Climate Change: Indian Perspectives Post Copenhagen

1. Climate Change: Indian Perspectives Post Copenhagen ProdiptoGhosh, Ph.D Distinguished Fellow The Energy & Resources Institute 20 August 2010

2. The Energy Challenge • Some 600 million fellow Indians, c. 10% of global population, live without electricity! • Traditional biomass is the primary cooking fuel for over 700 million Indians • 34.7% and 79.9% population below income level of $1 and $2 a day respectively • Lack of access to commercial energy leads to Illiteracy, Gender Inequality/Disempowerment, High IMR and MMR, Poor Health & and hence a low HDI • India’s per capita commercial energy consumption is about 20% of the world average, 4% that of the US and 28% that of China • Sustained GDP growth of 8-9% a year will enable India over the next 25 years to lift the bottom 40% of her citizens to an acceptable level of economic & social well being –this will require provision of modern energy to them

3. Myth 1: “India has a very high level of energy intensity (inefficiency?) of its economy (and has done nothing about it)!”

4. India’s Decreasing Energy Intensity

5. Specific Energy Consumption in Integrated Steel Plants 22% reduction in SEC from 1990-91 to 2004-05 Actual impact higher as share of D/R rising Source: Steel Authority of India Ltd.

6. Source: BEE, 2007

7. Source: BEE, 2007

8. Trends in Energy Consumption of Ammonia & Urea Plants World’s Best: 7.0 Gcal/ton of Ammonia India’s Best: 7.2 Gcal/ton of Ammonia FAI Target: 6.5 Gcal/ton of Ammonia Already average of top 25% ammonia plants more efficient than world’s top 25% plants 25% REDUCTION 26% REDUCTION Source: Fertiliser Association of India (FAI)

9. The fossil fuel CO2 intensity of the Indian economy in 2004 was the same as Japan; better than Germany! Data: “Growth and CO2 Emissions – How do different countries fare?” : Roger Bacon and Soma Bhattacharya: World Bank, 2007:

10. Myth 2: “India’s low per-capita GHG emissions reflect its low per capita incomes, but India is extremely inefficient when it comes to CO2 intensity of consumption!”

11. GHG emissions depend upon lifestyles! • India’s low per-capita GHG emissions are only partly due to poverty. A significant part is due to inherently sustainable lifestyles that do not change significantly as people become better-off! • Some international comparisons illustrate the point:

12. Source: TERI analysis (various data sources)

13. Municipal solid waste Average rate of recycling (%) (excl. re-use) GHG emissions from waste (gm/’000$GDPppp) Source: TERI Analysis, based on National Communications of different countries

14. Estimated CO2 emissions from passenger transport (gm/passenger-km) Source: TERI Analysis, various data sources

15. Per-capita consumption of construction materials per-unit of inhabited land area

16. What will India’s GHG emissions be in the future? What does it cost to mitigate GHG emissions? Results of three coordinated modeling studies:

17. NCAER-CGE: GDP growth rate projections till 2030 While GDP growth slows slightly till 2030, the CAGR of GDP is 8.84%

18. India’s Per capita GHG emissions till 2030 Per capita GHG emissions projections for India from 5 studies in Illustrative Scenarios (2010-2030) The projections range from 2.77 tons/capita CO2e (NCAER-CGE) to 5.0 tons/capita CO2 (TERI-Poznan). Except for the last all studies indicate that India’s per capita GHG emissions in 2030 will be below the 2005 global average of 4.22 tons! Per capita emissions, tons CO2e TERI-Poznan McKinsey TERI-MoEF IRADe-AA NCAER-CGE Year 18

19. India’s Aggregate GHG emissions till 2030 Aggregate GHG emissions projections for India from 5 studies in Illustrative Scenarios (2010-2030) The projections range from 4.0 billion tons CO2e (NCAER-CGE) to 7.3 billion tons (TERI-Poznan) Total GHG emissions, billion tons CO2e TERI-Poznan McKinsey TERI-MoEF IRADe-AA NCAER-CGE Year 19

20. Declines in energy and CO2e intensities of the economy: CO2e intensity, kg/$GDP at PPP Energy intensity, Kgoe/$GDP at PPP Both CO2e and energy intensities of the economy decline steadily till 2030. Even at present they are among the lowest in the world!

