Energy & Technology

Transportation in Developing Countries: Greenhouse Gas Scenarios for Delhi, India

Download Report

Transportation in Developing Countries: Greenhouse Gas Scenarios for Delhi, India

Prepared for the Pew Center on Global Climate Change
May 2001

By:
Ranjan Bose and K.S. Nesamani, Tata Energy Research Institute (TERI)
Geetam Tiwari, Indian Institute of Technology-Delhi
Daniel Sperling, Mark Delucchi, and Lorien Redmond, Institute of Transportation Studies, University of California, Davis
Lee Schipper, International Energy Agency

Press Release

Download Entire Report (pdf)

Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

Greenhouse gas emissions in developing countries are increasing most rapidly in the transportation sector. Even people with low incomes are meeting their need for mobility, and projected income growth over the next two decades suggests that many more will acquire personal modes of transportation. How this will affect the earth's climate is a great concern.

In Delhi, India, transportation sector greenhouse gas emissions are expected to soar. There are policy and technology choices that could significantly lower the emissions growth rate while increasing mobility, improving air quality, reducing traffic congestion, and lowering transport and energy costs. To realize these benefits, vision, leadership, and political will must be brought to bear. Delhi has high vehicle ownership rates for the city's income level, increasing congestion, poor air quality, poor safety conditions, and insufficient coordination among the responsible government institutions. Travelers in Delhi desire transportation services, reflected by the increasing numbers of inexpensive but highly polluting scooters and motorcycles.

This report creates two scenarios of greenhouse gas emissions from Delhi's transportation sector in 2020. It finds:

  • Greenhouse gas emissions quadruple in the high-GHG, or business-as-usual, scenario; but only double in the low scenario.
  • Transportation policies are readily available that will not only slow emissions growth, but also significantly improve local environmental, economic, and social conditions.
  • Improved technology would maximize the efficiency of automobiles, buses, and other modes of transportation and could play a key role in reducing emission increases.
  • Keeping many travel mode options available - including minicars and new efficient scooters and motorcycles - will help individuals at various income levels meet their mobility needs.
  • The time to act is now. The issues facing Delhi represent opportunities for improvement, but the longer authorities wait to address transportation inefficiencies, the more difficult and expensive it will be to produce a positive outcome.

Transportation in Developing Countries: Greenhouse Gas Scenarios for Delhi, India is the first report in a five-part series examining transportation sector greenhouse gas emissions in developing countries. The report findings are based on (1) a regression model developed by TERI to forecast future increases in vehicle ownership and travel by different modes and (2) a Lifecycle Energy Use and Emissions Model developed by the Institute of Transportation Studies at U.C.-Davis which estimates greenhouse gas emissions from the transportation sector.

The Pew Center gratefully acknowledges Anita Ahuja of Conserve, Ralph Gakenheimer of MIT, and Michael Walsh, an independent transportation consultant, for their review of earlier drafts. 

Executive Summary

Delhi, India is a rapidly expanding megacity. Like many other cities its size, Delhi faces urban gridlock and dangerous levels of air pollution. Vehicle ownership is still a fraction of that in industrialized countries, but remarkably high considering the population's relatively low income. Worldwide, energy use is increasing faster in the transport sector than in any other sector, and fastest of all in developing countries. From 1980 to 1997, transportation energy use and associated greenhouse gas (GHG) emissions increased over 5 percent per year in Asia (excluding the former Soviet Union) and 2.6 percent in Latin America, compared to one percent growth in greenhouse gases from all sectors worldwide.

Delhi faces the same transportation, economic, and environmental challenges of other megacities. Population, motor vehicles, pollution, and traffic congestion are all increasing. Air pollution levels greatly exceed national and World Health Organization health-based standards, and transportation is by far the largest source of pollution. In the past 30 years, Delhi's population more than tripled and the number of vehicles increased almost fifteenfold.

By 2000, Delhi had about 2.6 million motor vehicles - 200 for every 1,000 inhabitants, a rate far higher than most cities with similar incomes. Most of these vehicles are small, inexpensive motorcycles and scooters, rather than automobiles. This proliferation of vehicles in a relatively poor city indicates the strong desire for personal transport - a phenomenon observed virtually everywhere. Delhi is an example of how that desire can now be met with relatively low incomes.

Delhi is expected to continue growing at a rapid rate. Its population is expected to surpass 22 million by 2020. Motor vehicles, including cars, trucks, and motorized two- and three-wheelers, are expected to grow at an even faster rate. The domestic auto industry is predicting car sale increases of 10 percent per year. With an extensive network of roads and increasing income, there is every reason to expect vehicle sales and use to continue on a sharp, upward trajectory. 

0

Equity and Global Climate Change Conference

Promoted in Energy Efficiency section: 
0
The Pew Center conference on Equity and Global Climate Change will bring together experts from a variety of disciplines and nationalities to explore how best to ensure fair and reasonable actions by all countries in addressing climate change.

April 17-18, 2001 - Washington, DC

Conference Press Release

The Pew Center conference on Equity and Global Climate Change will bring together experts from a variety of disciplines and nationalities to explore how best to ensure fair and reasonable actions by all countries in addressing climate change. Given critical differences among nations -- in their economies, their historic and projected emissions, and their vulnerability to climate change impacts -- achieving equitable international commitments is an extraordinary challenge. Speakers and panelists will examine the underlying economic, cultural, and ethical issues and how they influence this crucial debate. Through this conference, the Pew Center hopes to stimulate an ongoing international dialogue leading to the better understanding of equity concerns and solutions that all parties believe are fair.

PANEL DESCRIPTIONS

Approaches to Equity

Equity concerns are at the very core of the climate change debate: Who bears the greatest responsibility for climate change? Who is at greatest risk? Who is best able to act? Even if we agree that equity is a goal, how do we define "equitable"? Many approaches to conceptualizing and addressing equity in the context of climate change have been advanced, including: per capita emission rights; various forms of "grandfathering;" allocating reductions according to ability to pay; sharing costs according to historic emissions; and combinations of these and other critiera. This panel will explore some of these approaches and will ask whether, ultimately, equity is more feasibly addressed through a political bargain than through a given principle or formula.


Economic Considerations

At the root of many equity concerns are stark economic realities. Countries face widely divergent costs in addressing climate change - both the direct costs of mitigation, and the opportunity costs of diverting scarce capital from other social needs. The stakes of not acting also vary widely; and those facing the greatest costs from flooding, drought and other climate change impacts may be those with the fewest resources to spare. While some developed countries are concerned about competitiveness impacts if other nations do not act, developing countries are reluctant to assume obligations that may jeopardize their economic development. This panel will explore these differing perspectives, and will examine opportunities to address economic inequities through technology transfer, capacity building, clean energy investment, and other climate change strategies.


