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Energy Intensive Sectors of the Indian Economy: Options for Low Carbon Development

December 11, 2009

At Copenhagen

December 11, 2009 - At the Government of India’s request, the World Bank today presented some draft findings from its forthcoming study, Energy Intensive Sectors of the Indian Economy - Options for Low Carbon Development, at Copenhagen.

World Bank Presentation at Copenhagen

The study, commissioned by the Government of India in 2007, looks at five sectors of the Indian economy that accounted for three-quarters of India’s CO2 emissions from energy use in 2007 – power generation, energy-intensive industries (including iron and steel, aluminum, cement, fertilizer, refining, and pulp and paper), road transportation, commercial buildings and residential housing. It presents three carbon emission scenarios, outlining the different growth paths that India could follow from 2007 to 2031 -- the end of the Fifteenth Five Year Plan.

Draft findings that were presented at Copenhagen

- The study says that India’s carbon intensity – a measure of carbon emissions per unit of GDP -- is likely to decline until at least 2031, but the rate of decline will be determined by the country’s efforts to maximize domestic sources of renewable energy and implement energy efficiency measures. Based on the current Five Year Plan and Integrated Energy Policy, the carbon intensity of the five sectors studied is set to improve by 19% by 2020 (33% between 2005 and 2031) but could improve by as much as 30% by 2020 (45% by 2031) with an all-out effort on the technical, financial and institutional fronts to reduce carbon emissions, at existing technologies.

- The rate of decline of carbon intensity will depend on the timing and effectiveness of investments in hydropower and other clean energy resources; reduction of transmission and distribution losses in the power sector; modernization of energy-intensive industry; and greater use of sustainable transport and energy-efficient household appliances. These green measures come with large up-front costs, the study says, but can be recovered in the long-term by lowering operating costs.

- In order to achieve the largest possible improvement in carbon intensity, India will have to make an all-out effort to invest in nuclear and emerging technologies such as concentrating solar power, and consider regional energy trade. However, solar power has yet to be deployed on a large scale anywhere in the world, and it still costs more than four times conventional coal-fired generation.

- Though India is ranked among the top 10 emitters, the study says the Indian economy currently has a relatively low carbon footprint. In 2007, its carbon emissions from fossil fuels were 1.2 metric tons per capita -- small compared to the global average of 4.4 metric tons -- and its carbon intensity was on par with the global average.

- Under all scenarios sketched out in the study, consumption in India is projected to remain relatively frugal. Even the richest third of urban Indian households in 2031 will be consuming only one-third of the average electricity consumed in the European Union today and the number of Indians owning cars in 2031 (86 per 1000) will be significantly fewer than the number of car owners in high-income countries today (300-765 per 1000).

Additional resources

South Asia Climate Change Program

Kathmandu to Copenhagen: A Regional Climate Change Conference

Emissions and Pollution in South Asia
This database include maps, charts and data tables. The information builds on a collection of data from the World Development Indicators.

World Bank Program in South Asia
Launching pad to all information on World Bank activities in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.