1
Indian Institute of Management, Ahmedabad, India
Sustainable Development for aLow-Carbon Society
Analysis for India
P.R. ShuklaIndian Institute of ManagementAhmedabad, India
Presentation at ICSS 2009Tokyo, February 5-7, 2009
Presented By: Vaibhav ChaturvediIndian Institute of ManagementAhmedabad, India
Indian Institute of Management, Ahmedabad, India
•Development paths underpin the baseline and stabilization scenarios
•Three aspects of Sustainable Development•Economic: includes cost and overall welfare across various sectors•Environmental: includes linkages with the local issues like air, water, land
and biodiversity•Social: includes issues like gender, equity, governance, education and
health
•Climate change through sustainable development lens
“For a development path to be sustainable over a long period, wealth, resources, and opportunity must be shared so that all citizens have access to
minimum standards of security, human rights, and social benefits, such as food, health, education, shelter, and opportunity for self-development “
(Reed, 1996 as quoted in the IV Assessment Report, IPCC, 2007)
Sustainable Developmentand Climate Change
Indian Institute of Management, Ahmedabad, India
India Base Case: 2050
Indian Institute of Management, Ahmedabad, India
Analytical Framework
DATABASES-Socio-Economic, Technologies, Energy Resources, Environmental Constraints
AIM CGE Model
ANSWER-MARKALModel
AIM SNAPSHOT ModelEnd
Use
Dem
and
Mod
el
AIM
Strategic Database
(SDB
)
Integrated Modelling FrameworkDATABASES
-Socio-Economic, Technologies, Energy Resources, Environmental Constraints
AIM CGE Model
ANSWER-MARKALModel
AIM SNAPSHOT ModelEnd
Use
Dem
and
Mod
el
AIM
Strategic Database
(SDB
)
DATABASES-Socio-Economic, Technologies, Energy Resources, Environmental Constraints
AIM CGE Model
ANSWER-MARKALModel
AIM SNAPSHOT ModelEnd
Use
Dem
and
Mod
el
AIM
Strategic Database
(SDB
)
Integrated Modelling Framework
2
Indian Institute of Management, Ahmedabad, India
India: Demographic TransitionPopulation (Million)
Labor Force (Million)
358
555
849
1183
14491593
0
400
800
1200
1600
1950 1970 1990 2010 2030 2050
133210
360
595
795915
0
200
400
600
800
1000
1950 1970 1990 2010 2030 2050
Year: 2000 Pop: 1021 Million
80 60 40 20 0 20 40 60 80
Age
Populat ion (million)
Female Male
15 -
60 y
ears
0
Male Female
18-6
2 Yr
s
80 60 40 20 20 40 60 80Population (Million)
Age
Pop: 1593 MillionYear: 2050
80 60 40 20 0 20 40 60 80
Age
Populat ion (mil l ion)
Female Male
15 -
60 y
ears
Male Female
18-6
2 Yr
s
80 60 40 20 0 20 40 60 80Population (Million)
Age
2.22%
2.15%
1.67%
1.02%
0.47%
2.30%
2.74%
2.54%
1.46%
0.70%
Growth Rate
Growth Rate
Indian Institute of Management, Ahmedabad, India
Base Scenario AssumptionsBase Scenario
1. GDP • Ann. Growth Rate: 7.2% from 2005-50• 2050 Economy: 23 times larger than 2005
2. Population • 2000: 1021 Million• 2050: 1593 Million
3. 650 ppmv CO2e Concentration Stabilization (or 550 CO2)
4. 4.7 W/m2 Radiative Forcing
0
5
10
15
20
25
2005 2020 2035 2050
Bas
e Ye
ar 2
005=
1
Annual Growth Rate 2005-50: 7.3%Annual Growth Rate 2005-32: 8%
GDP
0
2000
4000
6000
8000
10000
12000
2000 2010 2020 2030 2040 2050
US
$/pe
rson
Per Capita Income
Savings Rate
20.622.8
24.6
33.035.0
32
0
5
10
15
20
25
30
35
1980 1990 2000 2010 2020 2030
4037??
Indian Institute of Management, Ahmedabad, India
Energy and Carbon: Base Case From 2005-2050:Annual Economic Growth: 7.2%Annual Population Growth: 0.9%
Increase in 2050 over 2005Economy 23 timesPopulation 1.56 times
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Mto
e
Other RenewablesNuclearHydroGasOilCoalCommercial BiomassNon Com Biomass
Energy
Assumptions
Annual Improvement From 2005-2050:Energy Intensity: 3.14 (%)Carbon Intensity: 3.07 (%)Decarbonization of Energy: -0.07 (%)
Direct Investment in Energy Projects:2010-30: US$ 1.2 Trillion2030-50: US$ 2.3 Trillion
Results: Energy and Carbon Intensity
Carbon Emissions
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Milli
on T
on C
O2
Indian Institute of Management, Ahmedabad, India
Modeling Alternate Visions of Sustainable Low Carbon Society
3
Indian Institute of Management, Ahmedabad, India
Alternate Development VisionsStabilization Target and Visions
1. Global Stabilization Target Assumption:• 550 ppmv CO2e Concentration• 3.4 W/m2• @ 3o C temperature increase (50:50)
2. Two Development Pathways for India: (with same total CO2 emissions from 2005 to 2050)
1. Conventional Vision: Climate Actions at Margin of Conventional Development path
2. ‘Sustainability’ Vision: Aligning Climate Actions with Mainstream Development Actions
What path shall best deliver national development goals while fulfilling Climate Commitments?
