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India’s Approach To Climate Change

India’s Approach To Climate Change. Surya P. Sethi Principal Adviser Energy Infraline Energy Round Table May 7, 2008. The Structure Of The Presentation. A look at the Real India Emission Reduction Targets – A Reality Check India's Contribution To Mitigation To Date

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India’s Approach To Climate Change

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  1. India’s Approach To Climate Change Surya P. Sethi Principal Adviser Energy Infraline Energy Round Table May 7, 2008

  2. The Structure Of The Presentation • A look at the Real India • Emission Reduction Targets – A Reality Check • India's Contribution To Mitigation To Date • Sustainability Concerns • India’s Current Energy & Climate Change Policy Framework • Key Messages

  3. A Look At The Real India

  4. Ground Zero • Total Primary Energy Supply in 2005-06: 510 MTOE • Energy Mix: Coal & Lignite – 37.9%, traditional biomass-28.6%, oil-23.9%, gas-6.9%, hydro-1.7% and nuclear-1.0%. • Primary Commercial Energy Consumption 365 MTOE in 2005-06 • India’s share of global commercial energy supply in 2005 was 3.7%. Top 5 consume over 50% led by US at 22.2% and China at 14.7% followed by Russia, Japan and Germany. • India’s per capita commercial energy consumption is about 20% of the world average, 4% that of the US and 28% that of China Source: IEA, BP and Planning Commission

  5. The Energy Challenge • Some 600 million fellow Indians live without electricity. • Over 75% of household energy consumption is for the basic human need of cooking. Traditional biomass is the primary cooking fuel for over 700 million fellow 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. • Over the next 25 years India needs to lift the bottom 40% of her citizens to an acceptable level of economic & social well being – this will not happen without providing modern energy to these fellow Indians.

  6. India’s Development Goals • Reduce the poverty ratio by 5 percentage points by 2007 and by 10 percentage points by 2012 • Provide gainful and high-quality employment to the labor force • Ensure all children complete 5 years of schooling • Reduce dropout rates of children from elementary school from 52.2% in 2003-04 to 20% by2011-12 • Increase literacy rate 75% by 2007 and to 85% by 2012 • Reduce gender gaps in literacy and wage rates by at least 10% by 2012 • Reduce the decadal rate of population growth between 2001-2011 to 16.2%

  7. India’s Development Goals • Reduce the Infant Mortality Rate (IMR) to 45 per 1000 live births by 2007 and to 28 by 2012 • Reduce the Maternal Mortality Ratio (MMR) to 2 per 1000 live births by 2007 and to 1 by 2012 • Increase the forest and tree cover to 25% by 2007 and 33% by 2012 • Provide clean drinking water for all by 2009 • Electricity for all by 2012 • Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012

  8. Development—The Best Adaptation Tool Share Of Adaptation In Total Govt. Expenditure: 1997-98: 7%; 2006-07: 13% Adaptation Outlays As A Percentage Of GDP: 1997-98: 1.6%; 2006-07: 2.6% Key Components Of Adaptation Outlays In 2006-07

  9. India’s Energy Imperatives To Support 8% + Growth • India’s primary energy supply to grow by 4.3-5.1% to reach 1536 to 1887 MTOE by 2031-32 for GDP growth of 8%+. • India’s share of world fossil fuel supply in 2005 was 3.7%. This could become 7.6 to 10.9% by 2031-32. • India’s incremental requirement could account for 13-21% of the world’s incremental supply by 2031-32. • India would need to tap all available energy supplies and pursue all available and emerging energy technologies. • Above all India must lower energy demand through energy conservation and higher energy efficiency

  10. Emission Reduction Targets – A Reality Check

  11. CO2 Emissions - 2005

  12. Per Capita Convergence In 2050 With Total CO2 Emissions At 50 % of 1990 level @

  13. Per Capita Convergence In 2050 With Total CO2 Emissions At 2005 Level @

  14. India's Contribution To Mitigation To Date Sustainable Lifestyles Sustainable Production

  15. CO2 Emissions From Food Production & Food Processing Source: TERI analysis (various data sources)

  16. Estimated CO2 Emissions From Passenger Transport (gm/passenger-km) • Source: TERI Analysis, various data sources

  17. Municipal Solid Waste Average rate of recycling (%) (excl. re-use) GHG emissions from waste (gm/’000$GDPppp) Source: TERI Analysis, based on National Communications of different countries

  18. Per-capita Consumption Levels Per-unit Of Inhabited Land Area India ranks the lowest

  19. CO2 Emissions from Key Material Inputs for Infrastructure Development 1771 • S1 Scenario assumes India matches consumption levels of EU 15 on a per capita per square kilometer bases for Aluminum, Cement & Steel by 2031-32. • Co2 emissions increase from 1251 million tons (BAU) to 3022 million tons (S1) in 2031  Increase of 1771 million tons in S1 relative to BAU in 2031

  20. Specific Energy Consumption in Integrated Steel Plants 22% reduction in SEC from 1990-91 to 2004-05 Actual impact higher as share of D/R rising Source: Steel Authority of India Ltd.

