CSD-15 Learning Centre Course 30 April 2007

CSD-15 Learning Centre Course
30 April 2007, UN Headquarters, New York
How to align actions to address climate change

with national sustainable development goals?
P.R. Shukla
Indian Institute of Management, Ahmedabad, India
How to align climate change actions with national sustainable development goals?
Agenda
• Developing Country Dynamics

− Scenarios: Transitions of Goals, Institutions, Demographics, Incomes, Preferences
− Modeling: Co-benefits, Lock-ins, Endogenous and exogenous environment
− Policy analysis: Balancing Equity, Efficiency and Sustainability
• Some Illustrations (from India)

− Aligning Energy Security and Technology Transitions with Climate Goals
− Co-benefits from Aligning Energy-Water Markets in South-Asia
− Sustainable Development and Adapting Long-life Assets to Climate Risks
• Modeling Climate Stabilization Induced Development Paths
• Modeling Transition to Low Carbon Future through Sustainable Development
• Conclusions
1
Developing Country Dynamics
What make developing countries different?

– Different stage of development: priorities and capabilities
– Different economic dynamics than assumed in scenario assessments
– Need and opportunities to align climate and development agenda
Understanding development
• Dual Economy
• Multiple Transitions
• Informal Activities
• Subsistence Production
• Market Performance and Disequilibria
• Non-commercial Fuels
• Non-economic Concerns
• Policy Distortions
2
Transitions
Socio-Economic
Demographic
⎯ Population
⎯ Urban / Rural
⎯ Gender ratio
⎯ Migration
Development
⎯ Soft indicators: Income, Equity, Literacy, Health
⎯ Hard indicators: Infrastructure, Housing, Vehicles, Appliances
Political
⎯ Institutions
⎯ Laws
⎯ Policies
Demographic Transitions in India: Age/Gender Profile

Population in 1 970 Po pula tion Pr oje c tio n for 201 0
100 +
100+ 95- 9 9
95- 99 90- 9 5
90- 95 85- 8 9
85- 89 80- 8 4
80- 84 75- 7 9
75- 79 70- 7 4
70- 74 65- 6 9
65- 69 60- 6 4
60- 64 55- 5 9 F ema le
Age group
55- 59 Male
Age group
50- 5 4
50- 54 F emale 45- 4 9
45- 49 Male
40- 4 4
40- 44
35- 3 9
35- 39
30- 3 4
30- 34
25- 29 25- 2 9
20- 24 20- 2 4
15- 19 15- 1 9
10- 14 10- 1 4
5- 9 5- 9
0- 4 0- 4
50 40 30 20 10 0 10 20 30 40 50 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70
Population ( million) Po pula tion ( million)
Po pu la tio n Pr oje c t ion f or 20 30 Popula tion Pr ojec tion for 20 50
10 0 + 10 0+
95 - 9 9 95- 99
90 - 9 5 90- 95
85 - 8 9 85- 89
80 - 8 4 80- 84
75 - 7 9 75- 79 F ema le
Male
70 - 7 4 70- 74
F emale 65- 69
65 - 6 9 Ma le
60 - 6 4 60- 64
55- 59
Age group
55 - 5 9
Age group
50 - 5 4 50- 54
45 - 4 9 45- 49
40 - 4 4 40- 44
35 - 3 9 35- 39
30 - 3 4 30- 34
25 - 2 9 25- 29
20 - 2 4 20- 24
15 - 1 9 15- 19
10 - 1 4 10- 14
5- 9 5-9
0- 4 0-4
70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70
Pop ula tio n ( million ) Pop ulation ( million )
3
Demographic Transitions in India: Urban/Rural
Urban & Rural population of India (Medium Variant)
Rural
90 Urban
80
70
60
50
% Share
40
30
20
10
0
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Year
Composition of India's GDP by Sector
1950 - 51 1980 - 81 2003 - 04
Agriculture
Services
Services 24%
28%
Agriculture 37% Agriculture
Services
59% 41% 51%
Industry Industry
13% 25%
Industry
22%
22%
Data Source: CMIE and Economic Surveys of India
4
Shift in electricity demand and generation
Traction 3% Others 5%
Commercial
6%
Traction Others
3% 4%
Commercial
6% Industry
Demand
Domestic 35%
11% Domestic
Industry 22%
Agri
59%
17%
Agri
29%
1980
78 TWH
2000
313 TWH
Nuclear
Gas-
3%
Thermal
11%
Oil-
Thermal
Gas Thermal Nuclear 3%
Generation
0.04% 4%
Oil
Thermal
0.02 % Hydro
13%
Coal
Hydro Thermal Coal-
45% 51% Thermal
70%
1971
61 TWH
2001
558 TWH
Past Energy transitions: Global & India

