Climate change assessment of China and India for COP 21 - Paris 2015

GROWING FOOTPRINTS,
RISING CONCERNS
NOVEMBER 2015
Local Research. Unique Insights.
STUDY OF CLIMATE CHANGE TARGETS
FOR INDIA AND CHINA

Solaron Sustainability Services2
FOREWORD
Dragons and Elephants for sustainable future….
If we are to mitigate the worst effects of climate change, a number of challenges must be met.
Between 30 November and December 11 2015, global leaders will meet in Paris at the COP21 summit with
the aim of creating a legally binding and universal agreement to limit the worst impacts of climate change.
Earlier this year, the world agreed on a post-2015 sustainable development agenda with clear targets and
indicators through the Sustainable Development Goals (SDGs) and UN member states are now expected to
shape their policies and leadership accordingly.
Regardless of how successful we are in reducing greenhouse gases in the future, climate change is already
happening, we need to adapt to it and the financial sector has an important role to play. It needs to ensure
that capital flows to sectors and businesses that are looking to find solutions for climate change and to
contribute toward sustainability. And it needs to support them so they have the courage and creativity of
companies to find new solutions. Because businesses set the bar for how far politicians can stretch.
Whether through equity investments, bonds or direct lending or financing, we have to assess both the risks
and opportunities of investing in these sectors. And we also have a responsibility to allow our customers to
invest their money in more sustainable companies, which are coincidently the businesses that are most likely
to survive and thrive in a new low-carbon economic era.
Climate change solutions and approaches can be broadly categorized into two - a reactive ad-hoc approach
which emerge from external pressures and the second a proactive approach that stems from addressing
national needs. India and China provide an example of each approach. Both have substantial resource bases,
sizeable population and in more recent times, significant global clout and ambitions. Both are part of the
BRICS group of countries and both desire greater global power.
Both countries are also the victims of the Himalayan glacial retraction and the associated ramifications for
domestic water supply, flooding, agriculture production and livelihoods. Unfortunately there has been an
increase in the frequency of climate change related natural disaster with a total of 1.8bn people affected in
India since 1971, while in China, a total of 3.03bn people have been affected since 1980. With every degree
increase in mean global temperature the numbers of people at risk increases and the risk scenarios become
bleaker.
Both countries also face the indirect risks from slowing economic growth, which threatens to pull down more
of the population into the poverty trap.
For us developments in China and India for the mitigation of climate change issues and the economic issues
associated with it are key determinants for future global state of world.
Sasja Beslik
Head of Responsible Investments
Nordea Asset Management

3Study of Climate Change Targets for India and China
FOREWORD
How successful we are at limiting the effects of climate change is largely dependent on the responses of
China and India. Until recent times both have prioritized economic growth over responsible, sustainable
growth. Fortunately though, this appears to be changing at least in China.
Enlightened self-awareness from the Chinese dragon
For a long time China pursued economic growth, often at the expense of other concerns. The con-
sequences of earlier carbon intensive growth however, continue to impact upon the environment and
damage quality of life of Chinese citizens. Driven by this in the past two decades China has begun to
prioritize environmental protection over economic growth. It is looking to shut down the most polluting
facilities and to invest in the development of climate friendly industries and technologies. It has made
significant investments in the renewable energy for example and as of September 2015 had 378GW of
installed renewables – the most in the world. This new strategic direction eventually aims to combine
economic growth with the protection of the natural environment. If China is able to achieve this, it will
be a significant achievement in modern times.
Of course there are challenges. China needs to build and improve international cooperation for its bud-
ding emissions trading system (ETS). It also needs to foster greater transparency and knowledge sharing
to ensure the ETS is a success both at home but also for other countries looking to develop their own
emission trading systems. Additionally, a greater level of transparency and disclosure will also support
the reform of its existing capital markets and help to build a new climate market. We explain these
challenges in further detail in this report.
While the Indian elephant slumbers
India has had a slow start to the climate change journey. Over the last decade, international pressure and
pragmatism has led to a spate of policy measures. However, these measures have lacked implementation
support and guidance, therefore their impact is likely to be limited. Climate change is a much lesser
priority than economic growth and most Indian leaders do not appear to recognize the risks from climate
change and the associated adverse climate events. However as this report shows that many negative
impacts from climate change are already a reality in India, and have affected 1.8 billion people since
1971, moreover future impacts are likely to be significantly worse.
This report argues that India needs new vision and to take bold measures in order to protect its economic
interests and avoid climatic catastrophes. The IT services revolution has shown that India can adapt to
change and respond to challenges with great success. The lessons learned and experience gained during
that transition could be similarly applied to help mitigate and find solutions for climate change risks. India
should look to follow China’s example and seek to become a global knowledge and solutions provider for
climate change mitigation and adaptation strategies. The business case for doing so is strong, with the
global market for clean technology forecast to reach USD 2.7 trillion over the next five years.
If India, leverages its success in the IT services sector it could easily leapfrog into a knowledge and
innovation economy. Unfortunately much of India’s future economic growth appears to hinge on car-
bon-intensive coal power, and the new ‘Make in India’ manufacturing program. This is likely to cause
challenges if India is to meet its emissions reduction and climate change targets.
We wish both countries the best in this journey and encourage Institutional Investors to play their role in
supporting the transition of these two economies into low carbon economies and profit from doing so.
Vipul Arora
Co-founder
Solaron Sustainability Services

Analysts:
Radhika Mehrotra
radhikam@solaron.in
Aiswarya Sankar
aiswarya@solaron.in
Shreyes Shyamsunder
shreyes@solaron.in
Editors:
Vipul Arora
vipul@solaron.in
Sauravh Dubey
sauravh@solaron.in
Sonali Arora
sonali@solaron.in
Copyright ©2015 Solaron Sustainability Services Pvt. Ltd.
This report is published by Solaron Sustainability Services.
All rights reserved. Solaron Sustainability Services does not undertake to advise you of changes in the information
contained in this report, unless explicitly mentioned in the contract. These materials have been prepared solely
for informational purposes based upon information generally available to the public as well as our on the ground
research from sources believed to be reliable. This report has been prepared on a Best effort basis. While we make
a significant effort to get accurate information, it is certainly possible to miss certain elements of a Company’s true
sustainability information, due to limitations in talking to all possible stakeholders exhaustively. Besides, this infor-
mation changes with changing market context. Therefore, Solaron Sustainability Services makes no representation
with respect to the accuracy or completeness of these materials, the content of which may change without notice
based on market and other conditions. Solaron Sustainability Services disclaims any and all liability relating to these
materials and makes no express or implied representations or warranties concerning the accuracy or completeness
of the report. Solaron Sustainability Services accepts no liability for financial prejudice allegedly resulting from
inaccuracy of assessments or data or from the misinterpretation of their scope.
No portion of this publication may be reproduced in any form at or by any means including electronically or mechan-
ically, by photocopying, recording or by any information storage or retrieval system, or by any other form or manner
whatsoever, without the prior written consent of Solaron Sustainability Services.
Our sincere thanks to Sasja Beslik of Nordea Asset
Management for sponsoring and supporting Solaron in this
research endeavor.
Solaron bears sole responsibility for the content of this
report. The findings and views expressed in the report do not
necessarily reflect the views of the sponsor.
We would like to express our sincere gratitude to
Barbara Finamore of Natural Resources Defense Council,
Dr. Shin Wei Ng of E3G, Hanna Fekete of NewClimate
Institute for Climate Policy and Global Sustainability,
Manish Kumar Shrivastava of The Energy and
Resources Institute (TERI), Vinuta Gopal of Greenpeace,
Kunal Sharma of Shakti Sustainable Foundation and
Mohammed Razvi of Abletech Electro Engineers for
sharing their views and opinions on various topics within the
framework of our research.
We would also like to thank Dan Chivu for designing this report.
ACKNOWLEDGEMENTS

Solaron Europe
Tweede Weteringdwarsstraat 12 H,
1017SW, NH, Netherlands
Phone: +31 6 8390 3583
sales@solaron.in
www.solaronworld.com
Solaron U.S.A.
2600 El Camino Real, Suite 415, Palo
Alto, CA 94306, United States
Phone number: +1 818 462 4362
sales@solaron.in
Solaron India
No. 766, 8th Main, 3rd Block,
Koramangala, Bangalore 560034,
India. Phone: +91 80 4120 3449
sales@solaron.in
ABOUT SOLARON
Solaron is an independent ESG Research and Ratings agency that specializes in assessing
Emerging Market Risk and Opportunity exposure of Global Institutional Investors.
We analyze the ESG performance of large listed companies that have supply chain and consumer
market exposure in emerging markets. We also analyze local emerging market companies that
are of interest to Institutional Investors. We serve investors with ESG data, analysis, ratings
and actionable insights for specific companies and portfolio wide exposure.
Solaron is a pioneer in EM ESG research and has built a track record of highlighting hidden risks
across portfolios. To date USD 100billion of ESG risks have been identified by us, ahead of time,
helping create unique and significant value for our institutional clients. We are proud to be the
first ESG rating and research agency to bring primary research to the ESG industry. Solaron’s
proprietary Stakeholder Input Process brings key insights from local and stakeholder research
to source and validate unique risks that are usually hidden in secondary data.
Since 2007, we have supported the ESG industry with 350,000+ hours of primary and second-
ary research. We employ the world’s largest on-the-ground team of 60 analysts tracking local
risks across the globe with a special focus on emerging markets.
“For any Investor interested in Emerging markets - Solaron is a pioneer and thought leader in
ESG analysis. They understand the importance and financial relevance of ESG issues, as they
understand the local context. Insights provided by Solaron enable us to make better investment
decisions and for us, that means everything.”
- Sasja Beslik
Location of Solaron analysts