Ethical, Moral, and Cultural Considerations

Equity concerns are also shaped by differing ethical, religious, and cultural perspectives. Some cultures and traditions place a higher priority on meeting collective needs and those of future generations. Some argue that developed countries must be willing to sacrifice the comforts of an energy-intensive lifestyle. Some hold more strongly than others to the creed of market efficiency. While these differences can exert a powerful influence on national perspectives, they are typically overshadowed by pure economic concerns. This panel will explore how these differences color the climate change debate, and how a better understanding of other cultures and traditions can lead to stronger international cooperation against climate change.


Fair and Reasonable Action: First Steps

The Kyoto Protocol attempts to address equity concerns in at least two respects: it sets binding emissions targets only for developed countries, reflecting broad agreement that it is their obligation to act first; and among developed countries, it sets differentiated targets reflecting differences in national circumstance. How equitable are these decisions? Negotiations over rules to implement Kyoto raise another set of concerns: How is fair representation on the body overseeing the Clean Development Mechanism ensured? What must developed countries do to fulfill their commitments on finance and technology transfer? This panel will examine the underlying rationale for agreed-upon measures such as differentiated targets, and explore ways to resolve other equity issues that arise within the existing climate framework.


Fair and Reasonable Action: The Path Forward

Ultimately, it will be impossible to achieve safe, stable atmospheric concentrations of greenhouse gases by addressing only developed country emissions. There is growing pressure in the United States and elsewhere for developing countries to take stronger action against climate change. Developing countries want greater recognition for efforts already underway and are unwilling to commit to stronger action, insisting that industrial countries first demonstrate real progress toward achieving their emission targets and fulfilling their commitments on finance and technology transfer. This panel will explore differing perspectives on this central issue, and consider when and how a real dialogue on developing country commitments can or should begin.

Op-Ed: Getting It Right: Climate Change Problem Demands Thoughtful Solutions

OPINION EDITORIAL
"Getting It Right: Climate Change Problem Demands Thoughtful Solutions"

By Eileen Claussen, Executive Director for the Pew Center on Global Climate Change

Appeared in the Washington Post

November 14, 2000

Many of the government officials gathering this month for the climate change negotiations in The Hague are hoping to put the finishing touches on rules to implement the Kyoto Protocol. But getting those rules right is more important than getting them all completed.

Still unresolved on the eve of the meeting are a range of very complicated political and technical issues that will play a decisive role in determining whether we achieve our goal of stabilizing the earth's climate system. It is not a stretch to say that how we decide these issues will determine how we are judged by future generations.

Decision-makers in The Hague should remember that the Kyoto Protocol was designed as both a first step in reducing atmospheric concentrations of greenhouse gases and as a framework for long-term, cost-effective action. In other words, this is a treaty that will have to stand the test of time. Short-term political considerations-including the desire to resolve all remaining issues this year-should therefore take a backseat to the goal of creating a global system that is transparent, fair, environmentally effective, economically efficient, and as simple as possible.

The Remaining Issues

Four key sets of issues remain in play as the negotiators come together:

  1. The Kyoto Mechanisms. The Kyoto mechanisms were designed to allow countries to pursue the most cost-effective means of reducing their emissions-for example, by engaging in international emissions trading. But there are provisions being negotiated that would make the Kyoto mechanisms totally inoperable, and others that would seriously limit their use. If the negotiators are careless in defining the rules, or determined to constrain when and how the mechanisms can be used, this will simply increase the costs of complying with the Protocol. And the result might be a higher level of noncompliance, an outcome that no one should want.
  2. Carbon Sequestration. The question here is whether and how countries should receive credit toward their emissions reduction targets for using agricultural lands and forests to store carbon. A related question is whether credit should be given for investments in sequestration projects in developing countries. The important role of soil and forest sequestration in stabilizing the global climate system cannot be denied. However, we have not yet defined what types of sequestration activities ought to count-or even how to count them.
  3. Compliance. Yet another unanswered question is whether the Kyoto Protocol will include binding consequences for noncompliance. In other words, how will we penalize those countries that miss their targets? This is a crucial issue to the Protocol's success. Only by establishing and enforcing significant noncompliance penalties can we create a fair and efficient global system, and one that yields results.
  4. Assistance to Developing Countries. Developing countries properly argue that the industrialized world is not doing enough to implement provisions of the United Nations Framework Convention on Climate Change. In that precursor agreement to the Kyoto Protocol, the United States and other nations pledged to support developing countries in their efforts to reduce emissions through capacity building, technology transfer, and funding for "adaptation" initiatives. Decision makers in The Hague will have to respond seriously to these concerns at the same time as they are working on the more fractious issues of the Kyoto framework.

Looking Ahead

As if resolving these immediate questions were not enough of a challenge, everyone concerned with this issue must also give serious thought to the future. After all, the 2008-2012 deadline for achieving the first round of emissions reductions under the Kyoto Protocol is fast approaching. And, even if these initial targets are met (an unlikely prospect), they represent only a first step toward the sustained and significant reductions in emissions that will be necessary to reduce the threat of climate change throughout the 21st century.

A crucial issue for the future, then, is to think about what kind of targets we will have to establish in the years after 2012. At the same time, we need to think about how to involve developing countries in these future global efforts in a more active way. Developing countries are struggling to lift their people to a higher standard of living, and doing so will mean absolute increases in energy use and emissions.

We will accomplish very little, if anything, by requiring developing countries to achieve short-term emissions reductions. The better approach is to craft an equitable and effective framework for future targets for all countries, bearing in mind that we face a common challenge: maximizing the environmental benefits we are able to achieve while minimizing the costs of reducing and limiting our emissions.

Meeting the challenge of global climate change calls for no less than a second industrial revolution. We need to promote new technologies and new investments that will put the entire world on a path to clean economic development. And, in creating the global legal framework to make this happen, we need to make absolutely certain that we get it right.

Appeared in the Washington Post, Tuesday, November 14, 2000— by Eileen Claussen

Press Release: New Report Explores Ways to Encourage Consumers To Buy Energy-Efficient Home Appliances

For Immediate Release:
October 31, 2000

Contact: Katie Mandes, 703-516-4146
             Dale Curtis, 202-777-3530

New Report Explores Ways to Encourage Consumers To Buy Energy-Efficient Home Appliances

Washington, DC - Public policies to encourage turnover of aging home appliances and purchases of more efficient models could help reduce the emissions linked to global warming, according to a new report released by the Pew Center on Global Climate Change.

