Sustainable Development

Sustainable Development for a and Climate Change

Low-Carbon Society •Development paths underpin the baseline and stabilization scenarios

Analysis for India •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
P.R. Shukla
•Social: includes issues like gender, equity, governance, education and
Indian Institute of Management
health
Ahmedabad, India

•Climate change through sustainable development lens

Presented By:
Vaibhav Chaturvedi
Indian Institute of Management “For a development path to be sustainable over a long period, wealth,
Ahmedabad, India 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,
Presentation at ICSS 2009 health, education, shelter, and opportunity for self-development “
Tokyo, February 5-7, 2009

(Reed, 1996 as quoted in the IV Assessment Report, IPCC, 2007)

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

Analytical Framework
Integrated Modelling Framework
DATABASES
Socio-Economic,
- Technologies, Energy Resources, Environmental Constraints

India Base Case: 2050 AIM CGE Model

AIM Strategic Database

End Use Demand
ANSWER-MARKAL
Model

(SDB)
Model
AIM SNAPSHOT Model

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

1
India: Demographic Transition Base Scenario Assumptions
Population (Million) Year: 2000 Pop: 1021 Million Base Scenario Savings Rate
40 ??
1. GDP 35 35.0
37
1600 1593
1449
0.47%
• Ann. Growth Rate: 7.2% from 2005-50 33.0
1183 Male Female • 2050 Economy: 23 times larger than 2005 30 32
1.02% 24.6
1200 22.8
25
849
2. Population 20.6
1.67%

Age
• 2000: 1021 Million 20

15 - 60 years
Female
800 M ale

18-62 Yrs
Age
555 Growth Rate • 2050: 1593 Million
2.15% 15
358
400 2.22%
3. 650 ppmv CO2e Concentration 10
Stabilization (or 550 CO2) 5
0
1950 1970 1990 2010 2030 2050 80
80 60
60 40
40 20
20 0 20
20 4040 6060 8080
Po p u la t io n ( millio
Population n)
(Million) 4. 4.7 W/m2 Radiative Forcing 0
1980 1990 2000 2010 2020 2030

Labor Force (Million) Year: 2050 Pop: 1593 Million

GDP Per Capita Income
25 12000
1000
915 Annual Growth Rate 2005-50: 7.3%
795 Male Female Annual Growth Rate 2005-32: 8% 10000
0.70% 20
800

Base Year 2005=1

M ale Female

8000

US $/person
595 1.46%
600 15

Age

15 - 60 years

18-62 Yrs
6000

Age
2.54%
360
400
Growth Rate 10
4000
210 2.74%
200 133
2.30% 5 2000
80
80 60
60 40
40 20
20 00 20
20 40
40 60
60 8080
0
1950 1970 1990 2010 2030 2050 Population (Million) 0
P opul at i on (m il li on) 0 2000 2010 2020 2030 2040 2050
2005 2020 2035 2050

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

Energy and Carbon: Base Case

Assumptions
From 2005-2050: Increase in 2050 over 2005
Annual Economic Growth: 7.2% Economy 23 times
Annual Population Growth: 0.9% Population 1.56 times

3,500 8,000

Modeling Alternate Visions of

Other Renewables
Nuclear Energy 7,000
Carbon Emissions
3,000
Hydro
Gas
6,000
2,500 Oil
Coal

Sustainable Low Carbon Society

5,000
Million Ton CO2

2,000
Commercial Biomass
Non Com Biomass
M toe

4,000
1,500
3,000
1,000
2,000

500
1,000

0 0
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Results: Energy and Carbon Intensity

Annual Improvement From 2005-2050: Direct Investment in Energy Projects:
Energy Intensity: 3.14 (%) 2010-30: US$ 1.2 Trillion
Carbon Intensity: 3.07 (%) 2030-50: US$ 2.3 Trillion
Decarbonization of Energy: -0.07 (%)
Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