INDEX
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
INDIA - CLIMATE CHANGE SCENARIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
IMPACT OF CLIMATE CHANGE ON INDIA . . . . . . . . . . . . . . . . . . . . . . . . . . 18
HIMALAYAN GLACIAL MELTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
INDIA’S STAND ON CLIMATE CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
HISTORICAL POSITION IN ADDRESSING CLIMATE CHANGE (1990s TO 2007) . . . . . 23
INDIA’S STAND (2007 – 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
DEVELOPMENTS FROM 2012 TILL DATE . . . . . . . . . . . . . . . . . . . . . . . . . . 25
CLIMATE POLICY SCENARIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ENERGY SCENARIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
CURRENT INDUSTRY EMISSIONS AND ENERGY SCENARIO . . . . . . . . . . . . . 38
SWOT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ROLE OF INSTITUTIONAL INVESTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
INVESTING IN RENEWABLE ENERGY PROJECTS . . . . . . . . . . . . . . . . . . . . . . 49
INVESTING IN COMPANIES UNDER THE MAKE IN INDIA SCHEME . . . . . . . . . . . . 51
SUPPORTING INNOVATIONS IN CLEAN TECHNOLOGIES . . . . . . . . . . . . . . . . . 52
CHINA - SUSTAINABLE WAY FORWARD? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
HISTORICAL DEVELOPMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
DEVELOPMENTS FROM 1990s TO 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 56
CLIMATE CHANGE STRATEGIES FROM 2008-2012 . . . . . . . . . . . . . . . . . . . . 58
CURRENT DIRECTION & EXPECTED RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . 60
KEY DRIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SWOT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ROLE OF INSTITUTIONAL INVESTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
GREENING THE SUPPLY CHAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
FINANCING CLEAN TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
FINANCIAL MARKET REFORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

FIGURES INDEX
Figure 1 - Per Capita Emissions for Top 10 Emitters . . . . . . . . . . . . . . . . . . . . . . . . . 16
Figure 2 - Absolute emissions for Top 10 emitters . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Figure 3 - Emissions Intensity of Top 10 Emitters . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 4 - Cumulative GHG Emissions 1990-2011 (% of World Total) . . . . . . . . . . . . . . . . 17
Figure 5 - Extreme Events Timeline for India (1999-2015) . . . . . . . . . . . . . . . . . . . . . . 18
Figure 6 - Disaster occurrences vs. Economic damage . . . . . . . . . . . . . . . . . . . . . . . . 19
Figure 7 - Disaster occurrences vs. Total affected . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Figure 8 - Key drivers for India’s historical approach to climate change . . . . . . . . . . . . . . . 23
Figure 9 - Expenditure on Adaptation Oriented Schemes . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 10 - India’s key climate change mitigation and adaptation strategies . . . . . . . . . . . . . 27
Figure 11 - Solar power installed capacity (GW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Figure 12 - Climate policy puzzle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Figure 13 - All India Installed power capacity / Renewable power capacity (GW) . . . . . . . . . . . 33
Figure 14 - Current installed capacity for electricity generation . . . . . . . . . . . . . . . . . . . . 33
Figure 15 - Grid interactive renewable power capacity (GW) . . . . . . . . . . . . . . . . . . . . . . 35
Figure 16 - Renewable energy installed capacity (GW) . . . . . . . . . . . . . . . . . . . . . . . . . 36
Figure 17 - Timeline of renewable energy initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Figure 18 - Sectorwise consumption of electricity (2013-14) . . . . . . . . . . . . . . . . . . . . . . 38
Figure 19 - Industry electricity consumption trends (GWh) . . . . . . . . . . . . . . . . . . . . . . . 39
Figure 20 - SWOT analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Figure 21 - Solar Power Potential of Indian States . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure 22 - Renewable energy scenario (GW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Figure 23 - Evolution of climate institutions in India . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Figure 24 - Global renewable energy investments 2014 (USD Bn.) . . . . . . . . . . . . . . . . . . 46
Figure 25 - India’s clean energy investment trends . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Figure 26 - Trends in Gross Budgetary Support (USD Mn.) . . . . . . . . . . . . . . . . . . . . . . . 47
Figure 27 - Trends in funds raised from NCEF (USD Mn.) . . . . . . . . . . . . . . . . . . . . . . . . 47
Figure 28 - Institutional investors participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Figure 29 - Emerging Market Distribution of Clean Energy . . . . . . . . . . . . . . . . . . . . . . 53
Figure 30 - Per Capita Emissions for Top 10 Emitters . . . . . . . . . . . . . . . . . . . . . . . . . 54
Figure 31 - Absolute emissions for Top 10 emitters . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Figure 32 - Emissions Intensity of Top 10 Emitters . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Figure 33 - Cumulative GHG Emissions 1990-2011 (% of World Total) . . . . . . . . . . . . . . . . 55
Figure 34 - Historical Trends in CO2
emissions 1990-2013 . . . . . . . . . . . . . . . . . . . . . . . 57
Figure 35 - GDP per capita and Energy Intensity (China) . . . . . . . . . . . . . . . . . . . . . . . . 57
Figure 36 - Strategic industries shift . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Figure 37 - Extreme Events Timeline for China (1999-2015) . . . . . . . . . . . . . . . . . . . . . . 60
Figure 38 - China Disaster occurrences vs. Total affected . . . . . . . . . . . . . . . . . . . . . . . 61

Figure 39 - China Disaster Occurrences vs. Economic Damage . . . . . . . . . . . . . . . . . . . . 61
Figure 40 - China’s climate strategy focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Figure 41 - Key drivers of China’s Climate Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Figure 42 - SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Figure 43 - Renewable Energy Investment: China and Global (USD Bn.) . . . . . . . . . . . . . . . 73
Figure 44 - Installed Capacity Trends (GW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Figure 45 - Renewable Energy in China, by type: 2014 . . . . . . . . . . . . . . . . . . . . . . . . . 74
Figure 46 - New Investments Renewable Energy 2004-14 (USD Bn.) . . . . . . . . . . . . . . . . . 74
Figure 47 - Clean technology - highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Figure 48 - Climate Friendly Investment Expected Over 2015-2020 . . . . . . . . . . . . . . . . . 76
Figure 49 - Current top down approach to achieve targets . . . . . . . . . . . . . . . . . . . . . . 78
Figure 50 - Trading Threshold: Total Allowances (2014) . . . . . . . . . . . . . . . . . . . . . . . . 79
Figure 51 - Emissions Traded (millions tons): 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
TABLES INDEX
Table 1 - India-China Report Card . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 2 - Cumulative damages due to extreme climate events (India) . . . . . . . . . . . . . . . . 18
Table 3 - Consequences of Climate Change (India) . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 4 - Climate target vs. progress table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 5 - India’s key INDC targets ( 2021-2030) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 6 - Climate policies - transportation sector . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table 7 - Climate policies - Energy sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table 8 - Climate policies - other sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table 9 - Fiscal instruments for low carbon growth . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 10 - Clean Coal Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Table 11 - Proposed areas of investment for clean technologies . . . . . . . . . . . . . . . . . . . 52
Table 12 - Key policy measures and status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Table 13- Consequences of Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Table 14 - Summary of Key Policies guiding Climate Change 2012 onwards . . . . . . . . . . . . . 67
Table 15 - ETS Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Table 16 - Investment Potential Between 2014 - 2035 (USD Bn.) . . . . . . . . . . . . . . . . . . . 84
BOXES INDEX
Box 1 - Case Study: Low Cost Innovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Box 2 - Case Study: Mitticool Refrigerator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Box 3 - Case Study: India’s IT revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Box 4 - Case Study: Aadhaar Project, A classic example of success of the PPP model . . . . . . . . 49
Box 5 - Environmental Accountabilty Increases: EPL Implementation . . . . . . . . . . . . . . . . . 68
Box 6 - Status of key targets as on June 2015 (INDC) . . . . . . . . . . . . . . . . . . . . . . . . . . 68

EXECUTIVE
SUMMARY
INDIA AND CHINA: CLIMATE
CHANGE REPORT CARD
With the upcoming COP21 climate change ne-
gotiations upon us, a number of countries and
companies are focused on climate change and its
realities. There is also interest in some of the key
players and their proposed solutions for mitigating
the impacts of climate change. Solutions can be
broadly categorized into two - a reactive ad-hoc
approach emerging from global pressure and a
proactive approach that stems from addressing
national needs. Motivation is key to evaluating the
success or failure of the climate change strategies
the wider economic, environmental, infrastructural
and social frameworks must also be considered.
India and China are examples of the two different
approaches to climate change mitigation. Both
have substantial resource bases, sizeable popula-
tion and in more recent times, significant global
clout and ambitions. Both are part of the BRICS
group of countries and both desire greater global
power.
As countries and leaders convene to establish a new
framework that directly addresses past and future
damages to the ecology and indirectly molds the
economic processes for coming decades, India and
China are set to come under the spotlight again.
INDIA CHINA
Population:
1.25 Bn. [17.5% of World Popl]
Population:
1.35 Bn. [20% of World Popl]
GDP:
1.877 Trillion USD (2013)
6.83% of World GDP (PPP)
GDP:
10.36 Trillion USD (2013)
16.32% of World GDP (PPP)
FDI: USD 36 Bn. (2014 est.) FDI: USD 127.56 Bn. (2014 est.)
GDP Growth Rate:
6.6% (Q3 2015)
GDP Growth Rate:
6.9% (Q3 2015)
CO2
Emissions (per capita):
1.7 tonnes
CO2
Emissions (per capita):
7.4 tonnes

