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Economic Dimensions Integrated Assessment of Climate Change: Linking Science with Policies Presentation by P.R. Shukla Indian Institute of Management, Ahmedabad International Conference on Science and Technology Capacity Building for Climate Change October 20-22, 2002 New Delhi IIM Ahmedabad Presentation Agenda • Integrated Assessment of Climate Change • Integrated Assessment Models for Climate Policy Analysis • Economic insights from Integrated Assessment of Climate Change • Capacity building for Integrated Assessment in developing countries IIM Ahmedabad Integrated Assessment of Climate Change Climate Vs. Climate Change IIM Ahmedabad Integrated Framework for Climate Change IIM Ahmedabad Multiple Interfaces Climate Change Assessment Policymaking Process Models and Frameworks Integrated Assessment Meteorology Geophysics Biology Ecology Geochemistry Knowledge disciplines Atmospheric Chemistry Economics Policy sciences Climatology Hydraulics IIM Ahmedabad Why Integrated Assessment? • To assemble, summarise, organise, interpret and reconcile pieces of existing knowledge • To add value through integration (but not to add knowledge) • To develop full range of policy outcomes • To enhance Communication between scientific disciplines and policy formulation IIM Ahmedabad Integrated Assessment Models for Climate Change Policy IIM Ahmedabad AIM Model System AIM/Energy/Technology/Country A bottom-up technology selection model of energy use and emissions at country and local level A set of ecosystem models, including a vegetation dynamics model, a water resource model, an agricultural productivity model and a health impact model AIM/Bottom-up A bottom-up technology & land use model for Asia-Pacific region AIM/Material AIM Family Environmental Environburden mental Environmental Burden Industry Green Purchase Industry Consumer Environment Fund Wastes Recycle A environmenteconomy integrated model with material balance and recycling process modules AIM/Ecosystem/Water/Impact Environmental Burden Environmental Industry (waste management, recycle) Technology assessment Technology needs Research on new technologies Temperature Precipitation Sunshine Land use Water resource Crop Productivity Socio-economic indicator Impact on food demand Adaptation strategy AIM/Top-down A general-equilibriumtype world economic model AIM/Trend A reduced-form model to project future socioeconomic trends and environmental change for all 42 countries Future economic trend Future environmental trend Korea China India Thailand Japan IIM Ahmedabad Integrated Assessment Models • Framework for conducting research ensuring consistency pointing to areas where more information is required • IAMs are good ‘forecasting’ and ‘heuristic’ tools • Communications tools between different sciences and between science and policy • Insights from investigations in the domains of the subcomponents IIM Ahmedabad Component Models IIM Ahmedabad GDP and CO2 Emissions: AIM/Trend Model 50 GDP growth 40 16 C O 2 per capita [t-C /cap/yr] 30 14 20 12 10 10 EUROPE+FORMER USSR NORTH AMERICA 8 LATIN AMERICA AFRICA+MIDDLE EAST 6 4 2040 2030 ASIA PACIFIC 2020 2010 2000 1990 0 2 0 BGD NPL MMR VNM PAK IDN TJK IND LKA KGZ CHN PHL THA IRN PRK UZB MYS JPN NZL AUS TKM TWN KAZ KOR SGP 2032 2025 2015 Year 2005 1995 C ountry IIM Ahmedabad SO2 Emission AIM/Emission Model 2000 2030 Million Tons < 0.01 0.03 0.07 0.11 0.15 Million Tons < 0.01 0.01-0.017 0.017-0.026 0.026-0.035 0.035-0.044 0.044-0.053 0.053-0.060 > 0.060 < 0.20 IIM Ahmedabad Water Consumption: AIM/Ecosystem Model 1995 Baseline 2032 2030 Fortress World Market Force W A TER C O N S U M P TIO N 2032 Policy Reform 700.0000 C O N S U M P T IO N (km ^3/year) 600.0000 500.0000 400.0000 300.0000 200.0000 MF FW PR GT 100.0000 0.0000 1990 2000 2010 2020 2030 2040 YEA R Change of water consumption from 1995 to 2032 (Domestic + Agriculture + Industry) 1 m3/ha/year 40 200 1000 5000 IIM Ahmedabad Model System for India’s Emissions Policy Analysis Models Top-down Models Bottom-up Models Local Models •AIM/Material •SGM •GEMA •ERB •AIM/Trend •ANSWER – MARKAL •Stochastic MARKAL •Demand Projection •AIM/End-use •Power Sector LP •AIM/Emissions •GIS •Inventory Assessment •Health Impact Assessment Model IIM Ahmedabad Soft-linked Models Framework Top - Down Models AIM/Material Consolidation GEMA Productivity SGM Global Energy Prices ERB AIM/Trend Regional projections Bottom - Up Models Power Sector LP Prices, GDP ANSWER MARKAL End -use Demand Demand Projection Sector Demand AIM/E Technology Share Energy Balances Stochastic MARKAL Emissions Scenarios Technology Specifi cations Local AIM/Local nd - use Models Local Emissions Future Projections GIS Model Invent o ry Assessment Health Impact A ssessment Model IIM Ahmedabad Economic Insights from Integrated Climate Change Assessment IIM Ahmedabad Few Key Questions for Emissions Policies • What is the cost-effective emissions pathways to achieve a specific “GHG concentration stabilization” level? • What