2
Alternate Development Visions Vision I: Managing Climate via Conventional Path
Stabilization Target and Visions 1. Top-down/Supply-side actions
1. Global Stabilization Target Assumption: 2. High Carbon Price as main instrument
• 550 ppmv CO2e Concentration 3. Climate Focused Technology Push
• 3.4 W/m2
• @ 3o C temperature increase (50:50) 7,000
Cumulative Mitigation:62.6 Billion Ton CO2 Others
Device Efficiency
2. Two Development Pathways for India: 6,000
Renewable Energy

Million Ton CO2

(with same total CO2 emissions from 2005 to 2050) 5,000 CCS

1. Conventional Vision: Climate Actions at Margin of 4,000

Conventional Development path 3,000 Electricity Fuel Switch

2. ‘Sustainability’ Vision: Aligning Climate Actions with 2,000

Mainstream Development Actions 1,000

What path shall best deliver national development 2000

Carbon Tax
2010
7
2020
22
2030
40
2040
67
2050
100
$/tCO2
goals while fulfilling Climate Commitments?
Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

Vision II: Managing Climate via Sustainable Path Energy Technology Mix in 2050
1. Low Carbon Price
2. Bottom-up/Demand-side Actions 1,200
Total Energy Demand Share of Renewable
3. Behavioural Change Base Case

1,000 Conventional Dev. + Tax

4. Diverse Technology Portfolio Sustainability
Base 3004 Mtoe Base 24 %
C+T 2945 Mtoe C+T 34 %
800 Sust. 2004 Mtoe Sust. 47 %
7,000
Others

Mtoe
CCS
6,000 Transport Mode
600
Urban Planning
5,000 Consumption
Recycling 400
Million Ton CO2

Material Substitutions
Appliance Efficiency
4,000
Renewable Energy
Building 200
3,000 Electricity (Fuel Switch)

2,000

e
ro

s
l

as
il

ar
oa

as

l
ab
yd

le
G
C

om
uc

ew
H

Bi

en
1,000

R
0
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

3
Energy and Carbon Intensities CO2 Mitigation: Global and India
Energy and Carbon Intensities
CO2 Emissions: Global and India
50 50
7
Base CI
CT CI Base Case assumes global
6 650 ppmv CO2e stabilization
LCS CI
40 40

Carbon Intensities (CI) 5

CI (tCO2/Million INR)
India Base Case
EI (toe/Million INR)

Index 2000 =1
30 30 4

India Carbon Tax

3 (550 ppmv CO2e)
20 20

2
Global Base Case

10 10 1
550 ppmv CO2e

Energy Intensities (EI)

0
0 0 2000 2010 2020 2030 2040 2050
2000 2010 2020 2030 2040 2050

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

CO2 Emissions & Price Trajectories

CO2 Price
120

100
Modeling for Sustainability Vision:
Price CO2 (US $/tCO2)

80
Conventional • Restructure Private and Public Choices and Behavior
Society
60
• Focus on Long-term Drivers for Bifurcation
• Aligning long-term market signals for co-benefits
40
Sustainable Society
• Multiple Instruments
20

Base Case
0
2010 2020 2030 2040 2050

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

4
Urban Choices Choice of Automobiles
Rush Hour Traffic in India

Rising Incomes and Small Cars

• Land-use Planning • Infrastructures

• Building Choices • Service Networks Tata Nano: $2500 QQ: $4000

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

Choice of Transport modes Dematerialization

Bus Rapid Transport System
700 1000
Steel
Steel Cement
Technologies for Train Corridors 600
800
500

Demand (Million Ton)

Ton)
(Million Ton)
Conventional
400 Conventional 600
Development

Demand (Million
Development
300
400

Demand
200 Sustainable
Sustainable Society
200
100 Society

0 0
2000
2000 2010
2010 2020
2020 2030
2030 2040
2040 2050
2050 2000 2010 2020 2030 2040 2050

40 3000
Paper Lighting
35

Demand (Trillion Lumen hrs)

30

Demand (Million Ton)

Public Transport: Metro Rail 25
2000
Conventional Conventional
20 Development Development

15
1000 Sustainable
10 Society
Sustainable
5
Society
0 0
2000 2010 2020 2030 2040 2050 2000 2010 2020 2030 2040 2050

