By: Ananth Chikkatur & Sunita Dubey
"With Coal, we have light, strength, power, wealth, and civilization,”
W J Nicolls, a 20th-century American writer, once marvelled. “Without
Coal we have darkness, weakness, poverty, and barbarism.” A century
later, civilisation itself seems to be threatened by the ‘black
diamond’. Although breathing coal’s sulphurous smoke was once
considered healthy in England, it soon became clear that inhaling these
vapours was far from good for the human body. Moreover, it is not just
the coal fumes that are dangerous to human health. It is the invisible,
odourless carbon-dioxide (CO2) gas that results from burning coal that
is now threatening the world – not just human beings, but the entire
Coal, whose reserves are widespread across the globe, today provides about 40 percent of the globe’s electricity, but it has also become something of a black albatross. Similarly, refined crude oil has given us diesel and gasoline – the most energy-dense of liquid fuels – giving humanity the freedom to drive and fly across the globe. Yet, it has become increasingly obvious that our collective addiction to oil has become a geopolitical and environmental nightmare. While fossil fuels have irrefutably defined the modern way of life, countries around the world are now struggling to maintain a certain lifestyle – one made possible by fossil fuels – while not relying on the dirty sources.
Southasia has been no different than the rest of the world in imbibing the fossil-fuel-driven benefits. Commercial coal mining in India began in 1774, led by the British, and the coal-powered railway system built in the region during the colonial era transported goods, people and dreams. The British brought along automobiles with the railways, and Indians quickly fell in love with them in spite of the poor road infrastructure. Although today more Southasians have two-wheelers than cars, the new Tata Nano offers the possibility of making the car more affordable than ever. Yet industrial-scale environmental problems are becoming increasingly apparent to all. Jharkhandis are revolting against the continued coal mining, which has given them little more than lost livelihoods and destroyed forests; dense smog perennially envelopes the Indian capital; children breathe diesel smoke and dust in all large Southasian cities; rapidly receding snowlines are threatening the lives of the hundreds of millions who depend on glacial runoff; and a rising sea is likely to submerge large tracts of Bangladesh.
One of the most significant problems today is the continued reliance on dirty coal-fired power plants, which dominate the Indian power sector. Direct impacts resulting from the construction and ongoing operation of coal power plants include emissions of particulates and hazardous chemicals, pollution of local waterways, and degradation of land used for storing the by-product of burned coal, known as fly ash. The indirect impacts result mainly from coal mining, which includes degradation and destruction of land, water, forests, habitats and societies in general.
Although there are air-pollution regulations in most of the countries of Southasia, the enforcement of these regulations remains problematic. For Indian coal plants, the emphasis has mainly been on particulate emissions. While assessment of environmental impacts and routine monitoring are expected of all power stations, there is little penalty for violating the stated norms. There are provisions in the law that allow for power plants to be closed down for not meeting environmental standards; but such plants have never been shuttered because, as the Central Electricity Authority notes, India “can hardly afford to close any unit in the power starved situation”.
This region, like the world in general, is quite literally being consumed by its insatiable desire for the energy required for accelerating economic growth. Meanwhile, our political leaders are unwilling to make the difficult, but necessary, changes; as such, politics continues to trump the environment, and economic growth remains king. At the same time, those who fervently demand that an economic system completely addicted to fossil fuels simply quit do not take economics and institutional inertia into account when promoting currently expensive technologies such as solar photovoltaic (PV) panels or wind turbines. As a result, even while politicians struggle to maintain the status quo in the midst of impending environmental crises, environmentalists, with few exceptions, seem to be holding little sway in Southasian policy debates.
Yet procuring an energy-secure future for Southasia will involve not only the ability to get access to energy resources. It will also require dealing with a whole spectrum of increasingly pressing environmental and ecological issues, including deforestation, soil erosion, desertification, air and water pollution, carbon emissions, water shortages in cities, and the impacts of climate change such as unpredictable monsoons, severe tropical storms, droughts and floods. Taking on such a range of issues will clearly require input from the full spectrum of stakeholders, large and small.
Red herring of consumption
In general, as countries become richer, energy consumption per capita rises correspondingly, to satisfy increasing demand for energy services from both the industrialisation process and rising living standards. Although there is no fixed or causal relationship, there is a broad correlation between the Human Development Index (HDI) and per-capita energy consumption across countries (see Figure 1). This correlation does not mean that higher energy consumption necessarily adds to human development, but rather that the availability of energy services is an important ingredient for advancing many aspects of human development.
