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IIM Ahmedabad
Climate Policy Modeling: Some Insights for India
Presentation byP.R. Shukla
Indian Institute of Management, Ahmedabad
COP 8 Side-event (October 25 - 15:00 to 17:00 hours)Asia-Pacific Forum for Collaborative Modeling of Climate Policy Assessment
October 25, 2002, Hotel Grand Inter-Continental, New Delhi
IIM Ahmedabad
AIM Model System
Land use
TemperaturePrecipitation
Sunshine
Water resource
Crop Productivity
Socio-economic indicator
Impact on food demand
Adaptation strategy
AIM/Ecosystem/Water/Impact
A set of ecosystem models, including a vegetation dynamics model, a water resource model, an agricultural productivity model and a health impact model
A reduced-form model to project future socio-economic trends and environmental change for all 42 countries
Futureeconomic trend
Futureenvironmental trend
India
Thailand
Korea
Japan
China
AIM/TrendIndustry
Green Purchase
Environ-mental Burden
Environment Fund
Environmental Industry (waste management, recycle)
Was
tes
Environmental Burden
Rec
ycle
Technology needsTechnology assessment
Environmental Industry
Environmental burden
Consumer
Research on new technologies
AIM/MaterialA environment-economy integrated model with material balance and recycling process modules
AIM/Energy/Technology/Country
A bottom-up technology selection model of energy useand emissions at country and local level
AIM/Bottom-upA bottom-up technology
& land use model for Asia-Pacific region
AIM/Top-downA general-equilibrium-
type world economic model
AIM FamilyAIM Family
IIM Ahmedabad
Model System for India’s Emissions Policy Analysis
Models
Top-down Models
•AIM/Material•SGM•GEMA•ERB•AIM/Trend
Local Models
•AIM/Emissions•GIS •Inventory Assessment•Health Impact Assessment Model
Bottom-up Models
•ANSWER – MARKAL•Stochastic MARKAL•Demand Projection•AIM/End-use•Power Sector LP
IIM Ahmedabad
Soft-linked Models Framework
ERB
SGM
AIM/Material
AIM/Trend
Invent o ry Assessment
Health Impact A ssessment Model
GIS Model
Pro
duct
ivit
y Global Energy Prices
Regional projections
Power Sector LP
Demand Projection
AIM/E nd -use
ANSWER
MARKAL Stochastic MARKAL
AIM/Local
Bottom -Up Models
Energy Balances
Sector Demand
End -use Demand
Tec
hnol
ogy
Sha
re Scenarios Emissions
Consolidation
Prices, GDP
Local Models
Top -Down Models
GEMA
Local Emissions Future Projections
Technology Specifi cations
IIM Ahmedabad
Few Key Questions for Emissions Policies
• What is the cost-effective emissions pathways to achieve a specific “GHG concentration stabilization” level?
• What will be the future trends of emissions and intensities?
• How the local and GHG emissions control policies linked?
• What is mitigation supply curve for India?
• How can regional cooperation help in climate change issues?
• What would be the implications of stabilization regime, e.g. 550 ppmv, on India’s energy system during the century
• Is it worth to fund supply-side push of clean technologies like solar PV for GHG mitigation?
