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The focus of this paper is primarily on the dimension of inclusive growth, where we show how the greening of India's economy can help

The focus of this paper is primarily on the dimension of inclusive growth, where we show how the greening of India's economy can help

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    Wipro    green for inclusive growth Wipro green for inclusive growth Document Transcript

    • GREENENABLING INDIAS AGENDA FOR INCLUSIVE GROWTH www.wipro.com
    • TABLE OF CONTENTS 1 Executive Summary Salient Characteristics of Job 1 Generation in the Clean Energy Space India: The Low Carbon Economy 5 Can Drive its Inclusive Growth Agenda 7 Bridging the Energy Divide Annexure A: Estimated Green 9 Job Potential for India 11 Annexure B: Bibliography & References
    • AbstractOur fundamental premise is that following a low carbonpath of development represents the best choice for Indiaon three counts – energy security, reduced GHG emissionsand inclusive growth.The focus of this paper is primarily on the dimension ofinclusive growth, where we show how the greening ofIndias economy can help: Generate millions of green jobs that are equitably distributed across urban and rural sectors, and Bridge the energy divide by providing cost effective and speedy electricity access to nearly half the Indian population that currently lacks basic benefits that electricity enables – clean water, better health and sanitation, improved education and gender equity. www.wipro.com
    • GREENENABLING INDIAS AGENDA FOR INCLUSIVE GROWTHEXECUTIVE SUMMARYAmidst the global ecological crisis around climate change, India stands at a moment geospatial modeling etc – are estimated toin time where she has the dual responsibility of: be a $ 25 billion domain by 2020 that will generate 750,000 additional jobs. With its Fulfilling a growth path that will lift millions out of poverty, & strong legacy of leadership in IT and ITES, Of acting responsibly and ethically towards the environment. India can reap significant leverage from this opportunity.A more central concern is that the risks of pursuing a business as usual trajectory faroutweigh the costs of investing in a low carbon economy, especially so for India Both the global and the Indian estimateswhere its poor will be the hardest hit by the adverse impacts of global warming. do not adequately consider all sectors of the green economy. Therefore, we thinkFollowing a low carbon path of development represents the best choice for India on that the above estimates are conservative.three counts – energy security, reduced GHG emissions and inclusive growth. Thefocus of this paper is primarily on the dimension of inclusive growth, where we show If we include all sectors of the greenhow the greening of Indias economy can help: economy, our assessment is that Indias green job potential will be between 8-10 Generate millions of green jobs that are equitably distributed across urban and million jobs by 2030. rural sectors, and Bridge the energy divide by providing cost effective and speedy electricity access to Opportunity for India to take leadership: A nearly half the Indian population that currently lack basic benefits which electricity key driver of Indias green growth will be enables – clean water, better health and sanitation, improved education and gender adequate investments in the education equity. i n f r as t r u c t u r e t o w ar d s bu i l d i n g capabilities on a large scale – in engineering, design, architecture,Breadth and depth of clean energy space: spread through the support ecosystems pollution mitigation, audit as well as in theThe breadth and depth of the emerging of education, audit , legal as well as range of vocational skills. These criticalclean energy landscape will give rise to a through the layers of the supply chain in capabilities can help India carve out awide range of job profiles. The five sectors like steel, silicon, building leadership position in areas like R&D orsectors of Green Power, Green materials etc. Studies indicate that the Manufacturing where we have not had aTransportation, Green Industry, ratio of direct to indirect jobs in clean presence till now.Sustainable Habitat and Sustainable energy is likely to be equally balanced.Agriculture & Forestry not only require Inclusive growth: The fact that green jobsdomain specific competencies in R&D, Green job potential for India: The current are distributed across the urban-ruralmanufacturing and maintenance but a green workforce globally is estimated at divide and span a wide range of educationvariety of horizontal skills in research, 2.3 million, which