More to the point, as Figure 1 again indicates, it is only for countries with energy consumption below one tonne of oil equivalent (toe) that increased energy consumption offers the possibility of higher development gains. Most developing countries, including all Southasian countries, have very low per-capita energy consumption, and their level of economic and human development is likewise quite low. Hence, it is an inescapable conclusion that, as part of its development process, Southasian energy consumption would have to rise.
A related but important point is that energy consumption by itself also does not increase a country’s gross domestic product in a uniform manner. Figure 2 shows how GDP per capita increases with higher per-capita consumption. In general, GDP does increase with rising energy use but, again, only up to a point. As with HDI, there are several countries with high energy consumption and low GDP (of around USD 15,000 per capita); there are also countries with a wide range of energy consumption, yet whose GDP are all above USD 30,000. The ratio of energy use to GDP is called ‘energy intensity’, and it is an important metric in discussions regarding energy policy. The lower the energy intensity, the better for any country, as this indicates that more economic growth is being achieved with smaller inputs of energy – more bucks for the bang, so to speak. Projections of future growth in energy depend critically on assumptions related to energy intensity.
India is the dominant energy consumer and producer in the region, and its energy-consumption patterns in the future matter significantly in terms of how the region as a whole will cope with its energy requirements. Yet despite being the regional energy giant, total Indian energy usage is quite small compared to China and the US. Respectively, these two consume about three and 4.5 times as much total energy (including biomass, hydropower, etc) as does India. So, in spite of the juxtaposition of China and India in many debates – for instance, in terms of oil consumption and climate change – the latter actually has a significantly smaller footprint than does China.
This is true even in terms of per-capita energy consumption – India has a low 0.5 toe per capita, whereas China’s is 1.3 toe, in spite of both countries having similar sized populations (see Table 1). In general, Southasian countries consume about four to eight times less energy per capita than does the US. Bangladesh has the lowest per-capita energy consumption in Southasia; whereas India, Sri Lanka and Pakistan all have similar consumption rates of about a half-tonne of oil equivalent per person per year.
Although the energy consumption per capita of a country is, on one level, closely linked with its level of economic development, energy use in developing countries has generally been growing faster than in industrialised countries. According to the International Energy Agency (IEA), in terms of total energy consumption, China and India have each experienced a roughly threefold increase since the 1970s. Despite the opportunities held out by increased energy efficiency, there is little doubt that developing countries will need to further increase their total energy consumption to meet their development aspirations. The IEA estimates that global energy demand will grow by almost 60 percent by 2030, and more than two-thirds of this growth will be due to increased demand in developing countries, especially India and China. Nonetheless, even with this enormous growth, by the end of the next two decades developing countries will still likely be consuming only about one-fifth as much as many developed countries on a per-capita basis.
The low per-capita energy consumption in Southasia is primarily due to the fact that a vast majority of the populace does not have access to modern energy sources. Indeed, the region has the largest number of people without electricity relative to the rest of the world (see Figure 3). Nearly one in two Indians does not have access to electricity – a jarring contrast to the ‘Shining India’ and ‘World is Flat’ rhetoric. In fact, in Southasian and Sub-Saharan countries, the ‘energy poverty’ – the inability of their people to access sufficient energy – is one of the reasons for the low levels of development in these regions, as energy depravation has significant health, social, environmental and economic implications.
Throughout the region, most of the energy poor rely on biomass-based fuels, an energy source that comes with its own unique problems. Wood-based stoves (chulas), for instance, are highly inefficient, in addition to being a major source of hazardous chemicals and particulates. Indeed, the World Health Organisation has estimated that indoor air pollution from traditional fuel use in poor households is the sixth-largest health-risk factor in developing countries, accounting for an estimated 1.6 million premature deaths every year. In many ways, indoor smoke inhalation is worse than outdoor urban air pollution, even though the latter issue gets far more policy attention.
The collection of biofuels is also enormously time consuming, and is primarily performed by women and children. Given that the use of wood in traditional cookstoves is very inefficient, large quantities of it need to be collected every day. For example, the World Bank estimates that Nepali women in hilly areas spend more than an hour every day gathering wood; and in areas where wood is scarce, they spend upwards of two and a half hours. The ramifications of this are far-ranging. Children who are condemned to spend hours collecting biomass to support their families often have neither the time nor the energy for education, thus stunting their future possibilities. Women are particularly vulnerable to energy scarcity and environmental damages, thus making the problem not just one of energy economics or technology, but also of social justice.
