CII PRESENTATION ON CLIMATE CHANGE

BUILDING A LOW CARBON INDIAN

ECONOMY

PRESENTATION STRUCTURE

• Impacts of Climate Change on India and Global Economy

• India: Official Position So Far

• India: Current Scenario

• India: Leading by Example

• The New Economy of India: Opportunities for Climate Change

• India: Strategies to Combat Climate Change– Energy Efficiency

– Renewable Energy Technologies

– Cleaner Conventional Energy Technologies

– Strengthen free and open Markets

– Green Buildings

– Transportation

– Civil Aviation

– Adaptation

– Afforestation

– Research and Development

• The Way Forward

Climate Change No Longer a Topic of Scientific Debate: It’s a Real Concern

World Faces Today

Climate Change is for Real

.

Our Planethas got

Fever: Earth’ssurface temperature

continuouslyincreasing

over past few decades

Climate Change is for Real…Conti..

Concentration of Green House Gases have

increasedPhenomenally in recent past

Source: Development Alternatives

Climate Change: Global Impacts

• Indian 7500-km long densely populated and low-lying

coastline would be worst hit due to rise in sea level

– 20% of coastal population may need to migrate

• 25% of country’s population would be exposed to

increased cyclone

• 70% plants may not be able to adapt to new

conditions

• More than 20,000 villages may be deserted

• Adverse impact on agricultural yield

Climate Change: Impacts on India

• Supply-chain risk: vulnerability of inputs such as energy and agricultural products

• Product & Technology risk: various technologies will be at risk due to carbon constraints

• Litigation risk: threat of lawsuits for units emitting GHG gases

• Reputation risk: Several business practices may hamper reputation

• Physical risk: Direct impact: droughts, flood, rising sea level

• Competitive risk: Additional cost due to regulation

• Regulatory risk: Frequent change (tightening of) regulatory provisions

Climate Change: Risks on Business

India: Official Position So Far

• India can not afford to compromise on developmental

goals

– India and other developing countries need to work consistently to meet

millenium developmental goals

• Climate change dialogue should not impede nations to grow

• India and similar other developing countries require urgent

and profound attention on adaptation strategies

– Rapid Economic Development is the best Adaptation Strategy

• Climate change mitigation efforts can succeed only on the

basis of ‘Common but Differentiated Principles

• India is committed to promote voluntary measures

undertaken such as energy efficiency, renewable energy and

cleaner conventional energy technologies.

India: Current Scenario

• India is a responsible nation and is committed to growth with environmental responsibility.

• India has delivered a GDP growth rate of 8% with only 3.7% growth in its total primary energy consumption.

• India has achieved energy-GDP de-coupling at much earlier stage of its development cycle.– GDP growth rate has been higher than projected

even though power capacity addition has been lower (only 50% ) than planned

– Industrial growth and profitability has been high even though oil prices have sky-rocketed

India: Current Scenario…cont.

According to survey conducted by Global Market Institute-a Seattle-based group-

Indians are most concernedfor climate change

Indians are Responsible too

Energy intensity of GDP (kgoe/$ 2000 PPP)

0.15

0.17

0.19

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0.29

0.311971

1975

1980

1985

1990

1995

1999

2000

2001

2002

2003

TP

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(kg

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India: Current Scenario…conti.

Energy Intensity in India shows a downward trend

Source: Planning Commission

Breaking the Mould

• While GOI is formulating a negotiating strategy at

UNFCC forum:

– Indian Industry is poised to take a proactive role

towards developing global leadership in climate

change initiatives.

• As with 9% + growth rate

– Capital assets will double every seven years

• Opportunity to Leapfrog and Lead by Example

• Several examples indicate that Indian Inc. is already

doing it.• ITC Corporation initiatives

• LED Lamps by Cosmos Inc.

• Industry investment in renewable energy

• CII – Sohrabji Godrej Green Business Centre

• CII – ITC Centre of Excellence for Sustainable Development

• Cement Industry

India: Leading by ExampleChallenges Response

Massive EducatedUnemployment

India now a world leader in IT, ITES,Biotechnology, Research services

75% of the world’s CMM Level 5 softwarecenters are in India

over 185 Fortune 500 companies use Indiansoftware services

Indian IT sector employs over a millionpeople

Lack of Technology Indian companies made several globalacquisitions: access to cutting-edgetechnology one of the objectives

Tata Steel acquired Corus Suzlon acquired RE Power, Hansen Hindalco acquired Novelis

Poortelecommunicationinfrastructure, Lowteledensity

One of the fastest growing telecom marketin the world

Indian telecom network seventh largest inthe world (2001)

Call rates one of the cheapest in the world Plethora of world-class services and service

providers

India has a history of Converting Challenges into Opportunities

India: Leading by Example..contiChallenges Response

Food Security Scarcity of food,

milk and otheragriculturalproducts

Green Revolution White Revolution Yellow Revolution Blue Revolution

Energy: Expensiveand Short in Supply Severe Electricity

Shortage High Petroleum

Prices

Massive Energy Efficiency Programme Implementation of Energy Efficiency Conservation

Building Code (ECBC) Successful Energy Labeling and Certification

Programme Many companies in energy intensive sectors adopted

best practices in energy efficiency. Now they areamong the best in the world.