IIM Ahmedabad
The Framework Convention On Climate Change (UNFCCC)
Objective:
...stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. (p.5)
IIM Ahmedabad
Emissions and Concentrations
300
350
400
450
500
550
600
650
700
750
800
19
90
20
15
20
40
20
65
20
90
21
15
21
40
21
65
21
90
22
15
22
40
22
65
22
90
pp
mv
WRE 750WRE 650WRE 550WRE 450WRE 350
-2
0
2
4
6
8
10
12
14
16
19
90
20
15
20
40
20
65
20
90
21
15
21
40
21
65
21
90
22
15
22
40
22
65
22
90
Pg
C/y
r
WRE 750WRE 650WRE 550WRE 450WRE 350
IS92a IS92a
IIM Ahmedabad
Energy Consumption Carbon Emissions
0
200
400
600
800
1995 2005 2015 2025 2035Year
Car
bon
(M
T)
Energy and Carbon Emissions for India: AIM/ENDUSE Model
0
10
20
30
40
50
1995 2005 2015 2025 2035
Year
Exa
Jou
les
Coal
Oil
GasHydro
Nuclear
RenewablesBiomass
IIM Ahmedabad
Energy, Carbon, Electricity and GDP (History and Projections for Reference Scenario)
0
2
4
6
8
10
12
14
16
18
20
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Energy Carbon Electricity GDP
Past Trends
Future Projections
IIM Ahmedabad
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030
Electricity
CarbonEnergy
Past Trends Future Projections
GDP intensities of Energy, Electricity and Carbon (Reference Scenario)
IIM Ahmedabad
SO2 EmissionAIM/Emission Model
2000 2030
< 0.01 0.01-0.017
0.017-0.026 0.026-0.035 0.035-0.044 0.044-0.053 0.053-0.060
> 0.060
Million Tons < 0.01
0.03
0.07
0.15
< 0.20
0.11
Million Tons
< 0.01
0.03
0.07
0.15
< 0.20
0.11
Million Tons
Land use
Temperature
Precipitation
Sunshine
Water resource
Crop Productivity
Socio-economicindicator
Impact on food demand
Adaptation strategy
AIM/Ecosystem/Water/Impact
A set of ecosystem models, including a vegetation dynamics model, a water resource model, an agricultural productivity model and a health impact model
A reduced-form model to project future socio-economic trends and environmental change for all 42 countries
Futureeconomic trend
Futureenvironmental trend
India
Thailand
Korea
Japan
China
AIM/TrendIndustry
Green Purchase
Environ-mental Burden
Environment Fund
Environmental Industry (waste management, recycle)
Was
tes
Environmental Burden
Rec
ycle
Technology needsTechnology assessment
EnvironmentalIndustry
Environmentalburden
Consumer
Research on new technologies
AIM/MaterialA environment-economy integrated model with material balance and recycling process modules
Emission Intensity of SO2 in China
AIM/Energy/Technology/Country
A bottom-up technology selection model of energy useand emissions at country and local level
AIM/Bottom-upA simple technology selection model for Asia-Pacific region
AIM/Top-downA general-equilibrium-
type world economic model
AIM FamilyAIM Family
Land use
Temperature
Precipitation
Sunshine
Water resource
Crop Productivity
Socio-economicindicator
Impact on food demand
Adaptation strategy
Land use
Temperature
Precipitation
Sunshine
Water resource
Crop Productivity
Socio-economicindicator
Impact on food demand
Adaptation strategy
Land use
Temperature
Precipitation
Sunshine
Water resource
Crop Productivity
Socio-economicindicator
Impact on food demand
Adaptation strategy
AIM/Ecosystem/Water/Impact
A set of ecosystem models, including a vegetation dynamics model, a water resource model, an agricultural productivity model and a health impact model
A reduced-form model to project future socio-economic trends and environmental change for all 42 countries
Futureeconomic trend
Futureenvironmental trend
India
Thailand
Korea
Japan
China
AIM/TrendA reduced-form model to project future socio-economic trends and environmental change for all 42 countries
Futureeconomic trend
Futureenvironmental trend
India
Thailand
Korea
Japan
China
Futureeconomic trendFutureeconomic trend
Futureenvironmental trendFutureenvironmental trend
India
Thailand
Korea
Japan
China
AIM/TrendIndustry
Green Purchase
Environ-mental Burden
Environment Fund
Environmental Industry (waste management, recycle)
Was
tes
Environmental Burden
Rec
ycle
Technology needsTechnology assessment
EnvironmentalIndustry
Environmentalburden
