eco-innovations for low carbon society · from 2005-2050: annual economic growth: 7.2% annual...

Indian Institute of Management, Ahmedabad, India

Eco-Innovations for Low Carbon Society: A Macro Perspective on Measurement in Emerging Economies

P.R. Shukla

Indian Institute of Management

Ahmedabad, India

Presented in OECD Global Forum on Environment:: ‘On Eco-Innovations’

Organized by OECD Environment Directorate

Paris, November 4, 2009


Presentation Agenda

1. A Perspective on Measuring Innovation

Frontier of Low Carbon Development in

Emerging Economies

2. Scope & Scale of Innovations in Mitigation:

The Case of India

3. Measuring Impacts & Adaptation Costs:

The Case of Long-life Assets

4. Conclusions: Measuring Eco-Innovation

Policies


Co-Benefits of InnovationsMitigation Choices deliver multiple

dividends

• Significant co-benefit opportunities

exist in developing countries

• Mitigation Assessment should

measure all costs and benefits

“For developing countries, the „good

news‟ is that their environment and

natural resources policies are often

so bad that there are reforms which

would be both good for the economy

and good for the environment.”

Joseph Stiglitz

Utility Function


MDG and global targets India‟s National plan targets Climate Change Interface

Goal 1: Eradicate extreme poverty

and hunger

Targets: Halve, between 1990 and

2015, the proportion of people with

income below $1 a day and those who

suffer from hunger

• Double the per capita income by 2012

• Reduce poverty ratio by 15% by 2012

• Contain population growth to 16.2%

between 2001-2011

• Higher income enhances access

to services, food, fuel,

information, an enhances

mitigative and adaptive capacity

• Higher climate variability would

enhance risks to meet the goal

Goal 7: Ensure environmental

sustainability

Targets: Integrate SD principles in

country policies/ programs to reverse

loss of environmental resources

Target: Halve by 2015 the proportion of

people without sustainable access to

safe drinking water

• Increase in forest cover to 25% by 2007

and 33% by 2012 (from 23% in 2001)

• Sustained access to potable drinking

water to all villages by 2007

• Electrify 80,000 additional villages by

2012 via decentralized sources

• Cleaning of major polluted rivers by

2007 & other notified stretches by 2012

• Enhanced sink capacity, reduced

GHG and local emissions; lower

fossil imports; reduced pressure

on land, resources and

ecosystems

• Higher adaptive capacity to from

enhanced supply of water, health

& education in rural areas

MDG, India’s National Targets and Climate Change

Aligning Climate Change & Development

Aligning near-term development targets and actions with long-term climate policies:• MDGs / National development targets

• Agreed goals under extant international agreements

• Developing resilience to Vulnerabilities and Adapting to changing Climate Parameters


A Sustainability Framework

Sustainability

Domains

Domain

TypologiesActions/Instruments

(Examples)

How can

preferences be

shaped & aligned

with sustainability

goals?

What are the drivers

of key socio-politico-

economic

development

processes?

Processes/

Institutions

How do human

and natural

systems evolve?

How do they

interact?

How to sustain &

enhance capital

stocks in interest of

present & future

generations?

Capital

Stocks

Systems

• Natural

• Man-made

• Human

• Social

• Globalization

• Urbanization

• Industrialization

• Public

• Private/Personal

• Community

Conservation, Tax

Design, Standards

Investments, Access

Awareness, Media

Water Management, Trade

Cap & Trade, Eco-funds

Market Reforms, Tariffs

Zoning, User Charges

Competition, R&D

Social Security

Choices, Freedoms

• Human (e.g.

Food System)

• Natural (e.g.

Environment)

Preferences

Key Elements

(Examples)