Indian Institute of Management, Ahmedabad, India
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2000 2010 2020 2030 2040 2050
Mill
ion
Ton
CO
2
OthersDevice Efficiency
Renewable Energy
CCS
Electricity Fuel Switch
Carbon Tax 7 22 40 67 100$/tCO2
1. Top-down/Supply-side actions
2. High Carbon Price as main instrument
3. Climate Focused Technology Push
Vision I: Managing Climate via Conventional Path
Cumulative Mitigation:62.6 Billion Ton CO2
Indian Institute of Management, Ahmedabad, India
1. Low Carbon Price2. Bottom-up/Demand-side Actions3. Behavioural Change4. Diverse Technology Portfolio
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
OthersCCSTransport ModeUrban PlanningConsumptionRecyclingMaterial SubstitutionsAppliance EfficiencyRenewable Energy Building
Electricity (Fuel Switch)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
Mill
ion
Ton
CO
2
Renewable Energy Renewable
Vision II: Managing Climate via Sustainable Path
Indian Institute of Management, Ahmedabad, India
Energy Technology Mix in 2050
200
400
600
800
1,000
1,200
Coal
Oil
Gas
Hydro
Nuclea
r
Biomas
s
Renew
able
Mto
e
Base Case
Conventional Dev. + Tax
Sustainability
Share of Renewable
Base 24 %C+T 34 %Sust. 47 %
Total Energy Demand
Base 3004 MtoeC+T 2945 MtoeSust. 2004 Mtoe
4
Indian Institute of Management, Ahmedabad, India
Energy and Carbon Intensities
0
10
20
30
40
50
2000 2010 2020 2030 2040 2050
EI (t
oe/M
illio
n IN
R)
0
10
20
30
40
50
CI (
tCO
2/M
illio
n IN
R)
Base CI
CT CI
LCS CI
Energy Intensities (EI)
Carbon Intensities (CI)
Energy and Carbon Intensities
Indian Institute of Management, Ahmedabad, India
CO2 Mitigation: Global and India
0
1
2
3
4
5
6
7
2000 2010 2020 2030 2040 2050
Inde
x 20
00 =
1 India Base Case
India Carbon Tax(550 ppmv CO2e)
550 ppmv CO2e
Global Base Case
Base Case assumes global 650 ppmv CO2e stabilization
CO2 Emissions: Global and India
Indian Institute of Management, Ahmedabad, India
CO2 Emissions & Price Trajectories
Base Case
Conventional Society
Sustainable Society
0
20
40
60
80
100
120
2010 2020 2030 2040
Pric
e C
O2
(US
$/tC
O2)
2050
CO2 Price
Indian Institute of Management, Ahmedabad, India
Modeling for Sustainability Vision:• Restructure Private and Public Choices and Behavior• Focus on Long-term Drivers for Bifurcation• Aligning long-term market signals for co-benefits• Multiple Instruments
5
Indian Institute of Management, Ahmedabad, India
Urban Choices
• Land-use Planning
• Building Choices
• Infrastructures
• Service Networks
Indian Institute of Management, Ahmedabad, India
Choice of AutomobilesRush Hour Traffic in India
Rising Incomes and Small Cars
Tata Nano: $2500 QQ: $4000
Indian Institute of Management, Ahmedabad, India
Choice of Transport modesBus Rapid Transport System
Public Transport: Metro Rail
Technologies for Train Corridors
Indian Institute of Management, Ahmedabad, India
Dematerialization
0
200
400
600
800
1000
Dem
and
(Mill
ion
Ton)
Conventional Development
Sustainable Society
0
200
400
600
800
1000
Dem
and
(Mill
ion
Ton)
Conventional Development
Sustainable Society
Cement
2000 2010 2020 2030 2040 20500
100
200
300
400
500
600
700
2000 2010 2020 2030 2040 2050
Dem
and
(Mill
ion
Ton)
Steel
Conventional Development
Sustainable SocietyD
eman
d (M
illio
n To
n)
0
100
200
300
400
500
600
700
2000 2010 2020 2030 2040 2050
Steel
Conventional Development
Sustainable Society100
200
300
400
500
600
700
2000 2010 2020 2030 2040 2050
Conventional DevelopmentConventional Development
Sustainable Society
0
5
10
15
20
25
30
35
40
Conventional Development
Sustainable Society
0
5
10
15
20
25
30
35
40
Conventional Development
Sustainable Society
0
5
10
15
20
25
30
35
Dem
and
(Mill
ion
Ton)
Conventional Development
Sustainable Society
2000 2010 2020 2030 2040 2050
Paper
Dem
and
(Tril
lion
Lum
en h
rs)
0
1000
2000
3000
Conventional Development
Sustainable Society
Lighting
2000 2010 2020 2030 2040 2050
6
Indian Institute of Management, Ahmedabad, India
Co-benefits of LCS Transition through Sustainable Development
Indian Institute of Management, Ahmedabad, India
Co-benefits of Alternate Choices
0
2
4
6
8
10
12
14
2000 2010 2020 2030 2040 2050
Mill
ion
tSO
2
Base Case
Sustainable Development + Low Carbon Tax
Conventional Path + High Carbon Price
Co-benefits: SO2 Emissions
Indian Institute of Management, Ahmedabad, India
Co-benefits of Regional Co-operationCoCo--benefits of Southbenefits of South--Asia Asia
