scenarios, modelling and analysis of low carbon society ... · indian institute of management,...

Indian Institute of Management, Ahmedabad, India

Scenarios, Modelling and Analysis of Low Carbon Society for India

P.R. ShuklaIndian Institute of ManagementAhmedabad, India

Presented in the‘13th AIM International Workshop’Tsukuba, Japan, February 17-18, 2008


Base Scenario


Demographic DriversYear: 2000 Pop: 1021 Million

80 60 40 20 0 20 40 60 80

Age

Population (million)

Female Male

15 -

60 y

ears

0

Male Female

18-6

2 Yr

s

80 60 40 20 20 40 60 80Population (Million)

Age

Pop: 1593 MillionYear: 2050

80 60 40 20 0 20 40 60 80

Age

Populat ion (mil l ion)

Female Male

15 -

60 y

ears

Male Female

18-6

2 Yr

s

80 60 40 20 0 20 40 60 80Population (Million)

Age

Population (Million)

358

555

849

1183

14491593

0

400

800

1200

1600

1950 1970 1990 2010 2030 2050

2.22%

2.15%

1.67%

1.02%

0.47%

Growth Rate

Labor Force (Million)

133

210

360

595

795915

0

200

400

600

800

1000

1950 1970 1990 2010 2030 2050

2.30%

2.74%

2.54%

1.46%

0.70%

Growth Rate


Drivers of Economic GrowthHuman Capital

⎯ High Labor Supply ⎯ Increasing Education ⎯ Migration (intra & inter county)

R&D⎯ Increasing Government/ Private Expenditure⎯ International Knowledge Flows ⎯ R&D Collaborations

Technology⎯ Infrastructures⎯ Learning, transfers, deployment

Behavioral Changes⎯ High Savings Rate⎯ Changing Lifestyles

Governance⎯ Institutions⎯ Laws⎯ Policies

Savings Rate

20.622.8

24.6

33.035.0

32

0

5

10

15

20

25

30

35

1980 1990 2000 2010 2020 2030

4037??


Base Scenario GDP

0

5

10

15

20

25

2005 2020 2035 2050

Bas

e Ye

ar 2

005=

1

Annual Growth Rate 2005-50: 7.3%Annual Growth Rate 2005-32: 8%

GDP

0

2000

4000

6000

8000

10000

12000

2000 2010 2020 2030 2040 2050

US

$/pe

rson

Per Capita Income

Base Case Assumptions: Summary1. GDP

• Ann. Growth Rate: 7.2% from 2005-50• 2050 Economy: 24 times larger than 2005

2. Population • 2000: 1021 Million• 2050: 1593 Million

3. 650 ppmv CO2e Concentration Stabilization (or 550 CO2)4. Radiative Forcing: 4.7 W/m2


LCS Scenarios: Alternate Paradigms

Scenarios: Two Visions of Low Carbon SocietyAchieving Stabilization of GHG Concentration by:

1.Climate Centric Actions at the MarginMargin of the Conventional Development Path

Policies: Global Carbon Price over Conventional Development Path

2.Aligning Climate Actions with the MainstreamMainstream DevelopmentActions

Policies: Sustainable Development Path + Stabilization

What path shall best deliver national development goals while fulfilling international commitments?


Modeling


Integrated Modeling Framework

DATABASES-Socio-Economic, Technologies, Energy Resources, Environmental Constraints

AIM CGE Model

ANSWER-MARKALModel

AIM SNAPSHOT ModelEnd

Use

Dem

and

Mod

elA

IM Strategic D

atabase(SD

B)

Integrated Modelling FrameworkDATABASES

-Socio-Economic, Technologies, Energy Resources, Environmental Constraints

AIM CGE Model

ANSWER-MARKALModel


Use

Dem

and

Mod

elA

IM Strategic D

atabase(SD

B)

DATABASES-Socio-Economic, Technologies, Energy Resources, Environmental Constraints

AIM CGE Model

ANSWER-MARKALModel


Use

Dem

and

Mod

elA

IM Strategic D

atabase(SD

B)

Integrated Modelling Framework


Base Scenario Analysis


Energy and Carbon: Base Case

From 2005-2050:Annual Economic Growth: 7.2%Annual Population Growth: 0.9%

Absolute Growth in 2050 over 2005Economy 23 timesPopulation 1.56 times

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mto

e

Other RenewablesNuclearHydroGasOilCoalCommercial BiomassNon Com Biomass

Energy

Assumptions

Annual Improvement From 2005-2050:Energy Intensity: 3.14 (%)Carbon Intensity: 3.07 (%)Decarbonization of Energy: -0.07 (%)

Ratios: 2050 over 2005Energy Intensity: 0.249Carbon Intensity: 0.257Decarbonization of Energy: -3.1 (%)

