New Energy Frontiers Expand Global Connections – Part II

Necessity is the mother of invention, and that holds true for a global economy that depends on a declining supply of fossil fuels. As a result, innovations in new alternative sources could emerge from fast-growing developing nations that lack fossil fuels and cannot afford the rising prices, suggests this YaleGlobal series. The second article of the series focuses on trends toward renewable energy sources in India, the world’s second most populated country and one slated by researchers to be hit harder than most countries by climate change. By designating a special cabinet post, creating five-year plans and supporting specific projects, the India government has made alternative-energy development a priority. The task is complicated by the rising concern over greenhouse-gas emissions from giants like India and China. To reconcile global ambitions with an obligation to protect the planet, argues Alexis Ringwald, a Fulbright scholar who researched clean energy and climate change in India, the nation’s leaders “must take critical steps today to avoid locking in to an obsolete high-emissions trajectory.” – YaleGlobal

New Energy Frontiers Expand Global Connections – Part II

Lacking fossil fuels, fast-growing India must innovate with alternative energy sources
Alexis Ringwald
Tuesday, August 19, 2008
Search for power: While farmers use draught animals to plow, India has emerged fourth in the world in the use of wind power

NEW DELHI: Maybe it was the inspiring announcement about plans for construction of India’s first multi-megawatt solar photovoltaic power plant or the recent carbon-market mania that fueled global interest in India as the next clean energy “hot spot.” Or it may be escalating concerns about India’s unreliable electricity infrastructure, and anxiety about urban congestion and pollution with galloping consumer demand for personal mobility.

It’s become clear that India, after China, will experience the greatest increase in energy and greenhouse gas emissions globally. To sustain 8 percent annual economic growth and support its expanding population, India’s primary energy demand must multiply three to four times, an increase that moves India from the world’s fourth largest energy consumer to third largest by 2030, after China and the US.

Currently India ranks fifth globally in installed electric power capacity with nearly 145 GW, mostly from coal; for comparison, the US has 1076 GW and China has more than 710 GW. For a country of India’s size, 145 GW is clearly not enough. More than 400 million Indians do not have access to any electricity.

To address this gap, India’s current Five-Year Plan calls for 80 GW of new electric power to be built between 2007 and 2012, including 14 GW from renewable energy – a massive build-up. For transport and industry, meanwhile, India relies heavily on oil imports to meet 75 percent of its needs, a dependence that would rise to above 90 percent by 2030 if alternatives are not promoted. Natural gas, likewise, presents challenges of import dependence and rising prices. In short, India’s energy situation is precarious, and decision-makers recognize the need for alternative energy.

In reconciling the nation’s emerging global ambitions with an obligation to protect a planet on which one out of every six people will be Indian, policy leaders must take critical steps today to avoid locking in to an obsolete high-emissions trajectory. “If India wants to be a global superpower, it must also take on global super responsibilities,” said Jairam Ramesh, minister of state for power. With new infrastructure constructed every day, decisions made today will last throughout this century.

Despite that awareness, though, India’s leaders find it difficult to take a unified stance on climate change, especially due to an enduring gap between rich and poor. Although India’s overall CO2 emissions at 1.2 gigatonnes per year are on a path to make India the third largest emitter of energy-related CO2 by 2015, the per capita average is 1.67 tons, dwarfed by the US’s 23 tons or Europe’s 11 tons. Therefore, the argument goes, India has a large allowance within which emissions may grow.

Figure 1. Average per Capita CO2 Emissions Enlarge image

A Greenpeace report “Hiding Behind the Poor,” points out that India’s highest income group emits 4.97 tons of CO2 per capita, near the world average of 5.03 tons (see Figure 1).1 The emissions from this high-income group consisting of 1 percent of the country’s population are 3.7 times more than 73 percent of the population earning less than $125. Thus, concludes G. Ananthapadmanabhan, executive director of Greenpeace India, in an interview with the Times of India, “India’s low average per capita emissions is due to the over 800 million poor population whose emissions are negligible.”

