IIM Ahmedabad Climate Policy Modeling: Some Insights for India Presentation by P.R. Shukla Indian Institute of Management, Ahmedabad COP 8 Side-event (October

IIM Ahmedabad

Climate Policy Modeling: Some Insights for India

Presentation byP.R. Shukla

Indian Institute of Management, Ahmedabad

COP 8 Side-event (October 25 - 15:00 to 17:00 hours)Asia-Pacific Forum for Collaborative Modeling of Climate Policy Assessment

October 25, 2002, Hotel Grand Inter-Continental, New Delhi

IIM Ahmedabad

Integrated Framework for Climate Change

IIM Ahmedabad

AIM Model System

Land use

TemperaturePrecipitation

Sunshine

Water resource

Crop Productivity

Socio-economic indicator

Impact on food demand

Adaptation strategy

AIM/Ecosystem/Water/Impact

A set of ecosystem models, including a vegetation dynamics model, a water resource model, an agricultural productivity model and a health impact model

A reduced-form model to project future socio-economic trends and environmental change for all 42 countries

Futureeconomic trend

Futureenvironmental trend

India

Thailand

Korea

Japan

China

AIM/TrendIndustry

Green Purchase

Environ-mental Burden

Environment Fund

Environmental Industry (waste management, recycle)

Was

tes

Environmental Burden

Rec

ycle

　　　　　　　　 Technology needsTechnology assessment 　　　　　　　

Environmental Industry

Environmental burden

Consumer

Research on new technologies

AIM/MaterialA environment-economy integrated model with material balance and recycling process modules

AIM/Energy/Technology/Country

A bottom-up technology selection model of energy useand emissions at country and local level

AIM/Bottom-upA bottom-up technology

& land use model for Asia-Pacific region

AIM/Top-downA general-equilibrium-

type world economic model

AIM FamilyAIM Family

IIM Ahmedabad

Model System for India’s Emissions Policy Analysis

Models

Top-down Models

•AIM/Material•SGM•GEMA•ERB•AIM/Trend

Local Models

•AIM/Emissions•GIS •Inventory Assessment•Health Impact Assessment Model

Bottom-up Models

•ANSWER – MARKAL•Stochastic MARKAL•Demand Projection•AIM/End-use•Power Sector LP

IIM Ahmedabad

Soft-linked Models Framework

ERB

SGM

AIM/Material

AIM/Trend

Invent o ry Assessment

Health Impact A ssessment Model

GIS Model

Pro

duct

ivit

y Global Energy Prices

Regional projections

Power Sector LP

Demand Projection

AIM/E nd -use

ANSWER

MARKAL Stochastic MARKAL

AIM/Local

Bottom -Up Models

Energy Balances

Sector Demand

End -use Demand

Tec

hnol

ogy

Sha

re Scenarios Emissions

Consolidation

Prices, GDP

Local Models

Top -Down Models

GEMA

Local Emissions Future Projections

Technology Specifi cations

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Insights from

Integrated Climate Change Assessment

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Few Key Questions for Emissions Policies

• What is the cost-effective emissions pathways to achieve a specific “GHG concentration stabilization” level?

• What will be the future trends of emissions and intensities?

• How the local and GHG emissions control policies linked?

• What is mitigation supply curve for India?

• How can regional cooperation help in climate change issues?

• What would be the implications of stabilization regime, e.g. 550 ppmv, on India’s energy system during the century

• Is it worth to fund supply-side push of clean technologies like solar PV for GHG mitigation?

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The Framework Convention On Climate Change (UNFCCC)

Objective:

...stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. (p.5)

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Emissions and Concentrations

300

350

400

450

500

550

600

650

700

750

800

19

90

20

15

20

40

20

65

20

90

21

15

21

40

21

65

21

90

22

15

22

40

22

65

22

90

pp

mv

WRE 750WRE 650WRE 550WRE 450WRE 350

-2

0

2

4

6

8

10

12

14

16

19

90

20

15

20

40

20

65

20

90

21

15

21

40

21

65

21

90

22

15

22

40

22

65

22

90

Pg

C/y

r

WRE 750WRE 650WRE 550WRE 450WRE 350

IS92a IS92a

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Energy Consumption Carbon Emissions

0

200

400

600

800

1995 2005 2015 2025 2035Year

Car

bon

(M

T)

Energy and Carbon Emissions for India: AIM/ENDUSE Model

0

10

20

30

40

50

1995 2005 2015 2025 2035

Year

Exa

Jou

les

Coal

Oil

GasHydro

Nuclear

RenewablesBiomass

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Energy, Carbon, Electricity and GDP (History and Projections for Reference Scenario)

0

2

4

6

8

10

12

14

16

18

20

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Energy Carbon Electricity GDP

Past Trends

Future Projections

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0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Electricity

CarbonEnergy

Past Trends Future Projections

GDP intensities of Energy, Electricity and Carbon (Reference Scenario)

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SO2 EmissionAIM/Emission Model

