game, thus
inviting conflicts.
– Grandfathering not feasible as allocation under ‘Cap and Trade’ regime if emerging
economies have to play central role in Climate Regime.
– Sustainability roadmap to LCS provides a practical way-out from:• Climate-centric commitments (as in ‘Grand architecture’) that have prevented cooperation, and• Non-binding ambiguous and ambitious goals (federalism or ‘Madisonian’ approach) which cannot
produce credible and stable policy signals.

– Even in Sustainable Low Carbon Societies, stabilization would still require climate focusedpolicies, both for mitigation (beyond Energy) and adaptation.
Indian Institute of Management, Ahmedabad, India

Thank you
Indian Institute of Management, Ahmedabad, India