"The economics are generally attractive for consumers to upgrade to energy-efficient models when they replace old or broken appliances," said Eileen Claussen, President of the Pew Center on Global Climate Change. "But without targeted public policies, consumers may be unaware of the potential cost savings and environmental benefits of doing so."

"This important Pew Center report illustrates how the use of energy-efficient appliances can help combat climate change," said Jeff Fettig, President and CEO, Whirlpool Corporation. "At Whirlpool, we believe that sound policy can stimulate companies to produce more energy-efficient products and encourage consumers to buy them."

"At Maytag, the extraordinary consumer acceptance of our Neptune washer provides clear evidence that consumers will purchase environmentally friendly appliances if those products also provide superior performance," said Lawrence J. Blanford, President, Major Appliance Division, Maytag Corporation. "Consumer education programs, such as the recent Boston washer study conducted by the Department of Energy and Maytag, bring the message to consumers that they and the nation benefit when they replace their older, less efficient appliance with a newer, high efficiency model."

Lessons On What Works, What Doesn't

The report, entitled "Global Warming and Appliances: Increasing Consumer Participation in Reducing Greenhouse Gases," was written by two leading experts in the field: Everett Shorey of Shorey Consulting, Inc. and Tom Eckman of the Northwest Power Planning Council.

The paper frames the policy issues by identifying the major home appliances that require the most electricity, such as refrigerators, clothes washers, and room air conditioners. Then it analyzes the economic ramifications for consumers of various appliance purchase options. Next it identifies important consumer characteristics to be considered at different stages in the appliance purchase process. Finally, it reviews past attempts to influence consumer choice through public policy initiatives and suggests how new initiatives could be targeted more effectively.

Experience from these past programs has demonstrated that:
  • Well crafted programs including rebates, publicity, and assistance in disposing of old appliances appear to motivate consumers to replace refrigerators before the end of the expected life of the appliance. It is likely that the refrigerator experience can be generalized to other appliances.
  • There is little or no evidence that consumer tax credits are effective in influencing a significant number of consumers to change their purchasing behavior.
  • Energy labels and the US EPA's Energy Star logo are good indicators of cost-effective and energy-efficient appliances, but the labels in themselves are insufficient to cause substantial change in consumer purchasing practices.


The more successful programs offer insights that should drive the development of any future programs:

  • It is much easier to influence consumers who are actively engaged in appliance purchases than to influence the general public.
  • Retail appliance salespeople have significant influence on consumer choice. Incentives aimed at the salesperson, coupled with simple sales tools, can steer consumers in the direction of energy-efficient appliances.
  • Direct financial incentives for consumers may not be necessary.
Continuation of Solutions Series

The appliance report is the second in a new series of reports aimed at identifying solutions to the challenges presented by climate change. Other Pew Center series focus on domestic and international policy issues, environmental impacts, and the economics of climate change.

A complete copy of these and other Pew Center reports can be accessed from the Pew Center's web site, www.c2es.org.

About the Pew Center: The Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the United States' largest philanthropies and an influential voice in efforts to improve the quality of the environment. The Pew Center is a nonprofit, non-partisan and independent organization dedicated to providing credible information, straight answers and innovative solutions in the effort to address global climate change. Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs, leads the Pew Center. The Pew Center includes the Business Environmental Leadership Council, a group of large, mostly Fortune 500 corporations all working with the Pew Center to address issues related to climate change. The companies do not contribute financially to the Pew Center; it is solely supported by contributions from charitable foundations.

Appliances and Global Climate Change: Increasing Consumer Participation in Reducing Greenhouse Gases

Download Report

Appliances and Global Climate Change: Increasing Consumer Participation in Reducing Greenhouse Gases

Prepared for the Pew Center on Global Climate Change
October 2000

By:
Everett Shorey, Shorey Consulting, Inc.
Tom Eckman, Northwest Power Planning Council

Press Release

Download Entire Report (pdf)

Download Report (ZIP file)

Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

It makes a big difference which home appliances U.S. consumers buy. Residential electricity consumption -- much of it from major home appliances -- accounts for about one fifth of U.S. energy-related greenhouse gas emissions. New energy-efficient appliance models that use as little as half of the energy as their predecessors are available on the market.

Yet previous studies have shown little consumer response to the marketing of energy-efficient appliances. Although consumers stand to save money over time from smart appliance choices, energy-efficient products and programs to encourage their use have had limited success in the marketplace. This report prepared by Everett Shorey of Shorey Consulting, Inc. and Tom Eckman of the Northwest Power Planning Council takes a look at how consumers decide which major home appliances to buy, and suggests ways in which policy makers could encourage the use of energy-efficient products.

The authors draw upon previous experience from government and utility-run programs aimed at influencing consumers to purchase energy-efficient products. In doing so, they highlight the strengths and weaknesses of various approaches and analyze the economic and environmental ramifications of consumer purchases of appliances such as washers, refrigerators, and air conditioners. The authors find that a program's effect depends upon the particular consumer choice in question. The consumer may be considering an upgrade, early replacement, or retirement of an appliance. Each of these involves different economic tradeoffs, and thus different opportunities for policy intervention. The efficacy of a policy also depends upon where the consumer is in the process of purchasing an appliance. Different kinds of programs are required to get the attention of a consumer who is not even thinking about buying an appliance, as opposed to one who is doing research in Consumer Reports, or already out shopping in appliance stores. The authors find that future public policy and incentive programs will be most effective if they avoid a "one size fits all" approach, and instead adopt messages and communications mechanisms targeted at different categories of consumers, and different kinds of decisions.

This report is the second in a series aimed at identifying practical solutions to address climate change. The Solutions series provides individuals and organizations with tools to evaluate and reduce their contributions to climate change.

The authors and the Center would like to thank the members of the Center's Business Environmental Leadership Council and David Goldstein of the Natural Resources Defense Council for their review and advice on previous drafts of this report. In addition, we acknowledge the input from appliance manufacturers, retailers, utilities, and government programs that contributed information and insights to this study.

Executive Summary

Consumer purchases of major home appliances are an important aspect of the discussion about greenhouse gas reduction and global climate change for two reasons. First, major home appliances account for approximately one third of residential electricity consumption, a principal source of greenhouse gases. Second, appliance purchases give consumers a direct opportunity to affect greenhouse gas emissions. Absent other intervening factors, most consumers would probably wish to purchase appliances which save energy and money, and which are environmentally friendly. The questions for policy-makers revolve around what choices are available to consumers now, how consumers make their current choices, and how might it be practical to influence consumer choice.

