Soon it will be 2030. Would the world have moved to a low carbon path by then? It is being argued that actions required to alter growth trajectories towards low carbon economy across the world are too little and/or too late. What is India prioritizing in this context?
Time flies. The first half of 2010 is already gone. It will not be an exaggeration to say that soon it will be 2030. One may think 20 years is a lot of time for human activities however, it is just two decadal steps in the context of climate change, which is a long-term phenomenon.
One generally notices that in any current ‘Reference Scenario’ projections to 2030, to meet the anticipated energy demand, alternative energy sources have a rather small share. While this has been a regular plank of commentators pointing to expansion of conventional energy systems as necessary at the least , most serious investors would concur with Bill Gates about the need to see some huge breakthroughs in the alternative energy space and the emphasis on spending more on research .
On the other side, committed ‘alternative energy protagonists’ fervently appeal for stronger de-carbonisation policies to catalyze actions to steer the world onto a low carbon path.
The latest report from the UK government's Committee on Climate Change, Meeting Carbon Budgets – Ensuring a Low-Carbon Recovery , is a fine example of the second variety. The report says a “step change” is required to save UK from failing to meet its targets for carbon dioxide emission reductions of 20% by 2020 and 80% by 2050. So, the new catch phrase is “step change”, which in fact it introduced in its first report last year.
Meeting UK’s Carbon Budgets
The Meeting Carbon Budgets report is harshly critical of UK government’s policies and concludes that the existing policies have not delivered. According to the report, subsidies for renewable energy, measures to force utilities to help customers save energy, tax breaks for electric cars and emissions trading, have all failed on the metric of carbon dioxide emissions reduction. The dip in emissions in 2009 over 2008 has been due to recession.
While this applies to the entire UK economy and all the four sectors - electricity, buildings and industry, surface transport and agriculture - covered in the report, it is evidenced for electricity sector. It is demonstrated that estimated income elasticities of demand for electricity predict the actual fall in demand in 2009 relatively well. Thus, electricity demand reduction appears to be a result of the recession rather than implementation of policies to improve energy efficiency.
The report holds that reforms in electricity market are of utmost urgency. New nuclear is likely to be a cost-effective low-carbon technology, and could be added to the system from 2018, potentially playing an important role in sector de-carbonisation through the 2020s.
Carbon capture and storage (CCS) is another area of very high importance and critical for “step change”. The report brings out the question of whether to include gas CCS in the portfolio of demonstration projects on the back of new analysis that suggests the potential competitiveness of gas CCS and anticipation of large capacity of capture-ready unabated gas plant that will be on the system by 2020. Apart from electricity market reforms and CCS demonstration, the report suggests having a carbon price floor for strengthening incentives for investment in low-carbon power generation. It feels that its own projection of €20 per ton CO2-equivalent would be too low a price in 2020.
Is this timeframe - 2020 / 2030 / 2050 - sufficient for energy transitions?
Energy transitions
Though the subject of energy transitions is well researched and documented, an interesting paper has appeared recently . Based on experience of the UK, the author has reviewed past energy transitions by sector and service and commented on how this offers a perspective for possible transition to a low carbon economy.
To be clear on definition, energy transitions occur when there are changes in the level, mix and/or quality of energy consumption. In addition, transitions are often associated with changes in the way an energy service is provided, which generally involve new technology.
The paper’s significant point is that energy transitions of the past have not happened quickly. On average, it took more than 100 years for the whole innovation chain and nearly 50 years for the diffusion phase. The paper looks at the transitions in energy services in end-use sectors of heating, power, transport and lighting.
In another significant point of the paper, cheaper costs and same or better energy services with value-enhancing characteristics are identified as the main drivers for the transitions.
The transitions in the more recent years have been faster than those occurred earlier. While the author notes that today’s markets are highly evolved and information spreads speedily, he does not venture to account for them when concluding that for most services and sectors, a transition to low carbon economy is likely to be slow and may take several, may be 100, years.
Two points come to mind after reading this paper. One, in determining the number of years required for the transition in each of the services it is important to note the year in which the breakthrough, which led to the transition, occurred. Therefore, the question that which year should we take as a starting point for nuclear, solar, or other renewable technologies, remains unanswered. Other important angle that needs elaboration is the physical limits on the capacity of the ‘new’ source or technology that replaces the incumbent. Could that become the reason for slower low-carbon transition?
If we then assume slow transition as a given then, at one level, all the pushing for right policy environment is perhaps correct and more urgency needs to be in place in every government’s policy agenda.
India’s priorities
The eight missions on the agenda of the Action Plan are getting cabinet approvals one by one, the latest being the Mission on Enhanced Energy Efficiency on 24th June, 2010.
A fortnight ago, MoEF released a document showcasing the post-Copenhagen domestic actions . A key step has been the setting up of an Expert Group on Low Carbon Strategy for Inclusive Growth.
The expert group has the mandate to develop a roadmap for low carbon development for India. It would recommend prioritized actions for Electricity, Transport, Industry, Oil and Gas, Buildings, and Forestry sectors.
It is noteworthy that the Planning Commission in its initial thoughts on the approach includes Climate Change as one of the themes to be considered in the 12th Five Year Plan whose goal is set to achieve faster, sustainable and inclusive growth . Recommendations of the Expert Group will become central part of India’s 12th Five Year Plan.
One eagerly awaits release of the expert group’s report that is expected to be out in September this year to see whether India prepares itself to sprint or just go with the flow of the slow progress worldwide. Given the ‘short’ timeframe of 5 years for the Plan, it is hoped that the report provides a solid foundation and realistically implementable actions.
References
- Energy Pipedreams by Robert Samuelson,
- Fareed Zakaria GPS Interview With Bill Gates ( Aired May 30, 2010 - 13:00, ET) http://www.theccc.org.uk/reports/progress-reports/2nd-progress-report
- Roger Fouquet: The Slow Search for Solutions: Lessons from Historical Energy Transitions by Sector and Service, WP 2010-05, Basque Centre for Climate Change (BC3), Bilbao, Spain
- India Taking on Climate Change – Post-Copenhagen Domestic Actions New Delhi, 30th June, 2010
- http://planningcommission.nic.in/
- UK Report- Meeting Carbon Budgets – Ensuring a Low-Carbon Recovery
Dr Ashish Rana works in a leading private sector company. He has been a Lead Author in Working Group III of the IPCC. The views expressed here are solely those of the author and do not reflect those of his employers.
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