CII P RESENTATION ON C LIMATE C HANGE BUILDING A LOW CARBON INDIAN ECONOMY

PRESENTATION STRUCTURE Impacts of Climate Change on India and Global Economy India: Official Position So Far India: Current Scenario India: Leading by Example The New Economy of India: Opportunities for Climate Change India: Strategies to Combat Climate Change –Energy Efficiency –Renewable Energy Technologies –Cleaner Conventional Energy Technologies –Strengthen free and open Markets –Green Buildings –Transportation –Civil Aviation –Adaptation –Afforestation –Research and Development The Way Forward

Climate Change No Longer a Topic of Scientific Debate: It’s a Real Concern World Faces Today

Climate Change is for Real. Our Planet has got Fever : Earth’s surface temperature continuously increasing over past few decades

Climate Change is for Real…Conti.. Concentration of Green House Gases have increased Phenomenally in recent past

Source: Development Alternatives Climate Change: Global Impacts

Indian 7500-km long densely populated and low-lying coastline would be worst hit due to rise in sea level –20% of coastal population may need to migrate 25% of country’s population would be exposed to increased cyclone 70% plants may not be able to adapt to new conditions More than 20,000 villages may be deserted Adverse impact on agricultural yield Climate Change: Impacts on India

Supply-chain risk: vulnerability of inputs such as energy and agricultural products Product & Technology risk: various technologies will be at risk due to carbon constraints Litigation risk: threat of lawsuits for units emitting GHG gases Reputation risk: Several business practices may hamper reputation Physical risk: Direct impact: droughts, flood, rising sea level Competitive risk: Additional cost due to regulation Regulatory risk: Frequent change (tightening of) regulatory provisions Climate Change: Risks on Business

India: Official Position So Far India can not afford to compromise on developmental goals –India and other developing countries need to work consistently to meet millenium developmental goals Climate change dialogue should not impede nations to grow India and similar other developing countries require urgent and profound attention on adaptation strategies –Rapid Economic Development is the best Adaptation Strategy Climate change mitigation efforts can succeed only on the basis of ‘Common but Differentiated Principles India is committed to promote voluntary measures undertaken such as energy efficiency, renewable energy and cleaner conventional energy technologies.

India: Current Scenario India is a responsible nation and is committed to growth with environmental responsibility. India has delivered a GDP growth rate of 8% with only 3.7% growth in its total primary energy consumption. India has achieved energy-GDP de-coupling at much earlier stage of its development cycle. –GDP growth rate has been higher than projected even though power capacity addition has been lower (only 50% ) than planned –Industrial growth and profitability has been high even though oil prices have sky-rocketed

India: Current Scenario…cont. According to survey conducted by Global Market Institute -a Seattle-based group- Indians are most concerned for climate change Indians are Responsible too

India: Current Scenario…conti. Energy Intensity in India shows a downward trend Source: Planning Commission

Breaking the Mould While GOI is formulating a negotiating strategy at UNFCC forum: – Indian Industry is poised to take a proactive role towards developing global leadership in climate change initiatives. As with 9% + growth rate –Capital assets will double every seven years Opportunity to Leapfrog and Lead by Example Several examples indicate that Indian Inc. is already doing it. ITC Corporation initiatives LED Lamps by Cosmos Inc. Industry investment in renewable energy CII – Sohrabji Godrej Green Business Centre CII – ITC Centre of Excellence for Sustainable Development Cement Industry

India: Leading by Example India has a history of Converting Challenges into Opportunities

India: Leading by Example..conti Climate Change to be another example

Technologies and practices affecting long-lived systems are difficult to penetrate once assets have been constructed. E.g. –Power plants and industrial facilities lasts for 50 years or more –Buildings, once built, can stand for many decades –A car or truck has a life span of years India is a new economy. The country is likely to add massive industrial/capital assets in the future. –Developed countries have to first retire old assets, before they can build new assets based on cleaner technologies –India can straight away opt for efficient clean technologies The New Economy of India: Opportunities for Climate Change Initiatives Environmentally Conscious Investment decisions can allow the country to leapfrog into an era of carbon efficient advanced technologies