This paper frames the policy issues by first focusing attention on the appliance categories that are purchased directly by consumers and that are significant consumers of electricity. Second, it analyzes the economic ramifications for consumers of their appliance purchase options. Finally, it reviews past attempts to influence consumer choice through public policy initiatives and suggests how new initiatives could be targeted more effectively. Further research is necessary in order to project how much energy would be conserved through any specific policy initiative.

The three areas of consumer choice that are potentially addressed through policy initiatives are upgrades to more efficient models of appliances when a consumer has already decided to make an appliance purchase; retirements of duplicate appliances; and early replacements of functioning appliances by newer and therefore more efficient ones. The first two of these consumer choices generally leave consumers economically better off if they purchase more efficient models. The economic and societal energy saving benefits of earlier than normal appliance replacements are generally positive as long as the consumer purchases an Energy Star® or higher-efficiency appliance or one meeting energy efficiency standards that are coming into effect in the next two or three years.

In the process of making any appliance purchase, individual consumers use different sources of information and have different interests, depending upon where they are in the purchasing process. Some consumers are actively engaged in researching and assessing appliances and intend to make an immediate purchase (Buyers), others may be researching appliances but are hesitating over when to purchase (Considerers), and still others are not interested in or receptive to information about appliances (Satisfieds). The differences between these groups both create opportunities and present challenges to policy-makers and program designers who are attempting to alter consumer appliance purchasing behavior.

Past public policy and incentive programs have not differentiated their approaches and messages by where consumers are in the appliance purchase process. Future programs will be more effective if they adopt more targeted messages and communications mechanisms. Experience from these past programs has demonstrated several key issues:

  • Well crafted programs including rebates, publicity, and assistance in disposing of old appliances appear to cause consumers to replace refrigerators before the end of the expected life of the appliance. It is likely that the refrigerator experience can be generalized to other appliances.
     
  • There is little or no evidence that consumer tax credits are effective in influencing a significant number of consumers to change their purchasing behavior.
     
  • Consumers seek information on appliances from many sources before they make a purchase and Consumer Reports is the most trusted source of information.
     
  • Energy labels and the Energy Star® logo are, in themselves, insufficient to cause substantial change in consumer purchasing practices.
     

Recent programs in the Pacific Northwest and in the Northeast to promote the use of high-efficiency washing machines are providing an interesting model of success in influencing consumer behavior. These recent programs demonstrate several factors that should drive the development of any new consumer-oriented initiatives:

  • It remains substantially easier to influence consumers who are actively engaged in appliance purchases (Buyers and some Considerers) than to influence the general public (Satisfieds).
     
  • Retail appliance sales representatives have substantial influence on consumer choice. Incentives oriented to the retail sales representative coupled with simple sales tools can cause the sales representatives to influence consumer product selections.
     
  • Direct financial incentives for consumers may not be necessary, especially when the consumer is already intending to purchase an appliance and the goal is to get the consumer to upgrade by purchasing a more efficient model.
     

Policy-makers must also craft any incentive programs in congruence with other public policy initiatives, especially minimum appliance energy efficiency standards. First, the minimum energy efficiency standard programs are the major public policy influence on manufacturers to raise the level of energy efficiency for their products. Without consideration of manufacturer intentions, it is possible that there will be no supply of more efficient products to meet any changes in demand caused by consumer-oriented public policy programs. Secondly, accelerating consumer purchases immediately in advance of a change in minimum standards could have the unintended effect of raising rather than lowering total societal energy consumption.

Based on these considerations, public policy programs could target each major appliance purchase decision using approaches and methods that have been successful in the past:

 

 

DecisionTarget GroupMajor Program Elements

Upgrade to More Efficient ApplianceBuyers
  • Point-of-sale information including Energy Star® logos
  • Energy labels (on appliances) and data on energy use in electronic "catalogs"
  • Sales representative training and incentives
Avoid Postponement of Appliance ReplacementConsiderers
  • Point-of-sale information including Energy Star® logos
  • Easy-to-use cost and savings analyses, especially for potential online buyers
  • Sales representative training and incentives
Early ReplacementConsiderers Satisfieds
  • Mass communications
    Bill stuffers
    Consumer Reports
  • Cost and savings analyses
  • Rebates/Store Credits for appliance retirement
Appliance RetirementAll households
  • Mass communications
    Bill stuffers
    Consumer Reports
  • Rebates
  • Pick-up and recycling programs

 

Everett Shorey
Tom Eckman
0

An Overview of Greenhouse Gas Emissions Inventory Issues

An Overview of Greenhouse Gas Emissions Inventory Issues

Prepared for the Pew Center on Global Climate Change
August 2000

By:
Christopher P. Loreti, William F. Wescott, and Michael A. Isenberg, Arthur D. Little Inc., Cambridge, Massachusetts

Press Release

Download Entire Report (pdf)

Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

At a Pew Center conference on Early Action held in September 1999, DuPont announced plans to reduce its greenhouse gas emissions 65 percent from 1990 levels by 2010. BP Amoco intends to reduce greenhouse gas emissions by 10 percent of 1990 levels by 2010 and has implemented an emissions trading system across all of its businesses. United Technologies Corporation has announced targets to reduce energy and water usage by 25 percent per dollar of sales by 2007.

Motivated by factors ranging from a desire to monitor and reduce energy consumption to concern for the environment to anticipation of future requirements to cut emissions that contribute to climate change, a growing number of companies are voluntarily undertaking action to reduce their greenhouse gas emissions. This report provides an overview of how greenhouse gas emissions are estimated and reported in emissions inventories. It highlights a variety of approaches taken by companies to identify, track, and curb their emissions, and provides insights from their experiences.

This Pew Center report is the first in a new series aimed at identifying practical solutions to address climate change. The Solutions series is aimed at providing individuals and organizations with tools to evaluate and reduce their contributions to climate change. This first report, prepared by Christopher Loreti, William Wescott, and Michael Isenberg of Arthur D. Little, Inc., identifies credible approaches and offers a set of principles for conducting emissions inventories. The authors identify key decision points in efforts to conduct an emissions inventory. They note that the purpose of an inventory should influence the approach, pointing out, for example, the tension that exists between encouraging consistency in reporting practices and providing flexibility to reflect a specific company's unique circumstances.

