Energy, emissions and India

By: Dr Sanjib Pohit
There is an intrinsic relationship between energy uses and economic development and India needs, at the very least, to increase its primary energy supply by 3 to 4 times and, its electricity generation capacity/supply by 5 to 6 times of their 2003 levels.

India needs to grow rapidly for a number of years if she is to eradicate poverty and give her people a satisfactory standard of living. Only rapid sustainable growth can generate the resources needed to provide social and physical infrastructure for education, health services, clean water, sanitation, transport and energy. Also, a fast developing economy can create adequate opportunities for gainful employment for all its people. India, as most other tropical countries, is also likely to face increasing constraints due to global climate change, restricting the attainment of her short and long term goals of development.

At present, India performs poorly in socio-economic indicators. Nearly 300 million persons live below the poverty line in India. About half of children are underweight (moderate to severe under nutrition) or are stunted. About 30 per cent of all adults have BMI (Body Mass Index) <18.5, which defines adult malnutrition (Planning Commission, 2008). Over 50 per cent of Indian population amounting to more than 500 million has no access to electricity. Moreover, over 75 per cent of household energy consumption is for the basic human need of cooking. To be specific, over 70 per cent households use only traditional biomass for cooking. As regards income, poorest 34.7 per cent of India’s population survives with a daily income of $1 while 79.9 per cent of Indian population has income below $2 a day. Clearly, India needs inclusive GDP growth in the range of 8 to 10 per cent over the next 25 years to lift the bottom 40 per cent of her citizens to an acceptable level of economic and social well being.

There is an intrinsic relationship between energy uses and economic development as chart below indicates (based on UNDP data, 2003). It is self evident from the chart below that if India has to move up the human development ladder, it needs to increase her energy uses on a per capita basis.

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Is India a guzzler of energy? The answer is a definite no. Going by energy intensity, i.e. energy use per unit of GDP, India has made significant progress over the years. Her energy intensity has declined continuously since 1990. At present, it is better than that of Germany. This has been possible since industry has adopted globally competitive technologies and management practices. For instance, in energy intensive sectors like steel, cement, aluminium and urea, India has been able to reduce her energy consumption significantly in the last 10-15 years. Most of the new plants in these sectors are energy efficient by global standards.

India faces formidable challenges in meeting her energy needs and in providing adequate energy of desired quality in various forms in a sustainable manner and at competitive prices. To deliver a sustained growth rate of 8 per cent and to meet the lifeline energy needs of all citizens, India needs, at the very least, to increase its primary energy supply by 3 to 4 times and, its electricity generation capacity/supply by 5 to 6 times of their 2003 levels. With 2003 as the base, India’s commercial energy supply would need to grow from 5.2 to 6.1 per cent per annum while its total primary energy supply would need to grow at 4.3 to 5.1 per cent annually (see Table 1). Power generation capacity must increase to nearly 8,00,000 MW from the current capacity of around 1,60,000 MW inclusive of all captive plants.

Is this path of energy growth sustainable from green house gas emissions (GHG) point of view? Even though India is not required to contain its GHG emissions, as a signatory to the UN Framework Convention on Climate Change and a country which has acceded to the Kyoto Protocol, India has been very active in proposing Clean Development Mechanism (CDM) projects. By Feb 2008, a total of 297 projects had been approved by India with projected reduction of 240 million tons. Moreover, Indian government has been actively following a number of initiatives that could significantly reduce the green house gas intensity of the economy. To be specific, they are:

  • Energy efficiency in all sectors
  • Emphasis on mass transport
  • Active policy on renewable energy including bio-fuels and fuel plantations
  • Accelerated development of nuclear and hydro-electricity
  • Technology missions for clean coal technologies
  • Focussed research and development on many climate friendly technologies
  • Energy efficiency rating of electrical instruments
  • Green rating of building

However, the international debate on future emission profile in recent times suggests that China and India would be the biggest contributors of GHG emissions by 2030, and hence they should make a commitment to GHG cuts. Till now, the international debate on climate change has been driven to a significant extent by the results of energy-economy models projecting global and region or country-wise emissions into the future. Almost all such studies have so far been carried out by researchers and institutions in developed countries, who in many cases are unfamiliar with the situation in developing countries, and have applied assumptions and data that do not reflect the realities of the developing world, with consequent implications for the global climate change debate.

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With a view to addressing this gap, the Ministry of Environment and Forests (MoEF) supported the development of several energy-economic, as well as impact models of the Indian economy, to better reflect the realities and policy and regulatory structure in India, and its specific climate change vulnerabilities. The initial results from some of these modelling works have now released by MoEF in the report titled India’s GHG Emissions Profile: Results of Five Climate modeling Studies. This report summarises the initial results of five studies, including three modeling studies supported by MoEF, with respect to India’s GHG emissions projections over the next two decades. These studies are: A computable general equilibrium (CGE) model study by the National Council of Applied Economic Research and Jadavpur Univercity (NCAER-CGE) developed by self and others, a MARKET Allocation (MARKAL) model study by The Energy & Resources Institute (TERI-MoEF), and Activity Analysis model study by IRADe (IRADe-AA), all of which were supported by MoEF, and another MARKAL model study by TERI presented at the 14th Conference of Parties on Climate Change at Poznan (TERI-Poznan), and finally, a Bottom-up study by McKinsey and Co. (McKinsey), both of
which were supported by other funding sources. The models/studies have differences in model structure, specific model assumptions and parameters, as well as some differences in the definitions of the Illustrative Scenarios whose results are reported. The initial results relate to India’s emissions profile over the next two decades, if no new policies which may impact GHG emissions are adopted over this period.

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The models project GHG emissions per-capita between 2.5 and 5.0 tons per capita in 2030-31 (2031-32 for the TERI-MoEF and TERI-Poznan studies), the lower end of the range being from the IRADe-AA study and the higher end from the TERI-Poznan study. Except for the TERI-Poznan study, the highest per capita emissions estimate is from the McKinsey study, i.e. 3.7 tons per capita in 2030-31, which, however, includes CH4 emissions from agriculture – not considered in the other models. This may be compared to the 2005 global average per capita GHG emissions of 4.22 tons per capita. In other words, four out of the five studies project that even two decades from now, in terms of the assumptions set forth in the respective Illustrative Scenarios, India’s per capita GHG assumptions would be well below the global average 25 years earlier!

The models serve to show that India’s GDP growth (with the minimum assumed in the 5 studies at 6.97 per cent per year till 2030) is inherently sustainable, and apprehensions that India’s GHG emissions would grow to a significant share of the global total in the next two decades are without foundation.

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