21. Costs of GHG Mitigation • Model results for: • NCAER-CGE: GHG mitigation and GDP losses from imposition of carbon taxes • TERI-MoEF: Energy system incremental investment and economic costs from CO2 constraints

22. Undiscounted Incremental Investment Cost for CO2 Reductions from Illustrative Scenario (2011-31) 10% reduction: ~ US$ 215 Billion 20% reduction: ~ US$ 493 Billion 30% reduction: ~ US$ 798 Billion

23. Undiscounted Incremental Energy System Cost for CO2 reductions from Illustrative Scenario (2011-31) 10% reduction: ~ US$ 240 Billion 20% reduction: ~ US$ 499 Billion 30% reduction: ~ US$ 1062 Billion

24. Undiscounted Cummulative GDP Loss US $ billion (constant 2005)

25. Undiscounted Cummulative GDP Loss US $ billion (constant 2005)

26. Myth 3: “Indian policymakers are oblivious to the potentially catastrophic impacts of climate change on its people!”

27. Adaptation to Climate Change • India is historically vulnerable to climate variability: floods, droughts, vector borne disease, cyclones, ocean storm surges, etc. • For over 6 decades, India has had large, nationally funded programmes to address climate variability and disasters.

28. India’s fiscal expenditures on programs directly related to adaptation to climate variability was 2.63% of GDP in 2006-07! This is more than its annual defence expenditure.

29. The Global Regime: The Story So far…

30. Myth:The climate change negotiations are about “saving the only planet we have!” Working paradigm of (all) negotiators: Climate Change negotiations are primarily economic negotiations, to determine future global economic patterns and strategic potentials.

31. Historical Responsibility for Climate Change of Selected Developing and Developed Countries, 1850-2005

32. Recap: Bali Road Map • Negotiations under Art 3.9 of Kyoto Protocol for second commitment period after 2012 + some proposed amendments (AWG-KP) • Negotiations under the UNFCCC for a comprehensive “Long-term cooperative action” (AWG-LCA) • 9 Negotiation sessions held between Bali (Dec 2007 and Copenhagen (Dec 2009)

33. Bali Road Map… • Slow progress was made in the negotiations in both tracks due to deep differences in objectives of countries (and mistrust about their intentions). • Before Copenhagen it became clear that closure was not feasible a Copenhagen, and that negotiations would have to continue • The idea was mooted by several developed countries that Copenhagen should yield a “Political Declaration”, and give a mandate for negotiations under both tracks to continue • After an extremely convoluted process, the Copenhagen accord was negotiated at the level of Heads of State/Governments

34. Copenhagen Accord • Status: Not a multilateral outcome under the UNFCCC, a best a Plurilateral Accord between acceding States. Legally binding nature of accord is in doubt, but clearly, in political terms acceding Parties commit themselves to its provisions. • Will require extensive further negotiations before it can be operationalized (if at all). However, since Accord is not endorsed by the UNFCCC, the question is in which forum will it be operationalized?

35. Copenhagen: Overall Political Assessment • India and BASIC: Significantlyprotected their development space; emerged as strong collective political bloc with common interests; significance beyond climate change • US: Obtained its pre-conditons for passage of “cap and trade” Bill in US Congress, i.e. Internationazed action by China & India, transparency wrt their actions, Financing architecture to invlve WB, existing MFIs). However, actual passage of Bill remains in doubt. • EU: Clear loser: None of its key objectives were met: apportionment of carbon space distorted in favour of developed countries; comparability of mitigation actions with US; legally binding commitments of all developed countries and emerging economies. Hold over SIDS and LDCs is fragile • G-77: Copenhagen revealed significant divergences within group!

36. Prospects: • Copenhagen Accord has received only tepid endorsement from several major Parties (and no explicit endorsement by China, India). Unlikely to be operationalized w/o closure on AWG-LCA and AWG-KP • Announced goals are extremely modest in relation to scale of problem • Fate of US energy and climate Bill is key! Passage (and prospects of negotiations are impacted by controversy over IPCC findings, economic downturn, upcoming Congressional elections).

37. Thank You for Your Attention!