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Climate Change Mitigation in
Developing Countries
P.R. Shukla
Indian Institute of Management, Ahmedabad
International Energy Workshop
IIASA, Laxenburg, Austria, 24-26 June, 2003
IIM, Ahmedabad, India
Presentation Agenda
1. How (and how much) developing countries have
contributed to GHG mitigation?
2. What should be key elements of post-Kyoto
architecture? Or, How “Development” and “Climate”
policies be reconciled in the post-Kyoto architecture?
IIM, Ahmedabad, India
Six Developing Countries Comparison
Country Population Primary Energy CO2 per Capita, CO2/GDP
(Million) per Capita, 2000 1998 (Tc/year) Tc/1995$ Mil (PPP)
(GJ /year)
Brazil 170 44 0.5 73
China 1262 27 0.7 175
India 1016 13 0.3 121
Mexico 98 56 1.1 210
South Africa 43 106 2.3 233
Turkey 65 47 0.9 137
World 6057 63 1.1 155
OECD 1116 200 3 128
USA 282 341 5.4 186
IIM, Ahmedabad, India
Primary Energy Use (2000)
100%
80%
60%
40%
20%
0%
Brazil China India Mexico South Africa Turkey
Coal Oil Gas Hydro
IIM, Ahmedabad, India
Energy Related CO2 Emissions (2000)
100%
80%
60%
40%
20%
0%
Brazil China India Mexico South Africa Turkey
Residential Commercial Industry Transport
IIM, Ahmedabad, India
Mitigation Measures
Brazil China India Mexico South Turkey
Africa
En. Efficiency Demand-
side
T&D
Clean Fuel Gas
Renewable
Transport Ethanol
Incentives for small car
CNG
Structural Change in Energy Use
Forest (controlling deforestation)
Energy Reforms Tariff
Reform
Privatization/ Competition
Social Reforms Population Policy
IIM, Ahmedabad, India
How much mitigation?
1. The six countries have mitigated 300 Million ton of
carbon per year by such measures, for reasons other than
climate change, though several measures could be
“additional” to the economic baseline
2. For context, the total mitigation commitment of
developed countries under Kyoto Protocol (including
USA) would be 392 Million ton of Carbon in 2010
3. Present emissions baseline of these six countries is 18%
below what would been without such measures
IIM, Ahmedabad, India
Mitigation: The Case of India
IIM, Ahmedabad, India
GDP, Energy, Electricity, Carbon
Intensity (per Rs. GDP)
6 1.8
Electricity
Electricity
1.7
5
Intenstity Index (1975=1)
1.6
Carbon
4
Index (1975=1)
1.5
Energy Carbon
3 1.4
GDP
1.3
2
Energy
1.2
1
1.1
0 1.0
1975 1980 1985 1990 1995 2000 1975 1980 1985 1990 1995 2000
IIM, Ahmedabad, India
Decoupling Carbon and Energy:
Policy Measures
• Energy Efficiency and Conservation
• Renewable Energy
• Clean Transport Fuel
• Energy and Electricity Sector Reforms
• Forestry and Land Restoration
IIM, Ahmedabad, India
Technology Push in Energy
Intensive Industry
Sector Units Average Best
Consumption Technology
1991 1995 2000
Cement Kwh/ ton 132 120.5 69
Paper Mwh/ ton 1.255 1.003 0.985
Caustic Soda Kwh/ ton 3351 3130 2196
Aluminum Kwh/ ton 16763 16606 15217
Urea Kwh/ ton 425.6 390 -
Steel G. Cal/ton 11.27 8.93 7.48
IIM, Ahmedabad, India
Renewable Energy
(capacity on March 2002)
Source/System Achievement
Rural Energy Family size biogas plants 3.262 million
Improved cooking stove 34.3 million
Biomass Power Biomass power 381 MW
Biomass gasifier 50 MW
Solar Energy Solar street lighting systems 41.4 thousand
Home lighting systems 177 thousand
Solar lanterns 383 thousand
SPV power plants 1172 kWp
Solar water heating systems 590 thousand m2 collector area
Box-type solar cookers 515 thousand
Solar PV pumps 4204