is expected to grow and skills aligns well with Indias inclusiveaudit, legal and consulting. Many of more than six fold to 15 million by 2030. growth agenda. An equally importantthese jobs are semi-skilled and do not Of this, India is expected to account for 4 consideration is that for the 51% ofrequire high levels of education and million jobs in just two sectors – Indias population that does not havetraining. For India, this can boost rural Renewable Energy and Green IT back- access to electricity, a decentralizedemployment significantly, thus office. Green back-office services that are model of delivering energy will be muchfacilitating inclusive growth. powered by IT – remote energy more cost effective and fast. Renewable management in business organizations, energy systems like Solar PV, Biomass fitDirect and indirect jobs: The ripple effect smart grid management of power the requirement very well here.of investments in clean energy will utilities, engineering design services,Note:1. This paper is a dipstick report that tries to bring out the power of the low carbon economy for India based on just two sectors, renewableenergy and Green IT. Several of the clean energy sectors have not been addressed e.g. green transportation, recycling, pollution control etc. Wesuggest the commissioning of a comprehensive report on the low carbon socio-economic trajectory that India should pursue. Such a report willhave to be a multi-stakeholder exercise involving the government, policy groups, academic institutions and corporate organizations. Wipro willbe happy to participate and lead such an effort.2. For further information, please contact P.S.Narayan at email: narayan.pan@wipro.com or mobile: +91-98451-61411.www.wipro.com | 2
    • GREENENABLING INDIAS AGENDA FOR INCLUSIVE GROWTHSALIENT CHARACTERISTICSOF JOB GENERATION INTHE CLEAN ENERGY SPACESeveral independent studies have emphasized the significant It is important for Indias policy makers and industry leaders tojob creation potential of clean technologies across multiple appreciate the breadth and depth of the clean energy space – assegments. What is interesting to note is that these job profiles illustrated in figure 1 – for the simple reason that such a vastspan a large spectrum of educational qualifications, skills and landscape provides multiple levers of opportunity for us toknowledge – from R&D scientists to maintenance technicians enhance our economy and to reduce our ecological impact.and from energy auditors to farmers who provide biomassfeedstock. As we explain later, the wide spectrum of cleanenergy jobs opens up opportunities for a big part of Indiaspopulation that has not had the advantage of good educationand training.www.wipro.com | 3
    • GREENENABLING INDIAS AGENDA FOR INCLUSIVE GROWTHFigure 1: The Clean Energy Landscape Sustainable Green Green Green Sustainable Agriculture & Power Transportation Industry Habitat Forestry Renewable Energy Electric vehicles Production Green buildings Agriculture Solar Pure EVs (cars and 2 infrastructure Passive Design e.g. High efficiency pumps Wind wheelers) Efficient electric drives building envelopes, Efficient irrigation Biomass Hybrids & plug-ins for motors lighting, cooling techniques Micro Hydel Lean processes More efficient HVACs Rice cropland Efficient lighting management Energy Efficiency Biofuels Biofuels Recycling Green buildings Efficient cooling e.g. Cellulosic ethanol Cellulosic ethanol Better Solid waste Afforestation Geothermal, EAT Crop fuels Crop fuels Management (SWM) Reforestation of Appliances e.g. LED Localized Biogas plants degraded land lighting, Energy Star Input materials for Forestry management products industry practices Power Infrastructure Cleaner automobiles Cleaner automobiles Composting for the Smart Grids Lighter materials Lighter materials green spaces Energy Storage Efficient power- trains Efficient power- trains systems Efficient engines Efficient engines Inverters Embedded controls Embedded controls Components e.g Wind blades Cleaner conventional Public transport Public transport Green energy Urban Mass-transit Urban Mass-transit transportationBetter Clean coal systems systems Evs Carbon capture & Improving the modal mix Improving the modal Efficient automobiles sequestration of goods transport mix of goods transport Mass rapid transit IGGC (between train, ship & (between train, ship & systems road) road) Horizontal Services Consulting, Legal, Environmental audits, IT services, Education, Skills training, R&D, Resource conservation, Pollution mitigationTable 1 below provides a glimpse of the kind of jobs and skills that the clean energy industry will demand over the next few years