Low Carbon Society (LCS): Scenario, Modeling and Analysis for India P.R. Shukla Indian Institute of Management, Ahmedabad, India Presentation for the 12th AIM International Workshop NIES, Tsukuba, Japan, February 19-21, 2007 Low Carbon Society: Scenario and Modeling for India
What is a “LCS” in the Developing Country context? LCS is a “ Development Pathway ” which: a. facilitates achievement of the national socio- economic objectives and targets, b. while contributing to the achievement of global objectives and targets for stabilization of greenhouse gas concentrations in the atmosphere, c. in a cost-effective and sustainable manner. Low Carbon Society: Scenario and Modeling for India
LCS: Conceptual Framework for Developing Countries “For developing countries, the ‘good news’ is that their environment and natural resources policies are often so bad that there are reforms which would be both good for the economy and good for the environment.” Joseph Stiglitz, in Foreword to “Economic Development and Environmental Sustainability: New Policy Options” Eds. Lopez and Toman, Oxford University press, 2006 Climate Goal National Development Targets Economic/social Indicator Economic/social Indicator Technology & Institutional Innovations; Co-benefits Climate Quality Climate Quality Low Carbon Society: Scenario and Modeling for India
Low Carbon Society Roadmap Technological National Innovations Social/Institutional Socio-economic (APEIS/SDB) Objectives Management and Targets Low Aligning Markets Carbon Co-benefits Win/Win Options Society Shared Costs/Risks Global Climate Change Objectives Long-term Vision and Targets Sustainability Avoid Lock-ins Modify Preferences Specifics of the roadmap would differ across countries. What is important is to communicate transparently the qualitative story and its quantification (i.e. modeling) Low Carbon Society: Scenario and Modeling for India
Low Carbon Society: Scenario Development for India Key areas for interventions: � Demographics � Lower Population Growth (e.g. investment in women’s education) � Higher investment in social infrastructures (e.g. health, education) � Conservation � Efficient technology, Substitutions, Recycling, Pricing, Dematerialization � City Planning � Architecture/ Building Codes; Land use policies; Public Transport � Infrastructure choices � R&D, technology transfer and selective technology push � Incentives for environmental industry � Influencing consumer preferences/ behavior Low Carbon Society: Scenario and Modeling for India
How sustainable development policies influence LCS? E.g. Education, Employment and Productivity nexus � Policies for public private partnership higher (public and private) investments in education Increases supply of education services � Incentives for education for women and socially and economically backward sections enhances demand for education � Women’s education reduces fertility rates & this together with family planning campaigns lead to lower population (than in reference & some others cases) � The increases in labor participation rates and enhanced skill profiles maintains labor supply and higher productivity in next few decades � Rural development policies (including education, employment, infrastructure push and reduced risk for investments) break through the rural/ urban dualism (Likewise for other drivers, the sustainability scenario story differ) Low Carbon Society: Scenario and Modeling for India
Scenario Drivers � Factors of Production • Labor Supply, Land-Use, Capital (Savings/ Investments) � Inputs: Resources supply/ Technologies • Energy � Intermediate goods & investments • Infrastructures • Energy (& Carbon) Intensive Sectors � Final Demand/ Behavior • Private Consumption (Income effects/ preferences) • Government expenditure � Governance • Rents • Taxes • Geopolitical Risks � Global/ External • Trade • Geopolitical Risks Demographic Transitions, Human Capital, Productivity, Growth and Sustainability Low Carbon Society: Scenario and Modeling for India