80%
India
60%
Percentage of PEC
No n-co mmercial
energy supply
40%
Co al &
LIgnite
Oil
20%
100
Nuclear
90 Global Gas
Traditio nal
80 0% Hydro
renewables
1953-54 1960-61 1970-71 1980-81 1990-91 2001-02
Percentage of PEC
70
60 Co al
50
40
Oil
30
Co al
20 Gas
10 Hydro
Nuclear
0
1850 1900 1950 2000
5
Changing Structure of Energy Use
80%
Percentage of Primary Energy Consumption

How to transit to
Modern Biomass?
60%
Food Security?
Traditional
Biomass
40% Domestic Resource: +ve
Coal Direct Employment: +ve
Oil Energy Security: -ve

20% Foreign Exchange: -ve
En. Security:
Fuel Supply? +Ve
Waste disposal? Nuclear Geopolitical Risk: High
Safety? Gas Foreign Exchange: -ve
0% Hydro
1952 1960 1970 1980 1990 2001
Regional water disputes?
Indirect Benefits
Transitions
Demand-side Opportunities
Efficient Appliances
Substitutions (e.g. Information for transport)
Advance Technologies
- Fuel-cell
- Hydrogen economy
- Bio-engineering
6
Transition in Household Energy Use in India:
Fuel-wood to LPG
25 1.8
1.6 Population
20
1.4
LPG consumption in India
Index: 1981=1
1.2
Index:1981=1
15
Fuel-wood
1
10 production
0 0
1997
1999
2001
2003
1995
1981
1983
1985
1987
1989
1991
1993
1981
1983
1985
1997
1999
2001
2003
1987
1989
1991
1993
1995
80
70 % Household LPG penetration in India
60
50
Urban
%
40
30
20
Rural
10 Data Sources - Census 2001, NSS 1994, 2000
0
1981 1984 1987 1990 1993 1996 1999 2002
Environmental Transitions
Awareness
- Pressure groups
Income-effects
- E.g. Kuznets phenomenon
Laws and Regulations

- Global agreements
- National policies
Technology
- Zero-effluent Processes
- Recycling
7
Consumption/Life-style Transitions
Conservation
- Substitutions
- Recycling
City Planning
Architecture/ Building Codes
Changing Preferences
Income Effects
Backbone Technology Transitions

Logistics
- Pipelines
Electricity T&D
- Decentralized utilities
Information
- Wireless
Nanotechnology
New and Renewable Energy

- Hydrogen
8
Path Dependence: Lock-ins vs. Innovations
• Elasticity of long-term paths to short-term influences
• Lock-ins from current technology supply
• SRES Scenarios and Technology paths
• Development policies and path dependence
IPCC SRES Emission Scenarios

Decarbonization of Primary Energy: History
30
A2
China
1000 25
??
India
20
kgC/toe
CO2 (GtC)
800 A1
USA 15
B2
10
600 WRE550
Japan
5
B1
France
400 0
1960 1970 1980 1990 2000 1990 2010 2030 2050 2070 2090
Year
Emerging drivers of technological change

International Labor market
• Wage differential
• Income gaps
• Migration
Human Capital
Knowledge flows
• Diasporas and social networks
• Shifting comparative advantage in knowledge services
• Role of local and contextual knowledge
• Governance, risks and investment flows
9
Modeling Developing Country Dynamics
(Some illustrations from India)
− Aligning Technology Transitions with Climate Goals
− Conjoint Market for CO2 and SO2 Emissions
− Co-benefits from Aligning Energy-Water Markets in South-Asia
Mainstreaming Climate Change in National Development

Aligning climate policies and actions with:
• MDGs / National development targets
• Agreed goals under extant international agreements
• Developing resilience to Vulnerabilities and Adapting to changing Climate Parameters
MDG, India’s National Targets and Climate Change

