India’s GHG Emission Reduction and Sustainable Development
India has made voluntary commitment for reducing the emission intensity of GDP in the year 2020 by 20–25 % below that in the year 2005. The Indian approach is based on delineating and implementing cost-effective mitigation actions which can contribute to national sustainable development goals while remaining aligned to the UNFCCC’s expressed objective of keeping the average global surface temperature increase to below 2 °C over the preindustrial average. This chapter assesses three emission scenarios for India, spanning the period 2010–2050. The analysis is carried out using a bottom-up energy system model ANSWER-MARKAL, which is embedded within a soft-linked integrated model system (SLIMS).
The central themes of the three scenario storylines and assumptions are as follows: first, a business-as-usual (BAU) scenario that assumes the socioeconomic development to happen along the conventional path that includes implementation of current and announced policies and their continuation dynamically into the future; second, a conventional low carbon scenario (CLCS) which assumes imposition, over the BAU scenario, of CO2 emission price trajectory that is equivalent to achieving the global 2 °C target; and third, a sustainable scenario that assumes a number of sustainability-oriented policies and measures which are aimed to deliver national sustainable development goals and which in turn also deliver climate mitigation, resilience, and adaptation as co-benefits. The sustainable low carbon scenario (SLCS) also delivers same cumulative emissions from India, over the period 2010–2050, as the CLCS scenario using carbon price as well as a mix of sustainability-oriented policies and measures.
The scenario analysis provides important information and insights for crafting future policies and actions that constitute an optimal roadmap of actions in India which can maximize net total benefits of carbon emissions mitigation and national sustainable development. A key contribution of the paper is the estimation of the net social value of carbon in India which is an important input for provisioning carbon finance for projects and programs as an integral part of financing NAMAs. The analysis in the paper will be useful for policymakers seeking to identify the CO2 mitigation roadmap which can constitute an optimal mix of INDCs for India.
KeywordsClimate agreement Sustainable development Scenario modeling Mitigation options CO2 Price Social cost of carbon PM2.5 emission
Key Message to Policymakers
India’s CO2 intensity declines in BAU yet inadequate for global low carbon goal.
Carbon price affects energy supply side and leads to high share of nuclear energy and CCS.
Sustainability policies reduce energy demand and enhance share of renewables.
Low carbon policies aligned to sustainability goals deliver sizable co-benefits.
Sustainability scenario delivers same carbon budget with lower social cost of carbon.
Eight National Missions for climate change
National solar mission
Specific targets for increasing use of solar thermal technologies in urban areas, industry, and commercial establishments
National mission for enhanced energy efficiency
Building on the energy conservation Act 2001
National mission on sustainable habitat
Extending the existing energy conservation building code, integrated land-use planning, achieving modal shifts from private to public transport, improving fuel efficiency of vehicles, alternative fuels, emphasis on urban waste management and recycling, including power production from waste
National water mission
20 % improvement in water use efficiency through pricing and other measures
National mission for sustaining the Himalayan ecosystem
Conservation of biodiversity, forest cover, and other ecological values in the Himalayan region, where glaciers are projected to recede
National mission for a “Green India”
Expanding forest cover from 23 to 33 %
National mission for sustainable agriculture
Promotion of sustainable agricultural practices
National mission on strategic knowledge for climate change
The plan envisions a new Climate Science Research Fund that supports activities like climate modeling and increased international collaboration; it also encourages private sector initiatives to develop adaptation and mitigation technologies
The Indian approach to climate change is based on delineating and implementing cost-effective mitigation actions which can contribute to national sustainable development goals while remaining aligned to the UNFCCC’s expressed objective of keeping the average global surface temperature increase to below 2 °C over the preindustrial average.
3.2 Model and Scenarios
3.2.1 Assessment Methodology and Model System
AIM/CGE and GCAM are top-down, computable general equilibrium (CGE), models used to compute the GDP loss and CO2 price for the 2 °C stabilization scenario. AIM/CGE has been developed jointly by the National Institute for Environmental Studies (NIES), Japan, and Kyoto University, Japan (AIM Japan Team 2005). The model is used to study the relationship between the economy and environment (Masui 2005).