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

5
 Co-benefits of Alternate Choices
Co-benefits: SO2 Emissions
14

Base Case

Co-benefits of LCS Transition

12

10 Conventional Path +

through Sustainable Development

High Carbon Price

Million tSO2
8

6
Sustainable Development + Low Carbon Tax

0
2000 2010 2020 2030 2040 2050

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

Co-benefits of Regional Co-operationMDG 1: Eradicate extreme poverty and hunger, MDG 7: Environmental Sustainability

Co-
Co-benefits of South-
South-Asia
Integrated Energy-
Energy-Water Market
Benefit (Saving) $ Billion % GDP
Cumulative from 2010 to 2030

Energy 60 Exa Joule 321 0.87

Conclusions:
CO2 Equiv. 5.1 Billion Ton 28 0.08

SO2 50 Million Ton 10 0.03

An Alternate Scenario Storyline

Total 359 0.98
Uzbekistan Tajikistan
Turkmenistan

Spill-over Benefits / Co-Benefits

and Modeling Framework
Herat
!.
Afghanistan China

Delaram
!.
Iran Kandhar Nangal
!. Ludhiana
BathindaSangrurAmbala
Quetta

• More Water for Food Production (MDG1)

!. Multan
!.
Pakistan Sonipat
Delhi
Faridabad Bareilly
!.
South-Pars
Iranshahar Khuzdar Nepal
Bandar-e-Abbas Shahjahanpur
!. !. !. Bhutan
Auraiya Kanpur Dispur
Gwalior Jagdishpuri
Bahrain Patna
Jhansi
Kota
Qatar Karachi
VijaypurGuna Gaya

• 16 GW additional Hydropower (MDG1&7)

!.

United Arab Emirates Mahesana

Kalol Ujjain Bangladesh
Nadiad AnandJhabua Kolkata
Rajkot India

Saudi Arabia
Ñ
Chotila Bharuch
ºÑ
OlpadSurat

Oman
º Dadra
Valsad Myanmar (Burma)

Legend Laos

Important Places ChiptunGuhagar Solapur Vishakhapattnam

Panvel
Pune
Thailand • Flood control (MDG1&7)
Yemen Existing Gas Pipelines Ñ
º
Ratnagiri Kokinada
Vijaywada ¨

Gas Pipelines under construction Gadag

Proposed Gas Pipelines Nellore

Existing LNG terminals MangaloreHassan

Palmaner Chennai

Bangalore
F
Chittoor • Lower energy prices would enhance
Proposed LNG terminals
Somalia Existing Gas Basin
Coimbatore

Kochi
Tiruchchirappalli

FKayankulamTutikorin
competitiveness of regional industries
¨ Proposed Gas Basin
Sri Lanka (MDG1)
Maldives
Indonesia Malaysia

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

6
Sustainable Low Carbon Development Conclusions: Modeling LCS with Sustainability
• Changing Behavior and Technology RD&D/ Transfer are key to LCS transition
Aim Drivers Interventions Targets • Moving from Margin to Mainstream
– Development vision matters to LCS transition
Technological
National – Managing climate change at the margin is costly, risky, and unsustainable
Innovations Social/Institutional Socio-economic
Management Objectives • ‘Paradigm Shift towards ‘Co-benefits’ and ‘Co-operation’:
and Targets
Low Aligning Markets – Modeling policy myopia, coordination failures, information asymmetry with focus on
Carbon Co-benefits moving to efficient frontier and pushing the frontier
Win/Win Options
Society Shared Costs/Risks – Modeling to gain co-benefits as a positive-sum game (shift modeling focus to co-
Global
Climate Change operation rather than competition)
Long-term Vision Objectives
and Targets
– Focus on Drivers of Long-term Energy and Environment Future
Sustainability Avoid Lock-ins
Modify Preferences • 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
Back-casting

Indian Institute of Management, Ahmedabad, India Indian Institute of Management, Ahmedabad, India

COMMENTS !

Indian Institute of Management, Ahmedabad, India