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Shaping the climate agendaOpportunity for Indian businesses

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Shaping the climate agendaOpportunity for Indian businesses

This report has been prepared by PwC India in association with ASSOCHAM

2016

Shaping the climate agenda 5

ContentsSetting the stage 10India’s response to tackling climate change:

Policies and initiatives18

Challenges for India 28What it means for Indian businesses 31The role of policymakers 49The climate change agenda 50

The severe impact of climate change has begun to be felt the world over, be it in the form of floods, droughts or tornadoes.

The loss of life and property on account of climate change has been immense. Both developed and developing nations have been equally affected. It is imperative that the problem of changing climate is collectively addressed by all countries.

Recently held in Paris, COP21 reflects the pledges made by all nations. Our Prime Minister (PM), Narendra Modi, has taken a bold step by committing to keep the per capita emission below that of the developed world by 2050. This is a serious commitment that can help in creating a sustainable global environment.

We therefore need to work, both individually and collectively, towards a cleaner and greener India in order to achieve the PM’s goal.

Sunil KanoriaPresident ASSOCHAM

Message from the president of ASSOCHAM


The recently concluded COP21, which was held in Paris, saw the signing of a landmark climate deal that could reshape international cooperation on climate action. Governments across the globe are gearing up for clear action-driven agendas based on their respective Nationally Determined Contributions (NDCs).

The Indian government proposed an impressive plan to promote its low-carbon growth strategy through technological interventions supported by enabling policy measures. India’s goals, though

impressive, are yet to be translated into specific actions. This year’s conference (i.e. COP22) will focus on the role of the various stakeholder groups in shaping the climate agenda and demystify the uncertainty with a clear course of action.

The NDCs have significant implications for Indian businesses in terms of future market design and their implications on future investment strategies, R&D initiatives and capacity building requirements. Public-private-partnerships (PPPs) are a key model to leverage the technological and execution strengths of the private sector. Recent policy measures by the government clearly indicate that future growth will be cleaner and greener.

This knowledge paper focusses on the potential starting point of India’s low-carbon transition.

We are happy to have PwC India as the knowledge partner for the conclave this year. The ASSOCHAM–PwC knowledge paper, titled ‘Shaping the climate agenda’, provides a good reference point for discussions on key agenda items for policymakers, business, academia and civil society. ASSOCHAM looks forward to expanding this dialogue with the government and corporate sector. We hope to draw from international best practices in this space, and I am sure that the participation of diverse stakeholders will help bring in deeper insights.

We recognise the efforts and contribution of Dr Om S Tyagi, Purnima Dhingra, Shikha Dutta and Nitesh Sinha towards organising the 5th Sustainable Environment Forum 2016–Climate Change–Energy Efficiency–Waste Management.

I believe this publication will serve as a useful resource, providing an overview of India’s approach to climate action, its polices, as well as the landscape of challenges and opportunities that lies ahead for Indian businesses.

D S RawatSecretary GeneralASSOCHAM

Message from ASSOCHAM

Human influence is believed to be the dominant cause of global warming. We are already witnessing the effects of climate change, such as deteriorating air quality, disturbed crop pattern, extreme weather events and the warming of the atmosphere. A number of international meetings have taken place since the Earth Summit in 1972 to recognise the issue and find common and acceptable solutions. The latest one in the series was CoP21 in December 2015, where over 196 countries reached an

agreement to limit the emissions below 1.5oC. In many ways, it represents a recognition of the fact that the impacts of climate change are already being felt in many parts of the world. India’s pledge to the United Nations Framework Convention on Climate Change (UNFCCC), prior to COP21, reflects a commitment towards encouraging sustainable alternatives, and the government of India, through its policies like the National Action Plan on Climate Change (NAPCC) and its target of generating 175 GW of renewable energy by 2022, might spur the growth of a green economy in India.

Although India has put together an impressive and optimistic plan to combat climate change, there exists a wide array of challenges, as many of its geographies are vulnerable to climate risks and the government has to balance the needs of the nation with limited resources. If India is able to think ahead of the curve and tap into future potential that exists in developing a green economy, through sustainable production, innovation, decentralisation, networking, smart technology, R&D, etc., the strengths of different stakeholders can be activated in ways that can lead to an inclusive, sustainable and more stable economy. India’s commitments, as stated in its Intended Nationally Determined Contributions (INDCs), will need an expenditure upwards of 2.5 trillion USD and this requirement will be met only through local actions and international collaboration for mitigation and adaptation.

The good news is that the global investment horizon for green growth is starting to open up and sustainability is now a common topic of boardroom discussions. Future markets are likely to see cost-competitive renewables supported by renewable policy initiatives, while ongoing capital investment would be subject to policy approvals feeding into regulated tariffs. Other potential interventions may include tapping into rural markets through decentralised impact models. Though the private sector is expected to play a crucial role in the transition towards a low-carbon future, it will have to innovate to find new ways of doing business in a regulatory environment that favours low-carbon growth. Many CEOs realise that there are crucial business reasons for integrating climate change strategies into their planning—from supply chain to marketplace, both from a revenue growth and risk management perspective—and are taking action to do so. Making these benefits clear and measurable, and communicating them widely, will be important to build deeper confidence in the business community, with the government and the public. We are already witnessing a change in decision-making from governments, businesses and other stakeholders that are thinking ahead of the curve.

‘Shaping the climate agenda’ is perhaps a starting point, presenting an overview of the current position on climate change, the broad implications of the outcomes of the Paris Agreement, India’s approach and response to climate change and what that means in terms of future market design, including the landscape of challenges and opportunities for businesses and other stakeholders.

Meeting India’s energy demands, sustainability, energy security and development goals, will require stakeholder inclusivity and this conclave is aimed at collaborating towards envisioning a different future, a better future for generations to come. This report highlights some of the potential areas where sustainability interventions can generate large impacts that can create shared value and meet India’s climate responsibilities.

Sudhir Singh DungarpurPartner PwC India

Message from PwC

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IntroductionIndia has taken several steps to control emissions and carbon intensity, including stringent emission standards, a nationwide energy conservation programme, a recent four-fold increase in carbon tax, establishing smart cities, and building additional forest cover. Being the world’s fastest growing major economy, India’s efforts towards reducing carbon intensity will play an important role in determining the world’s ability to limit the global temperature rise to 2°C. However, to shift the Indian economy on a sustainable path towards a low-carbon future, the needs of the poor must be adequately addressed. Unless basic needs such as electricity, housing, food and education are met, it will be hard to engage with the wider society on issues of climate change. Solutions that impose an unfair burden on underserved communities are likely to face resistance.

At the Paris Agreement, over 196 countries committed to reducing their carbon intensities and the resulting climate deal is considerably stronger than what was expected, with a stated ambition in the text of the agreement to limit temperature rise to 1.5°C and well below 2°C. The importance of 1.5°C, according to climate scientists, is that beyond this point we risk the danger of crossing ‘tipping points’ in the climate system or thresholds that can lead to abrupt and irreversible changes that might further exacerbate climate change and thwart sustainable development goals. While this is may be viewed as the beginning of a transition to a low-carbon future, now is the time for action.

This report seeks to describe the landscape of opportunities for the private sector and other relevant stakeholders, with insights pertaining to the Paris Agreement, commitments made by countries to decarbonise economies, India’s approach to tackle climate change and a look into the future market. The report presents a snapshot of the challenges and opportunities facing business and policymakers.

1. Fifth Assessment Report, 20142. NOAA, September 20154. Climate and Development Knowledge Network (CDKN). The IPCC’s Fifth Assessment Report: What’s in it for South Asia. Retrieved from http://

cdkn.org/wp-content/uploads/2014/04/IPCC_AR5_CDKN_Whats_in_it_for_South_Asia_FULL.pdf5. The Energy and Resources Institute (TERI). Coping with global change: Vulnerability and adaptation in Indian agriculture

Setting the stage


Climate change: The definitive storyIn the past few years, there has been a steady increase in scientific understanding of climate change. The recent reports by the Intergovernmental Panel on Climate Change (IPCC) show that human-induced changes to the climate are already taking place, with significant effects on earth systems.

The report highlighted the fact that warming of the atmosphere and ocean system is evident and human influence has been the dominant cause behind this. The report also warned that the longer we wait to reduce carbon emissions, the more expensive it will become.

The burning of fossil fuels is the main reason behind this increase. From where we stand today, the global community unanimously agrees on the scientific basis of climate change that the ‘warming of the climate system is unequivocal’1 and is primarily due to human influence. Through the United Nations Framework Convention on Climate Change (UNFCCC) process, to which 197 nations are party to, efforts have been made in the past to decarbonise economies. It is evident that there exists a wide gap between what has been achieved over 20 years since the signing of the first climate change treaty at the Rio Earth Summit in 1992, when countries agreed to limit their emissions of greenhouse gases (GHGs) and the magnitude of transitory change required to achieve the shared ambition of ensuring that global warming is limited to between 1.5–2°C of the carbon budget.

Setting the 2°C goal

Limiting the average global surface temperature increase to 2°C (3.6°F) over the pre-industrial average has, since the 1990s, been commonly regarded as adequate means of avoiding dangerous climate change, in science and policymaking. The consensus among scientists and researchers suggests that the most serious consequences of global warming may be avoided if global average temperatures are prevented from rising by no more than 2°C (3.6°F) above pre-industrial levels.

Recent climate models indicate that this can be achieved if GHG concentrations do not rise above approximately 450 ppm carbon dioxide equivalent (CO2e) by volume. At present the concentrations of CO2 in the atmosphere are at approximately 397.64 ppm of CO2e,2 indicating an urgent need to arrest its growth.

How climate change will impact India3

Climatic risks threaten lives, food security, health and well-being across many parts of India. There are clear signs that the impacts of climate change are already being felt. India’s diverse geographical regions, biodiversity and natural resources make it one of the most vulnerable to the risks of climate change.

Vulnerability to potential impacts of climate change in India4

• The warming occurred at a country scale and India has suffered more temperature extremes in recent years. The frequency of temperature extremes is likely to increase further in the future.

• Changing patterns of rainfall or melting snow and ice are altering freshwater systems, thus affecting the quantity and quality of water available in many regions of India.

• Effects of the rising sea levels are already felt in parts of India. This will have consequences for coastal settlements, as well as coastal economies, cultures and ecosystems.

• Low lying, densely populated coastal areas in India are at increased risk of storm surges.

• Extreme events are expected to be more catastrophic in nature for the people living in districts with poor infrastructure and rapid population growth.

• Climate-sensitive sectors such as agriculture and fisheries are affected by rising temperatures, rising sea levels and changing rainfall patterns.5

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Rio to ParisTimeline of international climate change negotiations and India’s climate change actions


1992 • The United Nation’s Framework Convention on Climate Change (UNFCCC) was created in Rio de Janeiro during the international environmental treaty negotiated at the United Nations Conference on Environment and Development (UNCED)(informally known as the Earth Summit).

1999 • 5th COP negotiates the Kyoto Protocol, setting targets for industrialised nations to reduce GHG emissions

2005 • First treaty to limit GHG emissions, the Kyoto treaty goes into effect and is signed by major industrial nations except the US.

2007 • IPCC’s Fourth Assessment Report declares humans cause global warming: report warns that serious effects of warming have become evident; cost of reducing emissions would be far less than the damage they will cause.

• Prime Minister of India’s Council on Climate Change (PMCCC) constituted

2008 • National Action Plan on Climate Change (NAPCC) launched in India

2009 • Copenhagen Accord (COP15) introduced the global goal of limiting warming to 2°C• India commits to reducing emission intensity of its GDP by 20–25% compared to

2005 levels by 2020. • First State Action Plan on Climate Change (SAPCC) launched in India

2010 • Expert Group on Low-Carbon Inclusive Growth established in India• Coal cess introduced in India• National Clean Energy Fund (NCEF) created for funding research and innovative

projects in clean energy technologies for the public or private sectors in India• Indian Network on Climate Change Assessment (INCCA) published India’s GHG

inventory for the year 2007

2011 • Renewable Energy Certificates (RECs) trading commences in India

2012 • Perform-Achieve-Trade (PAT) a market-based trading scheme to promote energy efficiency, started in India

2013 • National Electric Mobility Mission Plan 2020 launched in India• Fuel consumption standard notified

September 2014 • United Nations (UN) Secretary-General Ban Ki-moon hosts a summit for heads of state and government, as well as leaders from business, finance and civil society, to catalyse action on climate change.

December 2014 • UN climate negotiations: Ministers meet in December at Lima to discuss the post- 2020 agreement and pre-2020 action.

2014 • National Adaptation Fund instituted in India• 100 smart cities programme announced in India• Ministry of Environment and Forest (MoEF) renamed to Ministry of Environment,

Forest and Climate Change (MoEFCC)

2015 • Renewable energy (RE) target in India enhanced to 175 GW by 2022• India submits a proposal to amend the Montreal Protocol to phase down

hydrofluorocarbons (HFCs).

Early 2015 • Countries submit proposed plans on targets and contributions to the UN by March 2015, to be reviewed in advance of the Paris summit.

September 2015 • UN agreement on sustainable development goals (SDGs)

October 2015 • India declares its INDCs and promises to reduce its carbon intensity by 33–35% by 2030 from 2005 levels.

December 2015 • Paris Climate Summit• India to anchor the international Solar Alliance

January 2016 • The government of India (GoI) proposes amendments to the National Tariff Policy, 2005.

2016–2020 • International action continues, including continuation of the Kyoto agreement, ratification of the Paris Agreement and development of institutions

2021 • Formal date for implementation of the Paris Agreement

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Recent developments towards greater international cooperation on climate change • Broader national action: Increasing knowledge of climate

change impacts has prompted extensive responses from governments, business and the civil society. Many countries have developed comprehensive legislation to address climate change.

– The UK was the first country, with its historic 2008 Climate Change Act, to set statutory targets for emissions reduction.

– Mexico now has a General Law on Climate Change and Nigeria has a National Climate Change Policy and Response Strategy.

– China will shortly consult on a national climate change law.

– India launched the National Action Plan on Climate Change (NAPCC) in 2008.

• Decoupling emissions from economic growth: Though absolute emissions continue to rise, many countries are making progress towards decarbonising their economies. However, a collaborative effort grounded in transparency and accountability between all participating countries will be vital to achieve this target. The timelines are unforgiving, and the IPCC has indicated that emissions from developed economies need to consistently fall, and that absolute emissions from major developing countries, including India, will also have to start declining from 2020 onwards. Globally, efforts to reduce emissions are already underway and carbon intensity fell by 2.7% in 2014,6 the steepest decline on record. These may be the first signs of a decoupling of emissions from economic growth.

• Increased investment: Markets in low-carbon goods and services amounted to 3.4 trillion GBP in 2011–12 and are forecast to be worth 4 trillion GBP by the end of 2015.7 They have outperformed the mainstream economy since the onset of the financial crisis. Meanwhile, the cost of RE has fallen markedly as markets have expanded. There is an appetite for increased investing in action on climate change.

• US and China have shifted their positions: The past five years have seen significant shifts in position of the most influential countries, notably China and the US. Despite a divided Congress, President Obama has committed to reducing emissions, making climate change a defining issue of his second term. China has an ambitious strategy to grow its renewables sector, with tough new laws on air pollution and strong action on limiting coal consumption. In 2014, the two countries signed an agreement to work together on carbon reduction in crucial sectors, including transport and energy efficiency.

• The Paris Agreement: This agreement was adopted by all governments that participated at the COP21 deliberations. The deal is quite ambitious and represents a collective acceptance of the goal, in line with the IPCC’s recommendations, which is to prevent the most damaging impacts of climate change, the rise in global temperature must be limited 1.5°C. The IPCC has warned that the current trajectory will lead to warming estimated in the range of 3.7–4.8°C over the 21st century. However, as with past efforts like the Kyoto Protocol, it is evident that a successful deal in no way guarantees effective action. The Paris Agreement is yet to be ratified and then implemented by all countries. Limiting climate change in the long term depends on cumulative emissions so, if less is done now, greater effort will be needed in the future. Failure to act now will make it harder to limit temperature rises to less than 2°C, much less 1.5°C.

• INDCs: Governments have proposed a range of emissions targets and strategies that were submitted as INDCs to the UNFCCC, now called Nationally Determined Contributions (NDCs). Many countries are already translating these into national regulations, which will be key in unlocking the technology and investment needed to accelerate decarbonisation.

• India’s impressive climate change agenda: India aspires to play a leadership role by committing in its INDC to reduce the emissions intensity of its gross domestic product (GDP) by 33–35% by 2030 (from 2005 levels) and to triple its RE capacity by 2022. In addition, it is targeting to derive 40% of its power from non-fossil sources by 2030, and has proposed a broad range of policies, measures and initiatives aimed at accelerating the rate of decarbonisation of its economy and sustainable development.

