Low Carbon Development in South Asia: Challenges, Prospects and Prerequisites

By Raman Mehta and Sudhir Sharma 

Based on the report, “Low Carbon Development in South Asia: Leap Frogging to Green Future” and supported by Christian Aid.

Context: South Asia, which is the most densely populated region in the world, is home to 1.7 billion people, or around 23% of the global population.  The region contributes around 6% of the GHG emissions, the bulk of which emanate from India, which is home to 1.2 billion people. Thus, it could well be argued that South Asia is a region with a relatively low carbon footprint, when compared with, for example, North America, which supports 7% of the world’s population but accounts for 17% of global GHG emissions.

The relatively lower emission footprint of the region, however, is primarily because South Asia is home to 52% of the world’s poor, more than in Africa.  Income poverty in South Asia is another manifestation of deprivation.  For example, of the 2.6 billion people without sanitation in the world, one billion live in South Asia.  Further, income poverty is exceeded by energy poverty.  Thus, sustained economic development is a necessity to address poverty and usher in decent levels of living standards for South Asia’s people.  The challenge is to achieve this in a manner that the global goal of limiting the rise of temperatures to below 2 degrees Celsius can also be met.

The challenges: economic growth, poverty and climate change

Poverty and Economic deprivation: Over the past decade, south Asia’s economic growth rate increased by an average 7.9% per year. That rate faltered slightly, to just under 5% in 2013, but the prospects for 2014 and beyond look brighter. Yet South Asia, comprising India, Pakistan, Bangladesh, Sri Lanka, Nepal and Bhutan, remains the world’s poorest region. Around 30% of the people in South Asia live below $1.25 PPP a day. More people live in poverty in eight Indian states than in the 26 poorest African countries. The literacy rate is 66%, and only 39% of the population have secondary or higher education. The infant mortality rate is high, and around 40% of the children who do survive are malnourished.

This situation is untenable and has to change.  This in turn requires the South Asian region to pursue economic and social development at a faster and more inclusive rate than has been the case thus far.

Economic Growth and GHG emissions: The challenge that governments from all developing countries face in lifting people out of poverty, is creating the necessary infrastructure to provide health and education, sanitation, clean water, food security and employment. A prerequisite to achieving such goals, however, is the provision of clean, modern energy. Lights, refrigerators, computers, pumping plants, and industrial machinery are all needed in a functioning modern society – but they come at a cost which is not just financial. The progress made in South Asia so far has been built on energy systems which depend on fossil fuels.

The global and South Asian economic development paradigm, however, is still largely built on fossil fuels. Continued reliance on fossil fuels for economic development and growth means that the world cannot achieve the goal to limit average temperature rise to below 2 degrees Celsius from pre-industrial levels by 2050.  At the same time, the quest for economic development and not just alleviating poverty but ushering in prosperity cannot be compromised.  South Asia thus faces a Hobson’s choice: it must either develop along a trajectory that allows it to shake off its dependence on fossil fuels, or face a future filled with extreme climate risks that would wipe out any gains of economic development that may accrue due to a fossil-fuel dependent growth trajectory.

Accordingly, South Asia must find ways to rapidly increase the share of renewable energy in its total energy mix, and walk away from the highly polluting coal, which provides the bulk of its energy requirements.  And all this must happen while delivering fast, sustainable, inclusive and equitable economic development, designed to meet most post-2015 Sustainable Development Goals, by 2030.

While it is entirely possible that, with the right financial and technical support, countries in the South Asian region could ‘leapfrog’ from the business as usual dependence on the use of fossil fuels as they develop, many challenges remain.  This is not to say, however, that there are no opportunities.

Climate Change Impacts and Adaptation: According to the Intergovernmental Panel on Climate Change’s (IPCC), one of the most vulnerable regions to the changes in the global weather systems that will ensue if we fail to keep the global temperature rise to less than 2⁰C – the point beyond which scientists predict climate chaos –  will be South Asia.

Rising sea-levels will swamp low-lying areas, drought will blight large parts of the globe, crop production in many countries will collapse, and tropical diseases will spread farther.

The IPCC’s 5th assessment shows that unless dramatic action is taken to stem such greenhouse gas emissions (GHGs), the bulk of which come from the use of fossil fuels – coal, oil and natural gas – in generating power, the map of the world by the end of the century will look very different, and human existence for many will be a good deal harder.

Renewable future

Today, developing countries, fully accept that they have a role to play in cutting GHGs, but understandably, insist that they should not be robbed of the chance of development.