  21. SEC Trend Of The Aluminum Sector (Source: BEE, 2007)

  22. Energy Consumption Profile (Dry Process - Wtd. Avg.) BEST IN INDIA BEST IN WORLD THERMAL ENERGY KCAL/KG CL. WET KILNS: INDIA 5% US 18% SHARE OF BLENDED CEMENT OVER 60% ELECTRICAL ENERGY KWH/T CEMENT Source: CMA

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

  24. Process-wise Share Of Installed Capacity Of Caustic Soda In India MEMBARANE CELL PROCESS HAS LOWEST SEC WESTERN EUROPE: MERCURY CELL SHARE 55% USA: DIPHRAGM PROCESS SHARE 75%, INDIA: CURRENT MEMBARANE CELL SHARE 75% SEC OF INDIAN CAUSTIC SODA PRODUCTION IS 36% BELOW USA (Source: LBNL, 2005)

  25. Global Benchmarking Of Refineries-Shell Source: Shell Global benchmarking study in ‘Energy & Loss’ performance

  26. India’s Energy Intensity Falling

  27. India Is NOT Following The Fuelish Path of Industrialized Countries

  28. India’s Emission’s Performance Source: EIA &UNDP HDR

  29. World Bank Assessment Of India’s Relative Emission’s Performance • India is a relatively low carbon economy • India has been offsetting its CO2 emissions growth resulting from growth in population and high GDP growth by lowering energy intensity and improving the carbon intensity of its fuel mix • India has achieved these offsets despite a low initial emission level and against a backdrop of increasing CO2 intensity world wide between 1999-2004 • Most independent projections indicate that India’s CO2 intensity is likely to continue to decline through 2030-2050

  30. Sectoral CDM Potential During 2012-17(Power, Iron & Steel, Cement) • CO2 Emissions reduction potential of about 550 million tonnes during 2012-17 • Highest emissions reduction potential is in the power sector (309 MT)

  31. Additional Investment Requirements For Mitigation In the Selected Sectors, Vis-a-Vis Select Development Outlays Of GOI For Tenth Plan Additional investment requirements of US$ 25.1 Billion (at 2001 Prices) including $ 22.3 billion of positive mitigation cost options similar order of magnitude as plan support for meeting social and environmental development targets

  32. Marginal Abatement Cost Curve for Power, Steel and Cement Sectors (All options) [For 2012-17] • Total additional investment requirement : 25.1 billion US$ • For options with positive mitigation cost total additional investment requirement : 22.3 billion US$ • Mitigation cost is highest for SPV: 925.8 $/tonne . This has not been plotted

  33. No-regret Options Under Capital Constraints • In respect of GHG mitigation, refers to options that are of economic benefit even without GHG mitigation considerations. • Implies both reduced cost of energy service, and zero incremental investment cost. • Depends upon specific project situation, and cannot be generalized to an entire sector/economy!

  34. Sustainability Concerns

  35. Different CGE Models run with same scenarios give widely varying results (e.g. Indian share of global emissions) Source: Weyant & Parikh, 2004

  36. Qualitative Result: Carbon Intensity of GDP for India Source: Weyant & Parikh, 2004

  37. Impact Of Some Of India’s Energy Policies (2001-31) Baseline (BAU): Base year 2001, GDP growth 8%, Official demographic projections, IPCC emissions factors, 8% discount rate Policy Initiatives Over Baseline Assumptions: • S1:Cleaner fuels for power generation • S2: Electricity for all by 2012, decentralized renewable options and efficient cook stoves • S3: 20% increase in share of public road transport Greater use of CNG in buses, taxis, 3-W vehicles • S4: S1+S2+S3 S5: Same as Baseline but annual GDP growth rate 6.7%

  38. Change in India’s CO2 intensity as a result of Government policy initiatives TERI analysis

  39. CO2 intensity (MMT/Billion US $) TERI analysis

  40. India’s Current Energy & Climate Change Policy Framework

  41. Decoupling Energy Growth From GDP Growth & Managing Energy Mix

  42. India’s Approach In The Global Context Source : IEA. For India: actual for 2005-06; IEP estimates for 31-32

  43. Reforming Energy Markets • 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 • Strengthen or introduce independent regulation

  44. Instituting Energy Policies That Support Mitigation/Efficiency • Force conservation & restrict demand growth through high energy taxes • Energy/Power sector reforms to raise energy extraction, conversion transmission & distribution efficiency • Promote hydro, nuclear and renewable energy • Promote clean coal technologies • Improve highways, build mass transit & freight corridors • Promote less carbon intensive fuel for transport • Standards, labeling & bench marking for energy efficiency • Enforce environmental quality management

  45. Specific Initiatives To Further Mitigation / Efficiency

  46. Policy Focus On R&D And Science Of Climate Change • Advanced coal technologies: IGCC, Ultra critical, In-situ gasification, CBM, CCS & Zero emissions & Combustion Research Initiative. Gas hydrates & Hydrogen • Nuclear: closed fuel cycle & breeder/thorium reactors • Solar Thermal, Solar PV, Biomass gasifiers & Bio-fuels • Energy storage systems • Energy efficient technologies across sectors • Climate modeling, super computing & researching current & future adaptation practices/technologies

  47. Policy Focus On Adaptation • Enhance resource conservation through improved management of watersheds, forests, Coastal Zones etc. • R&D and technological innovation for development of tolerant cultivars • Innovative demand-driven technology delivery systems for stakeholders • Better risk management strategies including involvement of insurance industry, esp. for crops • Promoting alternative livelihood options

  48. Key Messages

  49. Key Messages • India, the world’s fourth largest economy, is also home to a third of the world’s poor without access to modern commercial energy • India’s development goals are closely aligned with the MDGs. Delivering these goals requires more energy • India’s patterns of production and consumption are sustainable. • India’s energy intensity and emissions intensity is comparable to the best in the world • India has put in place a policy framework that supports sustainable development, mitigation and adaptation

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