anddecades. Clean Energy Sector Job Categories in the Sector Illustrative Roles Renewable Energy R&D- Manufacturing-Services-Education Photonics Engineers |Solar Power Plant Technician | Drilling engineers ( Geothermal) | Wind turbine service technicians | Biomass collector, separator, sorter| Energy Efficiency R&D- Manufacturing-Services-Education Lighting &HVAC Engineers |Energy Auditors | Thermal engineers ( Geothermal, EAT) | Weatherization technicians | Green Building architects | Retrofit designers | Electrical Drafters | Power Infrastructure R&D- Manufacturing-Services-Education Metering Engineers| Energy Analytics Specialists| Transmission and Distribution specialists| Smart Grid Solution experts| Inverter service technicians| R&D specialists ( Energy Storage) | Green Transportation R&D- Manufacturing-Services-Education Materials scientists| R&D technologists ( Fuel Cells| Alternate Fuel System specialists ( Biodiesel, Biofuels..) | Internal Combustion Engine Designers| Urban Transportation Designers| Urban Transportation logistics experts| Green Industry R&D-Manufacturing-Services Waste heat recovery engineers| Electrical Motor Designers| Materials scientists|, Process experts ( Steel Manufacturing & Cement Manufacturing)| Sustainable habitat Manufacturing-Services Green Building Architects| Onsite Environment protection technicians| LEED building auditors| Recyclable Material Collectors| Sustainable agriculture Services Irrigation system installers| Precision agriculture technicians| Forest Management experts| Afforestation assistants| Water management & forestry experts for rice farming|www.wipro.com | 4
    • GREENENABLING INDIAS AGENDA FOR INCLUSIVE GROWTHSome compelling facts on cleanenergy jobs become apparent:1. Wide landscape: The clean energy landscape extends between is a wide range of roles and jobs for the picking – insignificantly beyond Renewable Energy and Energy Efficiency, Education, Design, Manufacturing, Installation, Maintenance, IT,the two sectors that are the familiar to many. ; The fact that this Grid Management etc. The fact that many of these jobs aremultiplies the job-generation potential manifold holds semi-skilled and do not require high levels of education makescompelling implications for policy makers e.g. In China, nearly clean energy jobs more easily accessible to the youth in rural andone million people are currently employed in the renewable semi-urban areas.energy industry but it is estimated that more than ten timesthat number are employed in the recycling industry of which More jobs per unit of investment: A recent study by the Political700,000 are employed in electronics recycling alone . Economy Research Institute (PERI) U.S.A indicates that the job generation potential of the Renewable Energy and Energy2. Inclusive employment: Viewed from the lens of skills and jobs, Efficiency domains can be 2-3 times that of conventionalthe clean energy space is strikingly different from conventional energy e.g. coal, oil (refer table 2). This can be attributed to theenergy (as well as high tech and other mainstream industries) nature of renewable energy that is less capital-intensive andon at least two counts – more decentralized.Distributed job generation: The vast spectrum of required skillsand education in the clean energy space ranges from specializedR&D competencies in emerging technologies to manual skills inassembly and dis-assembly of renewable energy equipment. Inwww.wipro.com | 5
    • Direct Job Creation Indirect Job Creation Energy Source per $1 million in per $1 million in Job Creation Total Job Creation output (# of jobs) output (# of jobs) % Relative to Oil Fossil Fuels Oil & Natural gas 0.8 2.9 3.7 Coals 1.9 3.0 4.9 32% Energy Efficiency Building Retrofits 0.8 4.9 11.9 222% Mass transit, freight, rail 11.0 4.9 15.9 330% Smart grid 4.3 4.6 8.9 140% Renewables Wind 4.6 4.9 9.5 157% Solar 5.4 4.4 9.8 165% Biomass 7.4 5.0 12.4 235%3. Positive feedback loops: The third compelling fact is to do with We believe that many of the estimates of green jobs by researchthe multiplier effect of clean energy jobs – while there will be a groups worldwide are stated on the conservative side, as they dosizable segment of direct clean energy jobs, the indirect segment not incorporate dynamic feedback effects into their models.. Foris expected to be equally sizable . Examples of direct jobs in the example an increase in the number of green buildings will beclean energy space are well defined: manufacture of solar accompanied by an increase in the production of LED lights andpanels, installation of wind turbines, design of green buildings, of more efficient cooling equipment. As the prices of the lattermaintenance of a biomass plant are just some examples. reduce due to scale effects, this will act as an additional inductive force for more green buildings to be designed andSupporting these direct green jobs will be two layers of indirect built. There will also be a simultaneous increase in the number ofjobs: LEED architects, auditors of green buildings, recyclers and so on.