6. PwC’s Low Carbon Economy Index (LCEI), 20157. Retrieved from http://www.carbontrust.com/media/504208/ctc829-a-must-win-capitalising-on-new-global-low-carbon-markets.pdf


Country Pledges for 2020 Pledges for 2030 Pledges for 2050

China 40–45% carbon intensity below 2005 60–65% carbon intensity below 2005 Not disclosed

US 17% absolute below 2005 26–28% absolute below 2005 (by 2025) 83% absolute below 2005

EU 20–30% absolute below 1990 40% reduction below 1990 levels 80–95% below 1990

India 20–25% carbon intensity below 2005 33–35% carbon intensity below 2005 Per capita emission to never exceed the developed world

Russia 15–25% absolute below 1990 25–30% absolute below 1990 50% absolute below 1990

Japan 25% absolute below 1990; revised to 3.8% reduction on 2005 levels

26% absolute below 2013 (18% absolute relative to 1990)

Not disclosed

South Korea 30% below BAU (4% below 2005) 37% below BAU Not disclosed

Canada 17% below 2005 30% below 2005 60–70% below 2006

South Africa 34% below BAU 42% below BAU by 2025 Not disclosed

Mexico 2% below 2000 25% below 2000 50% below 2000

Brazil 37% below BAU by 2025 43% below BAU Not disclosed

Australia 5–25% below 2000 26–28% below 2005 Not disclosed

Indonesia 26% below BAU 29% below BAU Not disclosed

Turkey Electricity emissions 7% below BAU 21% below BAU Not disclosed

Table 2: Summary of pledges

The Paris Agreement: Summary of outcomesThe Paris Agreement provided a clear signal to the international community that the shift towards a cleaner future is now underway.

COP21 was different from those that came before it. In the early years of climate negotiations, the focus was on setting ‘top-down’ targets, which drove national action. Today, the emphasis has shifted. Individual countries were asked to come forward with their own ambitions and decarbonisation plans. The Paris Agreement is a step towards ensuring that the countries’ pledged contributions add up to sufficient global action, while providing financial support for adaptation, and the low carbon transition with transparency to enhance cooperation and scale-up efforts.

Though there is a growing recognition that pivotal issues such as eliminating poverty, improving health and building security are all outcomes linked to tackling climate change, developing countries, including India opposed the 1.5°C limit as it restricts the carbon budget that would remain available to scale up their economies.

Some of the contentious issues at COP21 were the long-term goal, finance, the review process for national action, and loss and damage. How to differentiate the responsibilities and actions of countries cut across these issues have added complexity to the talks. The final text of the Paris Agreement is worded with ambiguity to allow countries the flexibility to craft low carbon strategies and policies that may be acceptable domestically and tailored to their own unique development imperatives.

The agreement and the decisions

The deal is split into the agreement, broadly setting out what countries want to achieve, and the COP decisions, which introduce the agreement and explain how to put it into effect. The wording leaves aspects of it open to interpretation and will take time to digest, particularly when it comes to differentiation.

Here is a brief overview and instant reaction to some of the main articles:

• Purpose and objective: Raising the 1.5°C goal was a particularly emotive topic as it increases pressure on countries to ratchet up their targets in future. Others suggested that it was a helpful negotiating tactic which split the bloc of developing countries and that the goal has no practical implications as it does not link with either a global long-term emissions goal or the national mitigation targets. Many think that the 1.5°C goal is so challenging it actually undermines the credibility of the deal. PwC’s Low Carbon Economy Index (LCEI)8 chart (below) shows the huge gap between current progress and the 2°C goal—and the INDCs are only filling part of that gap. The 1.5°C goal is even more ambitious and will require unprecedented rates of low-carbon infrastructure deployment, including carbon capture and storage, global cooperation and revolutions in land management.

• Mitigation: The Paris Agreement formally recognised the NDCs and stated the need for progression over time. There is no quantitative long-term goal, but countries are expected to aim towards peaking of emissions at the earliest and rapidly reduce emissions afterwards, reaching net zero emissions by 2100. It also set out the process for five-yearly reporting on national action and reviewing collective progress and raising ambition. The first review will take place in 2023.

•

What the world has committed toThe sum of the pledges, if implemented, will take us to a 3°C scenario.

Countries have agreed to limit warming to below 2°C. The focus of the emission reduction proposals submitted in the INDCs in 2015 is for governments to put forward their proposed

contributions to a ‘fair sharing’ of effort to move global emissions downward in the period 2020–2030. Some countries have also presented long-term targets up to 2050.

Countries presented their INDCs in the lead up to Paris in many different ways (Table 3), with different approaches to setting baselines and targets.

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PwC’s low carbon economy index (LCEI) 2015

actions shall take into account these finance flows. The mobilisation will continue through to 2025 and the collective goal should rise from a floor of 100 billion USD per year.

• Differentiation: The division of responsibilities and actions of countries is described in many aspects of the agreement. It was particularly challenging to tackle in the facilitated groups that focussed on individual articles. Notably, there is no mention of the 1992 Convention’s Annex 1 (developed countries) or non-Annex 1 in the Paris Agreement. But throughout the agreement, there are references to developed and developing country parties, and specific references to the special circumstance of LDCs and small island developing states (SIDS). It remains to be seen whether this language truly breaks down the binary division between countries. The disadvantage of the woolly wording is that both supporters and detractors of the deal can still argue it either way when it comes to differentiation.

• Miscellaneous: Other aspects in the agreement address technology transfer, capacity building, the global review process, compliance, entry into force, and the governing and subsidiary bodies of the agreement.

• The Paris Agreement holds value as it allows countries to push ahead with strategies and policies for carbon emissions reduction, knowing that others will be doing likewise. It provides a predictable framework for a global low-carbon economy and improves international efforts to protect the natural environment by reaching a compromise in the demands of developed and developing countries.

PwC | Low Carbon Economy Index 2015 | 5

Potential for optimismPwC’s Low Carbon Economy Index has tracked the progress of the G20 economies against a 2°C global carbon budget for the past seven years. Throughout this period, we have seen economic growth closely coupled with growth in carbon emissions. The latest evidence from the Intergovernmental Panel on Climate Change (IPCC) fifth assessment report (AR5) reinforces the message that, without the rapid decoupling of GDP and emissions, climate change will present widespread threats to business and society.

AR5 sets out four carbon budgets that correspond to different degrees of warming by the end of this century. The current consensus target by governments, convened under the UN Framework

Convention on Climate Change (UNFCCC), is to limit the global average temperature increase to 2°C. The IPCC states that the physical impacts of more than 2°C of warming will be severe and in some cases irreversible. The IPCC’s two degrees scenario (known as RCP2.6) gives a two thirds chance of achieving that goal and assumes cumulative fossil fuel CO2 emissions between 2010 and 2100 of no more than 270GtC (or around 990GtCO2).

While all parties at the UNFCCC have committed to the goal of limiting warming to 2°C, implementation has fallen well short. The current trajectory is aligned with the IPCC’s highest emissions scenario which projects warming in the range of 3.7-4.8°C this century.

Figure 1: Pathway to 2°C

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100

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2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Car

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Global carbon intensity fell by an average of 1.3% per year from 2000 to 2014. At this rate the 2°C carbon budget will be spent by 2036.

Average G20 INDCsimply a decarbonisationrate of 3% per year.

To stay within the 2°C global carbon budgetthe decarbonisation rate needs to be 6.3% every year to 2100.

business asusual

3%a year

Paristargets2°C

6.3%a year

1.3%

Sources: BP, Energy Information Agency, World Bank, IMF, PwC data and analysis.

Notes: GDP is measured on a purchasing power parity (PPP) basis. The INDC pathway is an estimate of the decarbonisation rate needed to achieve the targets released by G20 countries. Where countries have not released a target their Copenhagen target is used. Turkey and Saudi Arabia are yet to set any form of target and are thus excluded. INDCs only cover the period to 2030, we extrapolate the trend in decarbonisation needed to meet the targets to 2100 for comparison.

In December 2015, all governments meet in Paris to try to agree a deal to avoid this outcome. PwC’s LCEI reviews progress made by countries since 2000. For the first time this year we have seen an apparent uncoupling of GDP and emissions. In 2014, energy related emissions increased by just 0.5%. Only in 2009, at the peak of the global recession, have emissions grown by less this century. In contrast with 2009, 2014 saw robust GDP growth of 3.3%. Combined, this has meant we have seen the fastest annual fall in carbon intensity, 2.7%, since 2000.

However, the increased decarbonisation rate seen in 2014 (2.7%) falls substantially short of what’s needed for 2°C. To prevent warming in excess of 2°C the global economy now needs to cuts its carbon intensity by 6.3% a year, every year from now to 2100.

8. LCEI tracks the rate that G20 countries are decarbonising their economies. More at: http://www.pwc.co.uk/services/sustainability-climate-change/insights/low-carbon-economy-index.html

• Reduced emissions from deforestation and forest degradation (REDD): The Coalition for Rainforest Nations finally have their approach to reducing emissions from deforestation and forest degradation (REDD+) recognised in the agreement. Having agreed upon rules to address leakage and safeguards for indigenous peoples in the past, supporters of REDD+ demanded its inclusion in the agreement.

• International emissions trading: The agreement described how countries can pursue voluntary cooperation in the implementation of their NDCs, or in other words, trade emissions. It also established a new sustainable development mechanism, which resembles Kyoto’s Clean Development Mechanism. It also described how countries shall ensure the environmental integrity of transfers and apply robust accounting. All of this was advocated by the business community, which celebrated its adoption and inclusion. Even carbon pricing is mentioned in the agreement, which recognises the important role of providing incentives for emission reduction activities, including tools such as domestic policies and carbon pricing.

• Adaptation, loss and damage: On loss and damage, there was clearly a compromise. In exchange for agreeing that it does not involve any liability or compensation, the least developed countries (LDCs) achieved recognition of this concept in a separate article in the agreement.

• Finance: The agreement stated that developed countries shall provide financial resources to developing countries for both adaptation and mitigation. Other countries (i.e. the emerging economies) are also encouraged to, or continue to, do so. Furthermore, developed countries should report on climate finance every two years and the review of national mitigation


How this will impact the Indian economy

• Pressure to reduce consumption of cheap fossil fuels: India’s energy security challenge and its target to provide every household with electricity by 2019 will be dependent on coal given that it is still the cheapest available energy resource. The pressure on India is likely to intensify from 2020 onwards, possibly due to continued expansion of coal-based energy. There have been discussions around the use of ‘green coal’ in India’s energy policy considerations and it will need to make investments in more efficient thermal power plans to improve the efficiency of energy conversion, to reduce pollution. It may be necessary for India and the other developing countries to come together to fight for their fair share of the carbon space after the first review of the Paris Agreement in 2018.

• Promoting alternative energy futures: The RE industry in India is likely to expand with GoI’s goal to expand RE capacity to 175 GW by 2022. Green energy solutions will see greater inflows of investment and greater access to financing from both domestic and international sources. Due to increase in R&D, solar power tariffs have continued to decline, having reached under 5 INR per unit, and investing in solar energy today is likely to reap long-term benefits across the Indian economy.

• Access to climate finance: Even international financial institutions like the World Bank have stated that they would provide financial support for new coal power projects only in circumstances where there are no viable alternatives for meeting basic energy needs. India will still have access alternative funds through bilateral and multilateral institutions, such as the New Development Bank (NDB), a Shanghai-headquartered bank operated by the Brazil-Russia-India-China-South Africa (BRICS) bloc, to fund coal-based power projects.

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India has emphasised that the developed world has to assume responsibility for historical emissions and has been negotiating against developing countries taking carbon emission reduction targets. In India, a country which faces numerous developmental challenges and needs significant development, GHG emission increase is inevitable and significant carbon finance is needed to reduce the emission intensity. The Indian government is doing well when it comes to promoting low-carbon growth. There have been various policy levers that were introduced in the last decade, including introduction of carbon tax, smart cities programme, energy trading scheme, RE purchase agreements and energy conservation building codes (ECBCs). India has also assumed a proactive role in all international climate change initiatives and negotiations and is a signatory to the UNFCCC. In its development strategy, India has pursued measures and options that include climate change mitigation and adaptation measures.

India’s INDCs: Post 2020 scenario

India’s INDCs show a strong willingness to play a formidable role in the effort to combat climate change.

In its INDC, India has committed to ambitious targets to achieve low-carbon growth and sustainable development and intends to

reduce the emissions intensity of its GDP by 33–35 % by 2030 from 2005 levels.

India’s INDC continues to demonstrate its ambition to lead the transition towards a green economy by committing to the following:

• Stringent emissions standards and mandatory efficiency targets have been placed on all coal-fired power stations. One hundred and forty four old thermal stations have been assigned mandatory targets for improving energy efficiency.

• 175 GW of renewables are expected by 2022, including 100 GW from solar photovoltaic (PV) and 60 GW from wind among others. By 2030, non-fossil fuel sources are expected to make up 40% of electric power installed capacity.

• India will continue to develop its nuclear energy potential and has set a target of 63 GW of installed capacity by the year 2032.

• The National Smart Grid Mission (NSGM) has been launched to bring efficiency in power supply network and facilitate reduction in losses and outages.

• Green Energy Corridor projects worth 380 billion INR (6 billion USD) have been launched to ensure distribution and evacuation of RE.

9. Retrieved from http://www.carbonbrief.org/indias-indc/

India’s response to tackling climate change Policies and initiatives


• A nationwide energy conservation programme will try to save 10% of today’s energy consumption by 2018–2019. Over the longer term, industry, transportation, buildings and appliances will be targeted for further energy efficiency savings.

• The carbon tax has recently increased fourfold to roughly 6 USD per tonne of CO2 and applies to coal, lignite and peat. Carbon tax revenue is redistributed through the NCEF and contributes up to 40% of project costs.

• PAT will enter its second phase of energy intensity targets (which has achieved a 4-5% decline in between 2012 and 2015 for eight sectors, iron and steel, cement, fertilisers, textiles, aluminium, pulp and paper, and chlor-alkali).

• 98 of 100 smart cities have been chosen for grant support.

• Extend forest and tree cover to save 2.5–3 billion tonnes of CO2 equivalent by 2030.

The INDC sets out a broad framework for implementation of its targets and commitments by highlighting areas that can be strengthened and where additional support is needed, which include:

• Climate change finance: India is home to 17.5% of the world’s people with a population of 1.2 billion that is expected to grow to 1.5 billion by 2030. India alone is responsible for about 6% of global emissions.9 India’s climate actions have so far been largely financed from domestic resources and scaling up the climate action plans would require financial support from the international community. India’s INDC comes with a significantly high price tag, yet on a per capita basis they are roughly at par with other countries. India would need at least 2.5 trillion USD (at 2014–15 prices) for meeting its climate change actions between now and 2030. India is not relying solely on budgetary resources and is experimenting with a careful mix of market mechanisms together with fiscal instruments and regulatory interventions to mobilise finance for climate change. One example is tax on coal that is channelled into the National Clean Energy Fund (NCEF); another is the National Adaptation Fund, which has been given an initial allocation of 55.6 million USD.

• Technology transfer and support: India has advocated global collaboration in R&D, clean technologies and enabling their transfer, free of Intellectual Property Rights (IPR) costs, to developing countries. Knowledge creation, ecosystem design for innovation and development, and technology deployment are areas where continued support is needed.

• Capacity building: India’s ambitions require training and upgrading of skills across sectors where capacity building programmes both at national and states level need to be implemented to address climate change challenges. International support mechanisms are required, including forming thematic knowledge networks, to further expand activities under the Global Technology Watch Group, establish more intensive state-centric knowledge, awareness-creating activities and training of professionals in different aspects of RE, and support R&D institutions.

• Investment in RE: India’s INDC pledges to increase solar capacity 25-fold to 100 GW by 2022, to more than double wind capacity to 60 GW by 2022 and raise nuclear capacity from 6 GW today to 63 GW in 2032. Reaching the 40% target (i.e. by additional capacity of RE sources, nuclear power or a combination), it is estimated that reaching this target would result in emission savings of 53–155 MtCO2e below current policy projections, resulting in an emissions level of 4.9–5.0 GtCO2e (a factor 4.3–4.4 above the 1990 level) by 2030. India to anchor a global solar alliance, International Agency for Solar Policy & Application (INSPA), of all countries located in between the tropics of Cancer and Capricorn. Green energy corridor projects worth 380 billion INR (6 billion USD) have been launched to ensure distribution and evacuation of RE.

• Energy Efficiency: GoI has committed to implement initiatives to improve the efficiency of coal-based power plants and to reduce its carbon footprint. All new, large coal-based generating stations have been mandated to use the highly efficient supercritical technology. Renovation and modernisation (R&M) and life extension (LE) of existing old power stations is being undertaken in a phased manner. One hundred and forty four old thermal stations have been assigned mandatory targets for improving energy efficiency. The National Smart Grid Mission (NSGM) has been launched to bring efficiency in the power supply network and facilitate reduction in losses and outages.

