IIM Ahmedabad 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 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 Presentation Agenda

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 Integrated Assessment Models and Frameworks Ecology Policy sciences Hydraulics Meteorology Climatology Geophysics Atmospheric Chemistry Economics Biology Geochemistry Knowledge disciplines

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 Land use Temperature Precipitation Sunshine Water resource Crop Productivity Socio-economic indicator Impact on food demand Adaptation strategy AIM/Ecosystem /Water/Impact A set of ecosystem models, including a vegetation dynamics model, a water resource model, an agricultural productivity model and a health impact model A reduced-form model to project future socio- economic trends and environmental change for all 42 countries Future economic trend Future environmental trend India Thailand Korea Japan China AIM/Trend Industry Green Purchase Environ- mental Burden Environment Fund Environmental Industry (waste management, recycle) Wastes Environmental Burden Recycle Technology needs Technology assessment Environmental Industry Environmental burden Consumer Research on new technologies AIM/Material A environment- economy integrated model with material balance and recycling process modules AIM/Energy /Technology/Country A bottom-up technology selection model of energy use and emissions at country and local level AIM/Bottom-up A bottom-up technology & land use model for Asia-Pacific region AIM/Top-down A general-equilibrium- type world economic model AIM Family

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 sub- components

IIM Ahmedabad Component Models

IIM Ahmedabad GDP and CO2 Emissions: AIM/Trend Model

IIM Ahmedabad SO 2 Emission AIM/Emission Model

IIM Ahmedabad Water Consumption: AIM/Ecosystem Model 2030 Market Force

IIM Ahmedabad Model System for India’s Emissions Policy Analysis Models Top-down Models AIM/Material SGM GEMA ERB AIM/Trend Local Models AIM/Emissions GIS Inventory Assessment Health Impact Assessment Model Bottom-up Models ANSWER – MARKAL Stochastic MARKAL Demand Projection AIM/End-use Power Sector LP

IIM Ahmedabad Soft-linked Models Framework

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 IS92a

IIM Ahmedabad Energy ConsumptionCarbon Emissions Year Carbon (MT) Energy and Carbon Emissions for India: AIM/ENDUSE Model Year Exa Joules Coal Oil Gas Hydro Nuclear Renewables Biomass

IIM Ahmedabad Energy, Carbon, Electricity and GDP (History and Projections for Reference Scenario)

IIM Ahmedabad GDP intensities of Energy, Electricity and Carbon (Reference Scenario)

IIM Ahmedabad SO 2 Emission AIM/Emission Model

IIM Ahmedabad GHG versus Local Emissions in India Carbon EmissionsSO 2 Emissions Year Carbon (MT) Year Million Tonnes

IIM Ahmedabad Carbon Mitigation Supply Curve ( ) 6 billion tons of mitigation below $25/ ton of carbon Carbon abatement (billion ton) Cost ($/Ton of Carbon)

IIM Ahmedabad Carbon Mitigation (under different Post-Kyoto Scenarios) (in Million Ton)

IIM Ahmedabad Indian Energy System Transformation Under 550 ppmv Stabilization Base Case Energy SystemEnergy Changes: 550 ppmv Case MTC 550 ppmv

IIM Ahmedabad Technological Change in India to Stabilize CO 2 at 550 ppmv 550 PPMV Non-Fossil Energy Contribution to GHG Mitigation

IIM Ahmedabad Regional Energy Market Development

IIM Ahmedabad Impact of Regional Energy Market Developments in South-Asia Carbon SOX Reduction (%) Year Emissions Reduction (2015 ) Grid Integration Grid Integration + Regional Co-operation

IIM Ahmedabad Advanced Technology: Competitive Paradox Base Hi-Solar $25 Tax Med-Solar + $25 Tax 0% 5% 10% 15% 20% 25% 30% High Solar$25 TaxMed Sol+ $25 Tax Solar PV Penetration Carbon Mitigation

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