Ironically, the poor are especially vulnerable to climate change, and over 60 percent of the country’s population directly depends on climate-sensitive sectors like agriculture, forestry or fisheries for their livelihoods

Environmental impacts, meanwhile, include temperature increases higher than the average global rise predicted by the UN Intergovernmental Panel on Climate Change; increasingly unpredictable monsoon patterns; rising sea levels; retreating Himalayan glaciers that reduce India’s freshwater source; and increased frequency of extreme weather events.

Threats to national security may also arise if conflicts emerge over energy, water or migrating refugees with neighboring nations like China, Bangladesh or Pakistan.

Moreover, because of its heavy dependence on coal, India may be more susceptible to the impact of future changes in international climate change treaties, including carbon and tax penalties. In sum, according to calculations by the Carbon Disclosure Project, “the cost of climate change in India could even be as high as a 9-13% loss in GDP by 2100 compared to a ‘no climate change’ scenario.”

Ambivalence or inaction on the carbon emission front, therefore, is not in India’s interest. The country’s first National Climate Action Plan, unveiled this year, promotes long-term strategies for advancing India’s development and climate-change objectives. Such initiatives are a good start, but more is needed to shift India towards a path that secures its superpower aspirations.

A critical part of the solution rests in promoting renewable-energy technologies as a way to address concerns about energy security, economic growth in the face of rising energy prices, and environmental degradation. As the only country in the world with a separate Ministry of New and Renewable Energy, India has 12.6 GW of renewable energy – excluding large hydro – representing about 9 percent of total electricity capacity. Today, India is ranked fourth globally for installed wind capacity and second for biogas generation.

Several trends underscore the growing momentum towards a low-carbon energy economy in India:

Investment in renewable energy is on the rise. With an increasingly favorable regulatory and policy environment along with a growing number of entrepreneurs and project developers, India ranked as the third most attractive country to invest in renewable energy, after the US and Germany, in the 2008 Ernst and Young Country Attractiveness Indices. Increasingly, it is key progressive state-led initiatives that determine the rapid pace of renewable-energy development in India.

“What isn’t measured, can’t be managed,” asserts the carbon mantra. Amid escalating global pressure for companies and individuals to consider their carbon footprints, analysts anticipate unprecedented demand for individuals and technologies that can measure and manage tremendous amounts of data on energy and emissions. The Indian information technology sector can assist in these climate change services.

Fundamental to lifting millions out of poverty in India is the development of rural economies. In low-income areas, microfinance institutions already seek clean, distributed energy products or services for their clients. At the same time, renewable-energy companies look for opportunities to access untapped markets for their off-grid energy products. This new trend towards partnerships between micro-financiers and clean energy companies can help clients expand existing businesses, start clean-energy shops or set up micro-utilities in areas with no grid or grid unreliability.

Several major corporations could also drive India’s clean energy market for 2008. To tap the supply of workers for enlarged operations in rural India, companies discover the need to bring electricity to these areas as well.

But emission clouds are on the horizon. Projected growth in India’s personal transport and road haulage is predicted to be higher than historical rates. On top of increased energy consumption, recent research by the Center for Science and Environment shows that new vehicles in Delhi actually emit more CO2 per km than earlier vehicle models.

Creative carbon crusaders in both India’s private and public sectors stretch their imaginations to identify new ways to reduce greenhouse-gas emissions. As the fourth largest emitter of such emissions, India is the largest contributor of Clean Development Mechanism projects and the second largest after China in terms of carbon credits issued.

Building on the country’s tremendous drive over the past few years, the trends suggest that renewable energy can be one of India’s most essential sustainable solutions.

With “climate change” and “growing energy demand” as the sensational headlines of the year, “clean energy” seems poised to become an indispensable mantra for India’s future development.

1 For simplification in calculations, a rate of $1=Rs. 40 will be used.

Alexis Eva Ringwald was a Fulbright scholar in India researching clean energy finance and climate change. She graduated from Yale University with a dual BA/MEM degree in environmental management. She expresses gratitude to the US Educational Foundation in India as well as The Energy and Resources Institute.

© 2008 Yale Center for the Study of Globalization