MDG and global targets India’s National plan targets Interface with Climate Change
Goal 1: Eradicate extreme poverty and • Double the per capita income by 2012 • Higher income enhances access to
hunger services, food, fuel, information, an
• Reduce poverty ratio by 15% by 2012
enhances mitigative and adaptive
Targets: Halve, between 1990 and 2015,
• Contain population growth to 16.2% capacity
the proportion of people with income
between 2001-2011
below $1 a day and those who suffer from • Higher climate variability would
hunger enhance risks to meet the goal
Goal 7: Ensure environmental • Increase in forest cover to 25% by 2007 and • Enhanced sink capacity, reduced
sustainability 33% by 2012 (from 23% in 2001) GHG and local emissions; lower
fossil imports; reduced pressure on
Targets: Integrate SD principles in country • Sustained access to potable drinking water
land, resources and ecosystems
policies/ programs to reverse loss of to all villages by 2007
environmental resources • Higher adaptive capacity to from
• Electrify 80,000 additional villages by 2012
enhanced supply of water, health &
Target: Halve by 2015 the proportion of via decentralized sources
education in rural areas
people without sustainable access to safe
• Cleaning of all major polluted rivers by
drinking water
2007 and other notified stretches by 2012
10
Bio-energy: Climate and Development Goals
Jatropha Plantation in India • Rural Employment: (MDG1)
Large scale employment potential in Jatropha plantation,
seed collection and extraction
• Farm Income (from waste lands): (MDG1)

Net income Rs. 12000/Ha/year
• Energy Security (MDG1&7)

Imported fossil oil is replaced
• Environment (MDG7)
Carbon neutral, Rehabilitates waste land
Rural Employment
Oil Extraction Plant
Network for Biomass Technology/Fuel Deployment
Household
lighting,
cooking
INPUTS OUTPUTS equipments
Social-economic setup
Surplus land from -Animal waste Biomass
Land markets foodgrains Land -Human waste for power
sufficiency
-Crop residues
-Waste-wood Biomass fired
-Forest produce
Fertiliser Biomass electricity
Fertiliser -pipeline transport
industry network for Gas industry
Rural Biomass
unemployed & Labour pellets for Community
under-employed burning lighting and
Banking
industry equipments
Rural Financing Capital BIOMASS Biomass

infrastructure Machinery liquid fuels
Farm auto, Transportation
component - personal
industry vehicles
RE technologies – Biomass - LCV, HCV
solar, wind, fuel Energy waste
cells, bio-fuels etc
Setting up Farm equipment
Water Technology change of local water pump,
processing + Water tractor fuel, agri
equipments conservation, Water -agricrop productivity small scale
industry river linking processing
-farm m/c efficiency industry
-Biomass and base
Construction Rural biotechnology R&D Fertiliser use in
and auto Roads, godowns, -fuel enduse efficiency fields +
heavy vehicles infra- Hydrogen
industries Fuel-cells hand-made
structure production paper
11
Conjoint Market for CO2
and SO2 Emissions
MDG 7: Environmental Sustainability
District-wise CO2 Emissions

Uzbekistan Tajikistan Uzbekistan Tajikistan
hanistan hanistan
China China
Pakistan Pakistan
Nepal Nepal
Bhutan Bhutan
Bangladesh Bangladesh
India India
Myanmar (B Myanmar (B
1991 2005
Sri Lanka Sri Lanka

Maldives Maldives
Indonesia Indonesia
Million ton
<0
0.01 - 1.50
1.51 - 3.00
3.01 - 7.00
7.01 - 15.00
15.01 - 39.29
12
CO2 emission from Power Sector (2005)
Uzbekistan Tajikistan
CO2 Emissions from Power sector
(2005)
hanistan
China
Pakistan ") ")

")
") ") Nepal
Bhutan
") ")
")
")
")
")
")")")")")
") Bangladesh
") ") ") ")
)"") India ") ")
")
") ") ") ")") )"")
")
") ")
") ") ") )"")
Myanmar (Bu
") ")
") ") ")
Legend ") ")

")
CO2 Emissions (mil. tons) ")
")
0.00 - 1.40 ")
)"
")
1.41 - 3.66
") ")
3.67 - 8.67
more than 8.67 ")
Sri Lanka
Maldives
Indonesia
CO2 emission from Cement Sector (2005)