Wind Wind power 1526 MW
Wind pumps 793
Hydro Small hydro power (< 25 MW) 1433 MW
Waste Energy recovery from waste 17 MW
Transport Battery operated vehicles 247
Awareness Energy parks 259
IIM, Ahmedabad, India
Carbon Mitigated - 2000
Technology Initiative Carbon Saved
(Million Ton)
Energy Conservation 2.60
(Supply-side)
Steel 0.86
Energy Conservation Cement 0.34
(Demand-side) Other industry 0.78
Agriculture 0.15
Transport 0.10
Residential + Commercial 0.27
Wind 0.94
Renewable Power Small Hydro 0.15
Biomass 0.19
Improved Stove 4.96
Gas Flaring 4.16
Biogas 2.30
Total 17.80
IIM, Ahmedabad, India
Carbon Mitigation
(1900-200)
20
18
Renewable Power
16
14
Stove
Carbon (MT)
12
10
Biogas
8
6 Gas Flaring
4
Energy Con (Demand-side)
2
Energy Con (Supply)
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
111 Million ton Carbon Mitigation from 1990 - 2000
IIM, Ahmedabad, India
Beyond Kyoto:
Development and Climate
IIM, Ahmedabad, India
Development and Climate: Premises
1. Climate most viably approached through development
strategies whose climate benefits are ancillary to sustained
economic growth
2. Rise in developing county emissions driven by
development imperatives and supported by current
resource and technology flows
3. Both climate and development concern fundamental issues
of energy, transport, land use and food security
IIM, Ahmedabad, India
Current Climate Regime
1. Regime architecture is climate-centric and flows from
output to input
2. CDM holds only limited prospect of increased or
redirected flows
3. No assurance of stable assistance from developed to
developing countries
IIM, Ahmedabad, India
Shifting Context – Transitions
1. Transition from state to market economies is a semi-permanent
2. Market reforms driven largely by need for new development capital
3. Patchwork of residual and “reformed” institutions and alliances
4. Private flows grew five-fold while ODA declined during 1990-2000
5. Shift in flows from bank lending to foreign direct investment
6. 10 countries receive 70 percent of FDI
7. Largest investments are in electricity, natural gas and telecom
IIM, Ahmedabad, India
Shifting Context - Partnerships
1. “Hybrid” states present new risk profiles
2. New Investment Strategies
3. Conservative investors hedge by acquiring local partners – i.e.
Brownfield investment
4. Aggressive investors seek “market-making” alliances
5. Changing Trends in Development Assistance
6. Characterized by pledges at Monterrey and Johannesburg:
• Softer and more selective
• Conditioned on “governance” reforms
• Channeled through public-private partnerships
IIM, Ahmedabad, India
Principles Going Forward
1. From Input to Output
• Policy must tilt development choices toward climate-friendly options
• Operate at a scale large enough to alter emission trajectories
• Rather than discrete projects, measured against business as usual, aim to
fundamentally shift baselines
2. Aligning Interests
• Seek alliances of domestic firms/agencies, foreign investors, ODA providers
3. Targeting Assistance
• Adaptation
• Capacity for climate-favoring development
4. Creating Regional Models
• Accelerate technology diffusion by targeting regional leaders
IIM, Ahmedabad, India
Options for a Future Architecture
1. Input-based goals
• Sectoral goals
• Intensity goals
• Policies and measures
2. Programmatic climate cooperation
• GHG credits for broad policy shifts
• A climate bank?