INDIA CHINA
Current
Status
India’s climate change strategy is conservative. India’s
carbon mitigation strategies focus on
• Green power generation to support its target of
achieving 40% energy demand from non-fossil fuel
based sources.
• Increasing efficiencies of energy intensive industries and
refurbishing existing grid.
• Building climate resilient cities through smart cities and
urban renewal missions.
• Establish an additional carbon sink of 2.5 to 3bn tons of
CO2
e through additional forest and tree cover by 2030.
China has launched an aggressive climate
change strategy that rests on three main
pillars:
• Energy Efficiency via Technology Upgrade
• Enhance Renewable Energy Capacity.
• Reform Economic/Industrial Base.
Risk Profile
Significant risks across all sectors:
• Production losses could reach USD 208bn in 2050
and US366bn by 2100 for rice, wheat and maize alone.
• Coastal erosion and land loss risks will directly
affect more than 1m people by 2050.
• Additional power generation costs could
require incremental capital investment of between
USD33bn and 123bn between 2050 and 2100
respectively to meet the costs of cooling India.
• Water shortages - the gross per capita water
availability in India could decline to as low as
~1140m3
/yr by 2050.
Significant risks across sectors.
• Production losses a temperature rise of just
1 degree Celsius could reduce wheat yields by
an estimated 3-5%.
• Annual drought related economic losses
estimated in excess of USD 1.1bn.
• Water scarcity already affects around 40%
of the Chinese population.
• Air pollution is currently thought to be
responsible for 1.2-2m fatalities every year.
Key Targets
• 33-35% reduction in emissions intensity by 2030
against a 2005 baseline.
• 40% cumulative electric power capacity from
non-fossil fuel sources installed by 2030.
• 2.5-3bn additional tons of CO2
carbon sink added by
2030, through additional tree and forest cover.
• 63GW installed nuclear power capacity by 2032, if
fuel supply can be ensured.
• 2030 peak carbon dioxide emissions.
• 20% non-fossil fuel share of energy mix by
2030.
• 60-65% lower carbon dioxide emissions per
unit of GDP against 2005 baseline.
• 4.5bn cubic meters increase on forest stock
volume against 2005 baseline.
Track record /
successes
30.3% current non fossil fuel based energy.
Target to increase share to 40% by 2030.
17% reduction in carbon intensity against by 2012.
Target to reduce by 25% by 2020 against 2005 levels.
24% forests & tree cover in 2013 – an increase from
23.4% in 2005. Long-term goal of 33% of geographi-
cal area under forest cover.
11.2% renewable energy in 2014.
Target to increase share to 11.4% by 2015.
13.4% reduction in energy intensity by 2014.
Target to reduce energy intensity against a
2005 baseline by 16% by 2015.
15.5% reduction in carbon intensity by 2014.
Target to reduce carbon intensity by 17%
against a 2010 baseline by 2015.
Current policy on:
Energy
National Mission for Enhanced Energy Efficiency
(NMEEE), National Smart Grid missions are the main
policies for carbon mitigation.
Current focus is on the improvement of the supply
network efficiency to reduce losses and outages. As well
as increasing the share of non-fossil fuel based installed
capacity and intensifying domestic coal production to
meet energy demands.
Reforms to energy sector with market mech-
anisms to enhance competitiveness and limit
monopolies set to be introduced.
Government to reduce its presence and call for
greater private involvement in order to drive
scale and efficiency.
Table 1- India-China Report Card

INDIA CHINA
Renewable
The Electricity Act, the National electricity, and Integrated
energypolicieshaveinitiatedrenewablepowergeneration.
Current policies include the National solar mission,
Renewable purchase obligations (RPO’s), and a variety
of incentives and schemes to increase clean power
generation.
Policy measures have been introduced to address
problems of curtailment and State administered
pricing. Investments in renewable energy sector
in China lead global efforts.
There is also parallel investment into infrastructure
such as smart grids and green dispatch systems.
Fossil Fuel
Clean coal policies have been introduced for both new
thermal power plants and the 144 existing thermal
stations. The Coal Mines Special Provision Bill, March
2015 aims to increase private participation, commercial
mining and foreign investment.
Target reduction in the share of fossil fuel based
energy from 67.5% to 65% between 2013 and
2017.
Industry
Policies focus on increasing the energy efficiency of
existing industries and the application of efficient
technologies for new developments.
Perform, Achieve, Trade (PAT) Scheme currently in force
for eight energy intensive industries and expected to be
applied to other sectors as well.
New Zero Effect Zero Defect (ZED) policy under the
‘Make in India’ scheme to be applied about one million
medium and small enterprises.
Industrial transformation with change in stra-
tegic industries from traditional iron & steel,
telecom, mining to new industries such as bio-
technology, IT and energy efficiency.
Progress towards a circular economy.
Production and consumption caps announced for
coal and steel segments. Simultaneous elimina-
tion of surplus backward capacity and expansion
in the coverage of energy efficiency schemes.
Key Drivers
• Energy access and energy security.
• Constraints in natural resources.
• International pressure & global aspirations.
• Climate change impacts.
• Economic competitiveness.
• Global ambitions.
• Energy security.
• Climate change impacts.
Strengths
• Substantial renewable energy potential.
• Recognition of climate impacts.
• Shifting domestic climate policies.
• Basic policy framework in place.
• Stable governance structure.
• Strong renewable energy sector.
• Interrelated industry support.
Weaknesses
• Fragmented climate governance.
• Absence of centralized tracking.
• Policy uncertainties and implementation challenges.
• Priority is still on economic growth.
• Fragmented implementation structure.
• Financing Limitations.
• Over-capacity in infrastructure.
Opportunities
Renewable energy prospects.
• Creation of green jobs.
• Instigate a low carbon growth trajectory.
• Clean technology infrastructure.
• Leader in comprehensive market mechanisms.
•Guideglobaldiscourseonclimatechange/sustainability.
• Global leader.
Threats
• Insufficient climate finance.
• Immature technology capabilities.
• Growth of population and absolute emissions.
Unreliability of data.
• Transparency & disclosure issues.
• Dependency on state subsidies.
• Nascent entrepreneurial segment.
• Provincial/City pilots to guide national policies.
Suggested
Focus Areas
• Policy reforms to aide transition to aide low carbon
economy. Such as:
o Phase-out fossil fuel subsidies.
o Introduce energy efficiency standards.
o Strengthen local and urban governments.
• Apply a ‘co-benefits’ based approach to the develop-
ment of climate policies
• Strengthen government to government collaboration.
• Invest in local solutions to solve local problems.
• Introduce Carbon pricing or an emission-trading scheme
• Leverage the success of the software industry to drive
sustainability solutions.
• Engage in greater collaboration with regard to
climate change solutions.
• Improve disclosure and transparency.
• Widen the scope of third party verifications and
audits to enhance learning and minimize risks.
• Enhance private players/entrepreneurs presence
by developing capital markets and other financing
options.

India has taken a conservative approach towards
climate risk with limited commitments towards or
investment in finding solutions. Economic growth
is seen the harbinger for political power, social
gains and breaking the enduring circle of poverty.
However this means coming challenges such as
climate change are not seen as high priority issues
by the national leadership. This has led to policy
measures that are ad-hoc and lack disaggregated
implementation mechanisms.
China in contrast, has taken a more aggressive
approach towards climate change. The country
is undergoing an economic transformation to
ensure both economic growth and the quality of
life for citizens is sustainable. The link between
climate change and the economy is well defined
and China appears to have moved beyond the
basic needs stage to cater to core sustainability
concerns of ecology, health and self-sufficiency.
Both countries are already affected by the
impacts of climate change on the Himalayan
glaciers. Which has had cumulative implications
for domestic water supply, agriculture production
and livelihoods and increased risks of flooding.
The frequency of climate change related natural
disasters has increased. Since 1971 an estimated
1.8bn people in India and 3.03bn people in China
since 1980, have been affected by climate change
related natural disasters. With every degree
increase in mean temperature the risk scenarios
become more significant.
As demand for food, power, employment and
income increases in both countries risks have
become more localized and more intense. Ad-
ditionally, both countries face the indirect risks
from slowing economic growth, which threatens
to push more of the population into poverty.
The role of INDCs
Through the most recent climate related policy
announcements - the Intended Nationally De-
termined Contributions (INDC) countries have
started debate and discussion around issues of
emission peaking, global warming, energy sce-
narios, clean technology, climatological disasters
and quality of life. For India and China, the IN-
DCs also provide a useful starting point for the
evaluation their strategies for mitigating climate
change impacts.
India’s INDC was announced in October 2015 and
the commitments it contains are watered down
by a relative slowdown in emissions which is
contingent on technology and funding transfers,
while parallel economic policy is focused on the
expansion of the share of coal and manufacturing
which are key generators of emissions. Experts
have pointed out that the targets contained in
India’s INDC are achievable, however the related
industry and technology conditions are counter-
productive. If past trends are any indication, then
India will have to make significant increase its ef-
forts in order to meet its climate change targets
for 2020 and 2030.
In contrast, China is expected to meet its INDC
targets with relative ease. Experts have called for
more stringent emission targets. As China already
has low-carbon energy policies, a planned tran-
sition to low carbon/service oriented industries
driving growth, and established market mecha-
nisms to guide climate change related platforms
like the ETS; the Chinese government has created
a strong enabling environment for adaptation and
mitigation. China’s low carbon growth transition
has thus far been fairly successful. It has met its
historic targets for improving energy efficiency,
increasing the share of renewable energy and in
reducing the growth rate of carbon emissions.
Traditionally China’s approach focused on moving
towards self sufficiency in energy supply through
comprehensive programs such as Top 1,000 and
correcting surplus industrial capacity. Surplus
capacity in traditional industries such as power,
coal and steel is now being phased out, which
will impact emissions significantly. Given its track
record, China is making rapid strides towards
meeting its stated targets, and may exceed them.
The role of the energy sector
The energy sector and linked industries are the
two main components of the energy supply and
demand chain. The drive towards low carbon
growth can only be achieved if conditions for

industry align with the overall climate change
policy. Renewable energy policies will be suc-
cessful only if they achieve the scale needed
to meet growing industrial demand and the
simultaneous technology efforts to govern the
switch from coal based to non-fossil fuel based
energy. India’s energy policy seeks to achieve
energy self-sufficiency through a push towards
both coal-based and renewable energies and the
Indian government is trying to create an enabling
environment to attracts private players. China is
following a similar path, albeit, with emphasis on
a gradual withdrawal of the government to allow
private initiatives to enhance efficiency through
pricing reforms. How these policies work on the
ground will set the stage for the energy sector
and overall climate change commitments.
The renewable energy segment is the key com-
ponent of both India and China’s climate change
strategies. However the countries are at different
ends of the spectrum with China taking the lead.
For example, State involvement in the Chinese
renewable energy sector has increased the
country’s installed renewable energy capacity to
368GW - the highest in the world. China’s focus
has now shifted to leveraging the strength in ca-
pacity through the introduction of market led effi-
ciencies. Simultaneously, policy is geared towards
addressing issues of curtailment via investments
and collaboration into infrastructure, including
the recently announced green dispatch system.
China has increased investment in the nuclear
energy segment as well, with capacity expansion
of 150GW planned by 2030.
The role of coal
Coal-based power is on a downslide in China while
India has increased efforts to expand the scope
of coal-based power considerably. In March 2015,
India has announced measures to improve private
presence in the coal sector, while simultaneously
introducing clean coal policy mandates for new
thermal power plants and for the 144 existing
thermal stations. The push to coal-based power
is expected to boost domestic self-sufficiency.
However, doubling coal production to 1bn tons
by 2020, will have detrimental impact on carbon
emissions and is likely to offset whatever gains
are made through the renewable energy segment.
While coal-based power in China still accounts for
a majority share of energy production, this is grad-
ually shrinking and the country has mandated the
closure of inefficient and small capacity projects
in 2013. The production of coal has come under
increased environmental scrutiny and overall
demand for coal has reduced. With an expected
2.5% reduction in coal-based energy production
between 2013 and 2017, China appears to be on
track for meeting its emission reduction target
over both the mid-term and long-term.
The role of industry
The contrast in approach between India and Chi-
na continues into industry. It is perhaps this con-
trast that is most representative of the expected
success each country has in addressing climate
change concerns. The recently elected Indian
Prime Minister, Mr. Narendra Modi is pushing the
‘Make in India’ campaign, to renew its position as
a manufacturing base. Historically, India has had
ad-hoc processes for environmental monitoring
and execution. It is expected this will continue if
the manufacturing base does expand. Policies
such as the PAT scheme and the ZED policy target
the large and SME (Small and Medium Enterpris-
es) segment. However without comprehensive
implementation norms and a less than ideal
historical record, India’s industrial policy leaves
much to be desired from the climate change lens.
Under the 12th
Five Year Plan China’s industrial
landscape is at the beginning of transformation
where heavy industries will make way for value
added services. Tangible results are already be-
ing seen with the decline in the coal and steel
industries. Environmental monitoring is now
mandatory and violators can be held to account
through fines or the courts.
Although the China’s climate change discussions
began in the 1990s, implementation lacked vigor.
One of the causal factors was the externaliza-
tion of the impacts and accountability. Because
anthropogenic emissions can be traced back
to the economic activities of the developed