Depleting EnergyResources

India now one of the world leaders in renewableenergy

Approximately 10,000 MW renewable based installedcapacity already in place

Dedicated financing institutions and R&D institutionson renewables (e.g. IREDA, C-WET)

An Indian company - Suzlon Energy Limited - is nowworld’s 4th largest wind energy company

Exclusive Renewable Energy SEZ being set-up in India India emerging as a export hub in wind, solar, biomass

equipmentClimate Change Country gearing towards low carbon path of

development

ClimateChangeto be

anotherexample

• Technologies and practices affecting long-lived systems are difficult to penetrate once assets have been constructed. E.g.– Power plants and industrial facilities lasts for 50 years or more– Buildings, once built, can stand for many decades– A car or truck has a life span of 15-20 years

• India is a new economy. The country is likely to add massive industrial/capital assets in the future. – Developed countries have to first retire old assets, before they

can build new assets based on cleaner technologies– India can straight away opt for efficient clean technologies

The New Economy of India: Opportunities for Climate Change Initiatives

Environmentally Conscious Investmentdecisions can allow the country

to leapfrog into an era of carbon efficientadvanced technologies

India: Reference Scenario and Alternate Energy Scenario

0

200

400

600

800

1000

1200

1400Primary EnergyDemand inReferenceScenario in2030 (Mtoe)

Primary EnergyDemand inAlternateScenario in2030 (Mtoe)

India: Difference Between Total Energy Demand and Sub-sector wise Energy Demand in Reference Scenario and Alternate Scenario

Source: International Energy Agency

India: Strategies to Combat Climate Change

1) Moderate Energy Demand by Increasing Energy Efficiency

a) Improve Vehicle Fuel Efficiency

– Set Fuel Economy Standards for Vehicles:

• Formulate and implement fuel economy standards for HMVs, LMVs at the maximum rate

possible by applying economics and available technology.

• Update/increase the standards on a regular basis.

• Corporate Average Fuel Economy (CAFÉ) standards in US show that the strategy could be

useful.

– Additional fuel efficiency improvements possible by reducing vehicle weight, horsepower or non-

critical amenities,or by developing step-out technologies

– New Initiatives in India:

• Delhi- 1st city to switch to CNG public transport

• Separate lanes for buses being introduced

• Metro Rail for public Transport initiated

• The 1 Lakh ($2500) People’s Car by Tata Motors with best norms in industry

• Electric Vehicles developed by REVA Motors

• Electric Two-wheelers by Hero Honda

– Way Forward:

• H2 Spiked CNG

• Fuel cell/Hybrid cars

1. Moderate Energy Demand by Increasing Energy Efficiency…conti…

b. Implement Building Energy Codes– Bureau of Energy Efficiency already formulated and announced Energy Conservation

Building Code (ECBC)• Adopting ECBC does not automatically guarantee energy savings

• Code enforcement and compliance also essential.

– The Direction in India is Right: Energy audits for 9 Govt. buildings completed including famous Rashtrapati Bhawan and Prime Minister’s office. Likely to become a norm for all Government buildings.

Initiatives in India

– Green Buildings in India: Much More than Energy Efficiency• Efficient Use of Water• Energy Efficient & Eco Friendly Equipment• Use of Renewable Energy• Building automation• Use of Recycled/Recyclable Materials• Indoor environment quality

How India can Leap Forward

– Develop codes for

• Data Centres

• Special Economy Zones (SEZs)

• Malls/ Shopping Centres

– Join international efforts to develop zero energy buildings

c. Enlarge the Scope of Appliance and Equipment Standards

– Bureau of Energy Efficiency has launched an Energy Labeling and Certification Programme covering following equipment:• Refrigerators with or without low temperature compartment

• Room air conditioner (unitary)

• Stationary storage type electric water heaters

• Electric motors up to 100 KW

• Agricultural pump sets including horizontal centrifugal pumps, mono set pumps and submersible pump set up to 15 KW

• Electric light sources, control gears and luminaries including tubular fluorescent lamps, inductive type ballasts, electronic ballasts, luminaries and compact fluorescent lamps

• Distribution Transformers

• Industrial fans and blowers up to 100 KW

• Air compressors up to 100 KW

– Energy efficiency standards should also apply to other increasingly common products, including those based on expanded digital technologies.

