Economic Considerations - A Developing Country Perspective

1. Economic Considerations - A Developing Country Perspective Equity and Global Climate Change April 17-18, 2001 Pew Center on Global Climate Change Washington D.C. Sujata Gupta Tata Energy Research Institute

2. Outline • International perspective • Initiatives in India • Future strategy

3. Per capita energy consumption (kgoe), 1998

4. Per Capita Carbon Emissions & Income 14.00 Qatar 12.00 10.00 United Arab 8.00 Carbon Emissions/Capita (tons) Emirates Luxembourg Bahrain Singapore 6.00 United States Australia Norway 4.00 Saudi Arabia Canada Czech Republic Japan 2.00 Switzerland Hong Kong, China 0.00 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 GDP/Capita (PPP$)

5. Energy consumption (mtoe), 1997

6. Total & per capita energy related CO2 (1996) Source: IEA & WRI

7. Per capita CO2 emissions

8. Where would we stand?

9. Main issues • Call for “meaningful participation” by major DCs made by the US • Globally, broad recognition of adverse impacts of climate change - commitment to take action • Several Annex B negotiators at COP-6 recognized that in the long run, equity pivoted on a per capita basis, is essential  convergence

10. National Development Objectives • Poverty removal/employment generation • Food sufficiency/self-reliance • Drinking water, primary health etc, • Containing population growth • Efficiency/long-term sustainability • Technology development/Renewable Energy • Power development • Public transport • Higher industrial competitiveness • Sustainable forestry

11. Energy Reserves

12. Energy sector characteristics • Persistent shortages • demand > supply • High import dependence - oil, BOP pressures • Poor productivity/efficiency • Poor internal rate of return • Limited energy alternatives for poor • Subsidies

13. Reforms and the environment • Promotion of RETs • Incentives to efficiency improvements • Waste recycling / cogeneration • Clean coal technologies • Coal washing and fly-ash handling • Dismantling of the APM / Re-structuring • Decentralization of environmental clearances

14. Ongoing Initiatives • Energy sector reforms • deregulation of the administered price mechanism - power, oil & coal (removal of subsidies)  market based pricing • private sector participation - power, oil & coal • Renewable energy programmes • Sector level reforms • Regional co-operation in energy

15. Ongoing Initiatives • Bagasse-based cogeneration – subsidies on state of the art technology & soft loans for modernization • Biomass combustion – MNES provides a one-time subsidy of up to 30% of the project cost • Grid-connected solar photovoltaic (PV) applications – two-third of the total project cost s.t. maximum of 20 million rupees per 100 kWp capacity

16. Ongoing Initiatives • Wind battery chargers – MNES has been subsidizing small aerogenerators for more than a decade • Wind pumps –MNES provides subsidies of 40-50% of the total cost • 9th Five Year Plan - Government recognizes the need to shift from capital subsidies for RETs to interest subsidies, & gradually phase out subsidies to move towards private entrepreneurship

17. Future strategy • Support the Kyoto Protocol • step in the right direction • Continue with the ongoing program for “meaningful participation” • Participation in CDM projects • Enthusiastic business partners • Change in government’s reserved attitude • Local benefits • Developmental objectives • Technological upgradation/advancement

18. Future strategy • Assess impacts of and vulnerability to climate change  adaptation measures • Exploit the synergy between local and global environmental issues with clear priority to local • Longer term perspective

19. Thank you!