• Nuclear energy: India will continue to develop its nuclear energy potential, as a safe, clean and economical source to meet its energy demand. Currently, six reactors with an installed capacity of 4,300 MW are at different stages of commissioning and construction. It has set a target of 63 GW of installed capacity by the year 2032.

• Carbon sink: Although the INDC does not state this, we assume the target is to create an additional carbon sink of 2.5–3 GtCO2e through additional forest and tree cover by 2030 representing an average annual carbon sink of 167–200 MtCO2e, over the period 2016–2020. Over half of this target could be achieved with the Green India Mission (GIM), which is expected to enhance carbon sequestration by about 100 MtCO2e annually. Policies like National Agro-forestry Policy (NAP), REDD+, joint forest management, national afforestation programme and proposed devolution of about 6 billion USD under compensatory afforestation to states, will further enhance forest cover and increase carbon sequestration. India has recently formulated the Green Highways (Plantation & Maintenance) Policy, 2015, to develop a 140,000 km long tree line with plantation along both sides of the national highways.

10. Retrieved from http://www.carbonbrief.org/indias-indc/

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Renewable energy

The quest for energy independence, economic growth, and environmental sustainability increasingly suggests the importance of RE sources across the globe.

Renewables are seen not only as sources of energy but also as tools to address many other pressing needs, including: improving energy security and access; reducing the health and environmental impacts associated with fossil and nuclear energy and mitigating GHG. RE is one of the cleanest sources of energy options with almost no pollution or carbon emissions and has the potential to significantly reduce reliance on coal and other fossil fuels. By expanding RE, India can improve air quality, reduce global warming emissions, create new industries and jobs, and move world towards a cleaner, safer and affordable energy future.

RE potential and growth in India

India meets close to 65% of its electricity needs from fossil fuels and is expected to continue doing so in the foreseeable future. This poses questions on cost of electricity supply in future, environmental impacts and energy security. At this juncture, RE is being seen as one of the important means to meet the growing power needs of the economy while enhancing energy security through diversification of fuel sources and providing opportunities for mitigating GHG emissions.

Technology Potential (MW)

Wind 102,800 (80 m hub height)

Small hydro (up to 25 MW) 19,700

Biomass, including bagasse cogeneration and waste to energy

22,500

Solar 50 MWp/km2

Source: Ministry of New and Renewable Energy (MNRE)

Table 3: India’s RE potential


Installed RE capacity in India

Wind: 22,465.03 MW

SHP: 3,990.83 MW

Biomass:10 4,273.13 MW

Solar: 3,062.82 MW

Total: 3,3791.74 MW

66%

12%

13%

9%

Wind Power

Small Hydro

Biomass

Solar

Wind

Biomass

Small hydro

Solar

9%

13%

12% 66%

India has vast RE potential through wind, solar, biomass, small hydro etc. The potential is concentrated in certain parts of India. The wind and solar potential is mainly in the southern and western states—that is, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat and Rajasthan. However, the exercise on mapping of potential is continuing in several other areas in the country.

The renewable power generation portfolio stands at 33.79 GW out of the total 254 GW in the country, as of December 2014. India is already the world’s fifth largest producer of wind power. Other RE sources like solar, small hydro, biomass power and bio-fuels are also being increasingly tapped.

As per the present estimates, India has an estimated RE potential of about 895 GW from commercially exploitable sources with 750 GW solar power potential assuming only 3% wasteland is made available.

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Potential for decentralised RE application

There exists significant potential from decentralised distributed applications for meeting hot water requirement for residential, commercial and industrial sector through solar energy and also meeting cooking energy needs in the rural areas through biogas. RE has great capacity to usher in universal energy access. In a decentralised or standalone way, RE is quite appropriate, scalable and viable solution for providing power to un-electrified or power deficient villages and hamlets. Around 1.1 million households are using solar energy to meet their lighting energy needs and almost similar number of the households meets cooking energy needs from biogas plants. Solar PV power systems are being used for a variety of applications such as rural electrification, railway signalling, microwave repeaters, TV transmission and reception and for providing power to border outposts. Over 10,000 remote and inaccessible villages and hamlets have been provided with basic electricity services through distributed renewable power systems.

Enabling framework for the growth of the RE sector in India

Existing policy and regulatory support

• Electricity Act (EA), 2003: Launched in June 2003, EA 2003 provides for policy formulation by the GoI and mandates State Electricity Regulatory Commissions (SERCs) to take steps to promote renewable and non-conventional sources of energy within their area of jurisdiction. It calls to promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of total consumption of electricity in the area of distribution licensee.

• National Electricity Policy, 2005: Aims to exploit feasible potential of non-conventional energy resources, reduce capital costs, promote competition and private sector participation. The percentage for purchase of power from non-conventional sources should be made applicable for the tariffs to be determined by the SERCs. Supplemented by Tariff Policy 2006 making RE procurement applicable. Also, a preferential tariff should be determined by SERCs to enable renewable energy technologies (RETs) to compete, and procurement of RE should be through competitive bidding. NAPCC 2008: The NAPCC by the GoI identifies eight core national missions running through 2017, envisaging several measures to address global warming. One of the missions states that a dynamic minimum renewable purchase standard (DMRPS) be set, with escalation each year till a pre-defined level is reached. It set targets of 5% RE purchase for FY 2009–10, with an increase of 1% in target each year to reach 15% RE penetration by 2020. However, the SERCs may set higher percentages than this minimum at each point in time.

• Renewable Purchase Obligation (RPO): SERCs set targets for distribution companies to purchase certain percentage of their total power requirement from RE sources known as RPO. The states have already specified their RPOs ranging from 2– 14% of their total energy demand to be met by RE. In order to address the mismatch between availability of RE sources and the requirement of the obligated entities to meet

their RPO across states, the REC mechanism was introduced in 2010 to enable and recognise interstate RE transactions. The REC mechanism facilitates emergence of a large number of cross-border RE transactions based on non-firm RE sources, while at the same time, enhancing the volume of cross-border RE transactions based on firm RE sources as well. RECs serve as a motive for high RE potential states to further develop their RE potential to the fullest.

Other planned initiatives

• Solar park scheme: Solar parks are concentrated zones of development for solar power generation projects, demarcating an area that is well characterised, equipped with proper infrastructure, and where the project risks are minimised and clearances are facilitated. As per the draft national scheme on solar parks, the Ministry of New and Renewable Energy (MNRE) will setup 25 solar parks of capacity sizes between 500–1,000 MW. It will provide support of 20,00,000 INR/MW to the park development agencies.

• National offshore wind policy: Preliminary assessments suggest interesting prospects for the development of offshore wind energy in India. To tap this potential, MNRE is currently working on a policy for the deployment of offshore wind energy projects in the exclusive economic zone (EEZ) of the country. The policy proposes to address issues such as resource assessment and surveys, seabed allocation and lease arrangement, facilitation in clearances and approvals, and evacuation of power generated from offshore wind power projects.

• Transmission infrastructure: This involves the development of a network specifically for the wheeling of RE power. The proposed infrastructure will be capable of evacuating power from the proposed capacity additions such as the Ultra Mega Power Plant (UMPP) in Leh. It proposes a high capacity transmission system (green energy corridor) that will evacuate renewable power from states rich in RE to load centres and make pockets of RE generation grid interactive. It will be integrated with the existing grid and will foster reliable forecasting of RE-based generation and reduce evacuation losses.

As a first step towards the development of the offshore wind sector in India, an MoU was signed on 1 October 2014 for the setting up of a joint venture company (JVC) towards undertaking the first demonstration offshore wind power project in the country. The MoU was signed by MNRE, National Institute of Wind Energy (NIWE), and a consortium of partners comprising National Thermal Power Corporation (NTPC), Power Grid Corporation of India Ltd (PGCIL), Indian Renewable Energy Development Agency (IREDA), Power Finance Corporation (PFC), Power Trading Corporation (PTC) and Gujarat Power Corporation Ltd (GPCL).


• Green energy transmission corridor: In 2012, PowerGrid planned high capacity transmission systems (green energy corridors) for the evacuation of renewable power from states rich in RE to load centres, with an aggregate capital outlay of around 425 billion INR (5 billion EUR). With the implementation of the green corridor, the RE generation pockets will become grid interactive and thereby reduce the restrictions on RE evacuation, and help cut down losses (as RE will be connected at EHV than HV level).

• RE resource assessment databases: To locate potential sites that are rich in RE through field measurements, India has developed databases for RE resource assessment. This has been done to promote the development of utilisation of RE in the country. The National Institute of wind energy (NIWE) has developed the wind atlas of India. NIWE also collects data from Solar Radiation Resource Assessment (SRRA) stations to assess and quantify solar radiation availability, quality of data assessment, processing, modelling, and developing a solar atlas of the country.

Investment opportunities

The Indian RE market is highly attractive as it has the potential to reduce India’s rising demand-supply gap, hence becoming a key cog in the wheel for India’s energy security strategy. The GoI has set up an encouraging policy and regulatory framework, with a combination of feed-in tariffs (FITs), renewable procurement obligations, and RECs. The most dominant asset classes–wind and solar–have attracted considerable supplier interest and hence equipment and Engineering Procurement and Construction (EPC) are available at increasingly competitive rates, thus boosting margins. Globally, India witnessed third highest investments in solar water heating capacity, and fourth highest investments in concentrated solar power (CSP) and

wind power in 2013.11 Also, India saw record small-scale project investment of 0.4 billion USD. The Jawahar Lal Nehru National Solar Mission (JNNSM) and several state-level solar policies are helping develop the solar energy market. Recent budgetary allocation for generation-based incentives and reintroduction for accelerated depreciation for wind power will spur investments in wind energy. The size of the RE market will see further growth as the application of RPO expands to cover open access and captive consumers.

Foreign direct investment (FDI) in the RE sector

• Hundred per cent FDI in the RE is permitted.

• FDI inflows in the RE industry from April 2000–February 2013 were about 2.5 billion USD.12

In view of the recent developments in solar technology, GoI plans to hasten the growth and is looking at a steep fall in the solar prices. There could be a possible addition of 1 lakh MW solar capacity in the next 5 years and also in other renewables. If so, investment requirements for solar power development itself will be nearly 100 billion USD in the next 5 years. To meet the financing requirements, more and more foreign investors are being attracted owing to the potent natural resources, large-scale investment opportunities and attractive government incentives. Wind and solar sectors are expected to garner massive overseas investments in the coming years.

At present, a variety of investors finance RE projects in India, including institutions, banks, and registered companies. In addition to the registered companies, venture capital and private equity (PE) investors contribute equity investment. Development banks, IREDA, continue to represent a key source of funds for RE investments, particularly in project finance, over the medium term.

Financing cost for RE projects in India

Entity Return on investment (RoI)

Scheduled commercial banks >12%

US Exim Bank ~ (10–12%)

Non-banking finance companies (NBFCs) ~ (11.5–13%)

Multilaterals and bilateral (ADB, IFC, etc.) >11%

Table 3: India’s RE potential

Potential sources of financing

Debt Equity

Domestic Foreign Promoters’ equity

Capital markets (public equity)

Private equity

Commercial banks, NBFCs, including IREDA and PFC

Insurance companies and pension funds

Capital markets (public issues of

funds)

Multilateral and bilateral

International banks, including Exim

Bank

Financial institutions, charitable institutions

and foundations

11. FS-UNEP Collaborating Centre, Bloomberg. (2014). Global trends in renewable energy investment12. Department of Industrial Policy and Promotion (DIPP). Fact sheet on FDI from April 2000–February 2013. Retrieved from http://dipp.nic.in/

English/Publications/FDI_Statistics/2013/india_FDI_February2013.pdf

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Energy efficiency‘The success of government of India’s Domestic Efficient Lighting Program (DELP) has showcased that a demand aggregation-based business model can unlock the huge investment potential of more than 90,000 crore INR in the domestic energy efficiency sector and result in avoided capacity generation of 41 GW. This option is thus very economical when compared to investing in new power plants.’ Amit Kumar, Partner, GRID, PwC India


India’s energy consumption has been increasing at one of the fastest rates in the world due to population growth and economic development. The estimated electricity consumption in India increased from 4,11,887 GWh during 2005–06 to 882,592 GWh during 2013–14, showing a compound annual growth rate (CAGR) of 8.84%. The increase in electricity consumption was 7.07% from 2012–13 (824,301 GWh) to 2013–14 (882,592 GWh).Of the total consumption of electricity in 2013–14, industry sector accounted for the largest share (43.83%), followed by domestic (22.46%), agriculture (18.03%) and commercial sectors (8.72%). The country has made significant progress towards the augmentation of its power infrastructure, yet there are issues in relation to energy availability. Although the Ministry of Power (MoP), through the Bureau of Energy Efficiency (BEE), initiated a number of energy efficiency initiatives in the areas of household lighting, commercial buildings, standards and labelling of appliances, demand-side management (DSM) in agriculture/municipalities, the country needs to use its energy as efficiently as possible.

Market potential

The National Mission for Enhanced Energy Efficiency (NMEEE) has indicated 74,000 crore INR of investment potential for energy efficiency and conservation (EE&C) in India, out of which 30,000 crore INR of potential exists in energy-intensive industries and remaining 44,000 crore INR in the other key demand side economic sectors.

Enabling framework for energy efficiency

• PAT scheme: This is a market-based trading scheme announced by the Indian government under NMEEE in NAPCC has moved to second cycle of implementation. However, based on the experience of first cycle, the implementation agency, BEE, has proposed changes in the target setting methodology to factor in the historical trend of sectoral efficiency improvement and national policy objectives such as INDCs.

• Standards and labelling: With 22% of the total electricity consumption in 2013–14, domestic sector is one of the key sectors for the implementation of energy efficiency measures. Many key initiatives have been undertaken by the government to improve efficiencies in this sector. The objectives of this programme is to provide the consumer an informed choice about energy saving, and thereby, the cost saving potential of the market household and other equipment. This is expected to impact energy savings in the medium and long run, while at the same time, it will position the domestic industry to compete in such markets where norms for energy efficiency are mandatory. Currently, there are only four appliances under the mandatory regime of standard and labelling. There are around 15 appliances which fall or as considered under the voluntary standard and labelling regime. There are plans to incorporate these appliances under a mandatory regime in future.

• ECBC: ECBC was developed by GoI for new commercial buildings on 27 May 2007. ECBC sets minimum energy standards for new commercial buildings having a connected load of 100 kW or contract demand of 120 KVA and above. While the central government has powers under the EC Act, 2001, state governments have the flexibility to modify the code to suit local or regional needs and notify them. Currently eight states and union territories (UTs) (Rajasthan, Odisha, UT of Puducherry, Uttarakhand, Punjab, Karnataka, Andhra Pradesh and Telangana) notified and adopted the code for their states.

• Energy Efficiency Financing Platform (EEFP): Under this programme, MoUs have been signed with financial institutions to work together for the development of the energy efficiency market and for identifying the issues related to this market development. These MoUs have been signed by BEE to promote financing for energy efficiency projects. BEE has developed training modules in collaboration with the Hong Kong and Shanghai Bank Corporation (HSBC) and also conducted few training programmes for financial institutions on energy-efficiency project financing.

Case studyDomestic Efficient Lighting Programme (DELP)

The national DELP programme envisions replacement of 770 million incandescent bulbs with energy-efficient LED bulbs by March 2019. The programme envisages to save around 105 billion units annually or result in 21,000 MW of peak capacity addition once the programme is completely implemented.

Energy Efficiency Services Limited (EESL) is the key implementing agency of the programme and adopts a multistate demand aggregation strategy. In the recent procurement round of 9W LED bulbs for the state of Madhya Pradesh, the price has come down to 64.41 INR, which is exclusive of taxes. This is a 10% reduction from the June 2015 price of 73 INR and about 80% reduction from the February 2014 price of 310 INR.

As of 1 February 2016, EESL has distributed more than 5.5 crore bulbs under the programme and has also tied up with ecommerce company Snapdeal to further increase the penetration of these products.

EESL plans to implement similar programmes for other appliances, including fans and air conditioners, thus unlocking the huge potential.

Industry

Domestic

Agriculture

Commercial

Traction and RailwaysOthers

44%

22%

18%

9%

2% 5%

Sector-wise electricity consumption (2013–14)

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‘After all, sustainability means running the global environment–Earth Inc.–like a corporation: with depreciation, amortisation and maintenance accounts. In other words, keeping the asset whole, rather than undermining our natural capital.’

— Maurice Strong, United Nations Environmental Programme (UNEP)

India is going through major shifts. Megatrends such as rapid urbanisation and resource scarcity are demanding innovative strategies across the economy for the government to provide smart governance to its citizens, by addressing local challenges affecting the citizens in their daily lives. The smart cities concept is based on the vision to create modern and advanced urbanisation which envisages achievement of three goals–social equitability, economic viability and environmental sustainability.