– Standards should be updated on a regular basis.

1. Moderate Energy Demand by Increasing Energy Efficiency…conti…

Moderate Energy Demand by Increasing Energy Efficiencyd. Increase Industrial Sector Energy Efficiency

– Energy Conservation Act has provided regulatory impetus to energy efficiency activities in industries. Following sectors identified as designated consumers of energy efficiency activities:• Aluminum• Automobile• Cement• Ceramics• Chemicals• Chlor Alkali• Fertiliser• Glass• Integrated Steel Plant• Petrochemicals• Pulp & Paper• Refinery• Sugar• Textile

– List of designated consumers should be constantly updated. New sectors to be added

– Promising areas for energy savings such as waste-heat recovery, separation processes and combined heat and power should be promoted across all manufacturing units

– Bureau of Energy Efficiency should conduct and promote research, development, demonstration, and deployment of industrial energy efficiency technologies.

Energy Audit mandatoryfor these sectors. Encouraged

for other sectorsNational Energy Conservation

Awards given to best performers

What Next

Energy Efficiency Targets for Eleventh Five-year Plan (2007-2012)

500 MWSmall & Medium Enterprises scheme6

2000 MWAgricultural DSM (Ag DSM) & Municipal DSM (Mu DSM)

5

500 MWEnergy conservation building code (ECBC) implementation

4

200 MWEnergy savings in existing buildings3

3000 MWStandards & Labelling programme2

4000 MWBachat Lamp Yojana (BLY)1

Targeted saved capacity

Name of the scheme

Source: Bureau of Energy Efficiency

• India already frontrunner in exploitation of renewable energy

– Over 9,500 MW of renewable based capacity has already been

installed• Fourth largest country in terms of wind energy capacity

• Numerous fiscal and financial incentives given to the promotion and exploitation of

renewable energy

• The only country to have dedicated Ministry of New and Renewable Energy

• Strong manufacturing and R&D orientation

• Dedicated financial institution for renewable energy

• Private Initiatives in Renewable Energy• An Indian company - Suzlon Energy Limited - is now world’s 4th biggest wind energy

company

• Exclusive Renewable Energy SEZ being set-up in India

• Majority of renewable energy capacity in India has been installed by private sector

• Companies like Signet, Moser Baer setting-up solar manufacturing units to add to

existing capacity of Tata BP, Selco Solar, CEL etc.

• Several Biomass Gasifier Manufacturing companies flourishing

• Areva setting-up Biomass R&D Centre in India

2. Accelerate Deployment of Renewable Energy Technologies

Summary of Renewable Energy Targets for Eleventh Five-year Plan (2007-2012)

Box 5: Summary of Renewable Energy Targets for Eleventh Five-year Plan (2007-2012)

Grid-interactive Renewable Power: A physical target of 14,000 MW is set for the Eleventh Plan for grid-interactive renewable power through wind, small hydro, bio-power and solar power.

Renewable Energy for Rural Applications: Distributed/Off-grid Renewable Power through wind, small hydro, bio-power and solar power. A target of 1000 MW of renewable based distributed capacity for Eleventh Plan.

Incentives provided for grid connected power from renewable sources would be linked to generation and not to power capacities created. Thus power regulators will be asked to create alternative incentive structures such as mandated feed-in laws or differential tariffs for grid interactive power.

National Bio-fuel policy will be finalized that provides incentives and leads to a competitive industry.

IREDA to be restructured by broad basing its equity structure for increasing availability of finance for new and renewable energy and its role to be enhanced.

Renewable Energy: Steps to be taken

• Significant potential available for further exploitation– Continue promotion of renewable energy sources under a stable regulatory

environment

– Provide critical infrastructure (transmission links, evacuation facilities,

approach roads) for remote renewable energy sites

– Ensure land availability for renewable projects in potential areas.

Emphasize on multiple uses of land

– Establish Hybrid Systems (wind-solar, wind-diesel, biomass-diesel etc.) as

firm sources of power

– The electricity grid needs to be strengthened in order to provide increased

flexibility in the generation mix

– Proper resource assessment should be done for various RETs

– Industry, service providers and research institutions should undertake

collaborative projects for bringing about improvements in technology,

particularly with regard to cost reduction, efficiency enhancements and

capacity utilization

•Formulate and announce a suitable Renewable Energy Policy

3. Switch Towards Cleaner Conventional Energy Technologies

• Accelerate Deployment of proven clean conventional energy technologies

– Ultra super-critical boiler

– Nuclear Energy

– Coal Bed Methane

• Undertake collaborative R&D on technologies that

can be soon commercialized and formulate a

strategy for their quicker deployment• R&D on Integrated Gas Combined Cycle (IGCC)

• R&D on In-Situ Coal Gasification

• Engage in R&D on Collaborative Public-Private

Partnership basis that can provide long-term

solutions

• India needs a well-instituted market mechanism,

where energy prices are based on the interaction

of demand and supply.