In the absence of a comprehensive climate policy regime, voluntary efforts to identify and reduce greenhouse gases at the source are critical. Ensuring that such efforts are ultimately recognized under future policy regimes is equally important and only likely to be possible if greenhouse gas emissions reductions are found to be real, quantifiable, and verifiable. A subsequent Pew Center report will address key issues in the verification of emissions inventories and emissions reductions.

The authors and the Pew Center would like to thank the companies featured in this report for sharing their stories and insights, and acknowledge the members of the Center's Business Environmental Leadership Council, as well as Janet Raganathan and others involved in the Greenhouse Gas Measurement & Reporting Protocol Collaboration, for their review and advice on a previous draft of this report.

Executive Summary

There is great interest today in the inventorying of greenhouse gas (GHG) emissions by corporations — perhaps more than there has ever been for a voluntary environmental initiative. This interest is part of the general trend among corporations towards increased reporting of environmental performance. In addition, many organizations have concluded that enough is known to begin taking action now to understand, to manage, and to reduce their GHG emissions. The possibility of earning credit for taking voluntary actions to reduce emissions is also a motivating factor for many companies to conduct inventories. Conducting an inventory is a necessary first step in managing greenhouse gas emissions.

This paper provides an overview of key issues in developing greenhouse gas emissions inventories, with particular emphasis on corporate-level inventories. It illustrates the range of current activities in the field and the experience of major corporations that conduct GHG emissions inventories. Areas of general agreement, as well as unresolved issues in emissions inventorying, are described. More specifically, the paper discusses:

  • How national level emissions inventories relate to corporate and facility inventories,
  • How companies conduct their inventories,
  • Inventory accuracy,
  • How companies decide which emissions to include (drawing boundaries),
  • Baselines and metrics,
  • Challenges for corporations in conducting global inventories, and
  • Learning from similar measurement approaches.


One important issue this paper does not address is the verification of emissions inventories and emissions reductions. Verification is the subject of another paper being prepared by Arthur D. Little, Inc. for the Center.

This review of GHG emissions inventory issues is based on meetings and discussions with the Center's Business Environmental Leadership Council, a survey of selected major corporations on their greenhouse gas inventory practices, and a review of pertinent literature. It is also informed by the participation of the Center and Arthur D. Little, Inc. in a collaborative effort led by the World Resources Institute and the World Business Council for Sustainable Development to develop an internationally accepted protocol for conducting GHG emissions inventories.

The intent of this paper is not to advocate any specific methodology or approach for conducting GHG emissions inventories, nor to promote any particular policy positions. The review of the experience to date and issues surrounding GHG emissions inventories, however, suggests several general principles for developing effective GHG emissions inventory programs:

1. Start by understanding your emissions. Knowing the relative magnitude of emissions coming from various sources is necessary to understand whether or not they are material contributors to a firm's total emissions. Understanding the nature and the number of the emissions sources will facilitate the use of the inventory development guidance that is becoming available.

2. Understand the likely uses of the emissions inventory. Companies conduct GHG emissions inventories for purposes that range from internal goal-setting to external reporting to obtaining financial benefits. These different uses of the inventory information imply different levels of completeness, accuracy, and documentation in the inventory. Each organization will need to reach its own conclusion as to the cost/benefit balance of developing its inventory, depending upon its set of likely uses.

3. Decide carefully which emissions to include by establishing meaningful boundaries. Questions of which emissions to include in a firm's inventory and which are best accounted for elsewhere are among the most difficult aspects of establishing GHG emissions inventories. Since the purpose of conducting an inventory is to track emissions and emissions reductions, companies are encouraged to include emissions they are in a position to significantly control and to clearly communicate how they have drawn their boundaries.

4. Maximize flexibility. Since requirements to report or reduce greenhouse gas emissions under a future climate policy regime are uncertain, companies should prepare for a range of possibilities. By maximizing the flexibility in their emissions inventories — for example, by being able to track emissions by organizational unit, location, and type of emission or by expressing emissions in absolute terms or normalized for production — organizations will be prepared for a wide range of possible future scenarios.

5. Ensure transparency. Transparency in reporting how emissions and emissions reductions are arrived at is critical to achieving credibility with stakeholders. Unless the emissions baseline, estimation methods, emissions boundaries, and means of reducing emissions are adequately documented and explained in the inventory, stakeholders will not know how to interpret the results.

6. Encourage innovation. Now is the time to try innovative inventory approaches tailored to a company's particular circumstances. The range of experience and lessons learned will be invaluable as voluntary reporting protocols are developed or as possible regulatory requirements are established. Learning what works best — and doing it before any requirements for reporting are in place — will be as important as learning what does not work.

Christopher P. Loreti
Michael A. Isenberg
William F. Wescott
0

Developing Countries & Global Climate Change: Electric Power Options in China

Developing Countries & Global Climate Change: Electric Power Options in China

Prepared for the Pew Center on Global Climate Change
May 2000

By:
Zhou Dadi, Beijing Energy Efficiency Center
Guo Yuan, China Energy Research Institute
Shi Yingyi, Beijing Energy Efficiency Center
William Chandler, Battelle, Advanced International Studies Unit
Jeffrey Logan, Battelle, Advanced International Studies Unit

Press Release

Download Entire Report (pdf)

Download Report (ZIP file)

Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

With annual releases of over 918 million metric tons of carbon dioxide into the atmosphere, the People's Republic of China takes center stage among developing countries in the climate change debate. If China could achieve significant emission reductions from the business-as-usual scenario, particularly within the electric power sector, it could be considered a major advance in addressing climate change. Yet the task is daunting. Decision-makers must have a better understanding of the paths that are possible for electric power investment in China, and the impacts of these investments.

This report is designed to improve that understanding. It describes the context for new power sector investments and presents five alternative policy scenarios through 2015. The report presents concrete policy strategies that could enable China to meet growing electricity demand while continuing economic growth, and reducing sulfur dioxide and greenhouse gas emissions.

The principal drivers of the technology choices for the next fifteen years are:

  • Growing awareness that under a business-as-usual path, carbon emissions from thermal plants will increase from 189 million tons in 1995 to 491 million in 2015, and sulfur dioxide emissions from 8.5 million to 21 million due to the heavy reliance on coal-fired power generation.
  • Increasing demand-side energy efficiency by 10 percent from business-as-usual projections could reduce carbon dioxide and sulfur dioxide emissions by 19 and 13 percent, respectively, in 2015, while lowering cost to 12 percent below the baseline.
  • Expanding the availability of low-cost natural gas through market reforms could reduce emissions of carbon dioxide and sulfur dioxide in the power sector by 14 and 35 percent, respectively, and increase cost by only 4 percent relative to the baseline.
  • Accelerating the penetration of cleaner coal technologies could help China reduce sulfur dioxide and particulate emissions, but the associated impact on carbon emissions would be minimal and would increase costs by 6 percent relative to the baseline.