India: Difference Between Total Energy Demand and Sub-sector wise Energy Demand in Reference Scenario and Alternate Scenario Source: International Energy Agency

India: Strategies to Combat Climate Change

1) Moderate Energy Demand by Increasing Energy Efficiency a)Improve Vehicle Fuel Efficiency –Set Fuel Economy Standards for Vehicles: Formulate and implement fuel economy standards for HMVs, LMVs at the maximum rate possible by applying economics and available technology. Update/increase the standards on a regular basis. Corporate Average Fuel Economy (CAFÉ) standards in US show that the strategy could be useful. –Additional fuel efficiency improvements possible by reducing vehicle weight, horsepower or non-critical amenities,or by developing step-out technologies –New Initiatives in India: Delhi- 1st city to switch to CNG public transport Separate lanes for buses being introduced Metro Rail for public Transport initiated The 1 Lakh ($2500) People’s Car by Tata Motors with best norms in industry Electric Vehicles developed by REVA Motors Electric Two-wheelers by Hero Honda –Way Forward: H 2 Spiked CNG Fuel cell/Hybrid cars

1. Moderate Energy Demand by Increasing Energy Efficiency…conti… b.Implement Building Energy Codes –Bureau of Energy Efficiency already formulated and announced Energy Conservation Building Code (ECBC) Adopting ECBC does not automatically guarantee energy savings Code enforcement and compliance also essential. –The Direction in India is Right: Energy audits for 9 Govt. buildings completed including famous Rashtrapati Bhawan and Prime Minister’s office. Likely to become a norm for all Government buildings. Initiatives in India –Green Buildings in India: Much More than Energy Efficiency Efficient Use of Water Energy Efficient & Eco Friendly Equipment Use of Renewable Energy Building automation Use of Recycled/Recyclable Materials Indoor environment quality How India can Leap Forward –Develop codes for Data Centres Special Economy Zones (SEZs) Malls/ Shopping Centres –Join international efforts to develop zero energy buildings

c.Enlarge the Scope of Appliance and Equipment Standards –Bureau of Energy Efficiency has launched an Energy Labeling and Certification Programme covering following equipment: Refrigerators with or without low temperature compartment Room air conditioner (unitary) Stationary storage type electric water heaters Electric motors up to 100 KW Agricultural pump sets including horizontal centrifugal pumps, mono set pumps and submersible pump set up to 15 KW Electric light sources, control gears and luminaries including tubular fluorescent lamps, inductive type ballasts, electronic ballasts, luminaries and compact fluorescent lamps Distribution Transformers Industrial fans and blowers up to 100 KW Air compressors up to 100 KW –Energy efficiency standards should also apply to other increasingly common products, including those based on expanded digital technologies. –Standards should be updated on a regular basis. 1. Moderate Energy Demand by Increasing Energy Efficiency…conti…

Moderate Energy Demand by Increasing Energy Efficiency d.Increase Industrial Sector Energy Efficiency –Energy Conservation Act has provided regulatory impetus to energy efficiency activities in industries. Following sectors identified as designated consumers of energy efficiency activities: Aluminum Automobile Cement Ceramics Chemicals Chlor Alkali Fertiliser Glass Integrated Steel Plant Petrochemicals Pulp & Paper Refinery Sugar Textile –List of designated consumers should be constantly updated. New sectors to be added –Promising areas for energy savings such as waste-heat recovery, separation processes and combined heat and power should be promoted across all manufacturing units –Bureau of Energy Efficiency should conduct and promote research, development, demonstration, and deployment of industrial energy efficiency technologies. Energy Audit mandatory for these sectors. Encouraged for other sectors National Energy Conservation Awards given to best performers What Next