Results: Energy and Carbon Intensity

Carbon Emissions

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050M

illio

n To

n C

O2


Investment in Energy: Base Case

127197

25130242

51

71

83

17

14

11

7

0

200

400

600

2010-15 2015-20 2020-25 2025-30

Inve

stm

ent (

US

$ B

illio

n)

Coal Oil & Gas Power

175 260 335 404

Energy Investments (2010-2030)

Oil & Gas21%

Power75%

Coal4%

$ 1173 billion Oil & Gas21%

Power75%

Coal4%

$ 1173 billion

Share of Energy Investments (2010-2030)


LCS Scenario Analysis


LCS Scenarios: Alternate Paradigms

Scenarios: Two Visions of Low Carbon Society

Achieving Stabilization of GHG Concentration by:

1. Climate Centric Actions at the MarginMargin of the Conventional Development PathPolicies: Global Carbon Price over Conventional Development Path

2. Aligning Climate Actions with the MainstreamMainstreamDevelopment ActionsPolicies: Sustainable Development Path + Stabilization

What path shall best deliver national development goals while fulfilling international commitments?


Indian LCS Scenario Assumptions• LCS Scenarios assume 550 ppmv CO2e

Concentration (or 470 CO2 Concentration)

• 3.4 W/m2 (or @ 3oC temperature increase)

• Two pathways of LCS produce identical cumulative CO2 emissions from 2005 to 2050

• LCS Vision 1 scenario has same GDP and Population as in Base Case (7.2% from 2005 to 50)

• LCS Vision 2 is a ‘Sustainability’ driven scenario with population & GDP lower than in Base Case (6.9%from 2005 to 50) but include variety of interventions in line with sustainable development paradigm


LCS Dimensions: Objectives/Interventions

Economic Development (Quantity and Quality of Growth)

Enhanced Investment in climate actions • Mitigation• Adaptation

Climate change Technologies• R&D/ IPR• Technology transfer

Climate change Risks• Adaptation costs• Climate Goals (e.g. Stabilization @ 450 ppmv CO2e or 2O C)

Equity/ Fairness of global climate regimeMechanisms/ Instruments to manage climate change

• Direct (Climate) vs. Indirect (Development)• Market vs. CC + Non-Market


Low Carbon Society Transitions

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2010 2020 2030 2040 2050

Mill

ion

Ton

CO

2

OthersDevice Efficiency

Renewable Energy

Electricity (Fuel Switch)

CCS

Carbon Tax 7 22 40 67 100$/tCO2

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

OthersCCSTransport ModeUrban PlanningConsumptionRecyclingMaterial SubstitutionsAppliance EfficiencyRenewable Energy Building

Electricity (Fuel Switch)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mill

ion

Ton

CO

2

Renewable Energy Renewable

LCS Vision 1: transition with conventional path and carbon price

• High Carbon Price• Climate Focused Technology Push• Top-down/Supply-side actions

LCS Vision 2: aligning climate actions with sustainable development actions

• Low Carbon Price• Bottom-up/Demand-side actions• Behavioural change• Demand-side technology pull• Diverse Technology portfolio


Demand Reduction & Substitution

0

200

400

600

800

1000

Dem

and

(Mill

ion

Ton)

Conventional Development

Sustainable Society

0

200

400

600

800

1000

Dem

and

(Mill

ion

Ton)


Sustainable Society

Cement

2000 2010 2020 2030 2040 20500

100

200

300

400

500

600

700

2000 2010 2020 2030 2040 2050

Dem

and

(Mill

ion

Ton)

Steel


Sustainable SocietyD

eman

d (M

illio

n To

n)

0

100

200

300

400

500

600

700

2000 2010 2020 2030 2040 2050

Steel


Sustainable Society100

200

300

400

500

600

700

2000 2010 2020 2030 2040 2050

Conventional DevelopmentConventional Development

Sustainable Society

0

5

10

15

20

25

30

35

40


Sustainable Society

0

5

10

15

20

25

30

35

40


Sustainable Society

0

5

10

15

20

25

30

35

Dem

and

(Mill

ion

Ton)


Sustainable Society

2000 2010 2020 2030 2040 2050

Paper

Dem

and

(Tril

lion

Lum

en h

rs)

0

1000

2000

3000


Sustainable Society

Lighting

2000 2010 2020 2030 2040 2050


Energy Mix in 2050

200

400

600

800

1,000

1,200

Coal

Oil

Gas

Hydro

Nuclea

r

Biomas

s

Renew

able

Mto

e

Base Case

Conventional Dev. + Tax

Sustainability

Share of Renewable

Base 24 %C+T 34 %Sust. 47 %

Total Energy Demand

Base 3004 MtoeC+T 2945 MtoeSust. 2004 Mtoe

Sustainable LCS would reduce competition & conflicts for energy resources; thus contributing to peaceful transition to prosperous global socio-economic order in the 21st Century