Developing Countries and Global Climate Change: Electric Power Options in China is the fourth of a series commissioned by the Center for Climate and Energy Solutions to examine the electric power sector in developing countries, including four other case studies of Korea, India, Brazil, and Argentina.

Executive Summary

China plays a leading role among developing nations in the field of energy and climate policy. The nation now ranks second in the world in energy consumption and greenhouse gas emissions. The electric power sector alone could consume as much as one billion tons of coal in 2015, and emit 300 million additional tons of carbon per year. Chinese decisions affecting energy development and emissions mitigation will significantly impact world climate. However, China currently has no formal plans to reduce its greenhouse gas emissions for their own sake.

China has changed dramatically since the country adopted economic reforms in the late 1970s. The nation's economy has grown and living standards have improved for over two decades. Although income per capita remains far less than in industrialized countries, its gross domestic product is large enough to affect the global economy. As the country's economy improves, China's influence will continue to grow.

China has fueled this robust growth with plentiful supplies of domestic coal. In 1997, the country consumed nearly 1.3 billion tons of coal, (accounting for three-quarters of all commercial energy demand), the highest in the world. Heavy reliance on coal has also caused severe environmental problems, including acid rain in southern China, deadly particulate levels in most cities, and increasing concentrations of greenhouse gases in the global atmosphere. Yet, for two decades energy use has grown only half as fast as the economy. According to official statistics, China has recently been far more successful than the United States in improving energy efficiency.

The power sector currently accounts for more than one-third of China's annual coal consumption. Coal-fired thermal power plants generate over 75 percent of the nation's electric power and are among the largest sources of air pollution in China. Continued growth in economic output and living standards implies that electric power demand will grow rapidly in the foreseeable future. How to meet demand at least cost — including local environmental impacts — is a topic of great concern for decision-makers in government and the power industry.

This analysis, which explores China's electric power options, has three primary goals:

  • Assess the current and future state of the power sector
  • Determine the least-cost combination of technologies to meet projected power demand through 2015 under various scenarios
  • Evaluate policies that could minimize both economic and local environmental costs.

This report begins with a brief review of China's economic and energy situation, then turns to a detailed account of the nation's electric power sector. The paper assesses available energy resources and generation technologies, and results of regional electric power demand forecasts through 2015. Results are presented from an analysis using a linear programming model to determine least-cost combinations of power supply technologies that meet projected power demand in 2015. The authors constructed a baseline and five policy cases to test economic and environmental policy measures, including sulfur dioxide and carbon dioxide controls, natural gas reform, clean coal investment mechanisms, and increased energy efficiency. The model simulated these scenarios by applying emissions caps, fees, cost reductions, increased fuel availability, improved plant performance, or lower demand estimates that then influence the selection of alternative technologies.

The authors conclude that without a strong environmental policy, China's electric power mix will become even more coal-dependent, with dramatic increases in emissions of sulfur dioxide, oxides of nitrogen, particulates, and carbon dioxide. These emissions would have serious effects on human health, property, and ecosystems.

When policy measures such as fuel availability, technical performance, and full-cost accounting are considered, however, the mix of electric power generation technologies — if not necessarily the fuels — changes significantly. The six scenarios produced the following results:

Baseline case. Power generating capacity and power consumption are expected to nearly triple by 2015 from their values in 1995, requiring some $449 billion in total costs. In the baseline scenario, coal then provides 85 percent of power, and coal use for power generation alone would reach 1 billion tons per year. Emissions of sulfur dioxide and carbon dioxide from the power sector would reach roughly 20 million tons and one-half billion tons per year, respectively. This scenario assumes that the current environmental policy remains the same, which appears increasingly unlikely.

Sulfur emissions control case. Annual sulfur dioxide emissions from the power sector could be cut to 12.7 million tons by 2015 — a 40 percent reduction from the baseline level — by imposing fees ranging from $360-$960 per ton of sulfur released. Total costs using the sulfur fees would rise by 4 percent. Sulfur control policies would reduce total coal use very little but greatly increase coal washing and flue gas desulfurization. These options cost less in China than alternatives such as nuclear power, hydropower, and advanced coal technologies that reduce sulfur emissions by a comparable amount. Achieving sulfur reductions would also require stricter regulatory enforcement. However, greenhouse gas emissions would change little as a result of stricter sulfur dioxide emissions control.

Carbon control case. This scenario tested the effect of reducing carbon emissions in the power sector by 10 percent, or 50 million tons per year, by 2015. The study simulates these reductions by assuming the construction of new, less carbon-intensive power plants; it does not consider alternatives to lower emissions in existing plants. A 10 percent reduction from the baseline would add an additional $20 billion to total costs by 2015, an increase of about 4 percent. Greater reliance on washed coal, hydropower, nuclear power, and fuel switching to natural gas would be the cheapest ways of reducing emissions. Moderate carbon taxes were also tested in this analysis, but they were not found to be particularly effective in encouraging fuel switching. Only very high taxes — over $75 per ton of carbon — produced significant emissions reductions.

Natural gas case. China currently uses very little natural gas for power generation. For change to occur, the government would need to establish new policies and reforms to increase the availability of natural gas. This scenario simulates the impact of policies to boost gas use in the power sector. Increased availability of low-cost natural gas in the power sector — combined with improved turbine efficiency and a $300 fee per ton of sulfur dioxide emissions — could cut carbon and sulfur dioxide emissions by about 14 and 35 percent, respectively, from the baseline. Natural gas power in this scenario is cheaper than coal-fired power only along the coastal regions (where coal is relatively expensive), but gas would need to be available for $3 per gigajoule. This value is lower than some forecasts, but still higher than gas prices in Europe and North America. The power sector would consume approximately 65 billion cubic meters of gas, accounting for roughly half of China's total gas demand in 2015.

Clean coal case. A set of scenarios tested the effect of reducing the cost of advanced coal technologies such as integrated gasification combined-cycle (IGCC) or pressurized fluidized bed combustion (PFBC) to help them capture additional market share relative to the baseline. A 40 percent reduction in capital costs for IGCC and PFBC, combined with a mid-level sulfur dioxide emissions fee of $300 per metric ton, would reduce carbon dioxide and sulfur dioxide emissions by 9 and 75 percent, respectively. However, approximately $140 billion in additional investment — perhaps through international cooperation on technology transfer and clean development — would be required to subsidize the cost of building these plants.