Energy Efficiency Targets for Eleventh Five-year Plan ( ) 500 MWSmall & Medium Enterprises scheme MWAgricultural DSM (Ag DSM) & Municipal DSM (Mu DSM) MWEnergy conservation building code (ECBC) implementation MWEnergy savings in existing buildings MWStandards & Labelling programme MWBachat Lamp Yojana (BLY)1 Targeted saved capacityName of the scheme Source: Bureau of Energy Efficiency

India already frontrunner in exploitation of renewable energy –Over 9,500 MW of renewable based capacity has already been installed Fourth largest country in terms of wind energy capacity Numerous fiscal and financial incentives given to the promotion and exploitation of renewable energy The only country to have dedicated Ministry of New and Renewable Energy Strong manufacturing and R&D orientation Dedicated financial institution for renewable energy Private Initiatives in Renewable Energy An Indian company - Suzlon Energy Limited - is now world’s 4th biggest wind energy company Exclusive Renewable Energy SEZ being set-up in India Majority of renewable energy capacity in India has been installed by private sector Companies like Signet, Moser Baer setting-up solar manufacturing units to add to existing capacity of Tata BP, Selco Solar, CEL etc. Several Biomass Gasifier Manufacturing companies flourishing Areva setting-up Biomass R&D Centre in India 2. Accelerate Deployment of Renewable Energy Technologies

Summary of Renewable Energy Targets for Eleventh Five- year Plan ( ) Box 5: Summary of Renewable Energy Targets for Eleventh Five-year Plan ( )  Grid-interactive Renewable Power: A physical target of 14,000 MW is set for the Eleventh Plan for grid-interactive renewable power through wind, small hydro, bio-power and solar power.  Renewable Energy for Rural Applications: Distributed/Off-grid Renewable Power through wind, small hydro, bio-power and solar power. A target of 1000 MW of renewable based distributed capacity for Eleventh Plan.  Incentives provided for grid connected power from renewable sources would be linked to generation and not to power capacities created. Thus power regulators will be asked to create alternative incentive structures such as mandated feed-in laws or differential tariffs for grid interactive power.  National Bio-fuel policy will be finalized that provides incentives and leads to a competitive industry.  IREDA to be restructured by broad basing its equity structure for increasing availability of finance for new and renewable energy and its role to be enhanced.

Renewable Energy: Steps to be taken Significant potential available for further exploitation –Continue promotion of renewable energy sources under a stable regulatory environment –Provide critical infrastructure (transmission links, evacuation facilities, approach roads) for remote renewable energy sites –Ensure land availability for renewable projects in potential areas. Emphasize on multiple uses of land –Establish Hybrid Systems (wind-solar, wind-diesel, biomass-diesel etc.) as firm sources of power –The electricity grid needs to be strengthened in order to provide increased flexibility in the generation mix –Proper resource assessment should be done for various RETs –Industry, service providers and research institutions should undertake collaborative projects for bringing about improvements in technology, particularly with regard to cost reduction, efficiency enhancements and capacity utilization Formulate and announce a suitable Renewable Energy Policy

3. Switch Towards Cleaner Conventional Energy Technologies Accelerate Deployment of proven clean conventional energy technologies –Ultra super-critical boiler –Nuclear Energy –Coal Bed Methane Undertake collaborative R&D on technologies that can be soon commercialized and formulate a strategy for their quicker deployment R&D on Integrated Gas Combined Cycle (IGCC) R&D on In-Situ Coal Gasification Engage in R&D on Collaborative Public-Private Partnership basis that can provide long-term solutions

India needs a well-instituted market mechanism, where energy prices are based on the interaction of demand and supply. Subsidies have distorted the market and have perpetuated inefficient use of energy commodities Establish an organised Domestic Carbon Market in India Discuss possibility of Dynamic ‘Cap and Trade’ to be implemented in India Carbon tax to increase relative price of carbon 4. Strengthen and rely upon free and open market, wherever possible, to produce efficient solutions