Natural Resources, Ecology

Buildings, Infrastructures

Education, Health

Institutions, Social Networks

Diets, Technologies

Climate Change, Bio-diversity

Trade, Migration

Urban Planning, Regulations

Industry Structure, Innovation

Rights, Equity, Public Goods

Lifestyle, Savings

Norms, Customs, Traditions Dialogue, Media


Development Perspectives

Carbon Market

Technologies

Energy Resources

Universal Participation

Market Structure/ Rules

Allocation of Rights

Modify Preferences

Competition/ Trade

Energy-Mix Mandates

Tech Transfer

Cooperative R&D

Remove Market Barriers

TargetInterventionsDriversAim

Forecasting

Stabilization

at Minimum

GDP Loss

Global

Greenhouse Gas

Concentration

Stabilization

Carbon Market

Technologies

Energy Resources

Universal Participation

Market Structure/ Rules

Allocation of Rights

Modify Preferences

Competition/ Trade

Energy-Mix Mandates

Tech Transfer

Cooperative R&D

Remove Market Barriers

TargetInterventionsDriversAim

Forecasting

Stabilization

at Minimum

GDP Loss

Global

Greenhouse Gas

Concentration

Stabilization

Conventional Climate

Centric Paradigm

Sustainable Development

and Climate ParadigmLow

Carbon Society

Innovations

Co-benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets

TargetsInterventionsDriversAim

Back-casting

Technological

Social/Institutional

Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision

Low

Carbon Society

Innovations

Co-benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets


Back-casting

Technological


Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision

Low

Carbon Society

Innovations

Co-benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets


Back-casting

Technological


Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision

Low

Carbon Society

Innovations

Co -benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets


Back-casting

Technological


Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision

Low

Carbon Society

Innovations

Co-benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets


Back-casting

Technological


Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision

Low

Carbon Society

Innovations

Co-benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets


Back-casting

Technological


Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision

Low

Carbon Society

Innovations

Co-benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets


Back-casting

Technological


Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision

Low

Carbon Society

Innovations

Co -benefits

Sustainability

National

Socio-economic

Objectives

and Targets

Global

Climate Change

Objectives

and Targets


Back-casting

Technological


Management

Win/Win Options

Shared Costs/Risks

Aligning Markets

Modify Preferences

Avoid Lock -ins

Long -term Vision


Integrated Modeling Framework

DATABASES

-Socio-Economic, Technologies, Energy Resources, Environmental Constraints

AIM CGE Model

ANSWER-MARKAL

Model

AIM SNAPSHOT ModelEn

d U

se D

eman

d

Mo

del

AIM

Strateg

ic Datab

ase(S

DB

)

Integrated Modelling Framework

DATABASES

AIM SNAPSHOT ModelEn

d U

se D

ema

nd

M

od

el

AIM

Stra

tegic D

ata

ba

se(S

DB

)

DATABASES

Socio-Economic, Technologies, Energy Resources, Environment

GCAM/AIM-CGE

ANSWER-MARKAL

Model

AIM ExSSEn

d U

se D

ema

nd

Mo

del

Glo

ba

l SD

B

(Tech

no

log

y D

ata

base

)

Integrated Modeling Framework


Scope & Scale of Innovations in

Mitigation: The Case of India


Global Climate Stabilization Scenarios

Stabilization Scenarios

with Global Targets

Baseline

Paradigm

Stabilization

Targets

Scenarios

Geography

Level

2.66.0 5.0 Radiative Forcing

Target W/m2

Global Regional National

4.5 2.66.0 5.0 4.5

Global Global Regional NationalGlobalLocal Local

Conventional Sustainability

Δt 4 to 6OC Δt 3 to 5

OC

Δt 3OC

Δt 2OC


Emissions Assessment and Mitigation Target

From 2005-2050:

Annual Economic Growth: 7.2%

Annual Population Growth: 0.9%

Absolute Growth in 2050 over 2005

Economy 23 times

Population 1.56 times

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mto

e

Other RenewablesNuclearHydroGasOilCoalCommercial BiomassNon Com Biomass

Energy

Base Scenario: Growth of Economy and Population

Carbon Emissions

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Mill

ion T

on C

O2

Global Stabilization Target: 2OC


Mitigation Mapping in Alternate Perspectives

Conventional Approach: transition with

conventional path and carbon price• High Carbon Price

• Climate Focused Technology Push

• Top-down/Supply-side actions

Sustainability Approach: aligning climate

and sustainable development actions• Low Carbon Price

• Bottom-up/Demand-side actions

• Behavioural change

• Diverse Technology portfolio

Technology Innovation/Transfer Areas• Nuclear

• CCS

• Renewable Energy - esp. Biomass

Technology Innovation/Transfer Areas• Transport Infrastructure Technologies

• 3R, Material Substitutes, Renewable Energy

• Process Technologies

• Urban Planning, Behavioral Changes

• Renewable Energy – Wind, Solar

0

2,000

4,000

6,000

8,000

2000 2010 2020 2030 2040 2050

Mil

lion

Ton

CO

2

Other

CCS

Device Efficiency

Nuclear

Renewable

Fossil Switch

Emissions (for 2O

Target)

Baseline Emissions

Carbon Price ($) 20 87 136 20052

0

2,000

4,000

6,000

8,000

2000 2010 2020 2030 2040 2050

Mil

lion

Ton

CO

2

CCSTransport Reduced ConsumptionRecyclingMaterial Substitutions

Device Efficiency

Renewable Energy

Building

Fossil Switch

Emissions (for 2O

Target)

Carbon Price ($) 15 55 100 11728


Macro Policy Measurement Indicators

• Risks Technology Unknowns (e.g. CCS)

Energy Security / Energy Access

National Competitiveness

• Costs GDP/ Welfare Loss

• Co-benefits Environmental (e.g. Air Quality)

Development (e.g. Employment)


Energy Mix in 2050

0

400

800

1,200

1,600

Coal Oil Gas Nuclear Hydro Renewable

Pri

mary

En

ergy D

ema

nd

(M

toe

)

Base

Conventional

Sustainability

Total Energy Demand

(Mtoe)

Base 2825

Conventional 2945

Sustainability 2207


Air Quality Co-benefits

0

2

4

6

8

10

12

14

2000 2010 2020 2030 2040 2050

Millio

n t

SO

2

Base Case

Sustainable Development +

Low Carbon Tax

Conventional Path +

High Carbon Price

Co-benefits: SO2 Emissions0

2000

4000

6000

8000

10000

100 200 400 800 1600 2400

GDP Per Capita 2000 = 100

CO

2 E

mis

sio

ns

(M

illi

on

TC

O2

)

