Tuesday, 8 November 2016

To Be or Not To Be | India's Energy Consumption vs Growth Dilemma

World is witnessing incredible changes in the sphere of environment sustainability in this decade. The steps taken, though tentative, are instrumental in reversing the damages caused due to rapid industrialization over the last 2 centuries.

Kyoto Protocol has been hailed as the most successful initiative so far that had the blessings and willingness of more than 190 countries – an amazing feat. It has been able to heal the ozone layer to an extent in a short span of 2 decades. More recent Paris Agreement on Climate Change was ratified by again a similar number of countries in less than 11 months of its conception – another wonderful feat indeed considering the challenges that are inherently associated with such a large number of countries with their own demands and needs & getting the same accommodated to everyone’s satisfaction as was highlighted by Prof. Ghosh of CEEW at the seminar conducted by Takshashila in Delhi on 5th Nov, 2016.

But few questions remain.

One should ask – Is it enough? There is enough criticism on the content of the Paris Agreement. Firstly, it is largely non-binding on the member countries. Secondly, many estimates suggest that the current commitment of NDCs are too low to restrict temperature rise below 2 degrees, while restricting it below 1.5 degrees by 2100 is more preferable. Thirdly, there are enough caveats for the developed countries to bypass the existing commitments [like purchasing Carbon Credits] – which no doubt is a great instrument in investing in cleaner energy in developing worlds; but essentially provides the right to pollute by more wealthy countries. Fourthly, it has a finance component of USD 100 Billion to be invested by 2025 which seems to be a challenge.

With respect to the last point about climate finance, Green Climate Fund [GCF] was proposed, established and operationalised in COP 15 [Copenhagen Accord], COP 16 [Cancun] and COP 17 [Durban] respectively. The objective was to generate a fund of USD 100 Billion by 2020. But only USD 10.3 Billion could be raised from member countries – with major European Countries facing tough financial situation during the period. It seems the that finance component of the new Paris Agreement is the extension of the same with an extended target. How much of it would be feasible and successful is yet to be seen; given the history of poor generation of finance from the wealthy countries who have a moral obligation to invest in such areas that focus on cleaner technologies.

But still Paris agreement is a positive step in the right direction. It focusses primarily on adaptation of new technologies rather than Mitigation. Thereby, it stresses on use and investment in cleaner and newer technology, rather than implementing safeguard measures and workarounds on the existing polluting means of energy generation. It will be a quantum jump for the developing nations and underdeveloped nations to directly use and utilise these technologies which do not come cheap. It is in the world’s best interests that the developed countries provide these technologies at an effective viable cost and subsidize where necessary along with a liberal IPR policy where required - in order to allow these technologies to be widely adopted; so that the social benefits are not traded off with development goals of these nations.

What should India do?

India has done quite a lot in this regard – slowly gaining traction as a pioneer of thought leadership in this arena. India has in place relevant laws enacted domestically to counter and support the stand it needs to take globally. But more importantly, Mr. Modi has led from the front with the foundation of International Solar Alliance – a grouping of 121 poorer and developing countries, pledging growth with the help of greener energy. Converting this motley alliance of 121 countries into a strong buyers’ club effectively has put the ball in the court of the richer developed countries that has a moral obligation to financially support these countries in the goal of achieving energy independence through cleaner energy without compromising on the developmental aspects.

One aspect that goes in India’s favour is that, there can be proper planning to add new energy sources to the existing power grids – evaluating in advance whether it will be through existing standard power generation techniques primarily thermal and nuclear power plants or through other means like hydel, tidal, wind or solar. GoI has already announced the target of 175,000 MW of renewable energy production to be achieved by 2022 as follows: 100,000 MW from solar power, 60,000 MW from wind energy, 10,000 MW from biomass and 5,000 MW from small hydro power projects. This provides a clear sense of direction.

Subsidies are already in place for both producers and consumers promoting solar energy adoption, especially at individual unit level. But unfortunately, the residential units figure at the bottom of the list of priorities for availing the subsidies [1]. Understandably, schools and government institutions like hospitals are higher on priority, but low income groups need to be kept in mind, specially first time energy consumers who may not have the purchasing potential to avail these schemes. There are few pockets in the country where off-grid subsidised solar energy sets are being provided at a minimal price, but as mentioned, these are happening in pockets.

Second aspect to be looked into is how soon can India reach its peak energy demands? This has various aspects and implications. Firstly, peaking is important to consider if the target of temperature rise has to be contained below 1.5 degrees by 2100. Secondly, later we peak, lesser time we have to cut down on emissions. Thirdly, can India afford to declare the peak emissions like China did [2030] at this stage? This doesn’t augur well for India at the moment, and hence no peak year has been mentioned. It would be more apt to look at the consumption pattern for another decade before a peak year is committed – as we are far behind China as far as development goals are concerned. It is a typical catch-22 situation. So, in short it is in India’s best interests to peak its energy demands as fast as possible – implementing and upgrading its existing energy infrastructure as per the policy defined above.

Last aspect being, can there be some radical means to bypass the entire discussion of energy savings and fight between rich and poorer countries on clean energy adoption and technology transfer?

We need radical technologies to effectively change the current pace of environment degradation – many existing estimates suggest that we might be a little late in containing the damage [2] [3]. There are ground-breaking new technologies like SolarCity and Hyperloop One that are being worked upon which will completely revamp two keys areas where energies are consumed in bulk – Housing and Transportation. Elon Musk’s overall objective is to tie in both of these horizontally with his Tesla project thereby creating an effective loop of energy savings. And the best place on Earth to start with, on a large scale should be China and India – two of the largest and fastest economies where appetite for energy is going to increase in the coming decades. Both India and China has to aggressively support such innovative technologies and embed them as part of national policies on energy – so that the right message is sent out to the world that we are indeed serious about climate change it is not all rhetoric and that we will walk the talk. The current challenges seem to be the investment climate of these countries coupled with complex bureaucracies that has a negative effect on investment from these companies in the energy sector.

In conclusion, there are technologies that are focussing on improving the efficiency of existing energy consumption – vehicles, power generators, etc. A renewed focus is on reduce, reuse and recycle. Actions also underway in creating carbon sinks to suck up atmospheric carbon-di-oxide that acts as a greenhouse gas. But the rhetoric is primarily around containing the temp increase below 2 degrees which may not be enough, especially for island countries. Developing countries and India also need to keep their self-interests intact and there are ways and means that have been highlighted above. It may be about time to take a step back and reassess if the existing solutions should be adequate to address the situation or should we focus more on new radical technologies and investment techniques that has more potential in saving the day and assess their impact – however radical it sounds.

Read More »