Energy and Carbon Intensities

0

10

20

30

40

50

2000 2010 2020 2030 2040 2050

EI (t

oe/M

illio

n IN

R)

0

10

20

30

40

50

CI (

tCO

2/M

illio

n IN

R)

Base CI

CT CILCS CI

Energy Intensities (EI)

Carbon Intensities (CI)


Co-benefits of Regional Co-operationCoCo--benefits of Southbenefits of South--AsiaAsia

Integrated EnergyIntegrated Energy--Water MarketWater Market

Benefit (Saving) Cumulative from 2010 to 2030

$ 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

• 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)

MDG 1: Eradicate extreme poverty and hunger, MDG 7: Environmental Sustainability

¨

!.

!.

!.

!. !.

!.

!.!.!.!.

F

F

Ñº

ÑºÑº

India

China

Iran

Pakistan

Afghanistan

OmanMyanmar (Burma)

Thailand

Nepal

Turkmenistan

Saudi Arabia

Tajikistan

Yemen

Bangladesh

Sri Lanka

Bhutan

Uzbekistan

Somalia

United Arab Emirates

Qatar

Laos

Malaysia

Bahrain

IndonesiaMaldives

Pune

GayaKota

Guna

Gadag

Kochi

Patna

Delhi

Anand

Dadra

SuratOlpad

Kalol

Panvel

Hassan

Dispur

Ambala

Nangal

Kanpur

Jhansi

UjjainJhabua

Valsad

NadiadRajkot

SolapurGuhagarChiptun

Chennai

Nellore

Kolkata

Sangrur

Sonipat

AuraiyaGwalior

Chotila Bharuch

PalmanerChittoor

Kokinada

LudhianaBathinda

Bareilly

Vijaypur

Mahesana

Tutikorin

MangaloreBangalore

Vijaywada

Faridabad

Ratnagiri

Kayankulam

Coimbatore

Jagdishpuri

Shahjahanpur

Vishakhapattnam

Tiruchchirappalli

Herat

MultanQuetta

Khuzdar

Karachi

DelaramKandhar

South-ParsIranshaharBandar-e-Abbas

Yemen

Somalia

Legend Important PlacesExisting Gas Pipelines

Proposed Gas PipelinesExisting LNG terminalsProposed LNG terminalsExisting Gas Basin

Gas Pipelines under construction

Proposed Gas Basin¨


CO2 Emissions & Price Trajectories

0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

Inde

x 20

00 =

1

India Base Case

India Carbon Tax(550 ppmv CO2e)

550 ppmv CO2e

Global Base Case

Base Case assumes global 650 ppmv CO2e stabilization

CO2 Emissions: Global and India

Base Case

Conventional Society

Sustainable Society

0

20

40

60

80

100

120

2010 2020 2030 2040

Pric

e C

O2

(US

$/tC

O2)

2050

CO2 Price


Income Effect and Co-benefits

0

2

4

6

8

10

12

14

2000 2010 2020 2030 2040 2050

Mill

ion

tSO

2

Base Case

Sustainable Development + Low Carbon Tax

Conventional Path + High Carbon Price

Co-benefits: SO2 Emissions0

2000

4000

6000

8000

10000

100 200 400 800 1600 2400

GDP Per Capita 2000 = 100

CO

2 Em

issi

ons

(Mill

ion

TCO

2)

0

2

4

6

8

10

12

14

SO2

Emis

sion

s (M

illio

n TS

O2)

CO2 Emissions in BAU

LCS CO2 Emissions

SO2 Emissions in BAU

Emissions and Income


Kaya Analysis of LCS Scenarios

883%

-315%

197%

-715%

50%

678%

-316%

279%

-471%

171%

-800%

-600%

-400%

-200%

0%

200%

400%

600%

800%

1000%

D E/D

C/E

C'/

C

Tota

l

vs20

00's

2050 CT Case 2050 SS Case


Sustainable Low Carbon Development

LowCarbonSociety

Innovations

Co-benefits

Sustainability

Technological

Social/Institutional

Management

Modify Preferences

Avoid Lock-ins

Long-term Vision

Win/Win OptionsShared Costs/Risks

Aligning Markets

National Socio-economic

Objectivesand Targets

GlobalClimate Change

Objectivesand Targets

TargetsInterventionsDriversAim

Back-casting


Conclusions• Modeling

– Integrated Modeling System with AIM/CGE, MARKAL & SNAPSHOT models

• Scenarios– Climate Change at Margin versus Mainstream

– High Carbon Tax versus Sustainable Development Policies

• Analysis– Kaya Identity Factors

– Technology roadmap to LCS

– Incentives and Infrastructures for Behavioral Changes

– Sustainability policies for altering development pathway

– Climate-centric policies to contribute to cost-effective global stabilization pathway and adaptation


Thank you

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