Uzbekistan Tajikistan
CO2 Emissions from Cement sector

(2005)
hanistan ^_
China
^_ ^
^_ _
^_
^
_
Pakistan
^_
^_ Nepal
Bhutan
^_ _^
^_ ^_
^_ ^_ ^_
^_ ^_ ^_^_ ^_^_ ^_^_
^_ ^_
^_ ^_ Bangladesh
^_
^_ ^ ^_
_
India
^_ ^_^_ ^_
^__
^ _
^_
^ ^_ ^_ ^_
^_^_ _
^ ^_ ^_ ^_^_^_^_ ^_ Myanmar (B
^^_^_
^_ ^__
^_
^_ _ ^_
^^_^_^_^_^_
^_ ^^_ ^_
_
^_
^_ ^_ ^_ ^_
^
_
Legend ^_
^_
^_
CO2 Emissions (mil. tons)
^_ ^_
0.00 - 0.08
^
_
^_ ^_ ^_
0.09 - 0.23
^_ ^_
0.24 - 0.60
Sri Lanka
Maldives
more than 0.60 Indonesia
13
LPS Locations
Year: 2000 Year: 2030
Co-Benefits: Joint SO2 and CO2 Mitigation
800
7 Carbon Emissions
SO2 Emissions
6
600 A2 Scenario
Million Ton of Carbon
A2 Scenario Emissions
Million Ton SO2
5 Emission
With Carbon Price @
$5/ton of CO2
4 400
3
Frozen SO2 Control Policies
With BAU SO2 Control Policies
2 200
0 0
1995 2005 2015 2025 2035 1995 2005 2015 2025 2035
Joint Mitigation (Period 2005-2030)

Mitigation Regime Co-benefits
SO2 mitigation alone Little carbon mitigation
Joint Mitigation: CO2 mitigation @ $5/ton Joint mitigation costs $400

& same SO2 target Million less
14
Co-benefits from Aligning Energy-Water
Markets in South-Asia
MDG 1: Eradicate extreme poverty and hunger
MDG 7: Environmental Sustainability
Adaptation Challenge: Food/Water/Energy/Climate
Food Water Energy

Water use depends on Energy use depends on
Agriculture uses
crop pattern, cultivation pump efficiency, water
Ground Water for
practices, electricity depth and Agriculture
Irrigation
supply, Climate practices
Climate
GHG emissions
depend on Energy/
Technology Mix
15
Rainfall, Inflows and Hydro Electricity Generation
State of Andhra Pradesh
Rainfall and Water Inflows Hydro Electricity Generation

4000 1000 11
Rainfall in Catchments Area 10

3200 800
Hydro Electricity Generation (TWh)

9
Inflow (MTC)
Rainfall (mm)
2400 600
1600 400
Water Inflow 6
5
800 200
4
0 0 3
1990 1992 1994 1996 1998 2000 1980 1984 1988 1992 1996 2000
South-Asia Energy-Water Cooperation: Co-benefits
Integrated South-Asia Energy-Water Market Benefit (Saving) Cumulative $ Billion % GDP

from 2010 to 2030
Energy 60 Exa Joule 321 0.87
CO2 Equiv. 5.1 Billion Ton 28 0.08
SO2 50 Million Ton 10 0.03
Total 359 0.98
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)
16
Modeling Climate Stabilization
Induced Development Paths
Stabilization induced technological change
• Depends on the underlying endogenous development path
• Stabilization would induce significant technological change
• How to represent future technologies in models?
• Architecture of climate regime is the key driver

Addressing Questions from Negotiators
¾ Allocations of Emissions Rights
¾ Taxes and Revenue Recycling
¾ Who pays?
¾ Technology protocols
17
Indian Carbon Emissions Scenarios
Carbon Emissions
1800
1600
Indian Emissions Scenarios IA2: Reference Scenario
1400
CO2 Emissions (MT)

Market integration
1200
Integrated Fragmented
IA1 IA2 1000

Centralizatio
IA1: Market Efficiency

800
Governance
Market Efficiency Hybrid Economy

n
(Reference) 600
IB1: Sustainable Development
IB1
Decentralization
IB2 400
200
Sustainable Self Reliance 2000 2020 2040 2060 2080 2100
Development Closed Economy
India’s Total Carbon Emission in 21st Century