nations, many developing nations have taken a
stand against shared responsibility. However,
the increasing frequency and intensity of global
warming driven risks and the related impact
on livelihoods, mortality and natural resources,
climate change is now viewed as a local reality.
Consequently, it warrants localized treatment.
Local responses have become one of key the driv-
ers pushing the climate change agenda in both
India and China.
India’s climate change agenda is a reaction to
international pressures and global conformity. Its
INDC targets along with recent policy movements
demonstrate this with a watered down scope and
execution plans that are limited in detail. The
gravity of climate change impacts is yet to be
internalized in India and current drivers are an
attempt to replicate past successes. The adop-
tion of two counter productive energy policies
- renewable and coal based - is indicative of this.
India is also looking to increase its manufacturing
sector, which is also a carbon intensive industry.
Without strong environmental regulations, the
proposed push towards manufacturing could have
significant ramifications.
China’s Climate Change commitments are based
on a strong nationalist agenda. In the 1990s,
self-sufficiency in energy was the primary moti-
vating factor. China is now keen to exploit its re-
newable energy and clean technology advantage
to create a new economic model, both domesti-
cally and globally. It is also attempting to under-
take an economic transformation and move from
a manufacturing economy to a service economy.
Such a move will fulfill the dual aims of slowing
a fall in income levels and when combined with
energy infrastructure, create a circular economy
that feeds off domestic consumption potential.
Energy security issues continue to drive China as it
scales up renewable energy to counter rising coal
imports and the related impacts on air pollution
and the health of its population. Combined, these
measures can push China into a leadership role on
the global platform for low carbon growth. This is
perhaps one of the subtlest yet most significant
results of China’s climate change strategy.
Given the global economic scenario and domestic
policy framework, there are key takeaways from
India and China’s climate change agenda. These
takeaways serve as crucial entry points for insti-
tutional investors.
The connection between climate change and
institutional investors is straightforward, and
can both either aggravate or mitigate climate
change impacts through direct investments and
active engagement with companies on potential
environmental risks of operations.
Climate change and its associated impacts pres-
ent significant material risks and opportunities
for investors. The global investor statement on
climate change released in November 2010 and
supported by 259 investors that collectively
represent assets of over USD 15 trillion is proof
that institutional investors are concerned about
the risks related to climate change and potential
impacts on regional and global economies and
individual assets. Concurrently, investors are also
interested in the economic opportunities that
arise from transitioning to a low-carbon econo-
my. Given the broad scope of climate change and
its relevance across industries and geographies,
changing rhetoric offers new investment opportu-
nities across the board. With a caveat of national
weaknesses and inherent threats, investors are
free to explore the stronger segments thereby
contributing to a self-fulfilling legacy.
Renewable energy has emerged as a strength
for both India and China. Policy measures include
various subsidies and support that has translated
into growing capacity and generation, more so
in China, than India, where private interest has
fluctuated. After a lull between 2012 and 2014,
investments in renewable energy in India have
rebounded and are expected to reach USD 10m
by the end of 2015. The renewable energy seg-
ment in China is expected to offer greater scope
as the government phases out its financial and
operational involvement through energy reforms.
Investments have soared and China was the top
investor in the segment in 2014 investing USD
89.5bn.

With renewable energy potential in India pegged
at 900 GW and current capacity standing at
37.4GW, the scope for renewable energy invest-
ment in India is huge. China has exploited the
potential to a significant level and is now looking
at the next step in the low carbon path with clean
technology, investment potential in the sector
is estimated to be USD 320bn by 2020 with
environmental protection as the most attractive
segment. Given the focus on widening the scope
of environmental monitoring and correction, this
segment is expected to witness considerable
expansion.
A significant weakness that damages potential
in India is the fragmentation of the climate
governance structure, which has created gaps in
accountability and weakened implementation. In
China, government and public sector bodies have
been driving economic policy and finance. This
had led to dependency on the state and a lack
of access to capital for smaller, entrepreneurial
units that China is now keen to promote. Related
current processes could derail the climate change
agenda as well.
The Indian strategy suffers from financing con-
cerns. Dependent on the State, renewable energy
has suffered from declining government invest-
ment. While in China the threat of pilot schemes
failing at the national level is significant. The
Emission Trading Scheme (ETS) in particular is
the flagship mechanism and has captured global
attention. However, the pilot schemes should be
approached with caution as their future is un-
certain and drawing conclusions for the national
system is not recommended. Coupled with the
constraints on data availability and verification,
the entire market based mechanism is based on
questionable data and assumptions.
Taking off from the potential weaknesses and
threats that can weaken India and China’s
climate, proactive measures to address these
are recommended. India needs to view climate
change as a real and Indian problem rather than a
by-product of developed countries’ growth. India
also needs to develop solutions relevant to the
local context capitalizing on local capacity and
innovation. The current strategy calls for aid from
developed countries on technology and financing
as a precondition for ensuring emission reduction
targets are met. Instead of adopting ready-made
solutions, for economic growth or climate change,
there is a case for deeper collaboration and lever-
aging local capabilities.
Conversely, for China the favourable conditions
indicate State controls could be loosened and
the market allowed to operate more freely. An
immediate benefit of this would be an improved
information flow, an issue which is critical in Chi-
na where disclosure and transparency concerns
are endemic. A number of low carbon projects
have emerged in recent years from collaborative
efforts. However the absence of any third party
verification or audits, means issues of data re-
liability arise. If China wants to take on a global
climate change leadership role, this gap must be
addressed.

INDIA - CLIMATE CHANGE
SCENARIO
India is one of the fastest growing economies and it is becoming increas-
ingly important in shaping the course of the global economy. Therefore,
how India manages subsequent phases of growth is extremely important
as it has a dual responsibility to both cater to the needs of its own people
and to contribute to global growth. Addressing these demands for growth
while addressing climate change risks is a delicate balance. The Climate
Change Vulnerability Index (CCVI) evaluates the sensitivity of populations,
the physical exposure of countries and governmental capacity to adapt to
climate change over the next 30 years. India ranked 13th 1
among the 32
countries identified as ‘extreme risk countries’, according to the CCVI 2015,
which is daunting proposition given its importance to the global economy.
However, India has a major advantage over other countries, as it is still
setting up basic infrastructure on multiple fronts like energy access, energy
Figure 2 - Absolute emissions for Top 10 emitters
Source: Graphs from World Resources Institute4
Figure 1 - Per Capita Emissions for Top 10 Emitters

grids, cities, buildings, and utilities. This means that leapfrogging to a low
carbon path is somewhat easier.
It is up to India to lead the way towards a low carbon future and to ensure
sustainable and responsible development. India needs to recognize its po-
tential in this regard and leverage this window of opportunity to address the
urgency of climate change.
Since the industrial revolution, India’s impact on the world in terms of green
house gas (GHG) emissions has been minimal. India’s per capita emissions
are still insignificant, and are only one-third of the global average2
, but
since the 1990’s, absolute emissions have risen substantially and India is
currently the world’s third largest emitter of GHG emissions (fourth when EU
is considered as a single entity). Taking into account India’s past emissions,
GDP forecasts and the emissions intensity pledge, absolute emissions are
forecasted to touch 6.5bn tons CO2
equivalent (GtCO2
e) in 20303
, up from
3.5 GtCO2
e today indicating a rise of almost 85% in emissions.
Figure 4 -Cumulative GHG Emissions 1990-2011 (% of World Total)
Figure 3 - Emissions Intensity of Top 10 Emitters

IMPACT OF CLIMATE CHANGE ON INDIA
According to the Climate Action Tracker report released in October 2015,
the Intended Nationally Determined Contributions (INDC’s) submitted by
various countries ahead of COP21 for 2025 and 2030 are projected to lead
to a warming of around 2.7°C by 2100, if fully implemented, compared to the
3.6°C by 2100 warming that is projected to result from current policies. As a
result, India stands at risk of a higher frequency of extreme weather events
like floods, landslides & heat waves, unprecedented monsoon variations and
subsequent impacts.
In India, despite climate change action gaining momentum, climate impacts
are almost always spoken of as events that are yet to happen. Facts demon-
strate the contrary. Climate risks have already started playing out, with
direct impacts in the form of a number of extreme weather events in the
recent past. Examination of a 15-year timeline of extreme weather events
indicates that life-threating climate events are happening more often than
before. Each year, records are set for the hottest summers and the coldest
winters.
Total Damage
(1975 - 2015)
Total Affected
(1971 - 2015)
Total Occurrences
(1971 - 2015)
USD 75.3 Bn. 1.8 Bn. 466
Table 2- Cumulative damages due to extreme climate events (India)
Figure 5 - Extreme Events Timeline for India (1999-2015)*
Source: Data from International Disaster Database
Dec-99
Jan-01
Feb-02
Mar-03
Apr-04
May-05
Jul-06
Aug-07
Sep-08
Oct-09
Nov-10
Dec-11
Jan-13
Mar-14
Apr-15
Flood Drought Storm Cyclone Cold_Wave
* This is only an indicative list of extreme events and not an exhaustive one

