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THE NEW CLIMATE ECONOMY: OPPORTUNITIES FOR INDIAManish BapnaExecutive Vice PresidentWorld Resources Institute

Left photo: Flickr: DFIDTop right photo: Asian Development BankBottom right photo credit: GuoZhongHua / Shutterstock.com

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A different growth pathway

CARBON BUBBLE

TODAY

LIMITS TOGROWTH

Growth performance

Good

Bad

Bad GoodClimate performance

NEW CLIMATE ECONOMY

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The New Climate Economy Project

Commissioned by 7 countries: Colombia, Ethiopia, Indonesia, Norway, Sweden, South Korea, United Kingdom

Led by a Global Commission: 28 former heads of state, CEOs and heads of international institutions. Chaired by Felipe Calderon, former President of Mexico

Overseen by an Economic Advisory Panel of 14 world leading economists, chaired by Professor Lord Nicholas Stern

Delivered by 8 research institutes:

Global Reports

Country Case Studies, including India

Contributions from 120+ organisations

(Managing Partner)

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Members of the Global Commission

Jean Pascal TricoireCEO, Schneider

Electric

Felipe Calderón(Chair)

Former President, Mexico

Ingrid BondeCFO and Deputy CEO, Vattenfall

Sharan BurrowGeneral Secretary, International Trade

Union Confederation

Chen YuanFormer Chairman,

Chinese Development Bank

Helen ClarkAdministrator, UNDP

Luísa DiogoFormer Prime

Minister, Mozambique

Dan DoctoroffFormer President

and CEO, Bloomberg

S. (Kris) GopalakrishnanCo-founder, Infosys

Angel GurríaSecretary General,

OECD

Chad HollidayChairman, Royal

Dutch Shell

Sri Mulyani IndrawatiManaging Director and

COO, World Bank

Caio Koch WeserVice Chairman, Deutsche Bank

Ricardo LagosFormer President,

Chile

Michel LièsCEO, Swiss Re

Trevor ManuelFormer Finance

Minister, South Africa

Takehiko NakaoPresident, Asian

Development Bank

Eduardo PaesMayor, Rio de

Janeiro

Annise ParkerMayor, Houston

Paul PolmanCEO, Unilever

Nicholas Stern (Co-Chair)IG Patel Professor at the

London School of Economics and Political Science

Zhu LevinFormer CEO, China International Capital

Corporation

Maria van der HoevenExecutive Director, International Energy

Agency

Ngozi Okonjo-IwealaFormer Minister of Finance, Nigeria

Naina Lal KidwaiChairman, HSBC

India

Suma ChakrabartiPresident, EBRD

Kristin Skogen LundDirector General, Confederation of

Norwegian Enterprise

Christian Rynning-Tønnesen

CEO, StatKraft

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Main findings of Better Growth, Better Climate: The New Climate Economy Report

• Economic growth and climate mitigation can be achieved together. We do not need to choose.

• A growing number of businesses, cities and countries are demonstrating this. Recent technological and policy developments mean that even more opportunities are available today.

• About US$90 trillion will be invested in infrastructure to 2030 – need to choose if it is low-carbon and climate resilient. Low-carbon would not cost much more, and fuel savings could fully offset additional investment costs.

• But if we lock-in the wrong path, we risk significant economic and social impacts of climate change. Need to act urgently.

• There are multiple economic benefits of action, e.g. reduced health costs from air pollution, less congestion & road deaths, enhanced energy, water and food security. In many cases these will outweigh the costs of action.

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INDIA: PATHWAYS TO SUSTAINING RAPID DEVELOPMENT IN A NEW CLIMATE ECONOMY

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CITIESLAND USEENERGY

RESOURCEEFFICIENCY

INFRASTRUCTURE INVESTMENT

INNOVATION

WIDER ECONOMY

BETTERGROWTH

Critical economic systems and key drivers of growth

SOURCE: New Climate Economy, 2014. Global Commission on the Economy and Climate. Available at: http://newclimateeconomy.report.

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CITIES

Shutterstock: Radiokafka

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Atlanta and Barcelona have similar populations & wealth, but different carbon productivities

Source: LSE research, drawing on data from Atlanta Regional Commission (2014), Autoritat del Transport Metropolita (Area de Barcelona) (2013), GenCat (2013), UCSB (2014), D’Onofrio (2014), based on latest data.

Atlanta’s built-up area

Population: 5.26 millionTotal area: 16,605 km2Urban area: 7692 km2Transport carbon emissions: 6.9 t/CO2 p.c.

ATLANTA

Barcelona’s built-up area

BARCELONA

Population: 5 millionTotal area: 3263 km2 Urban area: 648 km2Transport carbon emissions: 1.2 t/CO2 p.c.