will be the future trends of emissions and intensities? • How the local and GHG emissions control policies linked? • What is mitigation supply curve for India? • How can regional cooperation help in climate change issues? • What would be the implications of stabilization regime, e.g. 550 ppmv, on India’s energy system during the century • Is it worth to fund supply-side push of clean technologies like solar PV for GHG mitigation? IIM Ahmedabad The Framework Convention On Climate Change (UNFCCC) Objective: (Article 2) ...stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. IIM Ahmedabad Emissions and Concentrations 16 800 IS92a WRE 750 WRE 650 WRE 550 WRE 450 WRE 350 14 12 750 700 IS92a 650 10 600 ppmv 8 6 550 500 4 450 2 2290 2265 2240 2215 2190 2165 2140 2115 2090 2065 2040 2015 2290 2265 2240 2215 2190 2165 2140 2115 2090 300 2065 -2 2040 350 2015 0 1990 400 1990 PgC/yr WRE 750 WRE 650 WRE 550 WRE 450 WRE 350 IIM Ahmedabad Energy and Carbon Emissions for India: AIM/ENDUSE Model Energy Consumption Carbon Emissions 800 50 Renewables Nuclear Biomass 30 Hydro Gas 20 Oil 600 400 200 10 0 1995 Carbon (MT) Exa Joules 40 Coal 2005 2015 Year 2025 2035 0 1995 2005 2015 Year 2025 2035 IIM Ahmedabad Energy, Carbon, Electricity and GDP (History and Projections for Reference Scenario) 20 18 Energy Carbon Electricity GDP 16 14 12 10 Past Trends 8 6 4 Future Projections 2 0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 IIM Ahmedabad GDP intensities of Energy, Electricity and Carbon (Reference Scenario) 1.8 1.6 1.4 Electricity 1.2 Carbon Energy 1 0.8 0.6 Past Trends Future Projections 0.4 0.2 0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 IIM Ahmedabad SO2 Emission AIM/Emission Model 2000 2030 Million Tons < 0.01 0.03 0.07 0.11 0.15 Million Tons < 0.01 0.01-0.017 0.017-0.026 0.026-0.035 0.035-0.044 0.044-0.053 0.053-0.060 > 0.060 < 0.20 IIM Ahmedabad GHG versus Local Emissions in India Carbon Emissions SO2 Emissions 800 7 Million Tonnes Carbon (MT) 6 600 400 5 4 3 2 200 1 0 0 1995 2005 2015 Year 2025 2035 1995 2005 2015 Year 2025 2035 IIM Ahmedabad Carbon Mitigation Supply Curve (2005-2035) 60 6 billion tons of mitigation below $25/ ton of carbon Cost ($/Ton of Carbon) 50 40 30 20 10 0 1 2 3 4 5 6 7 Carbon abatement (billion ton) IIM Ahmedabad Carbon Mitigation (under different Post-Kyoto Scenarios) (in Million Ton) Scenario Kyoto Period Medium Term 2000-2012 2000-2030 Long Term 2000-2100 750 ppmv 138 (3%) 743 (5%) 11334 (11%) 650 ppmv 301 (7%) 1555 (11%) 23666 (23%) 550 ppmv 449 (10%) 2503 (17%) 33284 (32%) IIM Ahmedabad Indian Energy System Transformation Under 550 ppmv Stabilization Base Case Energy System Energy Changes: 550 ppmv Case 140 120 Exajoules 100 80 60 40 20 550 ppmv 0 1990 2005 Oil 2020 Gas Coal 2035 2050 Biomass Hydro 2065 Solar 2080 2095 Nuclear IIM Ahmedabad Technological Change in India to Stabilize CO2 at 550 ppmv Non-Fossil Energy Contribution to GHG Mitigation 2000 1600 1200 80 0 550 PPMV 40 0 IIM Ahmedabad Regional Energy Market Development IIM Ahmedabad Impact of Regional Energy Market Developments in South-Asia Emissions Reduction (2015) 10.5 Reduction (%) 9.0 7.5 6.0 4.5 3.0 1.5 0.0 Carbon Year SOX Grid Integration Grid Integration + Regional Co-operation IIM Ahmedabad Advanced Technology: Competitive Paradox Solar PV Penetration Carbon Mitigation 40 30% 35 25% 30 20% 25 20 15% Hi-Solar 15 10% 10 Med-Solar + $25 Tax 5 $25 Tax 5% Base 0 1990 0% 2000 2010 2020 2030 2040 2050 High Solar $25 Tax Med Sol+ $25 Tax IIM Ahmedabad Capacity Building for Integrated Environment Assessment in Developing Countries IIM Ahmedabad Integrated Assessment: Special concerns of Developing Countries • Assessment and modeling capabilities • Inadequate database • Assumptions derived from developed world perspective • Structural changes in the economy • Myriad and conflicting developmental concerns • Weak regional and international linkages • Lack of sustained funding IIM Ahmedabad Capacity Building Needs for Developing Countries • Inventorize existing best competence, data and experiences • Networking and cooperation with regional and global teams • Promote integrated assessment modeling under developing country expert leadership in cooperation with global experts • Sustained funding • Institutionalize integrated assessment activities IIM Ahmedabad Summary: Economic Insights • There is no “silver bullet” for mitigation or adaptation • Local and global emissions mitigation policies are disjointed • Regional cooperation can reduce the climate mitigation and impacts costs significantly • Strong mitigation regime, e.g. 550 ppmv, can alter the regional energy system significantly • Global cost-effectiveness requires substantial mitigation (and adaptation) in developing countries • Supply-push of few clean technologies is inadequate for mitigation • Climate Change impacts is complicated due to “winners and losers” rather than absolute impacts burden • Integrated policy assessment is vital for linking climate change and sustainable development IIM Ahmedabad