Efficiency scenario. This scenario tested the effect of reducing electric power use by 10 percent compared to the baseline. Such a reduction would lower carbon and sulfur dioxide emissions by 19 percent and 13 percent, respectively, in 2015, and save $55 billion in investment and fuel costs by postponing the need for 52 gigawatts of coal-fired generation capacity. The analysis did not consider the required policies or costs to lower power demand.

These scenarios revealed two important findings:

1. Policy options exist to reduce carbon emissions substantially in the Chinese power sector at relatively low incremental cost. Emissions reductions of more than 10 percent compared to projected baseline emissions in 2015 can be achieved for less than 5 percent of the total cost of power. Continued improvement in demand-side efficiency is a particularly attractive option to lower carbon emissions.

2. Not all of these reductions will be achieved for reasons that are in China's own interest, such as reducing sulfur dioxide emissions. Consequently, cooperation with other countries would be required to achieve more dramatic results.   

Guo Yuan
Jeffrey Logan
Shi Yingyi
William Chandler
Zhou Dadi
0

Press Release: Climate Change Conference Reveals Innovation and Progress

For Immediate Release :
April 25, 2000

Contact: Katie Mandes (703-516-4146)
             Kelly Sullivan (202-289-5900)

Climate Change Conference Reveals Innovation and Progress Across The Private Sector Worldwide and In Many Governments

WASHINGTON, D.C. — The opening of a two-day international conference today, sponsored by the Pew Center on Global Climate Change and the Chatham House/Royal Institute of International Affairs, served as a showcase for many of the most far-reaching innovations that businesses and governments are undertaking to address the challenge of global climate change.

"In the United States, climate change policies have been hotly debated but little action has been taken," said Eileen Claussen, President of the Pew Center on Global Climate Change. "Fortunately, there is substantial progress being made — by governments abroad, businesses here and around the world and by state and local governments here at home."

To complement the conference, the Pew Center on Global Climate Change also is publishing a special supplement on climate change in tomorrow's Washington Post. Significantly, the piece includes statements by 13 Chief Executive Officers (CEOs) of some of the world's leading companies, all members of the Pew Center on Global Climate Change's Business Environmental Leadership Council (BELC), acknowledging that climate change is a real problem that demands action by the public and private sector.

Among these statements are:

"Enron supports market-based initiatives that create efficient, cost-effective and environmentally sound energy systems," says Dr. Kenneth L. Lay, Chairman and CEO, ENRON. "As a company, we are taking steps to provide the world with clean energy solutions and implementing systems to manage greenhouse gas emissions. Our belief in the synergies between state of the art energy management practices and sound environmental policies have translated into effective pre-construction measures for our new headquarters building, which we expect will save $10 million and reduce greenhouse gas emissions by 34,000,000 lbs (or 17,000 tons) per year."

"Technology and innovation move us forward as people on earth," says George David, Chairman and CEO, United Technologies Corporation. "Environmentally benign fuel cells, built by United Technologies for every American space mission ever, may be the next great innovation to power our cars and our homes. A concerted public and private effort will make huge reductions in global climate change impacts for our nation and our world. All we need is the will."

Additional statements by the following CEOs are included in the supplement:

Göran Lindahl, President and CEO ABB Group, Dr. E. Linn Draper, Jr. Chairman of the Board, President and Chief Executive Officer American Electric Power, Harry M. Jansen Kraemer, Jr. Chairman and Chief Executive Officer Baxter International Inc., Ralph Peterson President and Chief Executive Officer CH2M Hill, Charles O. Holliday Chief Executive Officer DuPont, J. Wayne Leonard Chief Executive Officer, Entergy, Paul A. Yhouse President and CEO Holnam Inc., Robert D. Glynn, Jr. Chairman, CEO and President PG&E Corporation, Tag Taguchi, President, Toyota Motor North America, David R. Whitwam Chairman and CEO Whirlpool Corporation, Steven R. Rogel Chairman, President and CEO Weyerhaeuser Company Profiles.

Also included in the supplement are examples from these corporations highlighting their actions to mitigate climate change. Some examples include:

BP Amoco
BP Amoco believes in adopting a precautionary approach to climate change. BP Amoco intends to reduce its greenhouse gas emissions by 10 percent of 1990 levels by 2010 and has implemented a greenhouse gas emissions trading system across all its businesses to achieve this target cost effectively. Its portfolio of activities includes collaboration in research and policy development, growing its solar business and promoting flexible market instruments.

DuPont
By 2010 DuPont intends to reduce global carbon equivalent greenhouse gas emissions by 65 percent and hold energy use flat - in both instances using 1990 as a base year. The company also plans to be using renewable resources for ten percent of global energy use by 2010.

Featured speakers at the conference include:

  • John Prescott, Deputy Prime Minister, United Kingdom
  • Jan Pronk, Minister of Housing, Spatial Planning and the Environment, The Netherlands
  • Robert Hill, Minister for the Environment and Heritage, Australia
  • Theodore Roosevelt, IV, Managing Director, Lehman Brothers, Inc.
  • Rodney Chase, Deputy Group Chief Executive, BP Amoco

T he Pew Center was established in May 1998 by the Pew Charitable Trusts, one of the nation's largest philanthropies and an influential voice in efforts to improve the quality of the U.S. environment. The Pew Center is conducting studies, launching public education efforts, promoting climate change solutions globally and working with businesses to develop marketplace solutions to reduce greenhouse gases. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

The Pew Center includes the Business Environmental Leadership Council, which is composed of 21 major, largely Fortune 500 corporations working with the Center to address issues related to climate change. The companies do not contribute financially to the Center, which is solely supported by charitable foundations.

More information on climate change and the Pew Center on Global Climate Change, can be found at www.c2es.org.

Innovative Policy Solutions to Global Climate Change Conference

Promoted in Energy Efficiency section: 
0

April 25-26, 2000 - Washington, D.C.

This conference featured high-level speakers presenting innovative policy measures being implemented by industrialized country governments and the private sector. Conference topics were common policy approaches (taxes, trading, negotiated agreements), cross-cutting issues (competitiveness and trade), energy and transportation sector policies, and state and local programs.  A conference summary is available in PDF format.