(Billion Ton CO2)
Reference (IA2) Scenario : 363
Market Efficiency (IA1) Scenario : 286 (79% of IA2)
Sustainable Development (IB1) Scenario : 198 (55% of IA2)
Technologies in Low Carbon Scenarios: Medium-Term (2050)

Conventional Technology Path: Includes Globalization/Market Efficiency Scenario
significant endogenous technological change
Synfuels, Next-Gen Nuclear (Thorium)
Fuel cell vehicles, Pipeline networks
Energy efficient appliances/ infrastructure

4500
Frozen Technology IA2 Coal liquid, IGCC, Hydrogen from gas
3750 Advanced materials, Nanotechnology

IA1
CO2 Emissions (Million Ton)
3000
Sustainable Development Scenario

2250 Push for renewable energy & recycling
IB1
Renewablecar
Advanced Energy
pooling,
Technologies
Shared assets
1500
High speed trains, Swap of transport by IT
Dematerialization, Community institutions

750
2000 2010 2020 2030 2040 2050
Sustainable habitats, Reforestation
18
Indian Emission Scenarios and Stabilization
Carbon Emissions for Indian Scenarios
IA2
6
India’s Total Carbon Emission in 21st Century

5 (Billion Ton CO2)
Reference (IA2) Scenario : 363
IA1 Market Efficiency (IA1) Scenario : 286 (79% of IA2)
4
CO2 Emissions (Billion Ton)
Sustainable Development (IB1) Scenario : 198 (55% of IA2)
3
550 PPMV Cost-effective Regime : 140 (39% IA2)
IB1
550 ppmv
1
2000 2020 2040 2060 2080 2100
Modeling Transition to Low Carbon Future

through Sustainable Development:
An Analysis for India
19
Low Carbon Society (LCS) in Developing Country context?
LCS is a “Development Pathway” which:

a. facilitates achievement of the national socio-
economic objectives and targets,
b. while contributing to the achievement of global
objectives and targets for stabilization of
greenhouse gas concentrations in the atmosphere,
c. in a cost-effective and sustainable manner.
Low Carbon Society Roadmap
Technological
National
Innovations Social/Institutional Socio-economic
(APEIS/SDB)
Objectives
Management
and Targets
Low Aligning Markets

Carbon Co-benefits Win/Win Options
Society Shared Costs/Risks
Global
Climate Change
Long-term Vision Objectives
and Targets
Sustainability Avoid Lock-ins
Modify Preferences
Specifics of the roadmap would differ across countries.

What is important is to communicate transparently the
qualitative story and its quantification (i.e. modeling)
20
Low Carbon Society: Scenario Development for India
Key areas for interventions:
Demographics
Lower Population Growth (e.g. investment in women’s education)
Higher investment in social infrastructures (e.g. health, education)
Conservation
Efficient technology, Substitutions, Recycling, Pricing, Dematerialization
City Planning
Architecture/ Building Codes; Land use policies; Public Transport
Infrastructure choices
R&D, technology transfer and selective technology push
Incentives for environmental industry
Influencing consumer preferences/ behavior
How sustainable development policies influence LCS?

E.g. Education, Employment and Productivity nexus
Policies for public private partnership higher (public and private)
investments in education Increases supply of education services
Incentives for education for women and socially and economically backward
sections enhances demand for education
Women’s education reduces fertility rates & this together with family planning
campaigns lead to lower population (than in reference & some others cases)
The increases in labor participation rates and enhanced skill profiles maintains
labor supply and higher productivity in next few decades
Rural development policies (including education, employment, infrastructure

push and reduced risk for investments) break through the rural/ urban dualism
(Likewise for other drivers, the sustainability scenario story differ)
21
Scenario Drivers
Factors of Production
• Labor Supply, Land-Use, Capital (Savings/ Investments)
Inputs: Resources supply/ Technologies
• Energy
Intermediate goods & investments
• Infrastructures
• Energy (& Carbon) Intensive Sectors
Final Demand/ Behavior
• Private Consumption (Income effects/ preferences)
• Government expenditure
Governance
• Rents
• Taxes
• Geopolitical Risks
Global/ External
• Trade
• Geopolitical Risks
Demographic Transitions, Human Capital,