• Subsidies have distorted the market and have

perpetuated inefficient use of energy commodities

• Establish an organised Domestic Carbon Market in

India

• Discuss possibility of Dynamic ‘Cap and Trade’ to

be implemented in India

• Carbon tax to increase relative price of carbon

4. Strengthen and rely upon free and open market, wherever possible, to produce efficient solutions

5. Green Buildings

• Green building brings together a vast array of

practices and techniques to reduce the impacts

of buildings on the environment

• Indian private sector led by CII has already

achieved leadership in Green Buildings.

– Already approximately 30 rated buildings existing

– 100 more buildings have registered for

certification

– 7 of existing green buildings are Platinum rated

• A strategy should be worked out to increase

the penetration of Green Buildings in India

• Green Overhaul of Existing Buildings also to be

looked at

CII-GBC Building

Energy savings of 1,20,000 units per year 40 % less water consumptionContinuous CO2 monitoring 80 per cent recycled material used Discharges zero water 100% Day lighting15 % Power-Solar PV

6. TransportationTransport sector second largest consumer of energy after

industry

Key Strategies for Climate Change Mitigation in Transportation sector

– Improve technology (scooters, cars, advanced technologies e.g.

battery operated vehicles, fuel cell)

– Manage growth in vehicle use (with “carrots” and “sticks”)

– Enhance/improve travel alternatives to serve diversity of needs

and desires

• High quality, affordable mass transit system critical (e.g. Delhi Metro)

– Organize and emphasize on Freight transportation by waterways

– Coordinate government strategies and activities (transport and

land use, infrastructure investments, industrial policy and

transport, etc)

• Aviation contributed about 2 per cent of global fossil fuel

carbon dioxide emissions (2005)

– the impact of aviation on global warming is increasing rapidly

– According to Stern Review "aviation emissions could account for... 5 per

cent of the total warming effect (of all global CO2 emissions) in 2050,"

– expansion of air transport in India is among the fastest in the world

• Set emission targets for airlines operating in India:

– The Advisory Council for Aerospace Research in Europe has set target to

emit 50 per cent less CO2 for European aircraft

– NASA has set similar targets in US airlines

• Explore possibility of carbon credits for Indian civil aviation

sector

– In Europe, civil aviation has been included in ETS

• Invest in fuel-efficient aircraft and related equipment

• Formulate policies to encourage shift from aviation to high-speed

rail.

• Use advanced aircraft scheduling techniques and develop efficient

air traffic routes

7. Civil Aviation

• 2% of CDM proceeds to be used to help developing countries with their adaptation efforts (Article 12, Paragraph 8, Kyoto Protocol)

• In India, common adaptation activities would include • Afforestation

• Irrigation

• Coastal management

• Effective disaster management

• Breeding new plant species and crops which are more tolerant to changed climate

• Changes to building and infrastructure design standards to protect against more extreme weather events

• Improving water use efficiency, planning for alternative water sources

8. Adaptation...

9. Afforestation/Reforestation

• Afforestation is both an adaptation strategy and a

mitigation strategy

• Planting trees on formerly forested land can

enhance biodiversity

• Suitable tool for carbon sequestration

• India already has a strong afforestation programme

• Regulatory framework exist under Forest

Conservation Act of 1980

• Further impetus to afforestation activities should

be given at the state level

• Indian Government planning to undertake world’s

largest afforestation programme in recent times,

called Green India.

• Plan for greening six million hectares of

degraded forestland Completely a

voluntary initiative

• Enhance science and engineering capabilities and create long-term opportunities for research and development relevant from climate change stand point

• Collaborative R&D on promising projects/concept should be undertaken on public-private partnership mode– For example, Indian R&D stakeholders are part of Global R&D

consortia such as– ITER

– IPHE

– CSLF

– Futuregen

– IPR should be shared appropriately among various countries

• R&D on advanced industrial technologies, alternative energy technologies would be of prime importance

• A dedicated fund required to finance climate-friendly technologies

R&D

The Way Forward

Government•Collection/collation of targeted information

•Develop understanding of climate change impacts on India and response options

•Focus on Adaptation

•Supporting and Leveraging private actions

•Create Climate-friendly technologies fund

•Policy and regulation

Industry•Adoption of Best Practices

•Focus on Small-Scale Industries

•Leverage Climate-friendly technologies fund

•Partner R&D efforts to develop low/no carbon technologies

•Measure carbon footprint, and develop reporting systems

Civil Society•Promote awareness about impacts of climate change

•Campaign to effect behavioral change

•Work with Government and other role players as partners in sustainable development

THANK YOUTHANK YOU