Direct impacts such as extreme weather patterns are proof that climate
events are a very local phenomenon, and they disrupt communities and
livelihoods of the specific areas that are affected. This in turn has the
potential to create irreparable and irreversible damage to the social and
environmental fabric of a country. India can no longer afford to view climate
change as a developed world problem.
While it is true that historical emissions released by the developed world
are primarily responsible for the global warming phenomenon, the conse-
quences are happening across the world. Indicating that ‘climate events
are extremely local and have a devastating impact on the affected
country.’ This is further evidenced by the surge in the number of environ-
mental refugees from the small island states in the Pacific. These states
were the first to be affected despite the being least responsible for global
warming. India’s efforts for climate change mitigation and adaptation are
conservative and do not take into account the local impact of climate events
and the devastating effects it would leave behind.
Figure 6 - Disaster occurrences vs. Economic damage
Data from Centre for Research on the Epidemiology of Disasters, International Disaster Database
25
20
15
10
5
0
TotalDamage(Bn.s)
Figure 7 - Disaster occurrences vs. Total affected
Data from Centre for Research on the Epidemiology of Disasters, International Disaster Database
400
350
300
250
200
150
100
50
0
TotalAffected(Millions)
TotalAffected

Category Environmental Impacts Social Impacts Economic Impacts
Coastal
• Threatens nearly 3985 species
of flora and fauna sustained by
4,87,100 hectares of mangroves.
• Sea level rise along the Indian
coast is forecast to be between
30 and 80 cm by 2100.
• A vulnerability atlas of India
indicates that 8.5% of total
land is vulnerable to cyclones,
5% vulnerable to floods and 1m
houses vulnerable to other allied
damage annually.
• Directly affects 40 million
people living on India’s
6000 km coastal belt due to
coastal erosion
• Affects 20% of India’s
population, 250 million
people dependent on coastal
habitats for food and em-
ployment.
• More than 2660 towns and
3827 villages situated in the
coastal regions are at risk
as fishing & allied activities
constitute their primary
occupation.
• Estimated economic cost due
to vulnerability of coastal re-
gions ranges from USD 34.4bn
(INR 2287bn) in the case of
Mumbai to USD 54 million (INR
3.6bn) for Baleshwar district of
Odisha.
• Coastal states in India together
represent more than 60% of
Foreign Direct Investments
inflow and 68% of total
factories translating to USD
157 Bn. (60% of FDI 2014-15)
at risk.
• For every one-meter rise in
sea levels, the World Bank
estimates a loss of 2% in
national GDP due to shortage
of fresh water, damage to
agriculture and fisheries,
disruption of tourism, reduced
energy security, and other
consequences, translating to
USD 37 Bn. at risk annually.
Agriculture
• Loss in production per 1 degree
temperature increase
Rice production: 4% - 20%
Maize production: 32% - 50%
wheat production: 5% - 20%
• Between 2010-2039, major crop
yields could reduce by 4.5 to 9%.
• Yields of irrigated rice will be af-
fected by about 10% in majority
of coastal districts by 2030, rabi
and wheat production would
decrease by 0.5 to 1m tons.
• With 54% of India’s popula-
tion dependent on agriculture
for their livelihoods, climate
impacts could directly affect
more than 600m farmers.
• Nearly 200,000 farmers
have committed suicide
since 2007. Current national
average for farmer suicides,
1 every 30 minutes could
increase substantially.
• Production losses in rice, wheat
and maize alone could reach
USD 208bn by 2050 and USD
366bn by 2100.
• If 2°C temperature rise occurs
by the 2050s, India may need
to import more than twice the
amount of food-grain with
associated estimated costs of
USD 2bn annually.
Precipitation
• Projections indicate a 3% to
7% overall increase in all-India
summer monsoon rainfall by the
2030’s against a 1970 baseline
in the Himalayas. While Kharif
rainfall is expected to increase
1.8- 5.10% by 2020.
• Mean temperature rise of 2°C
globally would decrease crop
production by 12%.
• At 4°C warming, an extremely
wet monsoon that is currently
regarded as a 1 in 100 year level
event is projected to occur every
10 years by 2100.
• Climate impacts would affect
at least 1bn people, as 75%
of the population is directly
or indirectly dependent on
agriculture sectors.
• Change in rainfall patterns
will lead to a decline in
food availability with a
linked increase in childhood
stunting of 35% by 2050.
• The total share of Agriculture
(& allied sectors) in terms of
percentage of GDP was 17%
during 2014-15. As 60% of
Indian’s agriculture is reliant
on rain the cost to GDP is an
estimate USD 173bn.
• A 2°C rise in mean temperature
and a 7% increase in mean
precipitation will reduce India’s
net revenues o by 12.3% or
about USD 209bn.
Table 3 - Consequences of Climate Change (India)

Category Environmental Impacts Social Impacts Economic Impacts
Extreme
Weather
Events
• Changes in the lowest daily
minimum and highest maximum
temperature suggests a warming
between 1 and 4°C by 2030.
• Heat waves and associated heat
stress can reduce a milk yield by
10-30% during first lactation
and 5-20% in second and third
lactation periods in cattle.
• At 4°C warming, the West coast
and Southern India would become
high-temperature climatic regions.
• 700m people in rural India
dependent on climate-sensitive
sectors for their livelihood
and are at maximum risk from
climate change.
at least 1bn people, as 75% of
the Indian population is either
directly or indirectly dependent
on agricultural sectors.
• The cumulative cost due to high
impact extreme weather events
(466 events) between 1975 and
2015 was USD 75.3bn. As the
frequency of extreme weather
events increase, this number
will also increase.
Health
• Sea level rise along the Indian
coast forecasted to be be-
tween 30 and 80 cm by 2100.
This will result in saltwater
intrusion and the degradation
of groundwater quality.
• Transmission windows for
Malaria predicted to increase.
In Jammu, Kashmir and
Madhya Pradesh Malaria
transmission windows would
increase from 4 to 6 months to
7 to 9 months While in Uttar
Pradesh this would increase
from 7 to 9 months to 10 to 12
months.
• Premature deaths due to air
pollution. Between 2025 and
2050, the number of prema-
ture deaths due to air pollution
is estimated to be: 54,800 in
Kolkata, 52,000 in Delhi and
33,100 in Mumbai.
• Deaths due to increased rates
of Malaria are forecast to
increase to 5000 in 2050 and
to 19,500 in 2100.
• Asthma deaths are expected to
increase by almost 20% in the
next 10 years if urgent actions
to curb climate change and
prepare for its consequences
are not taken.
• If disease related deaths are
valued at life time earnings,
then loss of economic output
will be USS2.5bn and
USD21bn by 2050 and 2100
respectively.
• Value of lives lost due to
climate change induced effects
by 2050 - Malaria; USD 1.3bn,
Dengue fever; USD 30m,
Diarrhea; USD 1.1bn.
Forests
• 68-77% of India’s forest areas
are likely to experience shift in
forest types.
• Projected that 39% of forest
grids will undergo vegetation
type change.
• 5150 species of plants, 16,214
species of insects, 44 mammals,
42 birds, 164 reptiles and 435
fish species that are endemic to
Indian forests affected.
• 950m people who depend on
forests for their needs and
around 450m cattle affected.
• 200,000 villages located in or
near forests jeopardized.
• USD 4bn, the value of goods
and services provided by the
forest sector at risk from
climate-change impacts.
• Annual forestry losses fore-
casted at USD 1.8bn in OECD
countries.
Water
Resources
• Decline in gross per capita
water availability to as low as
~1140m3/yr. by 2050.
• 1.8 - 3.7 Celsius rise will result
in shrinking of glaciers by 45%
- 68% by 2100.
• Nine basins containing more
than 80% of the total water
used in India will face water
scarcity by 2050.
• Water deficit will roughly be
300bn cubic meters and 400bn
cubic meters by the 2030s and
2050s respectively.
at least 1bn people, as 75%
of the population is directly or
indirectly dependent on the
agriculture sector.
• Severe threat to long-term
water security may affect
1.5bn people on the plateau
and downstream.
• By 2050, agricultural demand
is set to increase by 56%,
drinking water demand will
double, industry demand will
increase five-fold. Sixteen
times more water would be
required for energy generation.
Inadequate water supply can
affect industry and agriculture,
and place USD 510bn (Industry
sector -30% of GDP 2014-15)
and USD 289bn (Agriculture -
17% of GDP 2014-15) at risk.
• Annual losses due to water
shortage forecasted at USD
34.8bn for the OECD.

HIMALAYAN GLACIAL MELTING
A SHARED CONCERN FOR INDIA
AND CHINA
The Himalayan mountain ranges and their many
glaciers form the lifeline for the entire surrounding
region, which includes Afghanistan (Hindu Kush),
Pakistan (Karakoram), Nepal, Bhutan, India, China
and Tibet. They hold the largest ice mass outside
of the poles, and are a large reserve of frozen
freshwater and thereby the basis of life in the
region. The Himalayas are often referred to as the
world’s third pole after the North and South poles
due their perennial ice and snow cover. However
they are under severe threat from global warming
and pollution. The UN World Glacier Monitoring
Service has recorded significant losses in freshwa-
ter reserve in the Himalayan glaciers over the past
60 years. The Gangotri glacier for example has
receded 1.14km in since 1935, and it is estimated
that by 2030, a further 30% will have disappeared,
and by the end of the century up to 70%.
IMPLICATIONS
• Makes up the water lifeline for one-sixth
of the world’s population.
• Adverse effects for biodiversity, people
and livelihoods.
• Possible long-term implications for re-
gional food security.
• Could encourage poor land management
practices and decrease potential soil
quality and nutrients.
• Rising temperatures could affect crops
and promote pests.
• Deaths due to extreme weather events.
• Cascading effects for other ecosystems.
THREATS
• Unprecedented glacial melting.
• Changing freshwater flows.
• Disruptions in glacial melt timing.
• Changing river course and capacity.
• Floods, droughts.
Retreating Himalayan Glacier
Source: www.pixabay.com