5. Green Buildings Green building brings together a vast array of practices and techniques to reduce the impacts of buildings on the environment Indian private sector led by CII has already achieved leadership in Green Buildings. –Already approximately 30 rated buildings existing –100 more buildings have registered for certification –7 of existing green buildings are Platinum rated A strategy should be worked out to increase the penetration of Green Buildings in India Green Overhaul of Existing Buildings also to be looked at CII-GBC Building Energy savings of 1,20,000 units per year 40 % less water consumption Continuous CO 2 monitoring 80 per cent recycled material used Discharges zero water 100% Day lighting 15 % Power-Solar PV

6. Transportation Transport sector second largest consumer of energy after industry Key Strategies for Climate Change Mitigation in Transportation sector –Improve technology (scooters, cars, advanced technologies e.g. battery operated vehicles, fuel cell) –Manage growth in vehicle use (with “carrots” and “sticks”) –Enhance/improve travel alternatives to serve diversity of needs and desires High quality, affordable mass transit system critical (e.g. Delhi Metro) –Organize and emphasize on Freight transportation by waterways –Coordinate government strategies and activities (transport and land use, infrastructure investments, industrial policy and transport, etc)

Aviation contributed about 2 per cent of global fossil fuel carbon dioxide emissions (2005) –the impact of aviation on global warming is increasing rapidly –According to Stern Review "aviation emissions could account for... 5 per cent of the total warming effect (of all global CO2 emissions) in 2050," –expansion of air transport in India is among the fastest in the world Set emission targets for airlines operating in India: –The Advisory Council for Aerospace Research in Europe has set target to emit 50 per cent less CO2 for European aircraft –NASA has set similar targets in US airlines Explore possibility of carbon credits for Indian civil aviation sector –In Europe, civil aviation has been included in ETS Invest in fuel-efficient aircraft and related equipment Formulate policies to encourage shift from aviation to high-speed rail. Use advanced aircraft scheduling techniques and develop efficient air traffic routes 7. Civil Aviation

2% of CDM proceeds to be used to help developing countries with their adaptation efforts (Article 12, Paragraph 8, Kyoto Protocol) In India, common adaptation activities would include Afforestation Irrigation Coastal management Effective disaster management Breeding new plant species and crops which are more tolerant to changed climate Changes to building and infrastructure design standards to protect against more extreme weather events Improving water use efficiency, planning for alternative water sources 8. Adaptation...

9. Afforestation/Reforestation Afforestation is both an adaptation strategy and a mitigation strategy Planting trees on formerly forested land can enhance biodiversity Suitable tool for carbon sequestration India already has a strong afforestation programme Regulatory framework exist under Forest Conservation Act of 1980 Further impetus to afforestation activities should be given at the state level Indian Government planning to undertake world’s largest afforestation programme in recent times, called Green India. Plan for greening six million hectares of degraded forestland Completely a voluntary initiative

Enhance science and engineering capabilities and create long-term opportunities for research and development relevant from climate change stand point Collaborative R&D on promising projects/concept should be undertaken on public-private partnership mode –For example, Indian R&D stakeholders are part of Global R&D consortia such as –ITER –IPHE –CSLF –Futuregen –IPR should be shared appropriately among various countries R&D on advanced industrial technologies, alternative energy technologies would be of prime importance A dedicated fund required to finance climate-friendly technologies R&D

The Way Forward Government Collection/collation of targeted information Develop understanding of climate change impacts on India and response options Focus on Adaptation Supporting and Leveraging private actions Create Climate-friendly technologies fund Policy and regulation Industry Adoption of Best Practices Focus on Small-Scale Industries Leverage Climate-friendly technologies fund Partner R&D efforts to develop low/no carbon technologies Measure carbon footprint, and develop reporting systems Civil Society Promote awareness about impacts of climate change Campaign to effect behavioral change Work with Government and other role players as partners in sustainable development

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