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Peaking and Net-Zero for India’s Energy Sector CO2 EmissionsAn Analytical Exposition

Vaibhav Chaturvedi
March 2021 | Low-Carbon Pathways

Suggested citation: Chaturvedi, Vaibhav. 2021. Peaking and Net-Zero for India’s Energy Sector CO2 Emissions: An Analytical Exposition. New Delhi: Council on Energy, Environment and Water.

Overview

This CEEW study is the first-of-its-kind exercise to outline multiple pathways for India to attain net-zero emissions, rather than fixating on a single scenario or a single year. The study focuses on insights related to four alternative scenarios: 2030 peak–2050 net-zero, 2030 peak–2060 net-zero, 2040 peak–2070 net-zero, and 2050 peak–2080 net-zero. It also highlights that, for a rapidly developing economy, the choice of a peaking year must be explicit in selecting a net-zero year.

Key Highlights

  • Carbon dioxide currently accounts for 88 per cent of India’s total greenhouse gas (GHG) emissions, including land-use change emissions.
  • For fast-growing economies with a rising emissions trajectory, the need to understand the key variables that impact a the choice of a peaking year is as critical as the determinants for the selection of a net-zero year.
  • The analytical formulation shows that the economic growth rate significantly impacts ‘effort gap’. For India, peaking in 2030 would be challenging given the expected economic growth rates for at least the next two decades.

Moving from peaking year to net-zero year

  • The per capita emissions for all other economies, including China, are much higher than India's, even if one assumes peaking for India in 2050.
  • India’s real GDP growth rate would be much higher than any other country after their peaking years, implying a much higher effort required by India to peak and subsequently reduce emissions.
  • India would have a much lower per capita income to support the transition, even if it began the transition in 2040.
  • The gap between the peaking year and net-zero year has been long for most countries, signifying the pace of transition that reflects a relatively less disruptive impact on energy systems and society.

Transition challenges 

  • The availability, or absence, of CCS would define the shape of India’s energy systems, regardless of the choice of peaking and net-zero year.

Key progress indicators across alternative peaking and net-zero year combinations in ‘with’ and ’without CCS’ scenarios

Key progress indicators across alternative peaking and net-zero year combinations in ‘with’ and ’without CCS’ scenarios

Source: Authors analysis based on GCAM-CEEW for 2050 numbers. a GoI (2021); b IEA (2021b); c IEA (2020); d IEA (2017)

If 2050 were chosen as a net-zero year and if CCS technology were commercially unviable by then, this would imply that:

  • The share of fossil energy in India’s primary energy mix would have to reduce to 5 per cent in 2050 from 73 per cent in 2015
  • 83 per cent of electricity would have to be generated from non-hydro renewable energy sources by 2050, up from 3.4 per cent in 2015
  • Biofuels would have to account for 98 per cent of India’s oil, compared to a negligible share currently
  • Over two-thirds of India’s industrial and transport energy use would have to be electrified, compared to less than 20 per cent share of electricity in industrial energy use and negligible share in transport energy use as of now.

India can choose the peaking year as 2030 and net-zero year as 2050 or 2060 only if substantial financial and technical support is available from other developed countries.

Even if India peaks in 2050 and chooses 2090 as the net-zero year, the 2021–2100 cumulative emissions would be 246 GtCO2. The 2021–2100 cumulative emissions based on their net-zero ambition would be 349 GtCO2 for China, 69 GtCO2 for the EU, and 104 GtCO2 for the US.

Cumulative emissions impact of alternative peaking and net-zero year combinations

Cumulative emissions impact of alternative peaking and net-zero year combinations

Source: (1) Author’s analysis based on GCAM-CEEW for all India-specific scenarios and numbers in the table, excluding historical emissions. (2) CEEW analysis for future emissions for China, the EU, and the US based on climate action tracker data (Climate Action Tracker, 2021). (3) Historical emissions for all countries/regions derived from the CAIT Climate Data Explorer (2017) dataset. Note: Here, we present three additional scenarios for India, where the net-zero year is delayed by 10 years for 2030, 2040, and 2050 peaking year alternatives. All carbon dioxide numbers exclude non-energy carbon dioxide emissions.

Political economy trade offs in a rapid transition

While a near-term transition from peak to net-zero presents opportunities for a green infrastructure driven economic growth agenda, it would also present many critical trade-offs

  • Electricity prices for households would increase
  • Railways passenger tariff would increase
  • Coal dependent states would face fiscal challenges.
  • Coal sector jobs would be lost with half a million seeking alternative gainful employment
  • Geopolitics would shift with increased dependence on Southeast Asia or South America for biofuels

Along with economic growth and the economic trade-offs presented above, there are four critical considerations in choosing peaking and net-zero year.

  • The duration between a peaking and net-zero year
  • The cumulative emissions associated with each peaking and net-zero year combination
  • The possibility of stranded assets
  • The availability of an economically viable mitigation technology set, mainly biomass, carbon capture and storage (bio-CCS) and/or green hydrogen

Key Recommendations

  • India should not wait until 2050 to peak its emissions. Postponing peaking and net-zero years will increase India’s climate impact, which needs to be minimised to the extent possible.
  • Recognise the trade-offs from the near-term transition to net-zero so and adopt appropriate domestic measures.
  • India should invest in technologies that can reduce energy intensity and emission intensity, and would need international support to pursue a more aggressive route to decarbonisation.

India would need to generate at least 83 per cent of its electricity from (non-hydropower) renewable energy sources by 2050, if it were to commit to achieving net-zero greenhouse gas emissions by mid-century.

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