INDIA’S STAND
ON CLIMATE CHANGE
HISTORICAL POSITION IN ADDRESSING
CLIMATE CHANGE (1990s TO 2007)
Between the signing of the UN Framework Convention on Climate Change
(UNFCCC) in 1992 and 2007, India’s stand on climate change was one of
denial for climate responsibility. It was a staunch supporter of the Common
but Differentiated Responsibilities (CBDR) principle of equity (Article 3.1,
UNFCCC)5
that pushes developed countries to take the lead for combating
climate change. In early climate negotiations, India alongside other develop-
ing countries insisted that developed countries should bear primary respon-
sibility for the accumulated human-activity related emissions reduction, and
for the transfer of funds and technology to help developing countries cope
with climate impacts and adopt mitigation measures. India played a crucial
role in the Kyoto Protocol in December 1997, with a strong stand on numbers
for per-capita energy and emissions data.
KEY TAKEAWAYS:
• Until 2007 India focused on warding off intensifying pressure to accept
emission reduction targets and chose an unwavering stand, to ask for
funding and technology transfer from developed countries.
• The Intergovernmental Panel on Climate Change’s (IPCC) fourth assess-
ment report released in 2007 indicated increasing risks of impending
climate catastrophe if drastic action was not taken. Yet, India remained
unresponsive to the findings and did not alter its stance on climate change.
• It had no special focus on addressing issues climate change. At govern-
ment level only the Ministry of Environment & Forests and the Ministry of
External Affairs were involved in India’s diplomatic stand in International
negotiations.
• Only adaptation programs were actively addressed during this period.
However reports from the Department of Economic Affairs, show that
the government’s expenses for nationally funded programs for disaster
management and climate impacts increased between 2001 and 2010.6
“ It would be fair to say that,
during this period, India’s position
in climate negotiations was a de-
fensive one instead of a pro-active
approach to sharing the burden
for climate action.
”
Pre 2007
Equity argument/
CBDR principle
Economic
Growth
Figure 8 - Key drivers
for India’s historical
approach to climate
change
Intl.
Pressure
Retain
Global Status
Apprehension of being
late in the climate race
2007 - 2012
Figure 9 - Expenditure on Adaptation Oriented Schemes
Source: Ministry of Finance

INDIA’S STAND (2007 – 2012)
India’s traditional approach of placing priority on social and economic devel-
opment issues over environmental aspects began to shift after 2007. As the
country grew in global economic importance, it began align with changes in
foreign policy goals. Apprehension at losing global status and the risk of be-
ing left behind in the climate race were the major external drivers7 that kick
started the country’s climate agenda. This is evidenced by India modifying
its stance and pledging climate action soon after China announced targets
to cut its emissions intensity in 2009.
KEY TAKEAWAYS:
• Between 2007- 2009 some speedy activity related to climate change
and several institutions for climate change decision-making arose.
This began with the establishment of the Prime Minister’s Council for
Climate Change (PMCCC) in 2007 and the subsequent establishment of
the National Action Plan on Climate Change (NAPCC) with eight national
missions that were operationalized between 2010 and 2014.
• India’s domestic strategy to address climate change implications was
primarily driven by the government in response to external pressure.
For example, NATCOM1 and NATCOM28 were created to communicate
India’s assessment of climate impacts to the UNFCCC, while the Nation-
al Plan on Climate Change (NAPCC) was set up to adopt the emissions
reductions intensity target.
• The first definitive agreement by India was taken during COP15 in 2009.
During COP15 India pledged to reduce its CO2
intensity by 20-25% by
2020, compared to 2005 levels.
• Following the announcement of India’s voluntary emission targets at
COP15, an expert group on Low Carbon Strategies for Inclusive Growth
was in January 2010. The aim of the expert group was to provide sector
specific recommendations to support the creation of India’s 12th
Five
Year Plan (2012–17).
• The Office of the Prime Minister’s Special Envoy on Climate Change was
established in 2008 to co-ordinate between the several nodal ministries
and creates mission documents. The office played a significant leadership
and co-ordination role that was instrumental in setting up the various
missions of the NAPCC. However, the envoy was dismantled in 2010 and
since then coordination mechanisms have weakened.9
Targets
20-25% reductions in
emissions intensity by
2020 as compared to
2005 levels
Progress
On track - 2014 UN
Emissions Gap Report
reports that India by 2012
has reduced 17% of its
emissions.
Table 4
Climate target vs.
progress table
The majority of the strategic planning and processes were established between
2007 and 2009. Various ministries were linked to climate change planning and
decision-making and this period instigated the institutionalization of climate
change issues in India.10

POST-2012 APPROACH
Between the departure of Environment Minister, Mr. Jairam Ramesh in
2011,11 and early 2014 very few climate policies were introduced. After
2014 a number of new climate change were bodies including an Executive
Committee consisting of secretaries of various ministries and Mission
Directorates, tasked with implementing the various missions were added
within nodal ministries were established.12
India’s current approach to climate change is reflected in its twelfth five-
year plan and in its Intended Nationally Determined Contribution (INDC) and
supported by domestic climate policies.
INDIA’S 12TH
FIVE YEAR PLAN13
India’s 12th
five-year plan covers the period from 2012-2017 and was released
in 2011. It is, the first five-year plan to place importance on sustainable
developmental priorities at both national and local levels and includes the
following goals:
• Achieve average 8% annual GDP growth.
• Reduce emissions intensity in line with India’s COP15 pledge.
• Add 30,000MW of renewable energy capacity.
INDIA’S INTENDED NATIONALLY
DETERMINED CONTRIBUTION (INDC)
Following the establishment of the new government in May 2014, India’s
climate change initiatives appear to have regained some momentum. At the
Lima COP20 meeting, India agreed to submit its INDC prior to the COP21
Paris Summit in December 2015. The INDC was submitted on October 1st
2015 and details India’s climate change strategies for mitigation and adap-
tation for the period 2021–2030. It contains quantifiable targets to support
the mitigation strategy. The key targets are noted below:
• 33-35% reduction in emissions intensity by 2030, compared to 2005
levels.
• 40% cumulative electric power capacity from non-fossil fuel sources
installed by 2030.
• Creation of an additional carbon sink of 2.5 to 3bn tons of CO2
e through
increased forest cover by 2030.
• 63GW of installed nuclear power capacity by 2032, if supply of fuel can
be ensured.
Summarizing India’s climate-policy scenario till early 2014, it would be fair to
say that India’s policy making strategy was largely ad hoc. India’s decentralized
way of tackling climate change was largely ineffective, with multiple decision
and policy making bodies leading to fragmented implementation.
The twelve focus areas
for the Twelfth
Five-year plan are:
• Advanced coal technolo-
gies.
• National Wind Energy
Mission.
• National Solar Mission.
• Technology Improvement
in Iron & Steel Industry.
• Technology Improvement
in Cement industry.
• Energy Efficiency Pro-
grams in the Industry.
• Vehicle Fuel Efficiency
Program.
• Improving the efficiency
of freight transport.
• Better urban public and
non-motorized transport.
• Lighting, labeling and su-
per-efficient equipment
program.
• Faster adoption of green
building codes.
• Improving the stock of
forest and tree cover.

INDC TARGETS
(2021-2030)
COMMENT
KEY OBSTACLES TO OVERCOME TO
ACHIEVE INDC TARGETS
33-35% reduction in
emissions intensity by 2030,
as compared to 2005 levels
2014 UN Emissions Gap
Report reported that by
2012 India had reduced
17% of its emissions. India
should achieve the INDC’s
intensity target as well.
-Indiawantstomaintainanaveragegrowthrateofabove6.5%.
- Coal consumption trends are projected to increase
year-on-year beyond 2030, which will result in an absolute
emissions increase.
- ‘Make In India Scheme’ – India’s planned transition to
manufacturing hub implies an increase in emissions and
energy use.
- Limited initiatives to control industry emissions and energy.
40% cumulative electric
power capacity from
non-fossil fuel sources
installed by 2030.
63 GW installed nuclear
capacity by 2032.
Currently, India’s non-fossil
fuel based energy accounts
for 30.3%. The target
of 40% achievable if the
domestic target of 175GW
is met.
Installed capacity from
nuclear power is currently
only 5.7GW.
- Financial, implementation and technological challenges
exist.
- Absence of comprehensive national laws/policies on
renewable energy.
- Disconnect between central and state authorities.
- This is contingent to the supply of nuclear fuel.
- Existing projects have suffered delays.14
- Other challenges include uncertainty regarding India’s
liability clause, financial issues at reactor suppliers, the
increased cost of nuclear energy15
and safety concerns.
Creation of an additional
carbon sink of 2.5 – 3bn
tons of CO2
e through
additional forest and tree
by 2030.
Recent assessment show
that forest and tree cover
had increased from 23.4%
in 2005 to 24% in 2013.
- ‘Make in India’ scheme & existing plan to open 60
new coal mines threatens existing forest cover.
- Afforestation programs cannot restore additional
forest cover within just 15 years.
- Green India Mission is expected to deliver 50-60%
of the required total. Details on how to achieve the
rest are absent16
.
Analysis of INDC Targets
Emissions Target
A majority of public responses indicate a belief that India’s
emissions reduction pledge is fair, several credible studies
argue that India’s emissions reductions intensity target is
conservative.17 The set emissions intensity target is weaker
than the current policies trajectory. (CAT, 2015). The 2014
UN Emissions Gap Report, indicates that by 2012 India had
already reduced emissions by 17% out of a pledged reduc-
tion of 20-25% by 2020. This suggests India could have set
more aggressive voluntary targets. India still prioritizes
economic development and therefore targets have been
set in terms of emission intensity reductions (the amount
of greenhouse gases emitted per unit of GDP), this implies
that absolute emissions would continue to increase. India
has not announced when it expects its emissions will peak
and eventually reduce. Given India’s demographic challenges
and growth targets, emissions are not expected to peak in
the near future.
Non Fossil fuel
based energy target
India has specified this as a conditional
target and announced this would be met
on availability of adequate finance and
technology transfer. Currently, India’s
non-fossil fuel based energy accounts for
30.3% of the total utility-based installed
electricity. Therefore the INDC target to
elevate this to 40% seems modest com-
pared to the domestic target of 175GW
from renewable energy sources. However
if the domestic target for renewals is
met, the 2030 fossil fuel reduction target
will be exceeded.
Table 5 - India’s key INDC targets ( 2021-2030)

