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Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
Cb   Low Carbon Sa Media Aug 09
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Cb Low Carbon Sa Media Aug 09

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Low carbon economy: Modelling and more

Low carbon economy: Modelling and more

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  • 1. <ul><li>Low carbon economy: </li></ul><ul><li>Modelling and more </li></ul><ul><li>CSE </li></ul><ul><li>At the South Asia Media Briefing Workshop </li></ul><ul><li>Delhi, August 27-28 </li></ul>
  • 2. Low carbon economy <ul><li>An economy model with a minimal output of GHG emissions, specifically carbon dioxide </li></ul><ul><li>Energy efficiency, low carbon energy supply & terrestrial carbon (forestry and agriculture) –reducing consumption or lifestyle changes not considered </li></ul><ul><li>Abatement cost: (cost of new tech – old tech)/(GHG emissions from old – new) -- US$ 100/ Euro 60 per tonne of CO 2 e avoided </li></ul>
  • 3. WGIII, AR4, IPCC, 2007 <ul><li>How much emission reductions can be done by 2030, by using technologies that will cost less than 100 US$/ CO 2 e abatement cost? </li></ul><ul><li>Potential: 16-30 billion tonne CO 2 e – 30-50% below business-as-usual in 2030 </li></ul><ul><li>Building, agriculture and forestry sector – cheapest + maximum potential </li></ul><ul><li>65% of the total potential in the developing countries </li></ul>
  • 4. McKinsey global GHG abatement cost curve <ul><li>Potential of technologies with abatement cost below Euro 60/ CO 2 e. </li></ul><ul><li>Potential : 38 billion tonnes in 2030 – 70% below BAU or 35% below 1990 levels </li></ul><ul><li>Worldwide cost : Euro 200-350 billion/ yr by 2030 – 1% of Global GDP </li></ul><ul><li>Capital cost: 500-800 billion/yr above BAU investment </li></ul><ul><li>70% of total abatement potential in the developing countries </li></ul>
  • 5.  
  • 6. McKinsey GHG abatement cost curve <ul><li>10 billion tonnes of CO 2 e by 2030 at negative cost + 20 billion tonnes between Euro 0-20 + 8 billion tonnes Euro 20-60 </li></ul><ul><li>14 billion tonnes in energy efficiency in buildings, transport and industrial sectors + 12 billion tonnes in low carbon energy (nuclear+renewable+CCS) + 12 billion tonnes forestry and agriculture </li></ul><ul><li>World in 2030: 330 million ha. new forests + 70 percent renewable electricity + 40% hybrid cars …………… </li></ul>
  • 7. <ul><li>Low carbon models for India </li></ul>
  • 8. McKinsey’s India GHG abatement cost curve <ul><li>India’s energy consumption would quadruple and GHG emissions would increase from about 1.5 billion tonnes CO 2 e in 2005 to 5-6.4 billion tonnes by 2030 </li></ul><ul><li>Potential to restrict total emissions to 3.0 billion tonnes CO 2 e in 2030 </li></ul><ul><li>But it will cost more than a trillion US$ -- 2-3% of GDP </li></ul>
  • 9.  
  • 10. McKinsey’s India GHG abatement cost curve <ul><li>Cost of solar technologies and nuclear lower in India – highly debatable. </li></ul><ul><li>Some proposals ludicrous – afforest pasture land, anti-methanation vaccines to 140 million heads of livestocks </li></ul>
  • 11. National Climate Change Policy Modelling Forum <ul><li>India Computable General Equilibrium (CGE) Model: GDP growth, level of energy use and GHG emissions </li></ul><ul><li>India MARKAL Model: “optimal” choice of energy-technology combination and least cost options to satisfy end-use energy demands. </li></ul><ul><li>India Activity Analysis Model: GDP, poverty and impact of GHG mitigation policy on poverty </li></ul><ul><li>India SWAT Hydrology Model: impact on water resources </li></ul><ul><li>India ASWP Cropping Model: impact on agriculture </li></ul>
  • 12. Preliminary results – CGE, MARKAL, AA Model <ul><li>Reference scenario (Business as usual) </li></ul><ul><li>India can achieve around 8 per cent GDP growth rate till 2030 which will virtually eliminate poverty </li></ul><ul><li>India’s commercial energy consumption increases by 5.1 times – coal consumption increases by 4 times and petroleum by 5 times. </li></ul><ul><li>CO 2 intensity of the economy (kg CO2e per US$ GDP) will decline by 3.7% per annum </li></ul><ul><li>India’s per capita CO 2 emissions will be around 2.7 tonnes in 2030, much below the current global per capita emissions of 4.5 tonnes </li></ul>
  • 13. Preliminary results – CGE, MARKAL, AA Model <ul><li>Scenario studies: </li></ul><ul><li>Imposition of revenue positive carbon tax on the production sectors (US$ 10, 20, 40, 80 per tonne CO 2 e) </li></ul><ul><li>Imposition of revenue neutral carbon tax on the production sectors (US$ 10, 20, 40, 80 per tonne CO 2 e) </li></ul><ul><li>Binding emission reduction target of 20% from the reference scenario ( deviation of 20% from business as usual ) </li></ul>
  • 14. Preliminary results – Impact of carbon tax
  • 15. Preliminary results – Impact of carbon tax
  • 16. Preliminary results – Impact of tax and binding targets <ul><li>Carbon tax will reduce India’s GDP growth rate, reduce per capita consumption level and hence welfare and will therefore increase poverty </li></ul><ul><li>Carbon tax will have no significant impact on energy consumption, CO 2 emissions or the commercial energy mix in the country </li></ul><ul><li>Binding emission reduction targets will reduce per capita consumption level and hence welfare much more than carbon tax and therefore will have larger impact on poverty levels </li></ul>
  • 17. Modelling and more <ul><li>Model outcomes highly depend on assumptions made, algorithm used and quality of data fed </li></ul><ul><li>The outcome of Indian models primarily hinges on two key assumptions they have made for the BAU scenario – Total factor productivity (TFG) growth rate of 3% per annum and Autonomous Energy Efficiency Index (AEEI) of 1.5% per annum. </li></ul><ul><li>We believe these are optimistic assumptions. lower these two and GDP decreases, emissions and per capita emissions increases </li></ul>

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