3.2.2 Scenarios Description
22.214.171.124 Business-as-Usual (BAU) Scenario
The BAU scenario considers the future economic development will copy the resource-intensive development path followed by the developed countries. The annual GDP growth rate is 8 % for the 17 years (2015–2032) and matches with the economic growth projections for India (GoI 2006, 2011). The GDP growth is expected to slow down post 2030, and the growth for overall scenario horizon, i.e., 2010–2050, is at a CAGR of 7 %. The rate of population growth and urbanization follows the UN median demographic forecast (UNPD 2013), and accordingly, the overall population is expected to increase to 1.62 billion by 2050. This scenario assumes a weak climate regime, and a stabilization target of 650 ppmv CO2e is considered. The carbon price rises to a modest to $20 per ton of CO2 in 2050 (Shukla et al. 2008).
126.96.36.199 Conventional Low Carbon Scenario (CLCS)
This scenario considers a strong climate regime and a stringent carbon tax post 2020. The underlying structure of this scenario is otherwise similar to the BAU. The scenario assumes stabilization target of 450 ppmv CO2e. The CO2 price trajectory assumes implementation of ambitious Copenhagen pledges post 2020, and CO2 price trajectory therefore is below 15 US $ per t CO2 till 2020 and then increases steadily to reach 200 US $ per t CO2 by 2050 (Lucas et al. 2013). The scenario assumes greater improvements in the energy intensity and higher share of wind and solar renewable energy compared to the BAU scenario.
188.8.131.52 Sustainable Low Carbon Scenario (SLCS)
This scenario follows the “sustainability” rationale, similar to B1 global scenario of IPCC (2000). The scenario assumes decoupling of the economic growth from resource-intensive and environmentally unsound conventional path of the BAU. The scenario seeks to achieve by significant institutional, behavioral, technological (including infrastructures), and economic measures promotion of resource conservation, energy conservation, dematerialization, and demand substitution (e.g., telecommunications to avoid travel). The scenario also considers a strong push for exploitation of large renewable energy potential (GoI 2015) and increased regional cooperation among countries in South Asia (Shukla and Dhar 2009) for energy and electricity trade and effective use of shared water and forest resources.
3.3 Scenarios Analysis and Comparative Assessment
3.3.1 Energy Demand
The overall demand for energy in the BAU is expected to increase 3.6 times from 2011 to 2611 Mtoe in 2050. The compounded annual growth rate (CAGR) is 3.6 % for the period 2011–2050 which is slower than average GDP growth of 7.0 % which has been assumed for the economy. The decoupling between GDP and energy use is due to both structural changes within the economy (greater share of service sector) and improvement in technological efficiencies. The technological efficiency improvement is most significant in the power generation where the net efficiencies improve from around 31.6 % to around 39 % in 2050.
In the SLCS energy demand is much lower (Fig. 3.4) since the demand for steel, cement, fertilizers, and many other energy-intensive commodities is much lower than BAU due to resource conservation and dematerialization. The energy demand is also lower from building, transport, and commercial sectors due to sustainable lifestyles. By 2050 the overall demand for energy is around one third lower than BAU. The fuel mix is also diversified; however, unlike CLCS, the reliance on nuclear energy and CCS is minimal and consistent with concerns with regard to their sustainability.
3.3.2 CO2 Emissions and Mitigation Options
In the SLCS scenario, emissions are lower due to a much lower energy demand (Fig. 3.4) from BAU. The lower energy demand is due to a wide variety of measures related to sustainability which reduce demand for energy-intensive industries like steel, cement, bricks, aluminum, etc. The second major driver is renewable energy which provides for one third of primary energy.
3.4 Co-benefits of Mitigation
Climate change mitigation can deliver co-benefits or co-costs, and we examine the scenarios on two indicators: energy security and local environment.
3.4.1 Energy Security
Many Indian cities have the very high levels of air pollution (WHO 2014) which is leading to serious health impacts (a. PM2.5 is one of the key local pollutants and is responsible for severe health risks. Transport sector accounts for 30–50 % of the PM2.5 (Guttikunda and Mohan 2014), and therefore, we analyze PM2.5 for transport sector.