Green power genera+on – 175GW of
renewable power to be set up by 2022
Refurbishing exis+ng energy grid –
Na9onal Smart Grid Mission
Building climate resilient urban centers –
Smart Ci9es Mission
Urban Renewal Mission for 500 ci+es –
AMRUT mission
Energy Conserva+on – Na9onwide
Campaign for Energy Conserva9on
Zero Effect, Zero Defect (ZED) policy under
the Make in India scheme
Green Highways policy – Develop 140,000
km long “tree-line” along both sides of
na9onal highways
Fuel efficiency standards FAME (faster
adop+on and manufacturing of hybrid
and electric vehicles) scheme
Soil health card scheme Paramparagat
Krishi Vikas Yojana to promote organic
farming prac9ces
Pradhan Mantri Krishi Sinchayee Yojana
to promote efficient irriga9on prac9ces
Neeranchal programme to promote
watershed development in the country
Na+onal Bureau of Water Use Efficiency
(NBWUE) proposed for promo9on,
regula9on and control efficient use of
water
‘Give It Up’ Campaign launched to
encourage ci9zens to give up subsidy on
cooking gas to promote shiV away from
inefficient use of biomass in rural areas.
MAJORMITIGATIONSSTRATEGIES
MAJORADAPTATIONSTRATEGY
CLIMATE POLICY SCENARIO
The National Action Plan on Climate Change is India’s central climate change
related program and commenced in 2008. The plan established of eight
missions that were operationalized between 2010 and 2014, these are:
1. The Jawaharlal Nehru National Solar Mission (JNNSM)
2. National Mission for Enhanced Energy Efficiency (NMEEE)
3. National Mission on Sustainable Habitat (NMSH)
4. National Water Mission (NWM)
5. National Mission for Sustainable Agriculture (NMSA)
6. National Mission for a Green India (NMGI)
7. National Mission on Strategic Knowledge for Climate Change.
8. National Mission for Sustaining the Himalayan Ecosystem
As these missions were created with a strong focus on climate change ad-
aptation and mitigation, an analysis of them will provide an overview of the
climate change policy scenario.
Out of the eight national missions of the NAPCC, the national solar and energy
missions are the only two that have performed satisfactorily to date. Analysis of
these two missions’ weaknesses is listed below in addition to common drawbacks
of all the eight missions. Given these weaknesses it is unsurprising that the policy
implementation has been weak.
Drawbacks of all eight missions
• Disconnect and poor communication between Central & State government
authorities.
• State Action Plans on Climate Change (SAPCC’s) are largely inadequate.
They are not backed by a robust climate change strategy. Initiatives have
not been effectively prioritized according to urgency level. States also face
challenges from lack of financing and policy uncertainties.
Figure 10 - India’s key climate change mitigation and adaptation strategies
“ A major portion of achieving
India’s targets is conditional upon
international support; The associ-
ated component of having 40%
of non-fossil fuel based energy
by 2030 would require a lot of in-
ternational support, failing which,
then it would be very difficult to
achieve this target.
”
Stakeholder Comments

• No explicit targets are set for seven of these eight missions. Targets for the
National Solar Mission are short term and do not extend beyond 2022.
• Status of implementation of these missions has not been disclosed in a
timely manner.
Jawaharlal Nehru
National Solar Mission – Setbacks
Mission Brief -The Jawaharlal Nehru National Solar Mission was launched
in January 2010 to significantly increase the share of solar energy in the
total energy mix. The main objective is to establish India as a global leader
in solar energy, and to create enabling policies for scaling up solar based
renewable power across the country. The initial target for this mission was
20GW of solar power by 2022. The target was revised in November 2014 to
100GW.
Mission Setbacks:
• The revised solar targets - a five-fold increase on the previous target have
not been reflected in policy and major implementation gaps exist.
• As of August 2015 only 4.2GW of solar capacity has been installed, com-
pared to 100GW target by 2022. India is far behind in solar manufacturing
- existing manufacturers are small and lack technological capabilities to
compete with global manufacturers.
• Very little emphasis has been placed on targeting off-grid potential of so-
lar power and minimal effort has been taken by the MNRE to take off-grid
solutions to un-electrified villages and regions of the country following
the end of the Remote Village Electrification Program (RVEP).
• Long term sustainability plans need to be thought out for solar power.
Figure 11 - Solar power installed capacity (GW)
Source: Ministry of New and Renewable Energy

Incentive schemes like the Accelerated Depre-
ciation (AD) and Generation Based Incentives
(GBI) will have to be phased out eventually.
There is a lack of detailed information on how
funds from the National Clean Environment
Fund are to be allocated.
• Most state power distribution companies (Dis-
coms) have failed to achieve their Renewable
Purchase Obligations (RPO’s) due to lack of
funds and policy uncertainties. Discoms18
in In-
dia have lost USD 10.6bn (INR 6.98bn) annually
and with an accumulated loss of USD 37.9 bn
(INR 37900 bn). This makes it even more diffi-
cult for them to achieve targets. Targets are
not directly linked to the respective state-level
RPO targets. While several attempts continue
to be made to harmonize the state-level RPO
targets with the national targets, these have
had limited success. Enforcement of the state
level RPO’s has been largely ineffective, cur-
rently only 15 states have established solar
policies.
• Recently announced targets such the 40GW
target for rooftop solar photo voltaics (PV) by
2022, are not supported by policy detail for
implementation.
National Mission on Enhanced Energy
Efficiency (NMEEE) - Setbacks
Mission Brief - The NMEEE focuses on enhancing
India’s energy efficiency measures. It is run by
Ministry of Power (MoP) and Bureau of Energy
Efficiency (BEE) through four initiatives. These
initiatives are Perform, Achieve and Trade (PAT),
Market Transformation, the Energy Efficiency
Financing Platform and the Framework for Energy
Efficient Economic Development.
• NMEEE’s mission focuses on end-use and
managing demand rather than addressing
the existing energy challenges like high grid
losses due to transmission and distribution
disruption. India’s grid currently loses about
23%19
of its power during transmission due to
outdated wiring and illegal drawing of power.
The schemes under this mission do not address
and seek to resolve existing energy efficiency
issues. For example, the Partial Risk Guarantee
Fund for Energy Efficiency (PRGFEE) and the
Venture Capital Fund for Energy Efficiency
(VCFEE) are both fiscal are only applicable to
new projects.
• Most of the energy efficiency standards in-
cluding, standards and labeling for appliances,
vehicles and buildings have a limited scope
and are not mandatory. The voluntary nature
of these standards dilutes the significant role
that energy efficiency has in the reduction of
harmful emissions. For example, the Energy
Conservation Building Code (ECBC) has is only
applicable to commercial buildings and only in
eight states.
• The PAT scheme currently only targets large
scale manufacturing industries and covers 478
entities across 8 sectors. Small and medium
sized enterprises that pollute have not been
considered. The Regulatory framework for
the PAT schemes’ second phase has not yet
been developed even though the first phase is
expected to end by 2015.
Climate policies other than the NAPCC and its eight
missions are listed below. Except for the energy
related policies, almost all the other policies and
schemes listed are either newly instituted or in the
formulation stage.

Integrated
energy policy
NationalMission
forsustainingthe
Himalayan
eco-system
Clean
energy cess
(NMEEE)
National Mission
on Enhanced
Energy
Efficiency
(JNNSM)
Jawaharlal Nehru
National Solar Mission
Renewable
Purchase
Obligation
(RPO’s)
National Rural
electrification
policy
Standardsandlabeling program
EnergyConservation
Building
Code
(ECBC)
standards
NationalMission
onSustainable
Agriculture
(NMSA)
NationalMission
onSustainable
Habitat(NMSH)NationalWater
Mission
(NWM)
NationalMission
forSustainable
Agriculture
(NMSA)
NationalMission
foraGreen India (NMGI)
NationalMission
onStrategic
Knowledgefor
ClimateChange
Smart
Cities
mission
AMRUT
urban
renewalmission
National
Agroforestry
Policy
SoilHealth
Cardscheme
FasterAdoption
andManufacturingof
Hybrid&Electric
Vehiclesscheme
(FAME)
Green
highways
policy
National
health
mission
National
Mission on
Himalayan
Studies
Integrated
Coastal Zone
Management
(ICZM)
National
Sm
artGrid
Mission
Clean
coal
policies
ZeroEffect,ZeroDefectPolicy
(ZEDpolicy)National
policy
onbiofuels
Dedicated
Freight
Corridors
(DFCs)
Table 6 - Climate policies - transportation sector
Figure 12 - Climate policy puzzle
Policies that yielded Effective / satisfactory results
Policies that did not yield satisfactory results
New policies / policies under formulation
Transportation Sector
Fuel related National Policy on biofuels.
Automobiles
1. Fuel economy standards.
2. Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) - scheme
developed as part of the National Electric Mobility Mission Plan 2020 (NEMMP).
Sustainable transportation
system
1. Increasing railway share of total land transportation from 36% to 45%.
2. Dedicated Freight Corridors (DFCs) - expected to reduce emissions by about 457 million
ton CO2
over a 30-year period.
3. Jal marg vikas announced to establish an integrated waterways transportation grid.
4. Green Highways (Plantation & Maintenance) Policy to develop 140,000 km long ‘tree-line’

Other National Schemes
For building climate
resilient centers
1. Smart cities mission - 100 smart cities are planned with the objective of developing new
generation cities.
2. Atal Mission for Rejuvenation and Urban Transformation (AMRUT) - a new urban renewal mission
has been launched by Government of India for 500 cities.
Agriculture &
Afforestation
policies
1. National Initiative on Climate Resilient Agriculture (NICRA).
2. Soil Health Card scheme.
3. National Agroforestry Policy (NAP).
Water related
policies
1. Watershed Development Program that stresses rainwater harvesting.
2. Neeranchal program.
3. National River Conservation Directorate.
Health related
policies
1. National Health mission to be formulated.
2. Integrated Disease Surveillance Program (IDSP).
3. National Vector Borne Disease Control Program (NVBDCP).
Policies for coastal
management &
island protection
1. Integrated Coastal Zone Management (ICZM).
2. Mangroves for the Future (MFF).
3. Island Protection Zone (IPZ).
4. National Disaster Relief Fund.
Protecting the
Himalayan ecosystem
1. National Mission for Sustaining the Himalayan Ecosystem (NMSHE).
2. National Mission on Himalayan Studies.
Rural livelihoods
security
1. Mahatma Gandhi National Rural Employment Guarantee Scheme in India (MGNREGS).
2. National Rural Livelihoods Mission.
Energy Efficiency Programs / Policies
Industrial energy
efficiency programs
1. National Mission for Enhanced Energy Efficiency (NMEEE).
a) Market Transformation for Energy Efficiency (MTEE).
b) Energy Efficiency Financing Platform (EEFP).
c) Perform, Achieve, and Trade (PAT) Mechanism for Energy Efficiency.
2. Small and Medium Enterprise (SME) Program.
3. Zero Effect, Zero Defect (ZED) policy under ‘The Make in India’ campaign - the scheme launched in
2015 and aims to cover about 1 million small and medium sized enterprises.
Clean Coal Policies
1. Mandatory for all new large coal-based generation.
2. Mandatory targets for 144 old thermal stations to improve energy efficiency.
3. Development of stringent emission is in progress.
Building codes Energy Conservation Building Code (ECBC) standards.
Other efficiency
programs (demand
side management)
1. Standards and Labeling Program.
2. Bachat Lamp Yojana.
3. State Energy Conservation Fund.
4. Green building rating systems.
5. GreenCo rating system to assess companies (in development).
Renewable portfolio
standards/obligations
Renewable Purchase Obligation (RPO) under the Electricity Act 2003
is mandated at state level.
Other significant
energy supply policies
1. National Tariff Policy 2006.
2. National Electricity Policy.
3. National Rural Electrification Policy.
Table 7 - Climate policies - Energy sector
Table 8 - Climate policies - other sectors