South Asia has a largely untapped abundance of renewable energy. There is enough renewable power in the region to deliver its energy needs.  Geothermal (harnessing the heat that emerges at the earth’s surface through geological faults), small-scale hydro, as well as solar, wind, tidal and local biomass fuels, including agricultural wastes, all offer the prospect of unlocking economic growth without adding to the planet’s problems.  For example, South Asia has abundant solar resources, with an estimated potential in the range of 600,000 GW[1]. Similarly it has significant wind potential: 48 GW in India; 4.6 GW in Bangladesh; 122 GW in Pakistan. Further, the region has significant geothermal (10 GW in India) and small hydro potential.  This is significant when compared to the total existing, largely fossil fuel based, installed electricity capacity in the region of about 255GW.

This potential is being tapped by the nations of South Asia. Thus India has set a goal of establishing 22 GW of solar capacity by 2022, while Bangladesh has a target of producing 5% of its electricity from renewables by 2015. Pakistan plans to develop 3 GW of wind capacity in the medium term and Nepal plans to to increase the share of renewable energy from less than 1% to 10% of the total energy supply and to increase access to electricity from alternative energy sources from 10% to 30% by 2032. Sri Lanka plans to increase the share in grid energy supply from nonconventional renewable energy sources to 20% by 2020. More, however, needs to be done to prevent dangerous climate change.

The key challenge in increasing the penetration of renewable energy, is finance. There are no specific South Asian estimates of increasing the penetration of renewable energy. The estimated cost, however, of India’s climate change missions, of which solar mission is one, is approximately $84.65 billion spread over 10 years (India’s 2013-14 central government planned expenditure is approximately 96 billion USD). The International Energy Agency (IEA) estimates that delivering the Sustainable Energy for All (SE4ALL) goals by 2030, the investment required for providing 100% electrification to everyone in India alone, would be US$135 billion during the period 2010–2030. Although some of these costs can be realised from the diversion of investments from conventional fossil fuel driven energy towards Renewable Energy, a considerable finance gap still remains.

Recommendations – overcoming the barriers to a low-carbon future

A transition towards Renewable Energy requires global political will and the following actions that must be agreed upon immediately:

  • Global climate deal: Governments need to set credible and stringent clean energy targets and goals, within a fair and ambitious global climate deal.
  • Regional technology sharing and innovation: Achieving ambitious cuts in emissions and accelerating green growth will require the development and diffusion of carbon-efficient technologies. Regional cooperation in knowledge sharing, energy development and trade will be essential.
  • Incentivise private sector investment: Developing country governments place too low an importance on low carbon technologies, while private sector investors balk at such involvement, not least because of the high start-up costs. Innovative finance mechanisms and policies are needed to reduce the risks perceived by mainstream lending institutions in cleaner technology investments and to enhance their capacity to finance low-carbon technologies and resource options.
  • International finance: The major obstacle to exploiting renewable energy reserves is finance. The support offered by developed countries to help poorer countries fight climate change, the report says, is totally inadequate, and not linked to what is actually needed, or where it is most urgently required. For that reason the report proposes the establishment of a ‘leapfrog fund’ from global mitigation finance to support South Asia move towards a low carbon economy. The Green Climate Fund, established by the United Nations Framework Convention on Climate Change should include a dedicated window for this purpose.
  • Shift subsidies from fossil fuels to energy access: fossil fuel subsidies, which in 2011 were almost seven times higher than the support for renewable energy, should be phased out. Instead support should be given to deliver energy directly to the energy poor to deliver sustainable energy access for all.

South Asia must embrace a Renewable Energy future in order to develop sustainably.  South Asia, however, needs the rest of the world, especially the developed world, to also take up the gauntlet and move towards an era of global cooperation at a scale that has never been achieved.  The alternative is global chaos and destruction.

[1] Calculation based on the solar insolation and available amount of land (roughly one sq. km is required for around 40 MW).

About The Authors:

Sudhir Sharma is a Senior Climate Change Specialist at the UNEP Risø Centre with over 15 years’ experience in Climate and Sustainable Development in developing countries, Sharma comes from an engineering background and a PhD in Development Economics. His work has focused on mitigation issues in developing countries in the context of sustainable development. He has over 10 years’ experience in the Clean Development Mechanism (CDM) working both in developing projects and developing methodologies. His present work at URC is focused on NAMAs, both, in terms of supporting capacity development in developing countries as well as analytical work on creating a better understanding of NAMAs. He is presently coordinating the country work on assisting seven countries in developing NAMAs.

Raman Mehta is an unaffiliated consulting professional based in New Delhi.  He has worked on issues related to climate and energy both from the perspective of the international negotiations as well as from a domestic Indian perspective.  He has also extensively worked on issues relating to management of natural resources, governance, equity and socio-political marginalisation.