(I) the first layer of a support infrastructure e.g. jobs in educationand skills training, jobs in recycling of materials, jobs in pollution The implications of the above points above will be of primemitigation ( in compliance with regulatory statutes) and interest to policy makers who are involved in shaping India’sprofessional services in the legal, consulting and environmental inclusive growth agenda– not only will there be many more jobsaudit spaces, and available for all sections of the emerging Indian workforce but the range of job profiles will require a concerted response on(ii) Jobs created further away in the supply chain e.g. an increase creating the right education infrastructure . Universities andin the demand for solar PV will have a ripple effect upstream on colleges must create capability on a large scale in the differentthe extraction and pre-processing of silicon, gallium etc. disciplines of clean energy. In parallel, the vocational institutesSimilarly, an increase in biomass generation will result in a of the country must be able to train large numbers on the newsimultaneous increase in farming jobs around the growth and skills that will be required.harvesting of the bio feedstock.www.wipro.com | 6
    • INDIA: THE LOW CARBON ECONOMYCAN DRIVE ITS INCLUSIVEGROWTH AGENDAWe think that the next two decades present an unprecedented Research and Consulting. This highlights the crucial importanceopportunity for India to carve out a leadership position in the of the indirect sector.low carbon world of the future. Done right – through rightpolicies and inter-governmental collaboration – we can realize Under the right policy and market conditions, the total numberthree significant benefits: reduced emissions, higher of jobs in the renewable energy space is estimated to grow moreproductivity of the economy, and inclusive growth. Providing than five times to around 15 million by 2030. The top countriesenergy access to rural India and a distributed model of are expected to be China (4 million), India (3.25 million) and USAgenerating jobs that is not urban centric will be the real drivers (2.8 million).of the inclusive growth story in India. As we explain in thefollowing sections, a low carbon model is the optimal way to An interesting insight from a study conducted in 2008 by themeet the both goals. American Solar Energy Society (ASES) is that the number of jobs generated by Energy Efficiency – Building Retrofits, Energy starGreen jobs worldwide appliances, Efficient Industrial motors etc – is expected to be 5Several studies of job generation in clean energy have been done to 6 times more than that from renewable energy. However,in the recent past (the bibliography in Annexure II provides a list most of the estimates do not include jobs in Energy Efficiency.of sources that have been referred to). Most of these studieshowever have tended to focus on the primary domains of A recent report by Clean Edge ranks the top five sectors for greenrenewable energy and energy efficiency. We must bear this jobs as: Solar, Biofuels and Biomass, Conservation andcaveat in mind that the sectors of green transportation, green Efficiency, Smart Grid, and Wind Power. In our opinion, thisindustry, pollution mitigation, recycling and sustainable ranking is likely to change over the next two decades; while Solarforestry / farming are yet to receive similar attention and is likely to hold on to its # 1 position, the other positions aretherefore many of the estimates of green jobs are likely to be likely to get shuffled quite significantly.under-stated. A few key facts that emerge out of these studies:The total number of employees people employed in therenewable energy space globally was 2.3 million in 2008. Thetop three countries are China (1 million), USA (0.46 million) andGermany (0.28 million). India’s renewable energy industrycurrently employs 200,000 (0.2 million) people. All thesenumbers include both, direct and indirect jobs.More than half of the jobs are in services – Engineering, Legal,www.wipro.com | 7