Table 9 - Fiscal instruments for low carbon growth
Fiscal
Instruments
Brief Description Analysis
Coal Cess / Clean
Energy Cess
Introduced in July 2010 as a carbon tax equivalent
to fund the National Clean Environment Fund. The
tax rose in July 2014 from USD 0.80 (INR 50) to USD
1.60 (INR 100) per ton, and doubled in March 2015 to
USDD3.20 (INR 200) per ton.
Up to FY2014-15 USD 2.4bn (INR 158bn)
has been collected as coal cess for
National Clean Energy Fund (NCEF)20
.
Mechanisms for
enabling
investments
under the NMEEE
Partial Risk Guarantee Fund for Energy Efficiency
(PRGFEE) - a risk sharing mechanism to provide
commercial banks with a partial coverage for risk
involved in extending loans for energy efficiency
projects.
Both these mechanisms have limitations
as only new projects are eligible for
these benefits. PRGFEE now extends to
government buildings, municipalities,
SME’s and industries, whereas VCFEE is
only available to government buildings
and municipalities.
Venture Capital Fund for Energy Efficiency (VCFEE)
- fund to provide equity capital for energy efficiency
projects and last mile equity support to specific
energy efficiency projects.
Increased Taxes for
Fossil fuels (Implicit
carbon Tax), Subsidy
Cuts for fossil fuels
Current taxes for petrol and diesel are USD 140 and
USD 64 per ton respectively translating to tax on
CO2
emissions of USD 25- USD 35 per ton21
.
Petroleum subsidies have been cut by c.26% since
October 2014.
Both these mechanisms indicate India’s
proactive stance for reducing fossil fuel
emissions. Subsidy cuts in fossil fuels
indicate that India is turning its carbon
subsidy scheme into one of carbon
taxation.
Direct Benefit
Transfer scheme
Direct Benefit Transfer transfers subsidies directly
to the people through their bank accounts.
Currently in place for transferring
subsidies for cooking gas directly into
the bank accounts of the targeted
beneficiaries. Total of USD 2.2bn (INR
144bn) saved during FY2014-15 as a
result of DBT.22
Tax Free
Infrastructure
Bonds
USD 750m(INR 50 Bn.) worth of Tax Free Infrastruc-
ture Bonds have been introduced for the funding of
renewable energy projects during the year 2015-16.
This will spur new investment in the
renewable energy sector, provided other
policies that increase ease of doing
business across borders and reduce risks
for investors are established.
Incentive for
creation of carbon
sink
The 14th
Financial Commission recommendation
released in February 2015 sets out criteria for
devolution of funds to states from the federal pool
is based on a formula that attaches 7.5 % weight to
the area under forest.
This would urge the states to develop
programs for enhancing green cover and
help India achieve its INDC target for
creating additional carbon sinks.

Figure 14 - Current installed capacity for electricity generation
Source: Central Electricity Authority
ENERGY SCENARIO
India’s energy sector accounts for 77%23
of its domestic GHG emissions and
4.91%24 of global GHG emissions. Therefore it makes sense to tackle the en-
ergy sector to bring about most impactful results. The coming decade will be
a challenging period for energy and climate change policy-making. The energy
sector already faces multiple challenges including, varying energy production
capabilities, unreliable energy supply, limited energy access, energy security
issues due to rising fossil fuel imports, fluctuations in price and challenges
from escalating environmental disputes around land, water and air.
FOSSIL FUEL DRIVEN ELECTRICITY25
Data from the Central Electricity Authority, indicates that India’s installed
electricity generation capacity is 278 GW.26
More than 60% is derived from
coal alone and fossil fuels collectively account for approximately 70% of the
total capacity.
Figure 13 - All India Installed power capacity / Renewable power capacity (GW)
Source: Central Electricty Authority, Ministry of New and Renewable Energy

At present energy trends, India’s dependency on coal will double by
2030 and therefore carbon emissions are set to increase 2 to 3 times
the current levels by 2030.27
Though per capita emissions would remain
well below the global average. It is noted in India’s INDC submission that coal
will continue to dominate power generation and that plans are underway to
expand coal capacity. India’s Energy Minister recently announced moves to
stop coal imports in the next two years is a welcome move, however the
country remain focused on developing its internal coal capacity.
There are a number of developments in place to support the coal industry,
these are:28
• The passing of the Coal Mines Special Provision Bill in March 2015. This has
given a green signal for commercial mining of coal and will eventually en-
courage greater private and foreign investment, this is a significant change
for the coal industry which was nationalized for more than 40 years.
• Plans are underway to ease environmental restrictions, permit processes,
land acquisition and the expansion of coal transportation rail lines.
• 6029
new coalmines are projected to open by 2020.
Key Takeaways
• India’s long-term dependence on coal is unsustainable. Coal consump-
tion currently exceeds production capacity. It has to import coal in
increasing quantities each year and is dependent on countries such as
Indonesia and Australia for imports. Secondly, the government appears
to have overlooked the environmental costs of increased coal production
and has not internalized the complete costs of displacing communities,
destroying ancient forests and environmental pollution. Research sug-
gests that the share of imported coal as a percentage of total power
generation in India stood at 18% in 2012 and is expected to reach 19%
by 201730
.
• Imported coal is priced at 1.6 times the price of domestic coal on an en-
ergy equivalent basis.31
Achieving the INDC renewable energy capacity
target could potentially save USD 2.5bn32
(INR 165 billion) each year
through reduced fossil fuel imports33
. If India increased its renewable
energy ambition to 100% of total power generation, USD 195bn (INR
12.9 trillion) would be saved annually. Which if channeled towards
strengthening renewable resources could have a dual advantage of re-
duced dependency on coal and an exponential increase in clean energy,
with associated benefits like cleaner air and fewer premature deaths.
• India’s energy strategy for enabling a low carbon scenario should include
the installation of new technologies for renewable energy, the upgrading
and revamping India’s unreliable transmission grid. India’s grid currently
loses about 23%34
power during transmission due to outdated wiring and
illegal drawing of power. India’s newly launched National Smart Grid Mis-
sion seeks to address this issue and bring efficiency in the power supply
network and facilitate a reduction in losses and outages. Green Energy
Corridor projects are also in progress to ensure evacuation of renewable
energy.
India’s plans to increase its coal production capacity and consumption trends will
create a lock-in for the India’s energy sector and will set India on a carbon intensive
path that cannot be reversed. India is still setting up its energy grids and infrastruc-
ture and has a choice to opt for a low carbon path, which could provide multiple
benefits of clean energy, reduced absolute emissions and avoiding harmful spillovers
like environmental pollution. Only when dependence on coal is reduced, can energy
diversification be truly achieved. The outcome of the recently formulated clean coal
policies would be insignificant when compared to India’s coal ambitions.
• Mandate for all new
large coal-based
generating plants
• Mandatory targets
for 144 old thermal
stations for improving
energy efficiency
• Stringent emission
standards formulation
- In progress
“ Indian government has
not been strict on where it can
curtail emissions; While the
energy policy speaks about clean
carbon technologies and moving
to supercritical technologies, we
still don’t have proper pollution
control standards in place for
power plants in industry.
”
Stakeholder Comments
Table 10
Clean Coal Policies

RENEWABLE ENERGY SCENARIO
India’s renewable energy targets have recently increased to 175GW installed
by 2022. This is to be comprised of 100GW from solar, 60GW from wind,
10GW from small hydropower and 5GW from biomass-based power. The
Ministry of New and Renewable Energy (MNRE) reported that in September
2015 installed capacity from renewable energy sources was 37.4 GW.35
This
includes 24.4GW from wind energy and 4.3GW from solar power. The solar
power target of 100GW is ambitious considering that the total current glob-
al Solar PV capacity is 180GW36
. To meet this target India urgently needs
to formulate renewable energy friendly policies and create an environment
that fosters investment to fund renewable energy projects.
In order to strengthen India’s renewable energy strategy, the National
Institution for Transforming India (NITI), has released a roadmap for ac-
celerated renewable energy deployment as its first initiative. However to
be fully effective, a bottom up approach with local state bodies driving the
implementation of renewables should be adopted. In addition to robust
policy frameworks, local state bodies must be supported financially and
technologically.
The following policies set the foundation for drawing energy from
renewable sources37
• The Electricity Act 2003 established the framework for renewable power
in India and provides the following:
• Optimal utilization of resources and promotion of electricity from renew-
ables.
• A national policy for stand-alone systems in rural areas.
• Suitable measures for grid connectivity.
• Notification of Renewable Energy Purchase Obligations (RPO’s) by State
Electricity Regulatory Commission (SERC’s).
• The National Electricity Policy 2005 further provided for:
• SERC’s to set progressive RPO’s.
• SERC’s to set differential tariff for renewables.
• Promote private participation in the renewable energy industry.
Figure 15 - Grid interactive renewable power capacity (GW)
Source: Ministry of New and Renewable energy

Climate change assessment of China and India for COP 21 - Paris 2015

Climate change assessment of China and India for COP 21 - Paris 2015

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Similar to Climate change assessment of China and India for COP 21 - Paris 2015

Similar to Climate change assessment of China and India for COP 21 - Paris 2015 (20)

More from Vipul Arora

More from Vipul Arora (20)

Recently uploaded

Recently uploaded (20)

Climate change assessment of China and India for COP 21 - Paris 2015