Demographic Transitions in India: Age/Gender Profile Population in 1970 Population Projection for 2010 2010 1970 100+ 95-99 100+ 90-95 95-99 85-89 90-95 80-84 85-89 75-79 80-84 70-74 75-79 70-74 65-69 65-69 60-64 Female 60-64 55-59 Age group Male Age group 55-59 50-54 50-54 45-49 Female Male 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 15-19 15-19 10-14 10-14 5-9 5-9 0-4 0-4 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 50 40 30 20 10 0 10 20 30 40 50 Population (million) Population (million) Population Projection for 2050 Population Projection for 2030 2030 2050 100+ 100+ 95-99 95-99 90-95 90-95 85-89 85-89 80-84 80-84 Female 75-79 75-79 Male 70-74 70-74 Female 65-69 65-69 Male 60-64 60-64 Age group 55-59 Age group 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 15-19 15-19 10-14 10-14 5-9 5-9 0-4 0-4 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 Population (million) Population (million) Low Carbon Society: Scenario and Modeling for India
Population and Working Age Population Population (Million) Annual Growth Rate of Population 1800 2.50% 1593 2.22% 2.15% 1600 1449 2.00% 1400 1183 1.67% 1200 1.50% 1000 849 800 1.02% 1.00% 555 600 358 0.47% 400 0.50% 200 0 0.00% 1950 1970 1990 2010 2030 2050 1950-70 1970-90 1990-2010 2010-30 2030-50 Annual Growth Rate of Labor Supply Labor Supply 1000 3.00% 2.74% 915 2.54% 795 2.50% 800 2.30% 595 2.00% 600 1.50% 1.46% 360 400 1.00% 210 0.70% 200 133 0.50% 0 0.00% 1950-70 1970-90 190-2010 2010-30 2030-50 1950 1970 1990 2010 2030 2050 Low Carbon Society: Scenario and Modeling for India
Growth Scenarios � Human Capital Government Expenditure in Education ⎯ Private Expenditure in Education ⎯ Urban / Rural & Gender-wise Education Expenditure ⎯ (Net) Migration by Labor Classes (intra & inter county) ⎯ R&D � Government/ Private Expenditure ⎯ Knowledge Flows ⎯ � Technology Backbones (infrastructures) ⎯ Savings Rate Learning, transfers, deployment ⎯ ?? 40 35.00 � Saving/ Investments 33.00 35 31.50 30.00 30 Social Security 24.60 ⎯ 26.00 25 22.80 Lifestyles, Behaviors 20.60 ⎯ 20 � Governance 15 10 Institutions ⎯ 5 Laws ⎯ 0 Policies 1980 1990 2000 2010 2020 2030 ⎯ Low Carbon Society: Scenario and Modeling for India
India ’ s Economic Growth: Future GDP Projections India’s GDP (Index: 2005 GDP = 1) 35 CAGR 2005-50 VH - 7.79%, H - 7.16%, M - 6.45%, L - 5.95% 30 25 Index: 2005 GDP = 1 Very High 20 High 15 India’s GDP Growth Rate (%) Medium 10 Very High CAGR 2005-32 10.0% VH - 9%, H - 8%, M - 7%, L - 6% Low High 5 8.0% Med GDP Growth Rates % 0 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 6.0% Low 4.0% 2.0% 0.0% 2000 2010 2020 2030 2040 2050 Low Carbon Society: Scenario and Modeling for India
Changing Structure of the Economy History 1950 1980 2005 Agriculture Services Services 22% 28% 37% Agriculture Agriculture Services 41% 59% 52% Industry Industry 13% 26% Industry 22% 22% Future 2050 2025 2100 Agri. Agri. Agri. 10% 16% 19% Industry Services Services Services 28% Industry 57% Industry 62% 55% 27% 26% Low Carbon Society: Scenario and Modeling for India
Changing Structure of Energy Use 80% Percentage of Primary Energy Consumption How to transit to Modern Biomass? 60% Food Security? Traditional Biomass 40% Domestic Resource: +ve Coal Direct Employment: +ve Energy Security: -ve Oil 20% Foreign Exchange: -ve En. Security: +Ve Fuel Supply? Geopolitical Risk: High Nuclear Waste disposal? Gas Foreign Exchange: -ve Safety? Hydro 0% Regional water disputes? 1952 1960 1970 1980 1990 2001 Indirect Benefits Low Carbon Society: Scenario and Modeling for India
Modeling & Analysis of Low Carbon Development Path Low Carbon Society: Scenario and Modeling for India
Low Carbon Society (LCS) Scenario Drivers of India’s LCS Scenario o Centigrade Global Target ) � Carbon Market Signal (e.g. from 2 � Energy Device Efficiency (Demand and Supply-side) � Dematerialization Building Materials and Design ⎯ Reduce (demand), Recycle & Reuse (3R) Materials ⎯ � Infrastructure investments Avoid lock-ins ⎯ Shift demand (e.g. transport modal split) ⎯ � R&D and Technology Transfer Leapfrog (to the efficiency frontier) ⎯ Innovations (to shift the efficiency frontier) ⎯ � Planning & Governance Facilitate change in Lifestyles & Behaviors ⎯ Institutions, Laws, Policies ⎯ Low Carbon Society: Scenario and Modeling for India
Carbon Emissions: Base vs. LCS Scenario for India India’s Cumulative Carbon Emission from 2000-2050 Billion Ton of CO 2 Reference Scenario: 127.2 Mitigation LCS Scenario: 64.3 Cumulative Mitigation in LCS: 62.9 % Cumulative Mitigation in LCS: 49.5% % Mitigation in LCS in 2050: 70.0% Low Carbon Society: Scenario and Modeling for India
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