India one of the least Carbon Intensive Countries in the World: McKinsey Reports

The India’s stand that the current climate change negotiations under the auspices of UN Framework Convention on Climate Change (UNFCC) are being skewed in favor of of the industrialized nations got another shot in the arm this week. Purported pre-release of a McKinsey report projects that India will continue to be one of the LEAST Carbon Intensive countries in the world despite an economic growth rate of 7.5%. This second endorsement follows the recent report  by the World Bank saying that India is right in resisting the mandatory emissions reduction.

Picture: A Coal Man in Mysore (India)

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The carbon intensity, also called per capita annual emissions, is a measure of how much carbon equivalents (CO2e) are emitted per capita of GDP. The inverse is the metric called carbon productivity which is the amount of GDP product per unit of carbon equivalent. These metrics capture the balance required for the general consensus in the climate change community that the stabilization of the amount of greenhouse gases (GHGs) should be achieved while maintaining economic growth. In order to meet an emissions target of 20 Gigatons per year (a maximum level that can be allowed without significant warming risk to the climate, according to many experts), the carbon productivity will have to increase from the $740 GDP per ton of C02e to $7300 GDP per ton of CO2e by 2050.

Last year the carbon intensity (tons of CO2e per USD 1000) of United States and Russia was 21.5 and 15.9 respectively compared to the values of  5.7 and 1.9 for China and India respectively. According to McKinsey the World’s sustainable carbon intensity average should be around 2.2. And this is where the disagreement between the stands, with respect to setting of emission reduction standards, of the developed and developing countries is. While industrialized nations are pushing for more carbon-abatement commitment from countries such as India and China, there is a push-back from the developing countries to limit the carbon-abatement costs. The McKinsey is one of the pioneers in the field of carbon abatement cost curves. According to the preliminary results from the report, India will have to incur the cost of hundreds of billions of dollars to cut emissions beyond the energy efficiency and other current activities. It is estimated that more than 80% of the opportunity to reduce emissions in India is very difficult to implement or will pay less in returns than the implementation cost.

Also India is worried that aggressive setting of emission reductions by UNFCC will impact the programs to alleviate its poor requiring more power consumption and at the same time provide for sanitation and water to all. A recent WorldBank report provided evidence that it will not be possible for India to stabilize its GHG emissions by 2030 without continuing to keep its citizens in poverty.  Though the Indian poverty alleviation programs will results in increased GHG emissions (upto 3.5 times the 2007-08 levels by 2031-32), it is not to support the developed country lifestyle and consumption pattern but merely to provide basic energy services to the poorest one thirds of the population. Specially, given the heavy dependence on coal-operated power plants, for electricity generation, that are significant contributors to GHG emissions in India. The WorldBank report endorses the 11th Plan of the Indian government as the best low carbon plan that could be adopted with current set of technologies and growth requirements.

The negotiation draft that will form the starting discussion document for coming up with the post-2012 global climate change policy regime at UN Conference on Climate Change in Copenhagen (December’09) was recently released by UNFCC.  And already salvos are being fired about how it is biased towards the industrialized nations. The reports from WorldBank and McKinsey will definitely strengthen the case being made by India, for itself and other developing countries.  But as experts point out, the assumptions made by the McKinsey report about the low costs of future technologies and existing energy sources being able to support high economic growth still need to verified first.

Once again appeal to all involved parties for adopting a truly global perspective on the new climate change policy regime – an “us approach”— and arriving at a widely acceptable median, instead of engaging in this tug-of-war for emissions reduction between the developed and developing countries,

 Picture: A Coal Man in Mysore (India) courtsey: Adam Cohn via Flickr under Creative Commons License.

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