    • Green jobs in India can generate an additional $ 12 BN in energy productivityIn assessing the job generation potential for India over the next through a 30 % reduction in transmission losses bytwo decades, we have focused on the sectors that Wipro is most implementing smart grids in its own power infrastructure.familiar with – Renewable Energy and Green IT. Our estimatesare based on a careful analysis of the methodologies commonly Based on the above-mentioned reports, we arrive at ain-use. These have been applied to the projected Indian conservative estimate USD $ 25 Bn as the value of India’s IT-scenarios of the next two decades. For wind energy and biomass, enabled green services. The primary areas to focus on would bewe have considered the known potentials for India. Whereas for in: remote Monitoring of clients’ energy consumption,solar energy, we have considered the targets that the National geospatial energy modeling, engineering design services, smartSolar Mission has recently published i.e. 20 GW by 2020 and 100 grid applications, green supply chain applications and greenGW by 2030. data center services. We estimate the job generation potential for this segment to be another 750,000 (0.75 million).Renewable Energy: We estimate that 3.25 million direct andindirect jobs can be generated by 2030 for the renewable energy Other clean sectors: In this paper, we have not attempted ansectors of Solar, Wind and Biomass alone ( See Annexure I for assessment of job generation potential for other clean energydetails). These jobs span the entire value chain – Research, sectors – Green Transportation, Green Industry, SustainableManufacturing and Services ; Given that a significant Habitat, Sustainable Agriculture and Forestry and Cleanerproportion of the services jobs will be around relatively low conventional energy. Based on an analysis of available reportsskilled jobs e.g. biomass collecting and sorting, equipment for other countries, we suggest a ballpark estimate of anassembly, technical maintenance, we think that this opens up a additional 4-6 million jobs by 2030 for these sectors. Just thegreat opportunity for job generation in the rural and semi-urban labor-intensive recycling sector alone – where China alreadyareas. Job generation in the renewable energy sector can be employs 10 million people – is likely to become big in India aspurposefully aligned with the programs on poverty alleviation well. We submit that the total green job potential in India rangesand vocational skills enhancement e.g. NREGA. from 8-10 million by 2030. Making this happen will require innovative and strong policy interventions by the governmentGreen back-office: Over the last three decades, India has built a and policy makers and an equally robust response from industry,formidable position for itself in the global IT and ITES sectors. education and the finance sector.Building on this strength and with little incremental capitalinvestment, India can become the green back-office of the Carving a leadership position in green: We talked about theworld. A recent McKinsey report (Strengthening India’s green back-office and India’s natural strengths in this sector.offshoring industry, August 2009, McKinsey Quarterly) suggests But we think that India’s green vision must extend far beyond itsthat propelled by the new areas of Energy Efficiency, Clinical natural capabilities in IT and in services – under the rightResearch and Mobile Platforms, the value of the Indian IT combination of a progressive policy framework, an internationalservices exports could rise to $ 100 Bn to $ 130 Bn by 2020. regime that drives technology transfer to developing countriesRemote Energy Management Services is a new off-shoring and an education infrastructure that aids research andopportunity that Indian companies must immediately start to innovation, India has the opportunity to carve for itself acapitalize on. leadership position in a high value area of green i.e. in research, education, manufacturing, design etc. We have not attemptedAnother McKinsey report (How IT can cut carbon emissions) to estimate the additional job creation potential for such asuggests that the innovative use of IT in just five sectors – scenario in this paper.Buildings, Power, Transport, Manufacturing and Telecommuting– offers a ready platform for the Indian IT industry to shape itselfinto the ‘green’ back-office of the world. The Smart Gridinfrastructure is a powerful illustration of how India cancapitalize on this emerging IT opportunity ; Through the use ofintelligent sensors, meters and automated sub-stations, anestimated $ 85 Bn of savings on a global level is possible. Of this,the IT applications are of the order of $ 10 Bn. In addition, Indiawww.wipro.com | 8