The Indian government has undertaken concrete steps for making smart cities a reality with the recent announcement of 98 aspirants. These smart cities will compete with each other to come up with holistic plans for becoming model cities. The government has incorporated sustainability as one of the key components of smart cities. With the increasing frequency of natural disasters, abnormal weather patterns, and the looming threat of global warming, the concept of a smart city must be merged with sustainability for the welfare of people and our planet as a whole. The marriage of innovation with technology will go a long way in optimising the management of infrastructure and resources and, at the same time, focus on inclusiveness and a greener environment. Smart sustainable cities will lay the foundations for a better future—a future where cities care for people, the earth, air, water and the environment.

Enabling environment for growth of smart cities

India has taken concrete steps towards the smart city transformation. As per the guidelines for smart cities released by Ministry of Urban Development (MoUD), a clean and sustainable environment will be a significant feature for the upcoming smart cities. The sustainability aspect is not just in terms of the environment but also has economic, social and governance dimensions. Sustainable economic advancement, political participation and social emancipation are the core foundations of a smart sustainable city. A model city must have an open and responsive government that involves citizens in decision-making, and a robust governance structure with a single nodal agency. Additionally, the city must have open data that is accessible to all, a robust model for city functioning and supportive regulatory systems that foster the culture of innovation and inclusiveness. Moreover, the involvement of the private sector sets new benchmarks for making cities smart and sustainable through funding, entrepreneurship and innovation. Sustainable funding is imperative to ensure a smoother journey towards the transformation of cities.

Potential opportunities for the private sector

The private sector looks at the smart cities concept as an opportunity to innovate products and services. Many organisations in the private sector are ready and willing to invest in their urban environments to the benefit of their core strategies and profit, in a ‘shared value’ approach.13

Smart and sustainable cities


Questions that service providers should considerAutomotive manufacturers

• Are my vehicles becoming obsolete?

• How much to bet on the electric vehicles market?

Banks and financial institutions

• How to become the payment platform of choice?

• What are my opportunities in infrastructure financing?

Healthcare providers

• How can I leverage technology to provide universal healthcare?

• How to deal with privacy issues?

Utility providers

• How to make my grids smarter and smooth the peaks in my network to serve smart homes?

• How much to invest in renewable sources?

Telecom operators

• How to configure my network to carry the new traffic?

• What value-added services can I provide for a smart community?

13. Retrieved from http://www.telegraphindia.com/pressrelease/prnw/en60399.html#.Vq8ri9JPrmI

Infrastructure• Urban planning• Conventional and renewable

energy• Smart grids• Transportation• Water• Building/housing• Lighting

Political participation• Citizen consultation

and participation• Government outreach

Intellect and innovation• Education• Small and medium

enterprises (SMEs)• Human development

ICT• Egovernment• Data centres• Broadband• Wireless• Epayments• Digital economy

Social• Health• Safety and security• Social integration and

cohesion

Culture and leisure• Tourism• Leisure venues

management• Cultural venues

management

Environmental• Solid waste

management• Waste water

management• Air quality

management• Green areas

Smart cities

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While India is all set to move forward on its path of decarbonisation and meet the commitments set out in its INDC, several challenges lie ahead.

Scale of investment India’s INDC pegs the cost of meeting its climate change actions between now and 2030 at upwards of 2.5 trillion USD (at 2014–15 prices). The ambitious RE targets alone will require an investment of around 150 billion USD. Earlier, the Expert Group on Low Carbon Strategies for Inclusive Growth in their final report in 2014 estimated the cumulative costs of low carbon strategies to be around 834 billion USD at 2011 prices over the two decades between 2011 and 2030. The financial burden does not end here. The cash-strapped power distribution companies are incurring sizable losses to the tune of 3.2 lakh crore INR and are unable to invest in modernising equipment, systems and networks. The scale of financing poses a significant mobilisation challenge given that funds will need to be sourced from both private and public sources. Besides directing government revenues, innovative ways like cess on coal for funding the NCEF need to be looked at along with international climate finance and incentive schemes for private sector and also creating long-term bonds for low-cost funding for green and clean technologies and energy efficiency initiatives.

Green bond issues by Yes Bank in 2015

In August 2015, Yes Bank raised 315 crore INR through the issue of Green Infrastructure Bonds to International Finance Corporation on a private placement basis. The amount raised will be used by the bank to finance green infrastructure projects like solar power and wind power. Earlier, in February 2015, Yes Bank had successfully raised 1,000 crore INR through the green bond route. Meeting India’s RE targets will require significant financing and green bonds are one such means to finance green energy projects.

Green bond issuance has grown rapidly in recent years from practically no green bonds in 2009 to 41.8 billion USD of green bonds issuances in 2015. Green bonds are touted as a significant development when it comes to climate finance. These present an attractive way for accessing institutional investors as the risk and returns of the bonds are tied to the issuer’s entire balance sheet and not just the project, resulting in an investment grade rating suited for institutional investors.

Challenges for India


Technology In line with the ambition at hand, technological innovation and research and development efforts need to be leveraged to make new and existing technologies feasible and cost-effective and allow for local manufacturing. India is dependent on China and imports 70% of solar PV modules to meet demand due to the lack of domestic manufacturing capacity, low investment in R&D and poor supporting infrastructure. Development of low-carbon solutions that are critical for India include areas DSM, making conventional technologies more efficient, energy-efficient appliances and buildings, efficient batteries for electric vehicles, feasible power storage options for wind and solar, etc., and transmission and distribution. Some of these technologies will require a push for ensuring greater penetration and adoption through measures like pricing, raising awareness and labelling programmes, viability gap funding (VGF), RE infrastructure, skills development and training targeting the needs of the RE sector.

Rapid urbanisation By the year 2050, more than two-thirds of the global population is projected to live in cities. India, too, is mirroring this trend, with tremendous growth in urban population owing to better employment and entrepreneurial opportunities and the hopes of a decent standard of living. The census data from 2011 shows that the population living in urban regions contributes to around 63% of the country’s GDP. This share is only expected to rise further as more and more people migrate to urban areas. Urbanisation brings with it several challenges like resource scarcity, congestion, pollution, poverty, lack of affordable housing, proliferation of informal dwelling, as well as sewerage and sanitation problems. All these further exacerbate the issue of climate change–directly and indirectly.

Policy mix A comprehensive, transparent and long-term policy framework for climate change mitigation and adaptation may be implemented by amending and updating existing laws/policies (e.g. addressing electricity related aspects from the Electricity Act, 2013) and/or creating a new laws/policies (e.g. specifically targeting RE as whole). All policies that address climate change and RE can define measureable targets with appropriate metrics, where all states would be equally responsible for meeting common national uniform targets. Laws and policies need to clearly identify the source, level, and distribution mechanism for financial support. An integrated approach to policy planning and deployment of resources is crucial towards creating an enabling environment for all stakeholders.

14. Retrieved from http://www.in.undp.org/content/dam/india/docs/capacity_building_for_addressing_climate_changefactsheet.pdf

Air pollution in Delhi and the National Capital Region (NCR)

Major Indian cities are grappling with issues of environmental pollution such as air quality/smog issues, municipal waste disposal, etc. Recently, the air quality issue in Delhi NCT (national capital territory) became a headline national news due to alarming levels of particulate matter concentration across city. Air pollution is responsible for many health problems in the urban areas. Of late, the air pollution status in Delhi has undergone many changes in terms of the levels of pollutants and the control measures taken to reduce them. Measures such as the odd-even scheme for regulating the number of vehicles on the road were enforced to control pollution levels.

The new solar off-grid policy in Maharashtra

The Maharashtra state cabinet recently cleared the solar off-grid policy which aims to save at least 500 MW over a period of five years. Urban civic bodies and sanctioning authorities have been directed to amend the development control (DC) rules to ensure construction permission is given to only those buildings that allow the undertaking to set up solar water heater panels. This rule will be applicable for the government colonies, Adivasi Ashram Shala (residential schools) and new private buildings all over the state. (Source: http://www.business-standard.com/article/pti-stories/maharashtra-unveils-solar-energy-policy-offers-incentives-116012501094_1.html)

Renewable technology lighting up rural African home

The concept of distributed power generation has been floating around for some time now and especially in the context of rural areas where adequate grid infrastructure is not available. However, powering rural homes through cutting-edge technologies is a new development that is shaping up in Africa. Azuri Technologies, a UK-based firm, is in the business of installing rent-to-buy solar systems for homes in Tanzania and several other sub-Saharan states. Power from the panels are paid for by mobile phone or scratch card. The payments also serve as instalments towards owning the system outright. After about 18 months, the homeowner has typically paid off the cost of the panels.

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Human resource and capacity building It is critical that national policy imperatives on climate change mitigation translate to and are adapted to state-level actions. To make this possible, it is important to build capacities of stakeholders at both national and state levels. This will involve developing talent and building capacity to create state action plans on climate change,14 increasing the knowledge of stakeholders on issues related to climate change, developing knowledge products on climate change, strengthening institutions at national and state levels, initiating knowledge partnerships for greater synergy between development goals and climate change strategies. Additionally, steps must be taken to increase capacity at the institutional level to enhance analytical capabilities and for conducting research on climate change science and making the necessary assessments.

Climate Parliament assisting legilslators in shaping the policy landscape in India

Climate Parliament is an international cross-party network of legislators, dedicated to preventing climate change and promoting RE. It has been supporting parliamentarians to undertake initiatives at national and regional levels to help accelerate the global renewable switch at the speed and scale required. Climate Parliament’s south Asia network, headed by Mukul Sharma, played a leading role in more than doubling India’s national budget for RE, and in increasing India’s 2020 RE target from 6–15% of the electricity supply. In addition to the parliamentary campaigns, the organisation periodically hosts a series of parliamentary workshops to raise awareness and build the capacity of legislators on climate issues.


4 5 6

7 8 9

What it means for Indian businesses

The ambition of the Paris Agreement points towards directing efforts for limiting the rise in global temperature to 1.5˚C. Nothing short of a transformation of the global economy will be required to measure up to this challenge.

Coal is being targeted and major economies are already regulating it. India has consistently raised its clean energy cess on coal. Despite this, coal is still expected to be a major component of the energy system in India in 2030.

The scale of investment in the low carbon transition implied by India’s NDC is estimated to be upwards of 2.5 trillion USD. Finance is essential for meeting ambitious RE targets and to accelerate a low carbon transition in key sectors. The vast majority of this is expected to come from the private sector.

The Paris Agreement signals a push towards accelerating investments in green projects and their deployment and innovation. Initiatives like the International Solar Alliance Mission Innovation, African Renewable Energy Initiative (AREI) are some of the recent steps in this direction in the wake of the Paris Agreement.

As governments take on stringent commitments and targets, pressure will mount directly or indirectly on the private sector to step up and take corresponding targets in line with national commitments and ambition.

As carbon pricing is increasingly adopted in developed and major developing countries, it is time for the industry to build carbon costs into investment decisions.

Market-based mechanisms (REC, PAT, RPO) have always been part of India’s climate change mitigation approach. India was also a leading carbon market player in the Clean Development Mechanism (CDM) days. A post-Paris world will likely see emergence of new international and national emission trading and carbon pricing schemes.

The investor community will seek greater transparency from the private sector when it comes to risks faced by companies in a changing world. It is about time private sector incorporates climate change and the related risks in its risk management framework.

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As the government prepares to implement the strategies outlined in the INDC, the change in regulations and policy action that will follow will be the main driver for the private sector to act.

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Globally, the sum of INDC commitments represents a step change in decarbonisation, more than doubling the global rate of decarbonisation achieved to date, with far-reaching impacts for business. Longer term ratchet mechanisms, designed to raise decarbonisation levels further beyond Paris, will present a series of further business risks and opportunities. India’s INDCs also mirrors the same ambition.

Although the final agreement in Paris is not the main driver of action for many businesses, the regulation that follows will drive the transformation of economies towards cleaner growth pathways. In the short term, the majority of INDCs have focussed their emissions reduction efforts on the power, industry and transport sectors, which account for majority of energy emissions. In this section, we focus on the impact INDCs will have for the key sectors.

For each of these, we will examine the following:

• Emissions from the sector• Mitigation opportunities• Key challenges• Main policies

‘I’d put my money on the sun and solar energy, what a source of power. I hope we don’t have to wait for oil and coal to run out before we tackle that.’

— Thomas Edison, inventor of the light bulb.

The energy sector in India is responsible for 71% of the country’s total greenhouse gas emissions (GHGs), as per the Biennial Update Report (BUR) submitted to the UNFCCC. Around 60% of India’s current power generation capacity is based on coal, which is expected to remain the dominant power source in the future, and the government has plans to double coal output by 2020 and increase coal-based power generation capacity. The government is promoting super-critical coal technology and such technology platforms used in coal-based power plants have been obtained through technical licensing from developed countries. Major technology approaches which merit adoption to further improve thermal efficiency are variants of pressurised coal combustion, gasification combined cycle and advanced ultra-super critical technology. An emphasis on RE is a strategic response to climate change and energy security. With plans to expand renewable capacity to 175 GW by 2022, the government has made clear its intention to chart a low carbon energy future for the nation. With the certainty in policy-level interventions, the economy is bound to propagate and the demand for energy will inevitably surge.

As of June 2015, all-India generation capacity stood at 275 GW with a contribution of 69% from thermal energy, 15% from hydro, 13% from renewable, and 2% from nuclear sources.

Power


Power

Mitigation opportunities• RE: Leveraging its huge and abundant renewable resources in

the years to come can help India cut down its requirement of expensive imported fossil fuels. There has been a huge focus on increasing the share of renewable sources-based power generation in the last few years, with the government setting aggressive and ambitious targets.

• Decentralised rural electrification: India, faced with the challenge of a growing population, provision of rural electrification, and serious energy shortages, simply had to develop all generation options. So, in the period of 2000–14, India added 31 GW of RE; the share of RE growing from 1–12% of total generation capacity. A further transformation is expected as the government sets to deliver its ambitious goal of 175 GW from RE sources by 2022 as outlined in the INDCs.

• FITs: FIT schemes have been a popular tool for many years, offering a simple model and high returns to investors. The new European Commission guidelines (2014) require the countries to move to competitive tenders from 2015–16 and from 2017 all new projects will be solely delivered through tenders. Further, Germany and Italy cut their FIT rates especially in solar PV and wind generation. Spain (2012) suspended its FIT for new projects, and some policy changes also had a retroactive effect. In India, FIT remains the mainstay for most RE technologies, but solar has made a successful transition to competitive bidding.

• Tradable green certificates: Green certificates allow RE generators to monetise by their sale to obligated entities that are short of their renewables procurement targets. The value of the certificate itself varies and depends on the supply and demand. Further, these programmes are now differentiated, for example, with different shelf life, or with a multiplier to promote particular technologies. Spain, France and the UK amongst others have implemented this. Italy, on the other hand, plans to phase it out. India launched its RECs in 2010 and they have been tradeable since 2011.

• Market premium approach: This offers generators a premium over market price for green electricity. Germany (2012) permits RE generators to sell on the power exchange, and the grid operator pays to help offset the shortfall in price realisation against the Renewable Energy Act (EEG) rates of remuneration. Likewise, Italy requires renewable projects above 1 MW to sell on the electricity market and receive a premium corresponding to the gap between a base FIT and monthly or hourly zonal electricity price (for controllable or variable renewable generation). The premium for larger projects can be set through competitive tenders.

• Smart grids: Losses remain high and the industry continues to struggle with service quality and reliability in urban areas and electrification in rural areas. NSGM offers the potential to revolutionise electricity supply and increase the probability of achieving the GoI’s electricity sector goals quicker and more efficiently. This vision sees the power industry transformed by technological interventions such as two-way communications and ubiquitous metering and measurement. It will also enable the creation of more reliable, robust and secure electrical infrastructure, curbing transmission and distribution losses and optimise available infrastructure.

Key challenges

Meeting India’s growing demand for energy by expanding coal output: While almost 61% of the power generated is from coal, India is looking to alter the generation mix by focussing on a low-carbon growth strategy, although coal production continues to be on the agenda of policymakers. India is dependent to a great extent on imports. For the coal-fired power plant, land acquisition and environment clearances are challenging issues, but the major concern is the supply of coal. The risk of using imported coal is that the operating costs are increased, which in turn causes for the profit minimisation of the generating companies or makes the end product costlier, i.e. increase in the per unit cost of electricity (tariff).

India is among the top five largest importers of oil and is also the sixth largest importer of petroleum products and liquefied natural gas (LNG) worldwide.