3. Early Signals
4. Integrated Solutions
IIM, Ahmedabad, India
Development and Climate:
The Case of India
IIM, Ahmedabad, India
Future Carbon Emissions
800
735
600
Carbon (MT)
400
200
0
1995 2005 2015 2025 2035
Year
IIM, Ahmedabad, India
Energy, Electricity and Carbon Intensities
(Reference Scenario)
1.8
1.6
1.4
Electricity
1.2
Carbon
Energy
1
0.8
0.6
Past Trends Future Projections
0.4
0.2
0
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
IIM, Ahmedabad, India
Carbon Mitigation via CDM
(under different Post-Kyoto Signals)
Global Carbon Cumulative
Carbon Price Mitigation Mitigation
Scenarios %
(Million Ton)
750 ppmv $5-8/ton 138 3%
650 ppmv $5-10/ton 301 7%
550 ppmv $5-14/ton 449 10%
IIM, Ahmedabad, India
South-Asian Energy Market Development
IIM, Ahmedabad, India
Environment Gains: South Asian Energy Market
Emissions Reduction in India (2015)
10.5
9.0
Reduction (%)
7.5
6.0
4.5
3.0
1.5
0.0
Carbon
SOX
Year
Grid Integration
Grid Integration + Regional Co-operation
IIM, Ahmedabad, India
Benefits of South-Asia Energy and
Electricity Market Integration
(Cumulative for period 2010-30)
$ Billion % of Region's
Benefit (Saving) GDP
Energy (Direct Benefits)
Energy 59 Exa Joule 180 0.48
Investment in Energy 72 0.19
Supply Technologies
Investment in Energy 69 0.18
Demand Technologies
Environment (Indirect Benefits)
Carbon Saved 1.4 Billion Ton 28 0.08
SO2 Saved 50 Million Ton 10 0.03
Total Direct and Indirect Benefits 359 0.98
Spillover Benefits
Water 16 GW additional hydro capacity
Flood Control From additional dams
Competitiveness Reduced unit energy/electricity cost
IIM, Ahmedabad, India
From CDM to “Development and Climate”
Strategy
Project/ Program
Retrofit Projects (e.g.) · Promote technology transition in small/
medium industry
· Boiler retrofit
CDM
· Link with resource conservation programs
· Process improvements
Green-field Projects (e.g.) · Positive list
· Promote technical/ financial collaborations
· New Wind Farm
· Jump start technology transition/ hedging
· Gas Power Plant
Infrastructure Projects (e.g.) · Link with development
· Regional energy cooperation
Development
· Gas Pipeline
· High mitigation potential but difficult to
· Electricity T&D operate under CDM regime
· Road/Rail infrastructure
Reform Programs (e.g.) · Strong link with economic reforms and
sustainable development
· Technology R&D/Dissemination
· High transaction costs but high co-benefits
· Electricity Distribution Reforms
· No way to operate under Kyoto regime
· Consumer Awareness
IIM, Ahmedabad, India
Indian Emission Scenarios
900
Fragmented Market
800
Regional Development
700 Market Reforms
Carbon Emissions (MT)
600
Sustainable Development
500
400
300
200
100
0
2000 2005 2010 2015 2020 2025 2030
Years
IIM, Ahmedabad, India
Global Emission Scenarios (SRES)
30
A2
25
20
CO2 (GtC)
15 B2
A1
10
WRE550
5 B1
0
1990 2010 2030 2050 2070 2090
Year
IIM, Ahmedabad, India
Technological Change in India to
Stabilize CO2 at 550 ppmv
Non-Fossil Energy Contribution to GHG Mitigation
2000
1600
1200
800
550 PPMV
400
IIM, Ahmedabad, India
Conclusions
1. Non-climate policies and measures in developing countries have
contributed significant mitigation
2. Climate cause would be better served if the regime is driven by
inputs than output measures
3. Rising investment and technology flows provide significant
opportunities for transition to low emissions pathways
4. Climate embedded within development policies would have
lower climate costs and risks
5. Development pathway is key determinant of effective climate
regime
IIM, Ahmedabad, India
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