Several articles — some of them misleading — have recently appeared in the media on a study by the World Bank, ‘Energy Intensive Sectors of the Indian Economy: Options for Low Carbon Development’. In an exclusive article for TOI, the report’s authors, Kwawu Mensan Gaba (Lead Energy Specialist), and Charles Joseph Cormier (Country Sector Coordinator, India) set the record straight and provide a definitive explanation of their findings:
During the run-up to Copenhagen, where the international community is striving to come up with a comprehensive agreement to combat climate change, India made a significant announcement that it intends to reduce 20% to 25% of its carbon intensity by 2020 against a 2005 baseline. India has a relatively low carbon footprint and a steadily declining carbon intensity over the last decade, and this voluntary target will further India’s contribution.
The World Bank’s forthcoming study, ‘Energy Intensive Sectors of the Indian Economy: Options for Low Carbon Development’ shows that a reduction in carbon intensity can be achieved while expanding energy services and reducing poverty.
Doing so will require stronger institutions, leadership in implementing energy supply and efficiency measures. Even though India has a low-carbon per capita footprint, it has had some success in reducing its carbon intensity, being one of the few nations whose carbon intensity declined in 10 years preceding 2006. Despite strong economic growth during second half of that decade, which could have been expected to have come with a higher carbon burden, India’s carbon intensity reduction was actually better in the latter half of the period.
According to our study, India’s carbon intensity from energy use is set to decline until at least 2031. The study examines the likely development trajectories of five sectors of Indian economy that accounted for three-quarters of India’s CO² emissions from energy use in 2007, namely power generation, energy-intensive industries (like iron and steel, cement, fertilizer, refining, pulp and paper, aluminium), road transportation, commercial buildings and residential housing. It presents three carbon emission scenarios outlining different growth paths that India could follow to 2031, the end of Fifteenth Five Year Plan.
According to our model, the carbon intensity of these five sectors is set to improve by 33% between 2005 and 2031 (19% by 2020) with existing plans, but could improve by as much as 45% by 2031 (and 30% by 2020) with an all-out effort on the technical, financial and institutional fronts to reduce carbon emissions. Needless to say, these green measures come with additional costs.
Preliminary estimates suggest large upfront costs could be recovered in the long term by lower operating cost. To take the instance of electricity supply to the national grid, the cost difference between least carbon-intensive scenario and existing plans has been estimated at 14%. However the cost scenario has to be fully studied by all stakeholders to integrate the transaction costs involved.
The rate of decline will be determined by the timing of investments to maximize domestic sources of renewable energy, enhance energy efficiency, reduce distortions in energy pricing, and introduce advanced coal technologies and cleaner transport options. The all-out effort, which represents lowest carbon pathway, encompasses measures such as introduction of 20GW of solar energy by 2020; import of 20GW of additional hydropower from neighbours in the region; acceleration by 10 years of plans to reduce transmission and distribution losses; as well as adoption of 340 greenhouse gas emission-reducing measures that have been introduced in the country in 80% of the industrial sector.
In addition to this, if efforts in non-energy sectors like agriculture and forestry (which the Bank study did not examine) are sustained, trends indicate that India could achieve its voluntary target while meeting its priority development objectives. Several improvements in technologies and practices in these sectors are known to help reduce carbon intensity, such as reduction of methane emissions from irrigated rice production and livestock, reduction of nitrous oxide from use of fertilizers, afforestation, as well as reforestation.
An important step towards lower-carbon development over longer term would be for India to achieve the targets it has set for itself in 11th and subsequent Plans. For India to rise above its past performance, it will need to ensure availability of adequate finance and technical knowhow; to strengthen the institutions delivering these targets; and to improve its skills-base.