• Investment bottlenecks: Investment in coal-fired generation has come to a stasis on account of changes in procurement models. Competitive bids for fuel-linked power plants moved from build-own-operate (BOO) to design-build-operate-

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Case study: Smart gridsCase study: Smart grids

An example of a smart grid is the system set up by The Energy and Resources Institute (TERI) in Gwal Pahari, Haryana, India. This smart mini grid is driven by state-of-the-art power electronic devices and controlled through ultra-fast digital technology based on National Instruments Compact RIO and LabVIEW, which offers a higher degree of flexibility, reliability, efficiency and safety of complete power systems.

This smart mini grid system involves the integration of the following distributed energy resources:

• A 10.5 kWp solar PV (crystalline silicon-based solar module) system

• A 2k Wp solar PV (crystalline silicon-based solar module) system

• A 1k Wp tin-film based solar PV system

• A 3.3 kW wind turbine generator (WTG)

• A 100 kW biomass gasifier (woody) system

• A battery bank of 48 V, 600 Ah for energy storage

• Diesel generator sets/utility grid.

The variation in demand due to seasonal changes, occupancy level of the residential premises, the number of conferences being held and several other factors are managed by this smart mini grid. Implementing scaled-up versions of such smart grids requires extensive planning, and resources leveraging the strengths of multiple stakeholders.

Policies supporting sustainable energy systems

• Renewable Purchase Obligations (RPO): As per amendments to the Electricity Act, 2003, the SERCs have issued RPO regulations specifying share of RE in the electricity mix. Further, to assist in meeting RPOs, the Central Electricity Regulatory Commission (CERC) has notified the RECs mechanism. Almost all SERCs have notified follow-up regulations enabling the obligated entities to purchase RECs to meet their RPO.

According to a recent report, the increase in RPO target from 3% by 2022 to 8% by 2019 implies an aggregate solar capacity of 69 GW by that time. This is equivalent to solar capacity growth of 87% per annum, which is largely consistent with the 2022 target of 100 GW.

• NCEF: This scheme introduced a cess on coal, lignite and peat at an effective rate of 50 INR per tonne of coal, both produced domestically and imported into India. This rate was increased in 2015 to 200 per tonne of coal. The NCEF

transfer (DBFOT) and those for domestic coal-based plants moved back to a modified version of the earlier model. These changes, besides other conditions—demand-supply balance and utilities purchase plateauing—have put many conventional power generation investments on hold.

• Transmission and distribution: The distribution network connects about 200 million consumers with a total load of over 400 GW. It is served by 73 distribution companies, of which 17 are privately owned. Several of the distribution utilities suffer large volumetric losses and are financially distressed. This raises a significant counterparty risk which is manifested in delayed payments to generators and other suppliers. Transmission, particularly for RE projects, is a challenge given the low capacity factors and congestion on existing networks.

• Expanding RE alternatives: Domestic manufacturing in RE is under-equipped to serve the ambitious growth target. Solar PV manufacturing is fragmented with many small players (total capacity is a mere 1.38 GW of solar cells and 2.75 GW solar modules) and lacks vertical integration. The lack or limited availability of non-recourse finance is the greatest deterrent to new entrants in the RE sector. The corporate bond market has not evolved as long-term investors such as insurance and pension funds are kept out by the rating threshold. Multilateral funding, except non-sovereign private sector investments, is limited to PPP projects.


supports projects, programmes and policies that promote clean energy technologies. Integrated Power Development Scheme (IPDS), notified in December 2014, covers urban areas under distribution utilities in India. The scheme aims at strengthening of sub-transmission and distribution networks in urban areas, including provisioning of solar panels and metering of feeders/distribution transformers/consumers including prepaid/smart meters. This scheme subsumes Accelerated Power Development and Reform Programme (APDRP), which was launched in 2003, and Re-structured APDRP (R-APDRP) of 2008.

The 12th Five Year Plan (2012–2017) has laid down a detailed agenda for sustainable development. The plan emphasises on a bouquet of intervention in governance/planning/technologies, e.g. ultra-mega power projects, supercritical technology, Super-Efficient Equipment Programme (SEEP) for superefficient fans, LED bulbs and tube lights.

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‘The mobility model we have today will not work tomorrow.’

— Bill Ford, great-grandson of Henry Ford and Executive Chairman of Ford Motor Company

The transport sector is the fourth largest contributor of GHG in India with a share of 7.5% of emissions in the country. Projections indicate that by 2021, India will have the largest concentration of megacities in the world, with a population exceeding 10 million. Out of a total of 88 cities, with a population of more than half a million in 2011, only 28 have any formal public transportation system. In most cases, the existing public transport systems are ageing and stretched beyond capacity, as the demand for public transport services outstrips supply, both qualitatively and quantitatively.

In the absence of proper planning measures, the dynamics between increasing numbers of vehicles as well as a growing population wanting to use private vehicles for transport are likely to pressurise transport infrastructure, leading to inefficiencies as a result of infrastructural bottlenecks such as traffic congestion, gridlocks and slower train speeds. This will result in higher traffic management costs and greater energy consumption, therefore significantly increasing carbon emissions from transportation.

Key challenges

Since the transportation sector is one of the largest and fastest growing sources of GHG emissions, decoupling growth in transport from increasing GHG emissions presents a clear challenge for policymakers in India. The congestion levels in many Indian cities have reached unmanageable proportions; the average vehicle speeds dropping down to as low as 10 km/hour in many cities. This leads to higher fuel consumption and GHG emissions due to low speeds and vehicle idling.

• Modal shifts: The modal split has shifted in favour of road

transport, away from energy-efficient modes like railways and buses that have a lower carbon footprint. This is a likely trend not only in most megacities but also Tier II and Tier III cities that are characterised by poor transport services and infrastructure. The growth in personal vehicle ownership will continue to accelerate with increasing incomes, greater availability, as well as access to credit and decreasing vehicle cost. There has been a massive shift towards personalised transport, particularly two-wheelers, and the growing use of intermediate modes such as taxis and autorickshaws.

• Growth in private vehicles: The transport sector is a key consumer of oil and oil products. More than 50% of the oil consumption in India occurs on account of transport-related activities.15 The World Energy Outlook, 2007, has estimated that most of the increase in oil consumption by 2030 in India will be driven by light-duty vehicles, mainly passenger cars—growing at an annual rate of approximately 10%. As disposable income increases as a result of economic growth, those entering the middle-class are able to afford and prefer personal vehicles as it is a symbol of upward social mobility; it also provides greater comfort, flexibility and convenience. In addition, with expanding cities and rising incomes, the share of pedestrians, cyclists and non-motorised transport users has also fallen.

• Reliance of fossil fuels: The transport sector relies mainly on fossil fuels and is a key consumer of oil and oil products. More than 50% of the oil consumption in India occurs on account of transport-related activities.16 Electricity is generally used in cases of rail-based transport modes, in addition to fossil fuels. In India, the low share of electrified routes ensures a low demand for electricity, even from railways. The dependence on fossil fuels is linked to the domination of internal combustion engine drivetrain technology.

Transportation


14. Retrieved from http://www.in.undp.org/content/dam/india/docs/capacity_building_for_addressing_climate_changefactsheet.pdf15. TERI Energy Data Directory and Yearbook (TEDDY) 2011/12. (2012). The Energy and ResourcesInstitute, New Delhi16. TERI Energy Data Directory and Yearbook (TEDDY) 2011/12. (2012). The Energy and ResourcesInstitute, New Delhi

• Poor transport infrastructure: The rapid growth of demand for passenger mobility in Indian cities has not been matched by an equal increase in supply of transport infrastructure and services. This has resulted in the increased use of private vehicles across most urban centres accompanied by the declining share of public transport systems. Only 20 cities in the country have an organised public bus service, which in most cases are inadequate, leading to an increased dependence on personal modes of transport. Overcrowding of the public transportation system is particularly evident in large cities, where buses and trains carry more than twice their optimal capacity.

Growth of green transportation and future potential

• India will be faced with the complex problem of convincing people not to use their vehicles because this will increase the demand for oil imports, thus adding to the budget deficit while contributing to the country’s growing carbon footprint. Therefore, the only way to really shift population mindset is by making public transportation networks extensive, accessible and safer. In the interim, alternative modes of sustainable personal transportation must be explored to tackle the immediate socio-environmental impacts of the internal-combustion engine (ICE).

Sustainable transport systems aim to reduce emissions, fossil fuel consumption and minimise the land area requirements while providing easy access to people to enable efficient mobility. Opportunities exist to make India’s transport growth more sustainable and climate compatible by aligning development and climate change agendas. India’s NAPCC recognises that GHG emissions from transport can be reduced by adopting a sustainability approach through a combination of measures, such as increased use of public transport, higher penetration of biofuels, and enhanced energy efficiency of transport vehicles.

There are several options available for low carbon transformation. Some options that are already being implemented in the transport sector include: (i) enhanced use of biofuels to substitute oil, (ii) increased share of public transport, especially the metro in the cities and mass transit systems, and (iii) enhanced penetration of electric cars and electric two-wheelers. Low carbon transition to electric vehicles and mass transport systems will require a supply of clean and low carbon electricity, for example, through an increased share of natural gas, renewables and emerging technologies like carbon capture and storage (CCS).

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The government has drawn plans to improve local rail networks in urban cities by improving access and expanding existing capacity. Other urban transport planning initiatives include bus rapid transport systems (BRTS), pedestrian zones, skywalks and cycling paths. Delhi, Mumbai, Kolkata, Chennai and Hyderabad are in different phases of planning or implementing light-duty metro rail services to complement existing modes of public transport. It is envisaged that these plans will have some impact on increasing the share of public transport. City gas distribution networks are being developed in many Indian cities, leading to a shift towards gas for transportation in place of petroleum oil.

India from 1 April 2010. BS-IV auto fuel was introduced in 13 identified cities on 1 April 2010 and is now extended to 50 more cities, with preference given to the most polluted cities, subject to availability of fuel and logistic constraints. This provision will be extended across the country by 1 April 2017 in phases. BS-V fuel quality and emission norms will be implemented in the entire country from 2019, and BS-VI emission norms for four-wheelers will be implemented from 2023.

• Alternative fuels: Increase in share of alternative fuels in overall fuel mix is yet another strategy to reduce emissions from the sector. The number of CNG cars and taxies in India grew from 23,166 in the 2001 to 439,250 in 2011. In 2011, Delhi (64%) had the highest share of CNG cars followed by Gujarat (18%) and Maharashtra (15%). The Ministry of Petroleum and Natural Gas directed the oil marketing companies to sell 5% ethanol-blended petrol (EBP).

• Biodiesel Purchase Policy: To encourage production of biodiesel, the Ministry of Petroleum and Natural Gas announced a Biodiesel Purchase Policy in October 2005, which became effective from 1 January 2006. In July 2013, it was decided that the oil marketing companies (OMCs) will procure ethanol from domestic sources only to achieve the mandatory requirement of 5% ethanol blending in areas/parts of the country where sufficient quantity of ethanol is available. In other parts of the country, blending of ethanol may be increased progressively depending upon the availability of ethanol to reach the 5% mandatory level.

• Hybrid and electric vehicles: Apart from the increase in CNG vehicles, an increase in electric vehicles is planned as a significant strategy. Given that electric vehicles have higher operational efficiencies than internal combustion engines, increasing the shares of electric vehicles is expected to enhance the overall energy efficiency of the transport sector with corresponding reduction of energy demand. The National Mission for Hybrid and Electric Vehicles (NMHEV) was launched to promote electric vehicle mobility. This initiative was designed to act as a focal point for all the industry’s needs on infrastructure, R&D and new incentives. The mission is headed by the Ministry of Heavy Industry & Public Enterprises (MoHI&PE) and stakeholders, including ministries like urban development, new and RE, and power along with private stakeholders (industry). This scheme is proposed to be implemented over a period of six years, till 2020, wherein it is intended to support the hybrid/electric vehicles market development and its manufacturing ecosystem to achieve self-sustenance.

Untapped opportunity to develop public transport networks using waterways

Finding new ways for travelling at a high commercial speed, comfortable, safe, cheap, and preserving the environment as much as possible by using less fuel is the new challenge for the government, municipalities and public transport operators in India. One of the alternatives is commuting via water buses, roll-on-roll-off boats or ferries. The use of waterways can be seen in many capitals and big cities around the world, such as Amsterdam, Budapest, Lisbon, Paris, Rotterdam and Venice. In these cities, we can see many floating vehicles for public transportation of passengers such as water taxis, water buses, amphibious, vaporettos, ships and ferries. This new alternative is more efficient and cleaner because there are no: traffic lights, traffic queues, many stops and offers a high commercial speed compared to the other public transportation vehicles such as buses, trolleybuses, trams, and a lower emissions per passenger trip.

Policies supporting the development of sustainable transport systems

• National Urban Transport Policy (NUTP): It is aimed at ensuring easily accessible, safe, affordable, quick, comfortable, reliable and sustainable mobility for all. It seeks to incorporate urban transportation, specifically modes of public transport and mass transit, as an important parameter at the urban planning stage rather than being a consequential requirement, thus encouraging integrated land use and transport planning in all cities.

• Auto Fuel Policy: To introduce fuel efficiency norms for the automobile industry to address both energy and environment challenges, the Auto Fuel Policy, 2003, was introduced. BS-III auto fuel (MS/HSD) has been extended to all cities of


Case study: Public transportation on water in Lisbon, PortugalWhat

The river Tagus separates Lisbon from the other cities such as Almada, Barreiro and Montijo, and serves as a transportation hub where passengers can connect with other means of transportation, thus helping them reach their desired destination. In Lisbon, the public transport operator Transtejo Soflusa established five connections between the two river banks using three types of boats, taking into consideration the capacity, as an alternative to crossing the river by road using the two existing bridges.

The issue

The route from Barreiro to Terreiro do Paco had some issues that could be addressed to benefit passengers, transport operators, the municipality of Lisbon and the environment. The CO2 emission from water transport are determined not only by the length of the route but also the boat model and cruising spend of the vehicle, which affect fuel consumption. The operator was using the same boat model and capacity without considering the peak and off-peak demand, leading to operational inefficiencies and avoidable emissions.

Solution for better management to improve transport efficiencies and reduce emissions

The fuel consumption for a boat with a capacity of 600 passengers is 600 l/h, while for a boat with a capacity of 500 is 410 l/h. Both boats can travel at the same speed and with the same number of crew. By using a boat with a capacity of 500 passengers during off-peak hours, the operator can reduce emissions by 32 g per passenger trip.

Benefits

Passengers: The passengers will spend less time on each trip out of rush hour from 25 minutes to 20 minutes. They will be allowed to carry more bicycles on board from two that are now to three. And probably the ticket will be cheaper during off-peak hours due to the fact that operating costs will decrease for transport operator.

Transport operator: This action will generate better management for the fleet and increase the income of the transport operator by decreasing the operating costs. It will give the crew five extra minutes to rest in the docks at the end of each trip. Will save fuel and will avoid exploiting the boats engines below the operating speed of 22 kn. By decreasing the price per ticket, the transport operator can attract more passengers.

Municipality of Lisbon: If a higher number of passengers are using the boat service to cross the river the chances of decongestion of the two main bridges that connect Lisbon with the cities located on the other side of the river are high. On the other hand, this makes the zone quieter and cleaner by reducing the traffic on the two bridges and the CO2 level produced by road vehicles and bigger boats. This also helps in generating a higher income by increasing the number of passengers that use the waterways, which might reduce the cost of maintaining road infrastructure.

Environmental sustainability: It reduces the CO2 emissions produced by bigger boats that are in use and road vehicles that use bridges to cross the river. Additional benefits include reducing noise and dust.

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Green buildings‘For our habitat is not created in vacuum–it is the compulsive expression of beliefs and aspirations that are central to our lives.’

— Charles Correa, award-winning architect/urban planner/activist

Indian cities are projected to increase by more than 400 million people by 2050, triggering extraordinary growth in energy-intensive construction and infrastructure.17 This rapid urbanisation presents a tremendous opportunity for energy efficiency, especially in new construction. Therefore, it is imperative for the industry to develop sustainable building technologies and green buildings. The real estate industry is one the major energy consumers and GHG emitters. Hence,

17. http://www.nrdc.org/international/india/files/low-carbon-future-FS.pdf18. NRDC, ASCI. (January 2014) Building efficient cities: Strengthening the Indian real estate market through codes and incentives, retrieved from http://

www.nrdc.org/international/india/files/real-estateefficiency-codes-IB.pdf.19. Real estate efficiency codes IB20. ASHRAE 90.1 is a US standard that provides minimum requirements for energy-efficient designs for buildings, except for low-rise residential buildings.

real estate activity in India has a significant impact on the environment and resources. This indicates that there is a real opportunity to develop green buildings in the country.

Sustainability in the real estate context is not only limited to energy conservation but also includes resource usage, impact on the neighbouring environment and working conditions for tenants. This concern has led to the development of green buildings. The green building concept broadly integrates many interests and aspects of sustainability, emphasising reduction of environmental impacts through a holistic approach to land and building uses, and construction strategies.

