Friday, August 05, 2011

India’s low carbon strategies; are they good enough?

Shankar Sharma, Power Policy Analyst

Over 30 years of professional experience in electricity industry in the areas of generation, transmission and distribution working with Central Electricity Authority, Ministry of Power, Govt. of India; Electricity Corporation of New Zealand, New Zealand and Queensland Electricity Transmission Corporation, Brisbane, Australia


The ‘expert group on low carbon strategies for inclusive growth’ which was set up under the Planning Commission to develop a strategy for India’s 12th Five Year Plan has released its interim report recently. While this interim report echoes the earlier govt. stand that India is one of the lowest GHG emitters in world, and hence has a right not to be forced with carbon emission cap, it also clearly recognizes that India is highly vulnerable to climate change, and hence has a strong interest in minimizing the risk of climate change. It refers to India’s announcement to reduce the emissions intensity of its GDP by 20-25 % over 2005 level by 2020 through pursuit of proactive policies. This interim report has provided a menu of options to reduce GHG emission intensity in critical sectors of the Indian economy.

The main sectors examined in this report are power, transport, industry, building and forestry. It is very relevant to note this report indicates that it is feasible to exceed the target of bringing down the emissions intensity of its GDP by 10 -13 % by 2020 through aggressive efforts. In view of the huge deleterious impacts to vulnerable section and environment of high GDP growth strategy of the successive governments, and the looming crises associated with the inevitable climate change, the civil society has a special interest in effectively participating in exploring various options available to our society to reduce the total GHG emissions. In this regard an objective review of the menu of options recommended by this expert group to reduce GHG emission intensity becomes essential.

Salient features – towards unsustainable growth rate

A major concern with the approach of this expert group is that it starts with the base line assumption that India needs to sustain an economic growth of 8 - 9 % over next 20 years to eradicate poverty and to meet its human development goals. It appears that the social, economic and environmental impacts on the vulnerable sections of our society associated with a sustained GDP growth of 8 - 9 % over the next 20 years were never a matter of concern to this planning group. Such a high growth rate will mean the manufacture of products and provision of services at an unprecedented pace leading to: setting up of more factories/manufacturing facilities; consumption of large quantities of raw materials; unsustainably increasing demand for natural resources such as water, minerals, timber etc.; acute pressure on the govt. to divert agricultural/forest lands for other purposes; huge demand for energy; clamor for more of airports, air lines, hotels, shopping malls, private vehicles, express highways etc. Vast increase in each of these activities, while increasing the total GHG emissions, will also reduce the ability of natural carbon sinks such as forests to absorb GHG emissions.

The net effect associated with high GDP growth target will be that the total GHG emissions will increase by considerable margin, even if reduced emissions intensity of country’s GDP is feasible. The desirability of this scenario to our society needs to be questioned in the context that the increase in total GHG emissions will be closely associated with the increased pollution of air, land and water; and the increased denial of access to natural resources to the vulnerable sections of the society. Reduced area and density of forests, dammed rivers, polluted air, forced displacements which will all be the consequences of a frenetic 9% GDP growth are bound to impact the vulnerable sections of our society. Since the vulnerable sections of the society are also the most impacted lot due to climate change, the civil society has a crucial role to ensure that their legitimate interests are protected adequately.

A quick look at the possible impact of 9% sustained growth on the critical sectors of the Indian economy can reveal a disturbing trend. The transport sector will demand much higher consumption of energy such as diesel, petroleum and LNG. These products which already have about 75% import content are projected to reach 85-90% soon with disastrous consequences on energy security. The pollution loading of vastly increased consumption of petroleum products, which has given rise to concerns in urban areas already, is likely to reach extremely unhealthy levels. Along with increased GHG emissions and much higher levels of suspended particulate matter, the pressure on the transportation infrastructure can become unmanageable. Increased use of private passenger vehicles, which is already a huge concern, will escalate to choke our roads and lungs.

Industrial activities, as a consequence of 9% sustained growth, will put unbearable demand on land, fresh water, energy and other raw materials. Such a demand on land (such as in SEZs, coastal industrial corridors, IT&BT parks etc.) have already given rise to a lot of concerns to social scientists, and already has witnessed social upheavals as in Singur, West Bengal. The industrial sector, which is already responsible for 22% of total GHG emissions, will contribute hugely to the increase in total GHG emissions of the country. Similarly, 9% GDP growth will lead to steep increase in demand for buildings in the form of factories, transportation infrastructure, offices, hotels, etc. which in turn will put huge demand for construction materials and energy. In this scenario can the increase in GHG emissions be far behind?

