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1
Developing SocioDeveloping Socio--Economic Economic
Scenarios for India Scenarios for India
Purnamita Dasgupta
Institute of Economic Growth, Delhi
National Workshop
2
Objectives
• To develop alternative socio-economic scenarios that
take into consideration a sustainable development
objective for India
• To develop a conceptual frame for indicative economic
costs of policies for adaptation to climate change,
specific focus on vulnerable groups.
• To illustrate the methodology with detailed studies,
focusing on agriculture as a key sector
3
Methodology• Key markers of socio-economic vulnerability and
adaptive capacity were identified
• These include Geographical (inter-state variation and
coastal location), Demographic (inter-state population
distribution) and Coping vulnerability (income
differentials and access to basic facilities)
• Socio-Economic variables impacting each of the above
(through either an increase/decrease in vulnerability)
are then interacted in a dynamic simulation model
• Model provides: (a) alternative development pathways
through short to medium term projections over (b)
varying time scales (c) key parameters which can be
influenced to achieve desirable outcomes for
decreasing vulnerability.
4
Gross Domestic Product
Poverty Reduction Sectoral Gross Domestic Product
�Food security
�Unemployment Reduction
�Access to Basic Services
Share of Agriculture Sector
Food grain Production
Conceptual Frame – Economy and Agriculture Module
5
Area under Food grain
� Profitability
� Technology
� Climatic Factors
� Irrigation
� Other Socio-Economic Factor
� Share of Primary Sector
� Education
� Infrastructure
Food Production
Population
Per Capita Production
Conceptual Frame:
Dynamic Simulation of Food grain Production
6
Gross DomesticProduct
Poverty
Reduction
Food Security,
Unemployment
Reduction,
Acess to Basic
Services
Sectoral
Gross
Domestic
Product
Share of
Agriculture
Sector
Area under
Foodgrain
area change dueto change inprofitability
factorchange inrelative
profitability
irrigated area
food grainnon-irrigated area
foodgrain
change in area
foodgrain
Proportion of land
irrigated
<Time>
food
production
Yield (irrigated)Yield
(nonirrigated)
Per capita
production
Population
in2
<Time>
<Time>
7
Emerging Scenarios
• Time scale from current time period till 2030
• Reference scenario has current expectations and
assumptions of structural stability, and, concerns for
vulnerability without climate change impacts – results
available
• Optimistic Scenario improves on reference with rapid
technological progress and adaptive strategies –
results available
• Longer term Scenario Simulation – in progress
• Indicative Costs – framework developed; ongoing work
8
Variable Reference Scenario
Optimistic Scenario
GDP growth rate (2020-2030) 7 % 8 %
Unemployment Rate 1% 1%
Income Poverty (Percentage BPL) 5% 5%
Sectoral Shares in GDP: Primary: (Secondary + Tertiary)
0.15: 0.85 0.10:0.90
Per capita Food Grain Production 182 kgs 198 kgs
Urbanisation 0.45 0.50
Access to basic amenities 100% 100%
Socio-Economic Scenarios for the Indian Economy, 2030
9
Per C
ap
ita F
oo
dg
rain
Pro
du
ctio
n
17
0.0
0
17
5.0
0
18
0.0
0
18
5.0
0
19
0.0
0
19
5.0
0
20
0.0
02004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25
2025-26
2026-27
2027-28
2028-29
2029-30
op
timis
tic sce
na
rio
refe
ren
ce s
cen
ario
10
Uncertainty Issues
• TFP, technological progress
• Limiting – cap values : land availability, irrigation
potential, population, relative international prices
• Turning points – thresholds : where these lie and extent
of certainty of occurrence
Quality Assurance
• Face Validity through repeated iterations – expected
and consistent signs and directions of flows
• Historical behaviour tests
• Reality checks with extreme values for parameters
11
Adaptation Framework
• Response Levels
– Variables determining potential for adaptation: education,
technological development
– Variables impacted by the potential: e.g. water use efficiency
• Drivers of Change
– Policies - State; Initiative – Public or Private or both
– Agency – State as Enabler; Individual and Civil society –
diffusion, uptake, funding
12
Adaptation Framework
• Costs
– Knowledge Advancement Costs : Awareness and
Media, R & D, Institutional Development
– Sustainability Transition Costs: building a climate
resilient society - most sectoral, context specific
approaches/estimates capture these (on track with
developmental goals) e.g.: R & D to installation of
early warning systems; from institutional
development to crop insurance at incremental
premiums for climate change
13
Some Conceptual Concerns
• Developmental goals well defined for short term (e.g. MDGs);
taken care of in setting the time frames and targets (e.g.
literacy, poverty, access to basic amenities)
• Adaptation Costs – in short run cover for derailment of the
economy from the desired time path
• Currently available CC data for 2071-2100; socio-economic
modeling limitations beyond 2030.
• Therefore, adopt a Systems Equilibrium approach ----
Moving from last three decades till 2004-05, to a future 30 year
period: 2071 to 2100.
Advantage – CC data available, disadvantages – too much
uncertainty to risk putting one number to it, even for the
economist!!!
For the present, See Adaptation costs in terms of directions of
change. Illustrate for food grain production.
14
Food grain prod. 2004-05
10.54
10.5
13.4
12.15
5.26
37.84
14.1
13.11
25.67
16.06
15
Foodgrain prod. 2030 (opt.)
15.19
11.18
14.28
12.93
5.6
40.28
26.04
13.96
27.34
17.12
16
Foodgrain prod. 2071, 2100
21.56
17.18
18.86
22.74
15.77
31.95
27.3
19.73
23.93
20.64
18.85
17.93
20.91
18.32
18.83
24.26
20.63
24.82
28.91
24.34
17
Relative Change in foodgrain production
State Name 2030 relative to
2004-52071 relative
to 2030
2100 relative to 2071
Andhra Pradesh + + +
Gujrat + + +
Haryana + + +
Karnataka + + +
Madhaya Pradesh + + -
Maharastra + + -
Punjab + - +
Rajasthan + + -
Uttar Pradesh + - -
West Bengal + + +
India + - -
18
Indicative Transition & Knowledge Costs
Adaptation to changing water availability for
agriculture in vulnerable areas
• Costs of weather insurance for typical rainfed
agriculture – private (esp. large and medium); social
/ government (small and marginal)
• Cost of water saving technology (drip and sprinkler
irrigation) – mostly private costing
• Cost of R & D in low water using crops – social/
government cost
• Cost of institutional development and resilience
build up for first two – both private and public; not
so for last. Rather, private agent may have incentive
to move into different land use.
19
Adaptation Costs
• Various definitions and conceptual inconsistencies
exist in adaptation literature and available estimates
• Anticipated costs which maybe incurred by public
and private agents to plan for a change foreseen
with reasonable accuracy
• Critical – precision of extent and probability of
climate change impacts; incremental attributable to
CC; agency which bears the cost.
• Adaptation Funding for apportioning of costs between
2010 and 2100
• NREGA, BPL
20
% NREGA employment , % BPL
2.78
26.97
0
42.5
10.63
16.33
14.74
15.65
2.56
18.94
21