Key challenges

Real estate developers face a few challenges that need to be overcome for the widespread adoption of green buildings:


What is a green building?A green building uses less energy, water and natural resources than a conventional building. It also creates less waste and provides a healthier living environment for people living inside it compared to a conventional building. Green buildings incorporate several sustainable features, such as efficient use of water, energy-efficient and eco-friendly environment, use of RE and recycled/recyclable materials, effective use of landscapes, effective control and building management systems and improved indoor quality for health and comfort.

• Access to finance and up-front costs: Developers are concerned about the recovery of the higher up-front costs of an energy-efficient project. Many are unaware of the relatively short payback period of these costs demonstrated at existing energy-efficient buildings.

• Split incentives: Developers often rent their buildings to tenants who pay the utility bills. In these arrangements, the developer incurs the costs of an efficiency measure, but the tenant benefits from the lower utility bills.

• Limited inducements: Incentive programmes that encourage investments in efficiency from government and financial institutions are not widely known or available.

• Lack of information and awareness: Developers are hesitant to upgrade from familiar products and methods without easy access to information about efficiency measures. A perceived lack of access to experts exacerbates this lack of information.

Mitigation opportunity

• If states across India adopt energy-saving building codes and leading developers go beyond minimum code requirements for commercial buildings, an estimated 3,453 TWh of cumulative electricity can be saved by 2030, the equivalent of powering as many as 358 million Indian homes annually between 2014 and 2030.18 Additionally, 1,184 million tonnes of CO2 emissions can be avoided by 2030, equivalent to the annual emissions from more than 17 coal-fired power plants (500 MW each) over the same period.19

• The National Mission on Sustainable Habitat (NMSH): This programme promotes sustainable cities, including energy-efficient buildings and local government adoption of ECBC and other efficiency measures. The programme aims to transform the design of new construction and major retrofits of commercial and high-rise residential buildings to optimize their energy efficiency. It is estimated that, in overall terms, the implementation of energy efficiency measures would help in achieving about 30% energy savings in new residential buildings, and 40% in new commercial buildings. In the case of existing buildings, these estimates are about 20% and 30%, respectively.

• Leadership in Energy and Environmental Design (LEED) India is the localised version of the international rating system and is administered by the Indian Green Building Council (IGBC). In 2014, there were 2,760 LEED India registered buildings and 524 LEED certified buildings, representing 2.19 billion sq ft of registered green building footprint. According to IGBC, projects that comply with the

ECBC also qualify for LEED India ratings, provided they are equivalent to specific standards, such as ASHRAE 90.1-2007.

• Green Rating for Integrated Habitat Assessment (GRIHA) is the national rating system for green building design, developed and implemented by TERI and the Ministry of New and Renewable Energy (MNRE). If buildings contain fully air-conditioned interiors, ECBC compliance is mandatory for GRIHA ratings. If buildings are naturally ventilated, only partial ECBC adoption is required. All new central government and public sector buildings are to comply with the requirements of at least three-star GRIHA ratings. It has a few variants like SVAGRIHA for small homes and GRIHA LD (for large developments such as townships, campuses and SEZs).

• Promoting solar energy applications: Use of solar thermal systems of air heating and steam generating applications as well as use of solar passive techniques in building design, through a combination of financial and promotional incentives and ‘Akshay Urja Shops’.

• Green leases: ‘Green leases’ address the problem of split incentives by allowing the owner to recover energy efficiency investments through higher rent, in exchange for lower tenant energy costs. Utilities can also provide on-bill financing, where upgrades are financed by the utility and payments are attached to a fixed electricity bill. Financial institutions can create innovative financing packages to reduce the upfront cost and monetise energy efficiency savings as well.

• Adopting innovative financing: Tax and fiscal incentives can bring down the higher initial cost of efficient products and shorten payback periods for developers.

Example: SERCs in Maharashtra and Delhi use incentives to support utility efficiency programmes and DSM. The incentives are funded by additional charges on the highest energy users, further motivating these users to increase their energy efficiency. State and local institutions could also issue loans to property owners for efficiency investments. These loans are repaid through the property taxes of the building, so that the costs (and savings) are passed on to a new owner when the building is sold. Additionally, Energy Service Companies (ESCOs) can help developers plan and finance energy saving projects.

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Policies supporting the development of green buildings

The Indian government is promoting a number of measures, such as building codes, policy interventions, labelling/rating systems, and appliance standards to streamline efforts to promote energy efficiency in the buildings sector.

• NMSH: Increasing energy efficiency in buildings: building bye laws and standards, energy performance monitoring, national standards for construction and recycling of construction waste, mandatory rainwater harvesting, water and energy audits.

• ECBC: Developed by the BEE, the code prescribes a minimum standard for energy use in new buildings and major retrofits. The code is voluntary at the national level, and the MoUD and state governments are responsible for its implementation and enforcement. Several states have announced plans to make ECBC operational for new construction and major retrofits. LEED and GRIHA have adopted ECBC as a minimum compliance requirement.

• National Building Code (NBC) of India: Provides comprehensive guidelines for regulating construction activities. The Bureau of Indian Standards (BIS) is in an advanced stage of revising the code to incorporate sustainability and ECBC references.

• BEE’s Buildings star rating programme for buildings: It is based on the actual performance of a building in terms of its specific energy usage in kWh/sq m/year. The programme rates buildings on a one to five-star scale, with five stars being the most efficient.

• Bachat Lamp Yojna (BLY): BEE is also undertaking the BLY which promotes the use of compact fluorescent lamps (CFL). A CFL can provide the same level of light as an incandescent lamp (IL) at a much lower consumption of electricity.

• Appliances labelling/rating scheme: BEE is also undertaking an appliances labelling/rating scheme. The appliances are rated in the range of one to five stars—five stars referring to most energy-efficient model. Looking ahead, stronger codes and standards for appliances will be essential to drive energy efficiency savings.

• National Programme for LED-based home and street lighting has been launched in January 2015. LED bulbs are being distributed in a phased manner from March 2015 onwards. The entire project of installing LED bulbs for domestic and street-lighting in 100 cities is targeted for completion by March 2016.


Case studyBuilding Energy Efficiency Project (BEEP)

The Indo-Swiss Building Energy Efficiency Project is a bilateral cooperation project between the MoP, GoI, and the Federal Department of Foreign Affairs (FDFA) of the Swiss Confederation. The BEE is the implementing agency on behalf of the MoP while the Swiss Agency for Development and Cooperation (SDC) is the agency in charge on behalf of the FDFA.

The core objective of this project is to reduce energy consumption in new commercial buildings, raise awareness on green buildings and disseminate best practices for the construction of low energy residential and public buildings. The project contributes to strengthening and broadening BEE’s building energy conservation programme for the 12th Five Year Plan. The project is of 5 years duration (2012–16).

This project includes the following components:

• Integrated design charrettes

• Technical assistance in developing building material testing infrastructure

• Design guidelines and tools for the design of energy-efficient residential and public buildings

• Production and dissemination of knowledge products

About the project

The project is within a special economic zone (SEZ) project in Gurgaon, Haryana. This area is categorised into two zones: processing and non-processing. The processing zone consists of the office areas, which includes the two buildings of phase I of the project, consisting of seven office blocks and two multilevel car parks (MLCPs). The non-processing zone consists of residential and commercial buildings as well as related social infrastructure.

Strategies recommended during the charrette:

• Free cooling for ventilation

• Utilising diesel generator’s exhaust for cooling through vapour absorption machines (VAMs) Integration of PV

The impact

Through energy simulation, an energy saving potential of 25% was predicted.

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‘Every profession bears the responsibility to understand the circumstances that enable its existence.’

— Robert Gutman, sociologist and cultural critic

Operation of telecommunications networks requires electrical power. The expense on energy accounts for a significant share of the operational cost of these networks. This is particularly so in rural areas where the availability of power is uncertain. The use of diesel generators to ensure continuous power supply has the disadvantage of increasing the GHG emission and consequent enlargement of the carbon footprint, which has a deleterious impact on the environment. While the contribution of the telecommunications sector to the global carbon footprint is low compared to other sectors like transportation and construction, it nevertheless contributes a noteworthy share with the growing reach of its network and projected expansion.

Increasing public demand for CSR and a genuine desire to effect positive change in the environment are leading telecommunications service providers and their suppliers to reduce their carbon footprint. Green telecommunications has also become a business necessity for telecom operators with energy costs becoming as large as 25% of total network operations costs.

Impact of the telecom sector on climate change

The telecommunications industry alone accounts for about 2% or 860 million tonnes of the world’s GHG emissions. The main contributing sectors within the telecommunications industry include the energy requirements of PCs and monitors (40%), data-centres (23%), and fixed and mobile telecommunications contribute about 24% of the total emissions. Compared to the other sectors such as travel and transport, construction and energy production, the telecommunications sector is relatively energy-lean with telecommunications contributing just 0.7%or about 230 million tonnes of GHG emissions. The challenge for

the telecom service providers, telecom equipment manufacturers and the government is to pursue growth in telecom networks, while ensuring that the 2% of global emissions does not significantly increase over the coming years.

The primary carbon footprint, or direct impact for a telecom service provider, would include network operational cost, building lighting, and cooling or heating and transportation. The service provider generally has direct control over these. The secondary footprint, a measure of the indirect CO2 emissions, is associated with the manufacture and eventual breakdown during the whole life cycle of the products that are used. Energy consumed in the manufacture of equipment—for instance, by a base transreceiver station (BTS)—is a source of indirect emission for service providers that use it.

Key challenges

• Lack of energy infrastructure in rural areas: India has around 310,000 telecom towers of which about 70% are in rural areas. Deficient grid power makes it imperative to use non-grid sources, the most common being diesel generators. Presently, 40% power requirements are met by grid electricity and 60% by diesel generators and for every kWh of grid electricity consumed 0.84 kg of CO2 is emitted. Approximately, a total of 5 million tonnes of CO2 is emitted due to diesel consumption and around 8 million tonnes due to power grid per annum.

• Lack of effective incentives: There is a general feeling that the alternate sources of energy are more expensive compared to the grid electricity or even that obtained through diesel generators. Incentives can be developed for equipment based on the principle of energy conservation, or subsidies can be provided for using RE and energy efficiency measures. Incentives can be developed to promote waste minimisation and recycling in the industry.

Telecommunications


Policies supporting the development of green telecom

• TRAI: It released a consultation paper on ‘green telecom’ in 2010, which offers guidance for the use of eco-friendly equipment in the telecom sector.

• Department of Telecommunication: It has implemented a set of directives aimed at mitigating the impacts of the sector on climate change, that include the following:

– At least 50% of the rural towers and 20% urban towers are to be powered by hybrid power (RE technologies + grid power) by 2015, while 75% of rural towers and 33% of urban towers are to be powered by hybrid power by 2020.

– By the year 2015, all telecom products, equipment and services in the telecom network should be energy and performance assessed and certified with a ‘Green Passport’ (GP), utilising the energy consumption rating (ECR) and the energy ‘passport’.

– All service providers have to declare to TRAI the carbon footprint of their network operations in the format prescribed by the authority.

– Service providers should adopt a voluntary code of practice encompassing energy-efficient network planning, infra sharing, deployment of energy-efficient technologies and adoption of RE.

– Service providers should evolve a ‘carbon credit policy’ in line with the carbon credit norms with the ultimate objective of achieving a maximum of 50% over the carbon footprint levels of the base year in rural areas, and achieving a maximum of 66% over the carbon footprint levels of the base year in urban areas by the year 2020.

21. TRAI22. TRAI23. UN Climate Change Secretariat. Emissions summary for India. Retrieved from https://unfccc.int/files/ghg_data/ghg_data_unfccc/

ghg_profiles/application/pdf/ind_ghg_profile.pdf

Figure 1: Sectoral break-up of GHG emissions in India23

Mitigation opportunity

Besides being part of the problem, the telecommunications sector is also a part of the solution. It enables significant reductions in the GHG emissions and costs across a range of sectors of the economy using multimedia communication, machine to machine (M2M) communication and software control of processes to deliver smart solutions like smart grid, teleconferencing, smart logistics and transportation. For each tonne of GHG the telecom industry produces through powering servers, data centres, networks, etc., it can leverage a reduction or avoidance of up to 9 tonnes across the economy.21

• Alternative energy: In 2010, India had more than 310,000 cell phone towers that consumed about 2 billion litres of diesel per year. The move from diesel to solar and other alternate sources of energy will result in a reduction of 5 million tonnes of CO2 emissions as well as savings of 1.4 billion USD in operating expenses for telecom tower companies.22 Moving to RE sources can generate millions of carbon credits that could offset the operating expenses on their towers. In addition, savings in the energy bills would further reduce the operating expense.

• Green telecom networks: In telecom networks, greening refers to minimising the consumption of energy through the use of energy-efficient technology, using RE sources and eco-friendly consumables.

• Green manufacturing: The greening process involves using eco-friendly components, energy-efficient manufacturing equipment, electronic and mechanical waste recycling and disposal, reduction in use of hazardous substances like chromium, lead and mercury and reduction of harmful radio emission.

• Design of green central office buildings: Optimisation of energy power consumption and thermal emission, minimisation of GHG emission.

• Waste disposal: Disposal of mobile phones, network equipment, etc., in an environment-friendly manner so that any toxic material used during production does not get channelised into the atmosphere or underground water.

• Carbon credit policy for the telecom sector: As suggested by Telecom Regulatory Authority of India (TRAI), a carbon credit policy for the telecom industry could leverage market mechanism to reduce emissions in the sector. Such a policy would usually involve setting a limit or cap on the amount of a GHG that can be emitted by a company or an industry. The limit or cap is allocated or sold to telecom companies in the form of carbon credits which represent the right to emit or discharge a specific volume of the GHG.

67.4

23.34

5.813.45

Energy

Agriculture

Industrial ProcessesWaste

46 PwC

Key challenges

Solid waste management is a relatively recent development in India, and as a result, there are competing technologies and process routes, each with its pros and cons. In addition, there are variants within each process route. Since the right technology for solid waste management depends on a number of factors, there has been significant amount of research involved and a high possibility of technology transfer in this sector.

Financial constraints of urban local bodies (ULBs), institutional problems within the departments, fragile links with other concerned agencies, lack of suitable trained staff, and other allied problems. Mostly, expenses towards municipal solid waste (MSW) management are met from the general budget and allocation from property taxes. Often, funding for operations and maintenance relating to provision of municipal solid waste management (MSWM) services are not earmarked and properly budgeted.

A national waste management and recycling programme must be developed with a suitable framework and guidelines for the promotion of green products. The government should promote the PPP model for waste management and recycling.

Mitigation opportunities

• Waste-to-energy technologies: Most of the waste generated finds its way into land and water bodies without proper treatment, causing severe water and air pollution. The problems caused by solid and liquid wastes can be significantly mitigated through the adoption of environment-friendly waste to energy technologies that allow treatment and processing of wastes before their disposal. The environmental benefits of waste to energy, as an alternative to disposing of waste in landfills, are clear and compelling. Waste to energy generates clean, reliable energy from a renewable fuel source, thus reducing dependence on fossil fuels, the combustion of which is a major contributor to GHG emissions. The urban cities in India together generate about 62 million tonnes of MSW annually, carrying away 1,240 ha of urban land for making landfill sites apart from environmental degradation, ground water contamination and spreading of diseases.

‘Swachh Bharat Abhiyan’ (SBA), a campaign to transform independent India in to a ‘clean India’ by the year 2019 was rolled out on 2 October 2014 by the Prime Minister of India, Narendra Modi. Furthering the campaign Oil and Natural Gas Corporation (ONGC) has conceptualised a ‘waste to Fuel project in the city of Puri, Odisha. The city generates about 50 MT of MSW every day, which is dumped into the designated landfill sites in the city. The plant will have a capacity of 50 TPD, which will segregate, process and convert the wastes into liquid fuel/gas under the corporate social responsibility (CSR) activities of ONGC.

WasteThe increasing industrialisation, urbanisation and changes in the pattern of life, which accompany the process of economic growth, have given rise to generation of increasing quantities of waste leading to increased threats to the environment. In recent years, technologies are being developed and demonstrated globally that not only help in reducing the amount of waste considerably but also in generating substantial quantity of decentralised energy.

Emissions from the waste sector

The main component of GHG emissions from waste sector is methane emissions that are released in the atmosphere as a by-product of anaerobic decomposition of solid waste. Similarly, waste water becomes a source of methane emissions and also a source of nitrous oxide due to the protein content in domestically generated waste water. Industrial waste water with significant carbon load that is treated (intended or unintended) treated in anaerobic conditions is also a source of methane emissions.

• Alternative fuel/raw material: Co-processing of industrial waste items in manufacturing sectors like cement have been effectively tested. Co-processing is the term used to describe introducing alternative fuels and raw materials into a standard cement production process rather than using conventional fuels and raw materials.