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A range of smart transport systems have taken off in numerous cities worldwide since 2000

Source: Sustainable Transport Adoption Curves, World Resources Institute, Embarq 2013

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Raahgiri Day has spread from one to 40 cities in 3 years with half a million people participating every Sunday

Photo: EMBARQ India

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Half of the world’s most polluted cities are in India

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India’s PM2.5 pollution is exceptionally high even for countries at or near its per capita income level

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Cities Recommendations

• Reform land regulations• Expand and renew urban infrastructure• Reform and strengthen urban local

government

Shutterstock: Radiokafka

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ENERGY

Flickr: DFID

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1995 201020001990 20142005

USD/MWh

Current fossil fuelrange, indicative

Solar PV, historical

Best utility-scaleproject, 2014

Sources: Citi Research 2012; G. F Nemet, “Beyond the learning curve”, Energy Policy 34, 3218-3232 (2006)

The cost of solar PV is dropping fast

Chart1

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Wind and solar power have become cost-competitive in several markets, even without subsidies

Source: REN21 Renewables 2014 Global Status Report; Deutsche Bank Markets Research; IEA 2013 Wind Roadmap.

Chile:First solar plant with no govt. support

U.S. southwest:Solar plant at ~8 ¢/kWh, competitive with coal

South Africa:7 ¢/kWh wind, 30% cheaper than new coal

Brazil:4.5 ¢/kWh wind, cheaper than any other source

Parts of India:Wind at 6-10 ¢/kWh, close to coal at 5-8 ¢/kWh

U.S.Wind at 5-8 ¢/kWh, cheaper than new coal

Wind also reported competitive with coal in Australia, Chile, Mexico, New Zealand, Turkey.

Rooftop solar cheaper than electricity retail rates in at least 11 countries

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India’s fast-rising demand for energy

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India has begun to capitalize on its renewable energy potential

Source: BP 2014; India Ministry of New and Renewable Energy 2014; Lawrence Berkeley National Laboratory

Installed capacity in 2013 remains less than 1% of physical potential

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Off-grid Energy

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Financing costs for solar power eliminate natural cost advantages in India. But innovative new financing models can unlock the potential of renewables

Source: Climate Policy Initiative, 2012. Meeting India’s Renewable Energy Targets: The Financing Challenge. Available from: http://climatepolicyinitiative.org/publication/meeting-indias-renewable-energy-targets-the-financing-challenge/

http://climatepolicyinitiative.org/publication/meeting-indias-renewable-energy-targets-the-financing-challenge/

21Flickr: DFID

Energy Recommendations

• Complete fuel subsidy reforms• Complete electricity sector reforms• Promote energy efficiency standards• Consider fuel taxes to promote a more

efficient fuel mix• Policies to reduce the high cost of

finance for renewable energy

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LAND USE

Shutterstock / Matyas Rehak

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China’s Loess Plateau shows how an agricultural landscape approach can deliver economic and climate benefits

1990 2012

Source: World Bank project completion evaluations of the Loess Plateau Watershed Habilitation Projects I and II, 1999 and 2005.

• In an area of 640,000 sq. km, lifted more than 2.5 million people out of poverty, boosting farm incomes from $70 to $200 pp pa

• Average grain yields increased by 60% over 10 years• Stopped Yellow River silting, reduced air borne dust to Beijing, and increased soil

carbon storage

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Agricultural R&D has a much higher return on investment than agricultural subsidies

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Agricultural R&D is better for poverty reduction too

26Shutterstock / Matyas Rehak

Land Use Recommendations

• Restructure public spending in agriculture

• Scale up forestry initiatives

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Main finding of India: Pathways to Sustaining Rapid Development in a New Climate Economy

Key reforms in energy, cities, and agriculture/forestry policies and institutions can unlock more rapid economic growth and improved welfare while tackling many of the unwanted national side-effects of the existing model of growth, such as severe air pollution, stress on water resources, rising energy insecurity and growth urban sprawl. Such reforms also provide important climate-co benefits by mitigating greenhouse gas emissions and climate risks.

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The ParisAgreement

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Thank you

Manish Bapna (mbapna@wri.org) Executive Vice PresidentWorld Resources Institute@ManishBapnaWRI

Please visit www.newclimateeconomy.report to read the New Climate Economy reports, contributing working papers and country case studies.

Follow us on Twitter at: @NewClimateEcon

mailto:mbapna@wri.orghttp://www.newclimateeconomy.report/

Slide Number 1A different growth pathwaySlide Number 3Members of the Global CommissionMain findings of Better Growth, Better Climate: The New Climate Economy ReportSlide Number 6Critical economic systems and key drivers of growthSlide Number 8Atlanta and Barcelona have similar populations & wealth, but different carbon productivitiesA range of smart transport systems have taken off in numerous cities worldwide since 2000Slide Number 11Half of the world’s most polluted cities are in IndiaIndia’s PM2.5 pollution is exceptionally high even for countries at or near its per capita income level Cities Recommendations Slide Number 15The cost of solar PV is dropping fastWind and solar power have become cost-competitive in several markets, even without subsidiesIndia’s fast-rising demand for energyIndia has begun to capitalize on its renewable energy potentialSlide Number 20Financing costs for solar power eliminate natural cost advantages in India. But innovative new financing models can unlock the potential of renewablesEnergy RecommendationsSlide Number 23China’s Loess Plateau shows how an agricultural landscape approach can deliver economic and climate benefitsAgricultural R&D has a much higher return on investment than agricultural subsidiesAgricultural R&D is better for poverty reduction tooLand Use RecommendationsMain finding of India: Pathways to Sustaining Rapid Development in a New Climate Economy Slide Number 29Thank you