The most telling impact of frenetic economic growth of 9% over 20 years will be on forests, rivers and other natural resources. As against National Forest Policy target of 33% of forests & tree cover, the country has less than 20% of the same, which are considered to be the most important sinks of GHG emissions. The demand for additional lands and minerals for the increased activities in all the above mentioned sectors will further reduce the forest & tree cover, which in turn will severely impact the availability of fresh water and on the nature’s ability to absorption GHGs. The impact of vastly reduced forest & tree cover on human health and on all aspects of our society requires no further elaboration. Whereas the increased economic activities associated with 9% growth will certainly result in vastly increased GHG emissions, the same will reduce the ability of forest & tree cover to absorb GHG emissions from the atmosphere. In this scenario it is anybody’s guess as to how the country’s total GHG emissions can be reduced to an acceptable level.

The report seems to mimic the tall claims made under the Green India Mission (GIM). The objective of GIM is to double the area to be taken up for afforestation and eco-restoration in India in the next 10 years at a gigantic investment of about 40,000 Crores. While the frenetic pace of economic development associated with 9% GDP growth rate will lead to considerable reduction in the existing natural forests of high ecological value, GIM may increase the tree over mostly with mono-culture species of much reduced ecological value. Such a situation will not only increase the GHG emission due to deforestation, but will also drastically reduce the ability of our forests to absorb GHG emissions. This anomaly has not been considered at all in the report.

Of various sectors of our economy energy sector has the highest contribution of emissions with 58% of CO2 equivalent in year 2007, as per this report. Within the energy sector the largest chunk of emissions was from electricity generation amounting to 65% of CO2 equivalent in that sector.

The report indicates that the compounded annual growth rate (CAGR) of emissions trend between 1994 and 2007 for electricity was one of the highest with 5.6% along with cement and waste. The report says: “Growth in these sectors can be attributed to tremendous increase in capacity of production during 1994 to 2007. Further, the emission intensity as expressed in grams of CO2 -eq per Rs. of GDP has fallen from 66.8 in 1994 to 56.21 in 2007, indicating the impact of government policies that encourage energy efficiency in various sectors of the economy”. In view of the huge CO2 – eq emission contribution of electricity to the total GHG emissions in the country, a cursory look at what the report recommends for this sector becomes important.

As in integrated energy policy (IEP), this Planning Commission report assumes that the country should have 8 - 9% GDP growth, because of which it projects gross electricity generation requirement of about 2,360 Billion kWH in 2020; as compared to 813 Billion kWH in 2007-08 (about 3 times increase). The report also indicates that aggressive efforts in bringing energy efficiency to domestic and commercial appliances can save about 150 Billion kWH by 2020. Whereas it has assumed that the energy saving potential in agricultural pump-sets though efficiency improvement and demand side management as 10 Billion kWH, the national level statistics on inefficiency of agricultural pump-sets indicates that the losses are about 10% of the total electrical energy consumption. Hence, if we consider net generation requirement of 2,210 Billion kWH in 2020, the energy saving potential in agricultural pump-sets can be as high as 50 Billion kWH if can reduce the losses even by 25%, which is technically feasible. Similarly, the report indicates that the savings feasible from efficiency improvement measures in industries as about 60 Billion kWH.

Despite all the suggested measures the GHG emissions within power sector is expected to increase from 598 million tons of CO2 – eq emissions in 2007 to about 1,620 million tons of CO2 equivalents in 2020 for the 9 percent GDP growth scenario; an increase of 2.7 times. Even with all the suggested aggressive efforts in the report the total installed power generating capacity is projected to increase to about 363,000 MW by 2020 as compared to the total capacity of about 160,000 MW in 2007; an increase of about 2.3 times.

Shortcomings of the report

The report assumes coal power to be the least cost option, and that the coal power capacity needs to be increased to 230, 000 MW from the present level of about 80,000 MW. It states: “… This will require an annual coal supply of at least 1,000 million tons, two and a half times the present. Domestic mining will have to increase considerably otherwise imports will have to meet a large fraction of coal demand.” To increase the domestic mining large tracts of thick forests have to be destroyed. The report while eulogizing how much GHG emission saving can be achieved by steps mentioned in the report, it completely ignores how much GHG absorption potential will be lost by destroying forests.