2000 2030

< 0.01 0.01-0.017

0.017-0.026 0.026-0.035 0.035-0.044 0.044-0.053 0.053-0.060

> 0.060

Million Tons < 0.01

0.03

0.07

0.15

< 0.20

0.11

Million Tons

< 0.01

0.03

0.07

0.15

< 0.20

0.11

Million Tons

Land use

Temperature

Precipitation

Sunshine

Water resource

Crop Productivity

Socio-economicindicator


Adaptation strategy






India

Thailand

Korea

Japan

China

AIM/TrendIndustry

Green Purchase


Environment Fund


Was

tes


Rec

ycle

Technology needsTechnology assessment

EnvironmentalIndustry

Environmentalburden

Consumer



Emission Intensity of SO2 in China



AIM/Bottom-upA simple technology selection model for Asia-Pacific region




Land use

Temperature

Precipitation

Sunshine

Water resource

Crop Productivity



Adaptation strategy

Land use

Temperature

Precipitation

Sunshine

Water resource

Crop Productivity



Adaptation strategy

Land use

Temperature

Precipitation

Sunshine

Water resource

Crop Productivity



Adaptation strategy






India

Thailand

Korea

Japan

China

AIM/TrendA reduced-form model to project future socio-economic trends and environmental change for all 42 countries



India

Thailand

Korea

Japan

China

Futureeconomic trendFutureeconomic trend

Futureenvironmental trendFutureenvironmental trend

India

Thailand

Korea

Japan

China

AIM/TrendIndustry

Green Purchase


Environment Fund


Was

tes


Rec

ycle



Environmentalburden

Consumer



IndustryGreen Purchase


Environment Fund


Was

tes


Rec

ycle



Environmentalburden

Consumer


IndustryGreen Purchase


Environment Fund


Was

tes


Rec

ycle



Environmentalburden

Consumer



Emission Intensity of SO2 in ChinaEmission Intensity of SO2 in China













IIM Ahmedabad

GHG versus Local Emissions in India

Carbon Emissions SO2 Emissions

0

200

400

600

800

1995 2005 2015 2025 2035Year

Car

bon

(M

T)

Year

Mil

lion

Ton

nes

0

1

2

3

4

5

6

1995 2005 2015 2025 2035

7

IIM Ahmedabad

Carbon Mitigation Supply Curve(2005-2035)

6 billion tons of mitigation below $25/ ton of carbon

0

10

20

30

40

50

60

1 2 3 4 5 6 7

Carbon abatement (billion ton)

Cos

t ($/

Ton

of

Car

bon)

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Carbon Mitigation (under different Post-Kyoto Scenarios)

Scenario

Kyoto Period2000-2012

Medium Term2000-2030

Long Term2000-2100

750 ppmv 138 (3%) 743 (5%) 11334 (11%)

650 ppmv 301 (7%) 1555 (11%) 23666 (23%)

550 ppmv 449 (10%) 2503 (17%) 33284 (32%)

(in Million Ton)

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Indian Energy System Transformation Under 550 ppmv Stabilization

0

20

40

60

80

100

120

140

1990 2005 2020 2035 2050 2065 2080 2095

Exa

joul

es

Oil Gas Coal Biomass Hydro Solar Nuclear0

500

1000

1500

2000

2500

1990 2005 2020 2035 2050 2065 2080 2095

Carbon Capture

Energy Efficiency

Wind

Solar

Biomass

Hydro

Nuclear

Gas

Oil

India 550 ppmv emission

Base Case Energy System Energy Changes: 550 ppmv Case

MT

C

550 ppmv

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Technological Change in India to Stabilize CO2 at 550 ppmv

0

500

1000

1500

2000

2500

1990 2005 2020 2035 2050 2065 2080 2095

Carbon Capture

Energy Efficiency

Wind

Solar

Biomass

Hydro

Nuclear

Gas

Oil

India 550 ppmv emission

550 PPMV550 PPMV

Non-Fossil Energy Contribution to GHG Mitigation

400

800

1200

2000

1600

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Regional Energy Market Development

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Impact of Regional Energy Market Developments in South-Asia

CarbonSOX

0.0

1.5

3.0

4.5

6.0

7.5

9.0

10.5R

edu

ctio

n (

%)

Year

Emissions Reduction (2015)

Grid Integration

Grid Integration + Regional Co-operation

IIM Ahmedabad

Advanced Technology: Competitive Paradox

0

5

10

15

20

25

30

35

40

1990 2000 2010 2020 2030 2040 2050

Base

Hi-Solar

$25 TaxMed-Solar + $25 Tax

0%

5%

10%

15%

20%

25%

30%

High Solar $25 Tax Med Sol+ $25 Tax

Solar PV Penetration Carbon Mitigation

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Conclusions

• There is no “silver bullet” for mitigation or adaptation

• Local and global emissions mitigation policies are disjointed

• Regional cooperation can reduce the climate mitigation and impacts costs significantly

• Strong mitigation regime, e.g. 550 ppmv, can alter the regional energy system significantly

• Global cost-effectiveness requires substantial mitigation (and adaptation) in developing countries

• Supply-push of few clean technologies is inadequate for mitigation

• Climate Change impacts is complicated due to “winners and losers” rather than absolute impacts burden

• Integrated policy assessment is vital for linking climate change and sustainable development

Documents

IIM Ahmedabad Climate Policy Modeling: Some Insights for India Presentation by P.R. Shukla Indian Institute of Management, Ahmedabad COP 8 Side-event (October