New Delhi, 02 Nov 2015: India’s energy emissions rose at 8.2% on-year in 2014 – highest in the world, driven by a double-digit growth in demand for coal, as power consumption increased in line with the rapid 7.4% growth in GDP.
Global emissions rose just 0.5%, albeit on a much lower world GDP growth of 3.3%.
The country’s carbon intensity grew 0.7%, as renewable energy adoption remained slow. However, its share in India’s energy mix remained unchanged at 7%, despite high growth in coal-fired power generation. By comparison, global carbon intensity fell 2.7%, recording steepest decline in seven years of the PwC analysis. India’s carbon intensity, despite rising in 2014, is about half that of China, and is still less than the global average.
These observations are part of PwC’s seventh annual Low Carbon Economy Index which models major economies’ carbon intensity – the measure of energy related greenhouse gas emissions per million dollars of GDP.
India has taken several steps to control emissions and carbon intensity, including stringent emission standards, nationwide energy conservation programme, a recent four-fold increase in carbon tax, establishing smart cities, and building additional forest cover.
Arvind Sharma, Executive Director, Sustainability, PwC India said, “India’s Intended Nationally Determined Contribution (INDC) unveiled ambitious 2030 plan. There is a strong focus on renewable energy, energy efficiency, smart cities and stringent emission standards for coal fired power plants among others. With this ambitious plan which cuts across thematic areas ranging from mitigation to adaptation, we believe that India is in a good position to access low cost finance and clean technology.”
Over a longer period, India has reduced its carbon intensity by 1.4% per year between 2000 and 2014. Its rate of reduction in carbon intensity is slightly better than the global average of 1.3% per year during 2000-2014.
However, that’s short of the targeted 2.1% yearly reduction by 2030, as outlined in its Intended Nationally Determined Contribution (INDC) plan, in the lead up to Paris. India committed to reduce its carbon intensity by 33%-35% by 2030, from 2005 levels, in its INDC plan.
Being the 4th largest emitter and expected to be the world’s fastest growing major economy, India’s carbon intensity management will play an important role in determining world’s ability to limit the global temperature rise to 2°C by the year 2100.
Coal and oil are large parts of India’s energy consumption and GDP growth is expected to slow. This will make it hard for India, but it has still left a large gap between its target and the decarbonisation rate needed to achieve the target of limiting warming to two degrees.
The global carbon reduction of 1.3% per year in 2000-2014 also fell short of the 3% annual cut needed as per the Paris target. Moreover, globally, carbon intensity needs to be cut 6.3% per year, far more than the 3% Paris target, if the warming is to be limited at 2 degrees.
As per the report, despite progress by some countries, globally, the target level of reductions in greenhouse gas emissions per unit of GDP has been missed for the seventh successive year.
In the lead up to Paris, governments have submitted targets and plans on how they will tackle emissions. Known as INDCs, these targets imply a global average decarbonisation rate of 3% per year – more than doubling the business as usual rate since 2000. These national plans are expected to drive action in the power, transport and finance sectors.
Many countries have put regulation of coal front and centre of their plans and are setting targets for renewables and low emissions vehicles. A significant shift in investments will be required to achieve these targets and build cleaner coal technology such as carbon capture and storage. The financial services sector will need to mobilise investors and create new financial products that fund and insure these projects. The automotive sector could expect government support into low or zero carbon next-generation vehicles in countries such as Japan and South Korea, or face more stringent fuel efficiency targets in others.
Breaking the link between emissions and economic growth – or ‘uncoupling’ – is essential to avoid the worst impacts of climate change. With less than 50 days to go before Governments meet in Paris to agree how to tackle climate change, the analysis indicates positive signs of ‘uncoupling’.
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