Drivers supporting sustainable waste management

• Foreign investment: Competition between cities, to provide a clean city with good municipal environmental infrastructure to attract (often foreign) investment can be a key driver. This appears to be particularly important in India, where competition for foreign information technology investment is strong.

• Regional and international drivers (e.g. solid waste flow as recyclable resources): Climate finance to be extended to developing, countries

• Socio-economic drivers (e.g. population trends and public awareness): Public health remains a key driver, particularly in hot climates. Outbreak of diseases such as plague, cholera, and diarrhoeal diseases due to the uncollected refuse has pushed the government to formulate rules and regulations for solid waste management (SWM).

• Technology development: Access to a diverse range of waste recycling and compacting technologies.

• Environmental protection: Climate change and environmental pollution arising from landfills/effluent discharge to water basins is a driving force for legislative changes. The National Green Tribunal (NGT) has been vigilant about the environmental degradation of rivers, in particular the Ganges.


To comply with the EU directive related to waste management (Directive 2008/98/EC), the Polish Ministry of Environment has set targets (issued in 2011) to reduce the amount of municipal waste going into landfills by 50% in 2013 and by 35% in 2020. The cement industry in Poland has actively encouraged waste management companies to develop facilities that treat MSW to produce a residue-derived fuel (RDF) that can be used at cement plants. Nearly all cement plants have received permits from their local regulators and are replacing on average 36% (in 2009) of their coal with RDF. As a result, close to 20% of the MSW is now converted to RDF, which is allowing the cement industry in Poland to lead with the highest contribution to the country’s waste reduction targets.

Industrial processes• Some of the large industrial units in India use state-of-the

art technology, in sectors such as cement and iron and steel. Although opportunities remain to upgrade other older plants, in the cement sector it has been observed that the poor quality of fly ash and steel slag used as a clinker substitute and the high costs of its transportation and handling limits its use. Improving energy efficiency from SMEs present a high potential for emission reductions. However, SMEs are constrained by an inability to access more efficient technologies and finance. Moreover, the heterogeneity of industrial units–differing vintages, inputs, and product mixes–makes using standardised benchmarks for carbon finance mechanisms extremely challenging.

Figure5: Breakdown of GHG emissions within the industrial processes sector24

24. UN climate change secretariat. Retrieved from https://unfccc.int/files/ghg_data/ghg_data_unfccc/ghg_profiles/application/pdf/ind_ghg_profile.pdf

Emissions from the sector

• According to the India’s first BUR to UNFCCC, this sector comprises of 8.46% of the total National GHG inventory.

• Industrial activities together emitted 412.55 million tCO2-e of GHG in 2007. Industry sector emissions have been estimated from the manufacturing of minerals, metals, chemicals, other specific industries, and from non-energy product use. The emissions covered in the industry sector include fossil fuel combustion-related emissions as well as the process-based emissions.

• To create a paradigm shift in the manufacturing sector, the National Manufacturing Policy was introduced in 2011 and sustainability and environmental protection in manufacturing is one of its key objectives.

• Regulatory framework: The recent launch of ‘Make in India’ campaign by GoI is a key step in this direction. Also steps to promote adoption of clean technology in the MSME sector that is responsible for a significant portion of environmental pollution in India. The government’s recent policy measures are geared towards promoting government procurement from the MSME sectors and significant impetus is given to modernise MSMEs through technology adoption and adequate access to finance.

Metal products

Mineral products

Chemical industry

45.26

37.67

17.07Mineral products

Chemical industry

Metal products

Production of Halocarbons and SF6

Consumption of Halocarbons and SF6

Others

60.4522.42

10.4

5.87

0.07 0.78

48 PwC

Case studyScaling energy-efficient technologies in small enterprises

The SDC was one of the first development agencies to promote the topic of energy efficiency in the MSME sector. Since the early 90s, SDC has supported TERI to improve practices in three energy-intensive MSME sub-sectors (foundry, glass and brick) by developing, demonstrating and disseminating energy-efficient technologies.

The MSME sector plays a vital role in the Indian economy. There are about 15 energy-intensive small industry sectors in 180 geographical areas in India. The MSME sector contributes around 45% of manufacturing output, 40% of exports, and employs more than 69 million people. Most MSMEs use fossil fuels to meet their energy needs, but this is often inefficient due to poor equipment and operating practices. This leads to both fuel wastage and the release of harmful greenhouse gases and particulates.

Due to the importance of climate mitigation and energy security, GoI strongly supports improving energy efficiency in energy-intensive MSMEs. The EESE project continues to strengthen efforts to do this by promoting policy initiatives to increase energy efficiency in enterprises, and supporting knowledge sharing among key players in the sector.

Objectives:

• Create an enabling policy environment and programme to facilitate the uptake of energy-efficient technologies in the MSME sector

• Expand the use of energy-efficient technologies in the foundry sector.

• Use energy-efficient technologies in other MSME sectors

How they are doing it:

• Facilitating the uptake of energy-efficient technologies in the MSME sector through analysis and dissemination of data on energy-intensive clusters

• Engaging with relevant stakeholders and formulating policy recommendations for an enabling environment

• Scaling up the use of energy-efficient technologies or practices in the foundry sector through training of foundry entrepreneurs and enabling local service providers to provide technical backup support

• Enabling the use of energy-efficient technologies or practices in other MSME sectors, such as the aluminium sector, and in the production of agricultural pumpsets.

The impact

Between the beginning of this project in 1993 and 2011, a total of 5,81,000 tonnes of CO2 is estimated to have been reduced within 650 MSMEs adopting new technologies with direct project support. This is equivalent to energy savings of 169,000 tonnes of oil.


Policymakers have the responsibility and are empowered with the tools to enact noticeable change for driving low-carbon growth. It is in their interest to ensure that an issue like climate change, which directly impacts people’s lives, becomes a national agenda and policy levers are created to provide private sector players to contribute to low-carbon growth. An active NGT, a reinvigorated PMCCC, and a dedicated ministry for climate change are in place. The recent initiatives by GoI, such as the Smart Cities Mission and Make in India, present significant opportunities to dovetail with the climate change mitigation strategy. Smart cities aiming to be more liveable and sustainable can embed low-carbon strategies. The Make in India campaign to push local manufacturing can drive the much needed-development of local low-carbon technologies that can spur innovation, cost reduction and increase manufacturing capacity.

Policymakers need to involve private players during the planning or visioning stage to ensure that a clear role is carved out for them right from the beginning instead of including them only in the implementation phase. Private sector companies have the potential to drive low-carbon growth not just for their businesses but also for the wider ecosystem, and policymakers bear the responsibility of providing a policy platform that incentivises such practice.

According to the final report of the Expert Group on Low Carbon Strategies for Inclusive Growth, policy interventions for mitigation can involve reducing energy requirement by promoting energy efficiency or increasing the use of low-carbon energy sources in the supply mix. A summary of broad sectoral policy measures25 recommended by the erstwhile Planning Commission’s Expert Group on Low Carbon Strategies and NITI Aayog are presented in annexures 1 and 2.

• Promote low-carbon development and inclusive growth Given the multitude of issues plaguing India, addressing developmental issues like inequality, livelihood, food security, health and education outcomes are equally important

objectives that need to be fulfilled. Policymakers need to promote and pursue holistic low-carbon inclusive growth that links development and climate change mitigation objectives. An indicative qualitative analysis of key climate change mitigation interventions and their respective contribution to reducing emissions and meeting development objectives is graphically represented below:26

• Promote participatory governance Policymakers need to leverage existing platforms (e.g. MyGov.in) and create new ones to form a two-way communication channel with the citizens and make them a part of the policymaking process. Such platforms, when suitably adapted, can play a critical role in driving local climate change initiatives both in an urban and rural context.

• Promote and incentivise innovative climate finance There are enough success stories from around the world wherein innovative financial models have been adopted to finance climate change projects, right from crowdfunding rooftop solar projects27 to rental solar farms28 and leveraging CSR budgets through PPPs. Given the limited financial sources policymakers work with, it is important to promote all possible and suitable sources of finance for low-carbon growth.

• Bottom-up approach Even though climate change is a global problem requiring concerted efforts on a massive scale, it goes without saying that a parallel bottom-up approach is also needed. Local planning and finance officials from developing countries are increasingly factoring in climate change while formulating development plans. Policymakers need to understand the local climate change impacts pertaining to their constituencies and accordingly develop locally relevant and comprehensive low-carbon plans and strategies.

• Forest stock and tree cover improvement

• Adoption of green building codes

• Advanced coal technologies

• Wind, solar

• Energy efficiency programmes In the industry

• Better urban public and non-motorised transport

• Smart city scheme

• Technological improvement in industry

• Lighting, labelling and (SEEP)

Inclusive growth potential

Car

bon

mit

igat

ion

pote

ntia

l

25. Planning Commission, GoI. (April 2014). Co-benefits framework for low carbon strategy: The final report of the expert group on low carbon strategies for inclusive growth; partly adapted from Table 9.1.

26. Mosaic. Retrieved from https://joinmosaic.com/27. UNFCCC. Retrieved from http://unfccc.int/secretariat/momentum_for_change/items/7850.php

The role of policymakers

50 PwC

India is one of the fastest-growing major economies in the world. Although it is the fourth largest greenhouse gas (GHG) emitter, accounting for 5.8% of global emissions, its emissions are relatively low compared to those of other major economies. India’s emissions increased by 67.1% between 1990 and 2012, and are projected to rise to 85%29 by 2030 under a business-as-usual scenario. However, on a per capita basis, its emissions stand at 2 MtCO2e, which is significantly low as compared to other developing economies.

With an impressive portfolio of green programmes and legislations, including emission intensity reduction, renewable energy targets, nuclear energy, increased excise duty on petrol and diesel, smart and sustainable cities, and energy efficiency, India is well positioned to take the lead on low-carbon growth. While the Indian government is doing well when it comes to promoting low carbon growth, the private sector is not far behind.

Most businesses have their carbon footprint measured and carbon reduction roadmap created. Both private and public sector companies have made significant investments in developing an alternate energy portfolio, mainly solar and wind. Private sector companies have also invested a great deal in attaining energy efficiency and exploring alternative fuel and raw materials, water conservation, and waste management.

Shaping this climate change agenda further will require a collaborative approach where policymakers, industry, academia and civil society come together to spur innovation, promote low-carbon growth and meet the basic access needs of society at large.

So, what’s the starting point for India? How does this translate into action and next steps? Where are the opportunities to shape a low carbon agenda?

This report summarises a few critical opportunities that stand out to encourage both policymakers and businesses.

Renewable energyThe Indian RE market is highly attractive as it has the potential to reduce India’s rising demand-supply gap and thus become a key cog in the wheel for India’s energy security strategy. The Indian government has set up an encouraging policy and regulatory framework with a combination of FITs, renewable procurement obligations and RECs. The most dominant asset classes, wind and solar, have attracted considerable supplier interest, and hence equipment and EPC are available at increasingly competitive rates, thus boosting margins. We estimate that the investment required for solar and wind is comparable to that of China at 210 billion USD. Around 40 billion USD is required by 2017 to achieve the government’s solar mission of 22 GW of installed capacity, and the government has started with a 1.4 billion USD investment. Increased use of renewables will generate demand for supporting technologies and supply chains.

29. India’s Climate and Energy Policies, Centre for Climate and Energy Solutions, October 2015

The climate change agenda

Manufacturing and industry

Indian private sector firms, especially large businesses, are serious about low-carbon growth. Most businesses have their carbon footprint measured and carbon reduction roadmap created. Both private and public sector companies have done a lot in the area of solar and wind energy. Private sector companies have invested a great deal in attaining energy efficiency and using alternative fuel and raw materials and water conservation and harvesting. There is significant potential in this sector to scale up investment and adopt measures that will contribute to low-carbon growth. For the energy sector, there is an opportunity to invest in super critical technology, coal beneficiation, alternative and low carbon intensive fuels and energy efficiency. For the cement sector, which is already one of the most efficient in terms of energy intensity, there lies a significant opportunity in the field of alternative raw material and fuels. As part of its Make in India campaign, India has relaxed the FDI rules to encourage private sector funding for local manufacturing and there are greater incentives for implementing energy efficiency measures.


Smart citiesThe recent announcement of 100 smart cities opens up several avenues to the private sector as they refocus their strategies and production models towards an increasingly urban customer base. Each smart city project will create opportunities for foreign capital to enter into India. Grants of 8 billion USD (15 million USD) per smart city per year have been earmarked for the next five years for 100 smart cities. Private sector investment will be required to substantiate this funding. These smart cities are likely to expand market prospects for global vendors in India and provide a platform for them to export their services.

Energy efficiency

The Indian government is serious about energy efficiency, and this is evident from the various policy levers introduced in the recent past to encourage energy efficiency. According to data from the India’s MoP, the investment potential for energy savings amounts to 9.8 billion USD, with annual savings of 183.5 billion kWh. These energy savings will mean 148.6 million tonnes of avoided CO2 emissions per year. Taking an isolated example of PAT exposure, certificates bought to make up for missed targets in phase 1 are estimated to cost business 5.4 billion USD.

Auto/transport

The ambitious smart cities plan presents an opportunity to invest in the smart mobility concept, which focusses on alternative modes of transport, fuels and green infrastructure. There is also increased investment in road vehicle technologies, including vehicle design, materials and electrification. For example, faster adoption and manufacturing of hybrid and electric vehicles (FAME India) will receive a 12.5-million USD boost from the 2015–2016 Union Budget.

Climate finance

Funding of clean energy technologies may exceed the 2 billion USD which was provided in 2014 as a result of recycled revenues from the doubled carbon tax. Tax-free infrastructure bonds of 794 million USD are being introduced for the funding of RE projects during the year 2015–16. The scale of investment implied by the INDC will require not just the mobilisation of investors but also the creation and innovation of financial products to finance and insure the projects involved.

‘The recent initiatives by GoI, including the Smart Cities Mission and Make in India, present significant opportunities to dovetail with the climate change mitigation strategy. Smart cities aiming to be more liveable and sustainable can embed low-carbon strategies as part of their mission. The Make in India campaign to push local manufacturing can drive the much needed-development of local low-carbon technologies that can spur innovation, cost reduction and increase manufacturing capacity. The government needs to work with a multitude of stakeholders and incentivise the uptake of low-carbon growth as a key lever while bringing the smart cities and Make in India vision to life.’

Arvind SharmaExecutive Director, Sustainability and Climate Change, PwC India

52 PwC

Business responses in a changing worldEight steps to climate leadership:

• Identify the business case for climate change action

• Put in place a strategy to manage the risks and opportunities in both the short- and long-term

• Go beyond direct operational impacts and consider the implications from supply chain to customer

• See regulation as an opportunity and not just as cost and risk

• Take the discussion to the board on a regular basis

• Consider partnering with others and speak to suppliers and customers

• Consider a climate change strategy as a key competitive advantage

• Set ambitious targets, hold people accountable and incentivise success

Thinking ahead…With the green economy pegged for expansion, business leaders must consider the following broad aspects:

Innovative business models

Can a change in business model—like leasing instead of selling—create strategic advantages and change the status quo?

Green product development

Can they benefit by creating a differentiated greener product that appeals to consumers who are willing and able to pay more for them?

Material and resource efficiency

Can they reduce costs by using resources more efficiently?

Managing ESG risks

How will they manage the risks that environmental change create?

Policy advocacy

Can they change or influence the rules of the game, perhaps by affecting regulatory actions?

Year Initiative/policy measure Impact

2007 Constitution of the PMCCC. This high-level advisory group on climate change was reconstituted in November 2014.

–

2008 Launch of NAPCC and its eight sub-missions:• Jawaharlal Nehru National Solar Mission (JNNSM)• National Mission on Enhanced Energy Efficiency (NMEEE)• National Water Mission (NWM)• National Mission for Sustaining the Himalayan Ecosystem (NMSHE) • National Mission for a Green India (GIM)• National Mission for Sustainable Agriculture (NMSA)• National Mission on Strategic Knowledge for Climate Change

(NMSKCC)Out of the eight missions, only JNNSM and NMEEE achieved notable progress.

Under JNNSM, addition of grid solar power of 2,870 MW and off-grid solar applications of 364.27 MW along with solar thermal collectors of 8.42 million sq m took place till 2013–14, resulting in a total CO2 reduction of 15.5 million tonnes.31

PAT scheme under NMEEE, under its three-year first cycle, aimed to achieve approximately 28 million tonnes of CO2 reduction by imposing a cap on specific energy consumption of 478 units in eight energy-intensive industrial sectors. The first cycle concluded on 31 March 2015 and is currently getting evaluated. The second cycle is expected.

2008 MoEFCC as the coordinating entity for overseeing NAPCC’s implementation directed states to develop their own SAPCC in line with NAPCC

30 states have released their SAPCCs.