Integrated EnergyIntegrated Energy--Water MarketWater Market
0.031050 Million TonSO2
0.98359Total
0.08285.1 Billion TonCO2 Equiv.
0.8732160 Exa JouleEnergy
% GDP$ BillionBenefit (Saving) Cumulative from 2010 to 2030
Spill-over Benefits / Co-Benefits
• More Water for Food Production (MDG1)
• 16 GW additional Hydropower (MDG1&7)
• Flood control (MDG1&7)
• Lower energy prices would enhance competitiveness of regional industries (MDG1)
MDG 1: Eradicate extreme poverty and hunger, MDG 7: Environmental Sustainability
¨
!.
!.
!.
!. !.
!.
!.!.!.!.
F
F
Ѻ
ѺѺ
India
China
Iran
Pakistan
Afghanistan
OmanMyanmar (Burma)
Thailand
Nepal
Turkmenistan
Saudi Arabia
Tajikistan
Yemen
Bangladesh
Sri Lanka
Bhutan
Uzbekistan
Somalia
United Arab Emirates
Qatar
Laos
Malaysia
Bahrain
IndonesiaMaldives
Pune
GayaKota
Guna
Gadag
Kochi
Patna
Delhi
Anand
Dadra
SuratOlpad
Kalol
Panvel
Hassan
Dispur
Ambala
Nangal
Kanpur
Jhansi
UjjainJhabua
Valsad
NadiadRajkot
SolapurGuhagarChiptun
Chennai
Nellore
Kolkata
Sangrur
Sonipat
AuraiyaGwalior
Chotila Bharuch
PalmanerChittoor
Kokinada
LudhianaBathinda
Bareilly
Vijaypur
Mahesana
Tutikorin
MangaloreBangalore
Vijaywada
Faridabad
Ratnagiri
Kayankulam
Coimbatore
Jagdishpuri
Shahjahanpur
Vishakhapattnam
Tiruchchirappalli
Herat
MultanQuetta
Khuzdar
Karachi
Delaram
Kandhar
South-ParsIranshaharBandar-e-Abbas
Legend Important PlacesExisting Gas Pipelines
Proposed Gas PipelinesExisting LNG terminalsProposed LNG terminalsExisting Gas Basin
Gas Pipelines under construction
Proposed Gas Basin¨
Indian Institute of Management, Ahmedabad, India
Conclusions: An Alternate Scenario Storyline
and Modeling Framework
7
Indian Institute of Management, Ahmedabad, India
Sustainable Low Carbon Development
Low Carbon Society
Innovations
Co-benefits
Sustainability
Technological
Social/Institutional
Management
Modify Preferences
Avoid Lock-ins
Long-term Vision
Win/Win OptionsShared Costs/Risks
Aligning Markets
National Socio-economic
Objectives and Targets
Global Climate Change
Objectives and Targets
TargetsInterventionsDriversAim
Back-casting
Indian Institute of Management, Ahmedabad, India
• Changing Behavior and Technology RD&D/ Transfer are key to LCS transition
• Moving from Margin to Mainstream– Development vision matters to LCS transition
– Managing climate change at the margin is costly, risky, and unsustainable
• ‘Paradigm Shift towards ‘Co-benefits’ and ‘Co-operation’: – Modeling policy myopia, coordination failures, information asymmetry with focus on
moving to efficient frontier and pushing the frontier
– Modeling to gain co-benefits as a positive-sum game (shift modeling focus to co-operation rather than competition)
– Focus on Drivers of Long-term Energy and Environment Future
• Even under LCS transition through sustainability, exclusive climate-centric actions for stabilization and adaptation will be needed, but their costs and risks shall be much lower
Conclusions: Modeling LCS with Sustainability
Indian Institute of Management, Ahmedabad, India
COMMENTS !