1. Aligning India’s Development Objectives, Amendment Proposals, and Cost of HFC Transition Vaibhav Chaturvedi Council on Energy, Environment and Water OEWG 38 Side Event Vienna, 19 th July 2016 © Council on Energy, Environment and Water, 2016

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3. | HFC phase down needs to be aligned with India’s development objectives Minimising environmental impacts Minimising economy wide cost of transition Regulating high prices of alternative refrigerants Enhancing domestic refrigerant and equipment manufacturing capacities Building capacity and skills of servicing sector Promoting R&D for India specific applications 2

4. | Domestic manufacturing capacity for alternative refrigerants Patent transfers End of application patents by chemical manufacturers Domestic subsidies for low GWP refrigerants Resetting standards for leveraging market entry to low GWP and patent free refrigerants Ensuring demand for alternatives: supply will follow demand 3

5. | Skill development and collaborative R&D Skill enhancement for Servicing sector Minimising leakages Capacity building for new refrigerants such as R-290 R&D for domestic application is critical Testing of CO 2 systems for commercial refrigeration is under progress For testing India specific applications e.g. HCs for larger systems A collaborative R&D platform?: Resource pooling through complementary resources for benefit to all sectors Supported and guided by policy makers and independent technical experts International R&D collaborations 4

6. | Understanding Emissions: How would key energy technologies grow in the future? 5 We first estimate the increase in cars, ACs, etc along with increase in income and population We then use information on charge sizes and leakage rates to estimate the growth in emissions SOURCE: CEEW and IIASA (2015) Stok of Cars Stock of Residential ACs

7. | For understanding costs, understanding sectoral mitigation potential is essential 6 Residential air-conditioning, commercial air-conditioning are the sectors with largest mitigation potential followed by mobile air-conditioning and commercial refrigeration Alternative refrigerants satisfying all technical and economic criteria however are not available for all sectors SOURCE: CEEW and IIASA (2015)

8. | Challenges of modelling cost, and our research strategy 7 Modelling cost in an uncertain and evolving environment is challenging However, given the limitations of our current understanding, it is critical to understand the potential cost faced by different sectors, and derive policy insights We employ the methodology adopted as a ‘standard’ in estimating costs for any climate policy intervention We model a BAU scenario, and model mitigation potential and associated cost in reference to the BAU: Incremental Cost We present numbers for different sectors rather than presenting an aggregate and let stakeholders choose which sectoral number they find ‘feasible’ Importantly, our analysis provides an initial point for moving from the current understanding to an ‘enhanced future understanding’ Multilateral Fund (MLF) looks at the costs in a very different way SOURCE: CEEW and IIASA (2015)

9. | Acknowledgements 8 Support by Indian industry representatives De. Sukumar Devotta for reviewing our cost analysis and providing critical insights MoEFCC, GoI for asking critical questions and engaging with us Shakti Sustainable Energy Foundation for funding SOURCE: CEEW and IIASA (2015)

10. | THANK YOU http://ceew.in 9

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12. | Modelling for insights, not numbers! Results from any analysis is contingent on the best currently available information The MAC curves and cost numbers that we highlight also reflect this If the cost of existing alternatives declines, then our numbers will change But future is uncertain, and continuously evolving We have to move forward give the uncertainties Through modelling, we seek to better understand the uncertainties To devise strategies for maximising the chances for a positive outcome 11

13. | An informed view on long term refrigerant prices Currently, only one generally acceptable alternative for the MAC sector, highly expensive compared to existing option Safeguarding all sectors and final consumers in developing countries from any financial shocks from any new and expensive alternative being forced on them is critical Why should a developing country pay more for a refrigerant when cheaper mitigation options are available in other sectors? Expectations of long term price of 1234yf are uncertain at best: Currently in India, cost of 1234yf almost 20 times compared to 134a Will it be 7-8 times when patents expire and economies of scale kick in Or will it be 1.5-2 times only Are there alternative process that can drive the price down? What about price of alternatives for the other sectors? 12

14. | Moving towards amendment with adequate safeguards and aligning with development objectives Irrespective of the amendment proposal, there will be a cost of phasing down HFCs Understanding trade-offs are critical for moving ahead with the amendment Mitigating High GWP HFCs is critical but phase down needs to align with India’s development goals Safeguards are a useful way for bringing all stakeholders on board 13