2009 India took a voluntary pledge to reduce the emissions intensity of its GDP by 20–25% compared to 2005 level by 2020,

According to MoEFCC, there was a 14% reduction in emission intensity between 2005 and 2010. Extension of this trend suggests that the 2020 target is within reach.32

2010 The erstwhile Planning Commission formed the Expert Group on Low Carbon Strategies for Inclusive Growth to provide recommendations for supporting development of 12th Five Year Plan (2012–17). The group released the ‘The Final Report of the Expert Group on Low Carbon Strategies for Inclusive Growth’ in April 2014, highlighting sectoral opportunities for mitigation and outlining a low-carbon growth strategy.

The outcome of the recommendations and targets suggested by the report remain uncertain.

2010 Clean energy cess of 50 INR per tonne on coal, lignite and peat introduced in Union Budget 2010–11

–

2013 NEMMP 2020 was launched for promoting wider adoption of hybrid and electric vehicles.

–

2014 Fuel consumption standards for passenger vehicles announced by the MoP Potential to reduce CO2 emissions by more than 66 million tonnes of CO2 by 2025.

2014 The government announced the Smart City Mission to develop 100 smart cities in India. MoUD recently announced the list of 98 cities that will be developed under the mission.

The smart city initiative will also drive forward the climate change mitigation agenda. The exact impact will be evident once the cities firm up their smart city plans

2014 The clean energy cess of 50 INR per tonne on coal, lignite and peat introduced in Union Budget 2010–11 was increased to 100 INR per tonne in the Union Budget 2014–15 and to 200 INR per tonne in the Union Budget 2015–16.

The proceeds are used to fund the NCEF to invest in ventures and research on clean energy technologies and clean environmental initiatives.

46 projects worth more than 16,000 crore INR approved so far.

2015 GoI took up an ambitious target of increasing India’s installed RE capacity target to 175 GW by 2022:

• 100 GW of solar power• 60 GW of wind energy• 10 GW of small hydropower• 5 GW of biomass-based power

The revised RE targets will entail an additional investment of 150 billion USD and savings of about 300 million tonnes of CO2 emissions per year.

2015 Announced in 2014, the government established the National Adaptation Fund on Climate Change (NAFCC) with a budget provision of 350 crore INR for the year 2015–16 and 2016–17, and an estimated requirement of 181.5 crore INR for the financial year 2017–18. The National Bank for Agriculture and Rural Development (NABARD) has been appointed as National Implementing Entity (NIE) responsible for the implementation of adaptation projects under the NAFCC.

The focus of the fund is to assist adaptation projects and programmes to support concrete adaptation activities that reduce the effects of climate change being faced by vulnerable communities and sectors.

2016 Draft National Tariff Policy proposing several reforms to improve the health of the power sector and promote RE. It will also conditionally allow power generation plants to increase capacity by 100%, while enhancing targets for RPOs.

The proposed policy will bring together power sector reforms, expand RE, promote renewable energy generation on a cost-plus basis, and introduce smart metering, uniform principles and standardised methodologies for determining tariffs.

Table 3: Summary of broad policy recommendations32

31. Retrieved from http://pib.nic.in/newsite/PrintRelease.aspx?relid=111425

Annexure 1

54 PwC

Sector/area Broad policy measures

Advanced coal technologies

• A national technology mission to develop ultra-supercritical power plants suitable for Indian conditions, with adequate finance and technology import, wherever required.

Smart grid • To pursue the MoP’s Smart Grid Vision and Roadmap for India and pilot different business models with different applications across the country to create a wealth of experience and knowledge for large-scale replication

Sequestration • Making Compensated Afforestation Fund Management and Planning Authority (CAMPA) funds available for enhancing green cover in urban areas (city forests) and villages (village forests)

• Attractive schemes for the promotion of low emission and clean cooking technologies to curtail the use of fuelwood for cooking

• Encouraging use of wood from sustainable social forestry for construction

Energy pricing • Accelerating the movement towards domestically competitive market pricing for fossil fuels and transfer targeted subsidies directly to the poor through the best means available

Carbon tax • Extending the current cess on coal, lignite and peat to all fossil fuels to effectively fund renewables like generation-based incentives, capital subsidies, interest subventions, etc.

Research and development

• Developing research programmes and supporting existing academic and research institutions for advanced technology development, capacity building and testing facilities

• Making cost-sharing facilities available for installation and testing of early stage technology and designating agencies to aggregate demand and enable bulk procurement when new technologies reach the market

32. A summary of select recommendations is provided above, detailed recommendations can be accessed at: http://planningcommission.nic.in/reports/genrep/rep_carbon2005.pdf, http://niti.gov.in/mgov_file/Report_on_India’s_RE_Roadmap_2030-full_report-web.pdf


Sector/area Broad policy measures

RE A comprehensive, transparent, long-term and definitive legislative/policy framework for RE should be implemented by amending existing laws/policies and/or creating a new laws/policies with national RE targets and integrated energy resources planning to include the following: • A framework providing financial support to reduce the incremental cost of RE, which is an area of focus for policymakers.• A restructured and enforceable RPO that incorporates a mandatory national uniform obligation on all bulk buyers and a

mandatory net metering (NEM)/FiT for behind-the-meter RE generation (e.g. rooftop solar).• Support mechanisms like ‘one-stop shop’ for streamlining the contracting process; low-cost financing; uniform, simple

financial support and disbursal mechanism, and streamlined project development for de-risking and fast-tracking RE deployment.

• Supporting grid interconnection and integration of RE by upgrading grid technology and grid operation protocols (grid codes, five-minute scheduling and dispatch), etc. The NSGM has been launched to bring efficiency in the power supply network and facilitate reduction in losses and outages.

• Policies providing stand alone off-grid systems in remote rural areas and developing district and block-level plans for providing electricity through deployment of micro-grids or mini-grids using renewable resources.

• Policies promoting solar parks, ultra mega solar power projects, canal top solar projects and solar pumps for farmers are at different stages of implementation.

• India has also decided to anchor a global solar alliance, the International Agency for Solar Policy & Application (InSPA), of all countries located between the tropics of Cancer and Capricorn.

Transport Focussing on low carbon infrastructure and public transport systems like dedicated freight corridors, Mass Rapid Transit System (MRTS), green highways, National Electric Mobility Mission Plan (NEMMP), biofuels and energy-efficient railways to reduce their environmental impact. This includes the following: • Promotion of railways as it is the most efficient form of land transport.

– For passenger mobility: Providing for faster and more convenient rail-based services for both intra and intercity as well as suburban services by augmenting the present rail infrastructure in terms of line and terminal capacity and rolling stock for carrying additional traffic

– For freight mobility: Rationalisation in freight rates to ensure competitive advantage and creation of dedicated freight corridors along the four quadrilaterals of the country and expansion of the rail network to cater to new ports, mining and industrial areas

• The development of transport and public service corridors’ master plans for medium-sized cities, raising the permissible floor space index (FSI) and auctioning of additional FSI for each corridor developed.

• Set stringent and tighter fleet energy efficiency norms for private vehicles and move towards cleaner alternate fuels.• Integrate non-motorised transport as an important component of the urban transport plans and set a parking fee to

accurately represent the social cost of congestion• Introduce provision for pavements and cycle paths of adequate width

Energy efficiency

NMEEE aims to strengthen the market for energy efficiency by creating a conducive regulatory and policy regime.

Households • Expansion of the appliance labelling programme to all appliances, which accounts for one half or two-thirds of the energy

consumption amongst households, and promotion of consumer awareness• Empowering government and public sector procurement officers to buy energy-efficient appliances on life cycle cost basis

and suitably modifying procurement rules for governmental institutions to allow for the same

Buildings • Promoting wider uptake of green buildings by providing incentives to the following:

– Property owners: Property tax rebate based on compliance to ECBC, or achieving the desired green rating – Developers: Additional floor area ratio (FAR), reduced property tax, stamp duty for green buildings, and any additional

cost of complying with green building standards – End users: Reduced interest on loans for green buildings

• Capacity building and knowledge dissemination of green building technologies among builders, architects and users• Strengthening ECBCs to promote construction of even more (near-zero) energy-efficient buildings.• ‘Design guidelines for energy-efficient multistorey residential buildings’, developed under component-3 of Indo-Swiss

Building Energy Efficiency Project, has also been launched

Industry • BEE to identify and prioritise possible industry sectors for the broadening of the PAT scheme coverage beyond the second

cycle and start specific consultations and studies for the inclusion of the prioritised sectors in subsequent cycles • Partial Risk Guarantee Fund for Energy Efficiency (PRGFEE), a risk-sharing mechanism to provide financial institutions with

a partial coverage of risk involved in extending loans for energy efficiency projects, and Venture Capital Fund for Energy Efficiency (VCFEE), a trust fund to provide ‘last-mile’ equity capital to energy efficiency companies, can be made more accessible.

Table 3: Summary of broad policy recommendations

India’s climate change mitigation action

India has been actively pursuing policy measures and launching initiatives to reduce its carbon intensity (per unit of GDP) starting with the launch of the flagship programme–NAPCC–in 2008.

A summary of such key measures is presented below:

30. PwC, Shakti Sustainable Energy Foundation. (November 2014). The PAT Scheme: Analysis, insights and way forward. Retrieved from http://shaktifoundation.in/wp-content/uploads/2014/02/The-PAT-scheme-Analysis-Insights-and-Way-Forward1.pdf

Annexure 2

56 PwC

Bloomberg, 2014; ‘Global Trends in RE Investment 2014’; available at: http://about.bnef.com/press-releases/global-trends-renewable-energy-investment-2014/

Carbon Trust, 2014; ‘A Must Win: Capitalising on the New Low Carbon Markets to Boost UK Export Growth’; available at: http://www.carbontrust.com/media/504208/ctc829-a-must-win-capitalising-on-new-global-low-carbon-markets.pdf

Carbon Brief, 2015; ‘Analysis: India’s climate pledge suggests significant emissions growth up to 2030’; available at: http://www.carbonbrief.org/indias-indc

CEA, 2014; ‘Executive Power Summary’; available at: http://www.cea.nic.in/reports/monthly/executive_rep/sep14.pdf

CII, 2010; ‘Energy Efficiency in Building Design and Construction’; available at: http://www.greenbusinesscentre.com/EES2010/Presentations/Energy%20Efficiency%20in%20Buildings/Mr%20M%20Anand,%20CII-IGBC.pdf

Climate and Development Knowledge Network (CDKN), 2014; ‘The IPCC’s Fifth Assessment Report: What’s in it for South Asia?’; available at: http://cdkn.org/wp-content/uploads/2014/04/IPCC_AR5_CDKN_Whats_in_it_for_South_Asia_FULL.pdf

Climate Policy Initiative, 2012; ‘Meeting India’s Renewable Energy Targets: The Financing Challenge’; available at: http://climatepolicyinitiative.org/wp-content/uploads/2012/12/Meeting-Indias-Renewable-Targets-The-Financing-Challenge.pdf

DIPP, 2013; ‘Facts on FDI’; available at: http://dipp.nic.in/English/Publications/FDI_Statistics/2013/india_FDI_February2013.pdf

India Environmental Portal, 2015; ‘Target Set to Reduce India’s Greenhouse Gas Emissions’; available at: http://www.indiaenvironmentportal.org.in/files/file/Target%20set%20to%20reduce%20greenhouse%20gases%20emission.docx

INCCA/MoEF, 2009; ‘Greenhouse Gas Emissions 2007’; available at: http://moef.nic.in/downloads/public-information/Report_INCCA.pdf

IPCC, 2014; ‘Fifth Assessment Report (FAR) Synthesis Report’; available at: https://ipcc.ch/report/ar5/

Jones Lang LaSalle (JLL), 2008; ‘Greenomics; Cost efficiency in green buildings’; available at: http://www.joneslanglasalle.com/ResearchLevel1/research_greenomics_cost_efficiency_of_green_buildings_in_india.pdf

Ministry of Environment, Forests and Climate Change (MoEFCC), 2015; ‘India: First Biennial Update Report to the UNFCCC’; available at: http://envfor.nic.in/content/india-first-biennial-update-report-united-nations-framework-convention-climate-change?theme=moef_blue

Ministry of Power, Government of India, 2015, ‘Amendments Proposed in the Tarrif Policy’ available at: http://powermin.nic.in/upload/Amendments_proposed_in_the_Tariff_Policy.pdf

MOSAIC, 2015; ‘Solar Financing’; available at: https://joinmosaic.com/

NRDC/ASCI, 2014; ‘Building Efficient Cities: Strengthening the Indian Real Estate Market Through Codes and Incentives’; available at: http://www.nrdc.org/international/india/files/real-estateefficiency-codes-IB.pdf

NRDC, 2015; ‘India: Addressing Climate Change and Moving Towards a Low Carbon Future’: Factsheet; available at: http://www.nrdc.org/international/india/files/low-carbon-future-FS.pdf

Press Information Bureau, MoEF, 2015; ‘National Adaptation Fund on Climate Change’; available at: http://pib.nic.in/newsite/PrintRelease.aspx?relid=124326

PwC-India, 2014; ‘The Smart City Perspective’; available at http://www.pwc.in/industries/smart-cities.html

PwC, 2015, ‘CEO pulse on climate change’; available at: http://download.pwc.com/gx/ceo-pulse/climatechange/index.htm

PwC-India, 2015; ‘Connecting the Dots: Smart and Sustainable Cities’; available at: https://www.pwc.in/assets/pdfs/publications/2015/connecting-the-dots-smart-and-sustainable-cities.pdf

PwC-India/India Tech Foundation, 2015; ‘Lets Energise: Meeting India’s Growing Fuel Demand’; available at: http://www.pwc.in/assets/pdfs/publications/2015/lets-energise-meeting-indias-growing-fuel-demand.pdf

PwC, 2015; ‘Low Carbon Economy Index (LCEI) 2015’; available at: http://www.pwc.co.uk/services/sustainability-climate-change/insights/low-carbon-economy-index.html

PwC-India, 2015; ‘Renewable Energy’s Transformation of the Indian Electricity Landscape’; available at: http://www.pwc.in/assets/pdfs/publications/2015/lets-energise-meeting-indias-growing-fuel-demand.pdf

PwC-India, 2015; ‘Smart Cities PoV’; available at: https://www.rvo.nl/sites/default/files/2015/05/PwC%20Smart%20Cities%20PoV%20april%202015.pdf

REN21, 2014; ‘Renewables 2014: Global Status Report’; available at: http://www.ren21.net/Portals/0/documents/Resources/GSR/2014/GSR2014_full%20report_low%20res.pdf

Shakti Foundation, 2014; ‘The PAT Scheme: Analysis, Insights and the Way Forward’; available at: http://shaktifoundation.in/wp-content/uploads/2014/02/The-PAT-scheme-Analysis-Insights-and-Way-Forward1.pdf

Shakti Foundation, 2015 ; ‘India Climate Report’; available at: http://shaktifoundation.in/india-climate-report/

Stefanescu, 2013; ‘Public Trasportation on Water; Case Study: Lisbon’, University of Timisoara, Romania; available at: http://www.toknowpress.net/ISBN/978-961-6914-02-4/papers/ML13-316.pdf

The Telegraph: India, 2014; ‘Public-Private Sector Collaboration Opportunities Key to Successful Smart Cities’; available at: http://www.telegraphindia.com/pressrelease/prnw/en60399.html#.Vrrt1tJPrIV

TERI, 2003; ‘Coping with Global Climate Change: Vulnerability and Adaptation in Indian Agriculture’; available at: http://www.teriin.org/files/coping.pdf

TERI, 2012; ‘TEDDY: TERI Energy Data Directory and Yearbook 2012’; available at: http://bookstore.teri.res.in/books/9788179935200

TERI/YES BANK, 2013; ‘Electric Vehicles: Challenges and Opportunities in India’; available at: http://www.slideshare.net/NitinSukh/final-electric-vehicles-report-24113

TRAI, 2011; ‘Green Telecom Paper’; available at: http://www.trai.gov.in/WriteReaddata/ConsultationPaper/Document/4-main.pdf

UNDP, 2012; ‘Capacity Building for Addressing Climate Change’; available at: http://www.in.undp.org/content/dam/india/docs/capacity_building_for_addressing_climate_changefactsheet.pdf

UNEP, 2013 ; ‘Promoting Low Carbon Transport in India’; available at: http://www.unep.org/transport/lowcarbon/PDFs/AssementMotorVehicle.pdf

UNFCCC, 2008; ‘Emissions Summary for India’; available at: https://unfccc.int/files/ghg_data/ghg_data_unfccc/ghg_profiles/application/pdf/ind_ghg_profile.pdf

UNFCCC, 2015; “Rental Solar Farms’; available at: http://unfccc.int/secretariat/momentum_for_change/items/7850.php

References

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