Productivity, Growth and Sustainability
India’s Economic Growth: Future GDP Projections
India’s GDP (Index: 2005 GDP = 1)

35
CAGR 2005-50
VH - 7.79%, H - 7.16%, M - 6.45%, L - 5.95%
30
25
Index: 2005 GDP = 1
Very High
20
High
15
India’s GDP Growth Rate (%)
Medium
10 Very High
CAGR 2005-32
10.0%
VH - 9%, H - 8%, M - 7%, L - 6% Low High
5
8.0%
Med
GDP Growth Rates %
0
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
6.0%
Low
4.0%
2.0%
0.0%
2000 2010 2020 2030 2040 2050
22
Demographic Transitions in India: Age/Gender Profile
Population in 1 970 Po pula tion Pr oje c tio n for 201 0
1970 2010
100 +
100+ 95- 9 9
95- 99 90- 9 5
90- 95 85- 8 9
85- 89 80- 8 4
80- 84 75- 7 9
75- 79 70- 7 4
70- 74 65- 6 9
65- 69 60- 6 4
60- 64 55- 5 9 F ema le
Age group
55- 59 M ale
Age group
50- 5 4
50- 54 F emale 45- 4 9
45- 49 Male
40- 4 4
40- 44
35- 3 9
35- 39
30- 3 4
30- 34
25- 29 25- 2 9
20- 24 20- 2 4
15- 19 15- 1 9
10- 14 10- 1 4
5- 9 5- 9
0- 4 0- 4
50 40 30 20 10 0 10 20 30 40 50 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70
Population ( million) Po pula tion ( million)
Po pu la tio n Pr oje c t ion f or 20 30 Popula tion Pr ojec tion for 20 50
2030 2050
10 0 + 10 0+
95 - 9 9 95- 99
90 - 9 5 90- 95
85 - 8 9 85- 89
80 - 8 4 80- 84
75 - 7 9 75- 79 F ema le
Male
70 - 7 4 70- 74
F emale 65- 69
65 - 6 9 M a le
60 - 6 4 60- 64
55- 59
Age group
55 - 5 9
Age group
50 - 5 4 50- 54
45 - 4 9 45- 49
40 - 4 4 40- 44
35 - 3 9 35- 39
30 - 3 4 30- 34
25 - 2 9 25- 29
20 - 2 4 20- 24
15 - 1 9 15- 19
10 - 1 4 10- 14
5- 9 5-9
0- 4 0-4
70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70
Pop ula tio n ( million ) Pop ulation ( million )
Population and Working Age Population

Population (Million) Annual Growth Rate of Population
1800 2.50%
1593 2.22% 2.15%
1600
1449
1400 2.00%
1183 1.67%
1200
1.50%
1000
849
800 1.02%
1.00%
600 555
400 358 0.47%

0.50%
200
0 0.00%
1950 1970 1990 2010 2030 2050 1950-70 1970-90 1990-2010 2010-30 2030-50
Labor Supply Annual Growth Rate of Labor Supply

1000 3.00%
915 2.74%
795 2.54%
2.50%
800
2.30%
595 2.00%
600
1.50% 1.46%
400 360
1.00%
210 0.70%
200 133
0.50%
0 0.00%
1950 1970 1990 2010 2030 2050 1950-70 1970-90 190-2010 2010-30 2030-50
23
Growth Scenarios
Human Capital
⎯ Government Expenditure in Education
⎯ Private Expenditure in Education
⎯ Urban / Rural & Gender-wise Education Expenditure
⎯ (Net) Migration by Labor Classes (intra & inter county)
R&D
⎯ Government/ Private Expenditure
⎯ Knowledge Flows
Technology
⎯ Backbones (infrastructures) Savings Rate
⎯ Learning, transfers, deployment 40 ??
35.00
Saving/ Investments 35
31.50
33.00
30.00
30
⎯ Social Security 25 22.80
24.60 26.00
⎯ Lifestyles, Behaviors 20
20.60
Governance 15
10
⎯ Institutions 5
⎯ Laws 0
⎯ Policies 1980 1990 2000 2010 2020 2030
Changing Structure of the Economy
History
1950 1980 2005
Services Agriculture
28% Services 22%
Agriculture 37% Agriculture
Services
59% 41%
52%
Industry Industry
13% 26%
Industry
22%
22%
Future
2000 2050 2100
Agri.
Agri.
10%
Agri. 18%
28%
Services Industry
Services Services
47% 28%
Industry 56% 62%
Industry 26%
25%
24
Modeling & Analysis of
Low Carbon Development Path
Low Carbon Society (LCS) Scenario
Drivers of India’s LCS Scenario