    • BRIDGING THE ENERGY DIVIDEWith 51 percent of the Indian population having no access to progress significantly on both these dimensionselectricity, the energy divide in our country is deep. Access to Telectricity is a fundamental pre-requisite for sustainable he eight missions of the NAPCC can provide the right platformdevelopment – studies clearly show a remarkable improvement for fueling India’s low carbon growth . In addition, a post-in health and sanitation, education levels and gender equity Copenhagen international regime that facilitates adequatewith access to electricity. technology and funds transfer from Annex I countries to developing nations like India can boost the green economyThe cost of providing access to centralized electricity grids, visibly.especially to remote rural areas is prohibitive. According to arecent study , the total levelized cost of providing electricity to a As the next step, we suggest the commissioning of avillage that is merely 25 Kms away from the nearest 33 KV comprehensive study of the low carbon options available tosubstation is likely to range from Rs 3.68 per unit to Rs 23.50 per India on multiple dimensions – economic growth, jobunit, depending on the connected load. Since the load factors in generation, ecological mitigation, energy access and energyvillages are normally low, the cost per unit usually exceeds Rs 10 security. Wipro will be happy to participate in and lead such aper unit. This cost only increases with the distance of the village study.from the substation. For thousands of villages in the remoterural hinterland of India, the cost per unit of most forms ofrenewable energy is not only comparable but is likely to beconsiderably less than the cost of grid-connected electricity.We think therefore that decentralized micro-grids based onrenewable energy must form the backbone of our policy andexecution to bridge the energy divide – localized installations ofsolar PV or biomass energy are speedier and more cost effectiveways to power India’s villages than from central power stationsthat run on coal or hydro.In summary,Inclusive growth has two vital dimensions – distributed jobgeneration and cost-effective access to energy . By adopting alow carbon trajectory of socio-economic growth ,India canwww.wipro.com | 9
    • Target installed Target installed Estimated # of jobs Estimated # of job capacity in MW (2020) capacity in MW (2030) generated (2020) generated (2030) Solar 20,000 100,000 400,000 2,000,000 Wind 15,000 35,000 150,000 350,000 Biomass 10,000 10,000 750,000 900,000 Total of Above 45,000 145,000 1,300,000 3,250,000 Green Back Office 350,000 750,000 Other Sectors 1.5 to 3 million 4 to 6 million Total 3 to 4.5 million 7 to 10 millionNotes:I. For all the three cases above, the estimate of generated jobs is for the entire supply chain – equipment manufacture, consulting,assembly & installation, systems integration, maintenance.The estimate has been done based on our knowledge of the renewable energy domain and publicly available benchmark information.However, a much more rigorous study and analysis is required to verify and state these figures with an adequate sense of accuracy.The methodologies commonly in-use adopt a ‘Jobs per MW’ model, where the number of jobs across the supply chain are estimated forevery MW of installed capacity. We have adopted a similar approach, but have qualified it further by accounting for the higher laborintensity of work in India.ii. The number of jobs per unit is relatively high for ‘Biomass’ because the supply chain of agricultural feedstock and its distribution islabor heavy.iii. The total potential for Wind Energy and Biomass for India is estimated at 45 GW and 20 GW by the IEA ( International EnergyAssociation) ; The assumption here is that close to full potential will be reached by 2030 under the right conditions of regulatory andfiscal enablementwww.wipro.com | 10
    • ANNEXURE B: BIBLIOGRAPHY & REFERENCESi.Green Jobs: Towards Decent Work in a Sustainable, Low-Carbon WorldUNEP (United Nations Environment Program) Report, September 2008ii.The Economic Benefits of Investing in Clean Energy: How the Economic Stimulus Program and New Legislationcan Boost US Economic Growth and EmploymentRobert Pollin, James Heintz & Heidi Garrett-PeltierDept of Economics and Political Economy Research Institute (PERI), Univ of Massachusetts, Amherst, June 2009iii.The Clean Tech Job Trends Report 2009Ron Pernick, Clint Wilder, Dexter Gauntlett & Trecor WinnieCleanEdge Report, Oct 2009iv.The Clean Energy Economy: Repowering Jobs, Businesses and Investments Across AmericaPew Charitable Trusts, USA, June 2009v.Strengthening India’s Offshoring IndustryNoshir KakaMcKinsey Quarterly August 2009vi.How IT can Cut Carbon EmissionsGiulio Boccaletti, Markus Löffler, and Jeremy M. OppenheimMcKinsey Quarterly, October 2008www.wipro.com | 11