Consumer
Research on new technologies
AIM/MaterialA environment-economy integrated model with material balance and recycling process modules
IndustryGreen Purchase
Environ-mental Burden
Environment Fund
Environmental Industry (waste management, recycle)
Was
tes
Environmental Burden
Rec
ycle
Technology needsTechnology assessment
EnvironmentalIndustry
Environmentalburden
Consumer
Research on new technologies
IndustryGreen Purchase
Environ-mental Burden
Environment Fund
Environmental Industry (waste management, recycle)
Was
tes
Environmental Burden
Rec
ycle
Technology needsTechnology assessment
EnvironmentalIndustry
Environmentalburden
Consumer
Research on new technologies
AIM/MaterialA environment-economy integrated model with material balance and recycling process modules
Emission Intensity of SO2 in ChinaEmission Intensity of SO2 in China
AIM/Energy/Technology/Country
A bottom-up technology selection model of energy useand emissions at country and local level
AIM/Bottom-upA simple technology selection model for Asia-Pacific region
AIM/Bottom-upA simple technology selection model for Asia-Pacific region
AIM/Bottom-upA simple technology selection model for Asia-Pacific region
AIM/Top-downA general-equilibrium-
type world economic model
AIM/Top-downA general-equilibrium-
type world economic model
AIM/Top-downA general-equilibrium-
type world economic model
AIM FamilyAIM Family
IIM Ahmedabad
GHG versus Local Emissions in India
Carbon Emissions SO2 Emissions
0
200
400
600
800
1995 2005 2015 2025 2035Year
Car
bon
(M
T)
Year
Mil
lion
Ton
nes
0
1
2
3
4
5
6
1995 2005 2015 2025 2035
7
IIM Ahmedabad
Carbon Mitigation Supply Curve(2005-2035)
6 billion tons of mitigation below $25/ ton of carbon
0
10
20
30
40
50
60
1 2 3 4 5 6 7
Carbon abatement (billion ton)
Cos
t ($/
Ton
of
Car
bon)
IIM Ahmedabad
Carbon Mitigation (under different Post-Kyoto Scenarios)
Scenario
Kyoto Period2000-2012
Medium Term2000-2030
Long Term2000-2100
750 ppmv 138 (3%) 743 (5%) 11334 (11%)
650 ppmv 301 (7%) 1555 (11%) 23666 (23%)
550 ppmv 449 (10%) 2503 (17%) 33284 (32%)
(in Million Ton)
IIM Ahmedabad
Indian Energy System Transformation Under 550 ppmv Stabilization
0
20
40
60
80
100
120
140
1990 2005 2020 2035 2050 2065 2080 2095
Exa
joul
es
Oil Gas Coal Biomass Hydro Solar Nuclear0
500
1000
1500
2000
2500
1990 2005 2020 2035 2050 2065 2080 2095
Carbon Capture
Energy Efficiency
Wind
Solar
Biomass
Hydro
Nuclear
Gas
Oil
India 550 ppmv emission
Base Case Energy System Energy Changes: 550 ppmv Case
MT
C
550 ppmv
IIM Ahmedabad
Technological Change in India to Stabilize CO2 at 550 ppmv
0
500
1000
1500
2000
2500
1990 2005 2020 2035 2050 2065 2080 2095
Carbon Capture
Energy Efficiency
Wind
Solar
Biomass
Hydro
Nuclear
Gas
Oil
India 550 ppmv emission
550 PPMV550 PPMV
Non-Fossil Energy Contribution to GHG Mitigation
400
800
1200
2000
1600
IIM Ahmedabad
Impact of Regional Energy Market Developments in South-Asia
CarbonSOX
0.0
1.5
3.0
4.5
6.0
7.5
9.0
10.5R
edu
ctio
n (
%)
Year
Emissions Reduction (2015)
Grid Integration
Grid Integration + Regional Co-operation
IIM Ahmedabad
Advanced Technology: Competitive Paradox
0
5
10
15
20
25
30
35
40
1990 2000 2010 2020 2030 2040 2050
Base
Hi-Solar
$25 TaxMed-Solar + $25 Tax
0%
5%
10%
15%
20%
25%
30%
High Solar $25 Tax Med Sol+ $25 Tax
Solar PV Penetration Carbon Mitigation
IIM Ahmedabad
Conclusions
• There is no “silver bullet” for mitigation or adaptation
• Local and global emissions mitigation policies are disjointed
• Regional cooperation can reduce the climate mitigation and impacts costs significantly
• Strong mitigation regime, e.g. 550 ppmv, can alter the regional energy system significantly
• Global cost-effectiveness requires substantial mitigation (and adaptation) in developing countries
• Supply-push of few clean technologies is inadequate for mitigation
• Climate Change impacts is complicated due to “winners and losers” rather than absolute impacts burden
• Integrated policy assessment is vital for linking climate change and sustainable development