o
Carbon Market Signal (e.g. from 2 Centigrade Global Target)
Energy Device Efficiency (Demand and Supply-side)
Dematerialization
⎯ Building Materials and Design
⎯ Reduce (demand), Recycle & Reuse (3R) Materials
Infrastructure investments
⎯ Avoid lock-ins
⎯ Shift demand (e.g. transport modal split)
R&D and Technology Transfer

⎯ Leapfrog (to the efficiency frontier)
⎯ Innovations (to shift the efficiency frontier)
Planning & Governance

⎯ Facilitate change in Lifestyles & Behaviors
⎯ Institutions, Laws, Policies
25
Carbon Emissions: Base vs. LCS Scenario for India
India’s Cumulative Carbon

Emission from 2000-2050
Billion Ton of CO2
Reference Scenario: 127.2
Mitigation
LCS Scenario: 64.3
Cumulative Mitigation in LCS: 62.9
% Cumulative Mitigation in LCS: 49.5%
% Mitigation in LCS in 2050: 70.0%
Mitigation in LCS Scenario for India
2050 Base Scenario Mitigation in LCS

4057 (in 2050)
Electricity (Supply 745

+ T&D Efficiency)
Buildings 384
(Materials/Design)
Million Ton of CO2
Renewable Energy 328
Device Efficiency 274

Material substitutions 207
Recycling 173
Reduced Consumption 90
Urban Planning 265
Transport (Modal shift) 272
1284 Transport Infrastructure 102
2050 LCS Emission: 1217
(70% Mitigation target in 2050) Total CO2 Mitigation 2840
1032
2000 2006 2050
26
Mitigation through “dematerialization” in LCS Scenario
Materials Demand in Base vs. LCS
• Dematerialization in LCS vis-à-vis Base Scenario is
contributed by multiple direct and indirect policies,
Steel Cement
most of which belong to the policy packages relating
to “sustainable development”.
• Change in building materials and design contribute Base
Base
significantly to dematerialization and energy
efficiency in construction
LCS
• In addition, three other key contributors to LCS
mitigation through dematerialization are:
Mitigation (MT CO2) in 2050
Material Substitutions 207
Reduced Consumption 173 Fertilizer Paper
Recycling 90
Base Base
• Energy and carbon intensive materials - of which

the substitutions and reduced consumption LCS
contribute most to mitigation in the LCS scenario - LCS
are steel, aluminum, cement, fertilizer and paper.
• Recycling reduces the energy and carbon intensity
of the materials, besides delivering environmental
co-benefits.
CO2 Intensities: Base vs. LCS Scenario

India’s Per Capita CO2 Emissions (in Ton of CO2)
3.0
2.5
Base Scenario
Per Capita Emissions
2.0
1.5
India’s CO2 intensity of GDP: Index 2000=100

1.0
LCS Scenario 100
90
0.5
80
0.0 70
2000 2010 2020 2030 2040 2050 Base Scenario
Index 2000=100
60
50
40
30
20
LCS Scenario 12.1
10
3.6
0
2000 2010 2020 2030 2040 2050
27
SO2 Mitigation Co-benefits of LCS Scenario
Joint Mitigation (Period 2007-2050)

Mitigation Regime Co-benefits
SO2 mitigation alone in Reference Scenario Little carbon mitigation
SO2 Co-benefit in LCS Scenario LCS policies generate benefits equivalent to 30% lower SO2
in 2050 and cumulative saving in SO2 Emissions Reduction
equivalent to $11.2 billion over period 2006-2050
Adapting to Climate Change:

Vulnerability and Adaptation of Long-life
Assets from Climate Change
28
Sustainable Development & Climate: Impacts on Infrastructure
Monsoon Rainfall (2050)
Sustainable Development & Climate: Impacts on Infrastructure