Featured speeches are available in PDF format:

  • John Prescott, Deputy Prime Minister, United Kingdom
  • Jan Pronk, Minister of Housing, Spatial Planning and the Environment, The Netherlands
  • Robert Hill, Minister for the Environment and Heritage, Australia
  • Theodore Roosevelt, IV, Managing Director, Lehman Brothers, Inc.
  • Rodney Chase, Deputy Group Chief Executive, BP Amoco

Conference Press Release

Hosts:

The conference was co-hosted by the Pew Center on Global Climate Change and the Chatham House / Royal Institute of International Affairs (RIIA), a leading institute for the analysis of international issues, based in London. The Royal Institute of International Affairs (RIIA), also known as Chatham House, is a leading institute for the analysis of international issues. Founded in 1920 in London, RIIA stimulates debate and research on political, business, security, and other key issues in the international arena, such as energy and environmental policy issues, primarily through its research, meetings, conferences, and publications. Visit http://www.riia.org for more information.

Roundtable Sponsors:

The Developing Country Perspectives Roundtable was co-sponsored by the Pew Center and the Shell Foundation Sustainable Energy Programme. The Sustainable Energy Programme (SEP) is the major grant-making programme of the Shell Foundation, both of which will be formally launching on June 5th, 2000. SEP provides grants to groups working in the public interest on projects that tackle two fundamental energy-related issues: the environmental impact of our dependence on fossil fuels, and the link between energy and poverty in developing countries. More information can be found at www.shellfoundation.org.

Developing Countries & Global Climate Change: Electric Power Options in India

Developing Countries & Global Climate Change: Electric Power Options in India

Prepared for the Pew Center on Global Climate Change
October 1999

By:
P.R. Shukla, Indian Institute of Management, Ahmedabad
William Chandler, Battelle, Advanced International Studies Unit
Debyani Ghosh, Indian Institute of Management, Ahmedabad
Jeffrey Logan, Battelle, Advanced International Studies Unit

Download Entire Report (pdf)

Foreword

Eileen Claussen, Executive Director, Pew Center on Global Climate Change

The electric power sector in India is characterized by low per capita energy use, rapid growth in demand, heavy losses in transmission and distribution, and tariffs well below average costs. Coal dominates usage, which combined with hydropower represents 85 percent of generated power. The power sector is responsible for half of India's carbon dioxide emissions, which were 92 million tons in 1995. Even with the prospect of market and industrial reforms, the 'business-as-usual' path for India in 2015 increases both generating capacity and carbon dioxide emissions by around 150 percent over 1995 levels. But the scenarios modeled in this study show that growth in emissions can be reduced to only 60 percent greater than 1995 if progressive sustainable development policies are implemented.

What are the drivers that will influence future technology choices in India?

  • The ability of India's power producers to fuel-switch and lower carbon dioxide emissions is heavily dependent on the availability and cost of alternative fuels (especially natural gas). In the scenario simulating stricter local environmental controls, this restriction steers decision-makers to sulfur control equipment and does not necessarily lead to reductions in coal use. On the other hand, striving to attain sustainable development goals can reduce costs and capacity needs, and achieve the most dramatic reductions in carbon dioxide emissions.
  • Market reforms can lower costs by 11 percent and carbon emissions by 7 percent through a reduction in the need to build more power plants through increased supply efficiency and earlier availability of new technologies.
  • More widespread adoption of cost-effective energy efficiency measures could also reduce carbon emissions by 23 percent and sulfur dioxide emissions by 60 percent, by reducing demand for power by around 15 percent.

Developing Countries and Global Climate Change: Electric Power Choices in India is the third in a series examining the electric power sectors in developing countries, including four other case studies of Korea, China, Brazil, and Argentina. The reports findings are based on a lifecycle cost analysis of several possible alternatives to current projections for expanding the power system.

The Pew Center was established in 1998 by the Pew Charitable Trusts to bring a new cooperative approach and critical scientific, economic, and technological expertise to the global climate change debate. The Pew Center believes that climate change is serious business and a better understanding of circumstances in individual countries helps achieve a serious response.

Executive Summary

Electricity consumption in India has more than doubled in the last decade, outpacing economic growth. The power sector now consumes 40 percent of primary energy and 70 percent of coal use. This sector is the single largest consumer of capital, drawing over one-sixth of all Indian investments over the past decade. Despite these huge expenditures, electricity demand continues to outstrip power generating capacity, leaving a 12 percent electricity deficit and a 20 percent peak power shortage.

The government has assumed the predominant role in electricity supply in the post-independence era. State electricity boards (SEBs) and power corporations plan and govern power plants financed with state funds. SEBs in particular are wide open to political influence and tariff distortions. Operational inefficiencies grew in the absence of competition and financial discipline, undermining the power sectors financial health. By the early 1990s, the sector was overdue for sweeping reforms to enhance revenues and mobilize investment in the short run, and to change ownership and the regulatory structure in the long run. Reforms underway fall broadly into the categories of SEB corporatization, privatization of power corporations, unbundling (vertical divestiture), and regulatory restructuring.

Despite enhanced competition from other fuels, coal remains the mainstay of power generation in India. The present power technology mix relies on domestic coal to provide three-fifths of the countrys power; large hydroelectric dams provide about one-quarter. Gas-fired power has grown from almost nothing to one-twelfth of total generation in the last decade due to the reduced risk associated with lower capital requirements, shorter construction periods, diminished environmental impacts, and higher efficiencies. Nuclear power contributes less than 3 percent to total generation and renewables (other than large hydro) just over 1 percent. India has a significant program to support renewable power, exemplified by wind power capacity that rose from 41 megawatts in 1992 to 1,025 megawatts in 1999.

Power transmission and distribution has suffered from losses amounting to over one-fifth of generated electricity, more than double the level of most countries. An institutional restructuring process began in 1989 to consolidate various suppliers and distributors under an agency called "Powergrid." Faced with unreliable power supply, many industries have invested in on-site power generation that now accounts for 12 percent of total capacity.

The phenomenal rise in agricultural electricity consumption is due to greater irrigation demand by new crop varieties and the very low price of electricity provided to that sector. The average electricity tariff in India is 20 percent below the average cost of supply. The gap is mainly due to subsidized rates for agriculture. Industrial consumers pay higher costs and provide a cross-subsidy that was worth over US$5 billion in 1997, equal to almost half of power sector investments that year.

Concerns about the environmental impacts of power plant projects have grown in the past twenty years. The power sector contributes about half of Indias carbon, sulfur, and nitrogen oxide emissions. Hydroelectric projects also have generated social concerns. Dam construction has forced the relocation of many Indians, a problem the government has handled poorly. Managing environmental and social impacts has therefore drawn considerable attention in policy-making, project development, and operations. 

Debyani Ghosh
Jeffrey Logan
P.R. Shukla
William Chandler
0
Syndicate content