In India Bharat Stage III emission standard for motor vehicle (equivalent to Euro III) is applicable across India, and BS IV emission standards are applicable in the National Capital Region of Delhi and 20 other larger cities. Thirty additional cities are planned to move to Euro IV by 2015 (GoI 2014). In all the three scenarios, it is assumed that the BS IV would be fully implemented by 2020 all across India (GoI 2014).
3.4.3 Net Social Cost of Carbon
The chapter presented historical projections of energy and emissions in India under different scenarios. The approach followed in this paper visualizes low carbon transition in India from two different perspectives. First is the conventional perspective which assumes the rest of the economy is in competitive equilibrium. The approach visualizes carbon mitigation as an outcome of the application of a globally efficient carbon price in the form of a tax or a shadow price resulting from the global emissions carbon cap. This perspective, referred to as conventional low carbon scenario (CLCS), however discounts the fact that developing country economies have deep-rooted institutional weaknesses which impedes competitive behavior. The paper proposes a second scenario, referred to as sustainable low carbon scenario (SLCS), that explicitly recognizes the market weakness and hence explicitly implement additional policies which align the national sustainable development goals with the global low carbon objective.
As a reference point for the low carbon pathway, a business-as-usual (BAU) scenario is also assessed. A notable result is that energy demand and CO2 emissions in India decouple significantly from GDP growth even in the BAU. However, the decoupling of CO2 is not adequate when compared to what would a cost-effective global carbon regime targeting 2 °C temperature stabilization. Thus, further carbon mitigation is needed to align India’s mitigation target with global stabilization.
Under CLCS, the application of global carbon price has little impact on energy demand, but it results in greater energy supply-side response like higher share of nuclear energy power and CCS. The projections show that by 2050, India can deploy nearly 30 billion tCO2 sequestration capacity under CCS. This is much higher than what is available in depleted oil and gas wells and coal mines, and using this capacity at higher end can be extremely risky due to the uncertainty of the CCS capacity and costs in India. This aside, in this scenario, nuclear energy would supply nearly a quarter of the primary energy demand in 2050. This is also a high risk proposition given the uncertainty of the full cost of nuclear energy in India.
Under the SLCS, many sustainable development-focused measures such as designing and implementing sustainable habitat and mobility solutions, 3R (reduce, reuse, recycle) measures, and demand-side energy and resources management measures result in reducing the energy demand by a third in 2050. In addition, the policy support for renewable energy results in relatively minimal use of CCS which can be easily sequestered within the depleted oil and gas wells or coal mines in the country. The demand for nuclear energy power is also reduced significantly under this scenario. Solar and wind energy would play a bigger role in both CLCS and SLCS (Fig. 3.8). The energy security benefits, compared to BAU, are very high in SLCS but negligible in CLCS. Air quality benefits are high in both CLCS and SLCS.
In case of CLCS, the mitigation is achieved by applying the global carbon price over Indian economy. In case of SLCS, the emissions budget is assumed to be the same as the emissions in CLCS during the period 2010–2050. In SLCS, the emissions are at first reduced by various measures targeted to achieve national sustainable development goals. The budgeted carbon pathway is achieved by the shadow price of carbon corresponding to the budget constraint. This cost, which we refer to as the “social cost of carbon,” is much lower in the case of SLCS since the carbon reduction that is delivered by the sustainability measures is assumed to be “free” since their cost is included in the cost-benefit assessment of national sustainability measures which typically do not include carbon benefits.
The assessment in the paper shows that aligning actions toward India’s low carbon pathway with measures for achieving national sustainable development goals would result in significantly lower social cost of carbon for India. This signifies the existence of sizable co-benefits between low carbon and sustainable development actions. The methodology and analysis in this paper thus provides a way forward for scientifically delineating the Intended Nationally Determined Contributions (INDCs) for mitigation. The technological and financial details underlying the modeling analysis can be useful for preparing the road map of India’s Nationally Appropriate Mitigation Actions (NAMAs) and downscale these to actionable projects with clearly identified pathways for technology development, transfer and deployment, as well as access to carbon finance.
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