Increase in Climate Intensity and Variability
Increase in mean and variability due to Climate Change
Present limate
C
Probability of Occurrence
More number of
days with >200
Less numberof
mm rainfall Very high
days with >200
number of days
mm rainfall
with >200 mm
rainfall
Future Climate
Light and Heavy and

spread-over rain Number of days with concentrated rain
> 200mm rainfall
Maintenance Cost Curve
Repair and Maintenance Costs
Cost with adverse Climate

Change and Deforestation
Cost with adverse
Climate Change
Conventional Bath-
Tub Curve
2000 2020 2040 2060 2080 2100
29
Conclusions: Aligning Climate & Sustainable Development Actions
Transiting to a Sustainable and Low Carbon Society
– The LCS actions in developing countries should be development centric and
facilitate achieving national sustainable development and global environmental
objectives simultaneously and cost-effectively
Developing Scenarios for Sustainable and Low Carbon Society

– Developing scenario storyline to gain ‘development and climate’ co-benefits in
the near-term and avoid lock-ins in the long-run to transit to a sustainable
development pathway
– Mainstreaming climate actions, including mitigation and adaptation, with
development actions that include innovations, co-benefits and sustainability
Modeling and Analysis for Sustainable and Low Carbon Society

– Multi-purpose soft-linked modeling tools linked to strategic global & national
databases
– Mainstream assessment of climate change and development actions through
national sustainable development objectives and targets
Thank you
30

CSD-15 Learning Centre Course 30 April 2007

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CSD-15 Learning Centre Course

30 April 2007, UN Headquarters, New York

How to align actions to address climate change

• Developing Country Dynamics

• Some Illustrations (from India)

• Modeling Climate Stabilization Induced Development Paths

• Modeling Transition to Low Carbon Future through Sustainable Development

What make developing countries different?

– Different economic dynamics than assumed in scenario assessments

– Need and opportunities to align climate and development agenda

Demographic Transitions in India: Age/Gender Profile

Population ( million) Po pula tion ( million)

Po pu la tio n Pr oje c t ion f or 20 30 Popula tion Pr ojec tion for 20 50

Pop ula tio n ( million ) Pop ulation ( million )

Urban & Rural population of India (Medium Variant)

Composition of India's GDP by Sector

1950 - 51 1980 - 81 2003 - 04

Data Source: CMIE and Economic Surveys of India

Past Energy transitions: Global & India

Percentage of Primary Energy Consumption

Oil Energy Security: -ve

70 % Household LPG penetration in India

 Laws and Regulations

 Architecture/ Building Codes

Backbone Technology Transitions

 New and Renewable Energy

• Lock-ins from current technology supply

• SRES Scenarios and Technology paths

• Development policies and path dependence

IPCC SRES Emission Scenarios

Emerging drivers of technological change

• Governance, risks and investment flows

Mainstreaming Climate Change in National Development

MDG, India’s National Targets and Climate Change

• Farm Income (from waste lands): (MDG1)

• Energy Security (MDG1&7)

Network for Biomass Technology/Fuel Deployment

Rural Financing Capital BIOMASS Biomass

District-wise CO2 Emissions

Sri Lanka Sri Lanka

Pakistan ") ")

") ") ")

Legend ") ")

more than 8.67 ")

CO2 emission from Cement Sector (2005)

CO2 Emissions from Cement sector

Year: 2000 Year: 2030

Co-Benefits: Joint SO2 and CO2 Mitigation

Joint Mitigation (Period 2005-2030)

SO2 mitigation alone Little carbon mitigation

Joint Mitigation: CO2 mitigation @ $5/ton Joint mitigation costs $400

Adaptation Challenge: Food/Water/Energy/Climate

Food Water Energy

Rainfall and Water Inflows Hydro Electricity Generation

Rainfall in Catchments Area 10

Hydro Electricity Generation (TWh)

South-Asia Energy-Water Cooperation: Co-benefits

Integrated South-Asia Energy-Water Market Benefit (Saving) Cumulative $ Billion % GDP

Energy 60 Exa Joule 321 0.87

CO2 Equiv. 5.1 Billion Ton 28 0.08

SO2 50 Million Ton 10 0.03

Total 359 0.98

Spill-over Benefits / Co-Benefits

Laws and Regulations

Architecture/ Building Codes

New and Renewable Energy

Rural development policies (including education, employment, infrastructure

R&D and Technology Transfer

Planning & Governance