The projected increase in the installed power generation capacity poses almost insurmountable logistical problems. “… In other words, it translates to adding about 20,000 MW of new generation capacity per annum. As against this, in the recent years, India has added only about 10,000 MW per annum…”. But this issue has not been dealt effectively, and how the gap can be bridged. The embedded GHG emissions in increasing the installed power capacity by about 150,000 MW are not even mentioned.

As in the integrated energy policy, the importance given to renewable energy sources is woefully inadequate. The report states: “Solar installed capacity if pursued with seriousness could grow to 20,000 MW by 2020. It is one of the critical technology options for India’s long term energy security. Several parts of India are endowed with good solar radiation and deploying solar even on 1 percent of the land area could result in over 500,000 MW of solar power.” With adequate encouragement given to feed-in-tariff mechanism for roof top mounted solar PV systems, for which there has been strong advocacy for a number of years, many times more than the 20,000 MW solar capacity can be realized; but sadly the required level of commitment is lacking.

As in the integrated energy policy, this report too has failed to put adequate emphasis on DSM measures, which with effective strategies can bring down the power capacity projection to a level much below 363,000 MW by 2020. Report says : “It is clear that in the absence of implementing DSM measures, India will continue to face power shortage in 2020, which itself could place an energy constraint on growth.”

A major problem for the Indian economy, as well as its environment, will be the unchecked growth of urban areas. The report states: “..The urban populations are predicted to rise to 550 million by 2030 or 42.0 percent of the total population….. This urban growth, combined with rapid growth in the economy, has resulted in putting enormous pressure on housing requirements, urban infrastructure and other services.” No measures have been contemplated to limit the growth of urban areas.

Way forward to ensure sustainable development of our masses:

The base line assumption that India needs to sustain an economic growth of 8 - 9 % over next 20 years to eradicate poverty and to meet its human development goals will lead to very many intractable problems for the society from social and environmental perspectives. Such a high growth rate has not been found necessary even in developed economies, where even at the highest growth period they are reported to have registered only 4-6 % growth. The so called “trickle down” benefits to vulnerable sections of our society through 8-9 % growth will be negligible as compared to the all round benefits associated with inclusive growth of a much reduced rate, say 4-6%, if we effectively harness our natural resources responsibly. Hence the obsession with target GDP growth rate of 8-9 % should be replaced by a paradigm shift in our developmental objective, which will give priority for inclusive growth aimed at sustainable and responsible use of natural resources.

We should dispense with the practice of projecting the total energy production capacity required to sustain 8-9 % GDP growth through the year 2020 0r 2030, and then aiming to attain that production capacity largely through conventional energy sources. Instead we should focus objectively in determining the lowest amount of energy required to wipe out the poverty, and how to meet that energy requirement at lowest overall cost to the society without compromising on the environmental well being on a sustainable basis.

The line of argument that the country has a right to emit more GHGs because its per capita emissions is one of the lowest may be suitable for the purpose of international negotiations, but it must be drastically modified to take into account the fact that it is the total GHG emissions which is relevant in the context of Climate Change, and not the per capita emissions. We cannot ignore the fact that the huge increase in total GHG emissions, which is inevitable with 8-9 % growth, will lead to heavy pollution of land, air and water, and will adversely impact the legitimate interests of various sections of our society while also leading to the exploitation of our natural resources in an unsustainable fashion.

We must appreciate that there is a limit to the nature’s ability to support the provision of products and services required by the increasing human population. Such a demand on the nature must be carefully managed, which is not possible if we set a target of 8-9 % GDP growth for such a huge population, which is growing every year.

In the global context of Climate Change, what is needed is the honest effort by every nation to reduce the total GHG emissions, and not exercising the individual right to increase emissions. While a target of 8-9 % GDP growth for India will lead to such a blunder, it is eminently possible to ensure steady development of all sections of our society by taking honest measures to reduce GHG emissions. Highest levels of energy efficiency, optimal demand side management, widespread usage of new & renewable energy sources, and responsible use of our natural resources are essential in this regard.

In this regard the menu of options to reduce GHG emission intensity in critical sectors of the Indian economy as recommended by ‘expert group on low carbon strategies for inclusive growth’ clearly falls short of the requirement, and hence much more proactive strategies to reduce the overall GHG emissions are needed.

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