0

2

4

6

8

10

12

14

SO

2 E

mis

sio

ns

(M

illi

on

TS

O2

)

CO2 Emissions in BAU

LCS CO2 Emissions

SO2 Emissions in BAU

Emissions and Income


Measuring Impacts & Adaptation Costs:

A Case of Long-life Assets


Climate Adaptation of Long-life Assets

Long-life assets (e.g. infrastructure) are vital to development

Huge investments are being committed in developing countries

Most infrastructures are open assets and hence exposed to climate

Development policies are correlated to impacts on long-life assets

Infrastructures have low autonomous adaptive capacity

Infrastructures are seldom assessed for climate impacts/adaptation


Case Study: Konkan Railway

760 Kms along Western coastal ghats

$745 million project

Considered and engineering marvel with:

179 main bridges

1819 minor bridges,

92 tunnels (covering 12% of total route)

>1000 cuttings (224 deeper than 12 meters)

Longest tunnel is 6.5 Km long

Longest bridge is over 2 Km.

The pillars of the tallest viaduct bridge are

more than 64 meters high.


2000 2020 2040 2060 2080 2100

Rep

air

an

d M

ain

ten

an

ce

Co

sts

Cost with adverse

Climate Change

Conventional

Bath-Tub Curve

Cost with adverse Climate

Change and Deforestation

Maintenance Cost Curve

More number of days with >200

mm rainfall Very high number of days with >200 mm

rainfall

Less numberof days with >200

mm rainfall

Present Climate

Future ClimatePro

bab

ilit

y o

f O

ccu

rren

ce

Light and

spread-over rain

Heavy and

concentrated rainNumber of days with

> 200mm rainfall

Increase in mean and variability due to Climate

Change

Increase in Climate Intensity and Variability

1 100 200 300 (mm/month)

JAN FEB MAR

APR MAY JUN

JUL AUG SEP

OCT NOV DEC

JAN FEB MAR

APR MAY JUN

JUL AUG SEP

OCT NOV DEC

Rainfall Scenario

Measuring Impacts, Risks and Costs


Konkan Railway: Climate Impact Matrix

Dep

end

ent

vari

ab

les

Tem

per

ature

Rai

nfal

l

Sea

lev

el r

ise

Extr

eme

even

ts

Wat

er l

oggin

g

Veg

etat

ion

grow

th

Lan

d sl

ide

Saf

ety/

Eff

icie

ncy

Mai

nten

ance

Tra

ffic

volu

me

Forcing Variables

Temperature L M L -- L -- -- -- L

Rainfall L -- M M M H L L M

Sea level rise -- -- -- M L M L -- L

Extreme events -- L -- M -- M L -- M

Water logging -- -- -- -- -- L L -- M

Vegetation growth L L -- -- -- L -- L --

Land slide -- -- -- -- M L M L H

Safety/Efficiency -- -- -- -- L -- L M M

Maintenance -- -- -- -- M L H H M

Traffic volume -- -- -- -- -- -- -- L M

Envir

on

men

tal

Var

iable

s

Pro

ject

Co

mp

onen

ts

Environmental Variables Project Components

Key Risk Policy Focus: Managing Landslides


Risk Parameters and Eco-innovation

Direct Climate Impact Parameters No. of Days with >200 mm rain

Indirect Impact Parameters Deforestation in surrounding terrain

Variability / Uncertainty Future Climate Change Predictions

Regional Development

Macro Policies Insurance, Discount rate

Adaptation Innovation

Microwave Safety Net


Conclusions: Measuring Eco-Innovations Policies


MEASUREMENT ISSUES AND PROBLEMS

1. Long Time Frame (e.g. Discount rate)

2. Space (e.g. Global vs. Local)

3. Costs & Benefits (e.g. Direct vs. Indirect)

4. Perspective (Integrative vs. Exclusive)

5. Parameters (Generic vs. Specific)

Measuring Eco-Innovation for LCS


• Under high uncertainty, policy measurements

should focus on inputs than outputs

• For long-term impacts (e.g. climate change),

measurement may start with focus on conduct

• Measure co-benefits; since indirect short-term

policy benefits are often more certain (e.g. AQ)

• Measure portfolio of policies (or actions); since

policies may have overlapping costs/benefits

(INTEGRATED ASSESSMENT OF POLICIES)

Inputs vs. Output MeasuresConduct (Promise) vs. Results (Performance)


Gaps: Policy Needs vs. Information

Thank you

• Technology Developments (e.g. Cost trends of

renewable, CCS) and R&D response curves

• Climate Change at low resolution (vital for local

innovations/ deployment of adaptation

measures)

• Set of measurable (agreed) indicators that best

represent the costs and benefits of policy (e.g.

carbon tax)

• Common trans-country metric (e.g. PPP vs.

MER, Statistical Value of Life etc.)

eco-innovations for low carbon society · from 2005-2050: annual economic growth: 7.2% annual...

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