Finally, use of biomass in rural areas strongly affects the environment. Collection of firewood involves not just the gathering of small twigs and branches, but also cutting down trees, first in local areas and then later in areas farther away. Such denuding of forests is exacerbated under drought conditions. In addition, the large quantities of soot produced by burning of wood have proven adverse effects on climate change. Finally, the use of crop residue and dung for fuel eliminates an important source of nutrients for the soil in societies that rely on agriculture.
When all of these factors are taken together, it is quite obvious that a major challenge in Southasia is ensuring that its large population of energy-deprived masses gets access to clean and affordable energy sources. These need to include electricity, LPG for cooking, and access to mass or personal motorised transport. While the affordability of these cleaner fuels is an issue, without modern distribution systems in rural areas, households cannot access modern fuels even if they can afford them. Thus, efforts to bring improved energy services to the poor have to contend not only with enhancing the supply, but also with setting up programmes and policies that account for the relevant economic, financial, cultural and institutional contexts.
Population and migration
The debate on whether there is an ongoing process of human-induced climate change is finally over, and it is now almost universally accepted that global warming is driven by the accumulation in the atmosphere of heat-trapping (‘greenhouse’) gases resulting from human activities. Carbon dioxide, mostly the product of the combustion of fossil fuels for energy use, is the single largest contributor to the problem. Thus, the climate issue is intimately linked to the use of fossil fuels in the energy sector. The recent data indicates that CO2 levels in the atmosphere now exceed 380 parts per million (ppm) by volume, a significant rise from the pre-industrial concentration of about 280 ppm. (Other greenhouse gases have also shown significant increases in atmospheric concentrations.)
The impact of climate change on water and other natural resources, crop yields, inundation by the sea and the direct consequences on human health, will also exacerbate existing social and environmental problems, and lead to increased migration within and across national borders. Scientists in India have warned that climate change could trigger the mass migration of individuals and their families, primarily because of livelihood loss but also because of direct loss of land and homes as sea-level rise inundates or destabilises coastal regions. Several scientists have challenged the IPCC’s projections of about a half-metre of sea-level rise by the end of the century as an underestimate, on account of its omission of any effect of ice-sheet dynamics. More realistic assessments, which take into account current understandings of business-as-usual conditions, suggest that a three-to-five metre rise in sea levels is not out of the question with a four-to-five degree rise in average global temperatures, which will hasten the break-up of ice sheets in Greenland and Antarctica. In the worst-case scenario, a five-metre sea-level rise would create about 125 million ‘climate migrants’ in Southasia alone, and they would have little or no legal standing under current international law as they cross international borders for sheer survival. In fact, the projected 75 million or so displaced from Bangladesh would be especially vulnerable, even as their entire nation state would face the challenge of land inundation and economic collapse.
In general, the impacts of climate change in developing countries are far more severe than the developed countries. For example, monsoon floods and storms in Southasia during the 2007 season displaced more than 14 million people in India and seven million in Bangladesh. Over 1000 people lost their lives across Bangladesh, India, southern Nepal and Pakistan. Even reported economic losses paint a distorted picture. While over 98 percent of people living in developing countries are affected by climate disasters, calculated economic impacts are skewed towards rich countries. The reason for this is that costs are assessed on the basis of property values and insured losses, which have been rising steeply. All eight of the climate disasters registering more than USD 10 billion in economic damages reported since 2000 took place in rich countries, six of them in the United States. Meanwhile, damages from disasters in developing countries are often not recorded accurately, simply because most people affected do not own properties or have insurance.
Southasia, already one of the most densely populated areas in the world, is also home to some of the fastest-growing cities in the world. The World Bank projects that by 2020, Bombay will be the second-largest city globally, closely followed by Delhi and Dhaka. With the addition of Karachi and Calcutta, five of the world’s 11 megacities will be on the Subcontinent. Any risk associated with climate change will thus put huge populations at risk, in both urban and rural areas. And as estimated by the World Bank, by 2050 the Southasian population is likely to exceed 2.2 billion, from the current level of 1.5 billion. With an estimated 600 million people subsisting on less than USD 1.25 a day in the region, even small climate shocks could cause irreversible losses, and tip a large number of people into destitution.
As per the World Bank, about 70 percent of Southasians live in rural areas and account for about 75 percent of the poor. Most of the rural poor depend on agriculture for their livelihoods. With their rural economies closely tied to climate-sensitive sectors such as agriculture and fisheries, the poor are likely to be disproportionately affected by climate change. People living in poverty are more likely to live in unplanned, temporary settlements erected on unsuitable land – those most prone to the risks of flooding, storm surges and landslides. They lack sanitation, and their limited access to clean water, poor diet and inadequate health-care provision undermine their resistance to infectious diseases.
In general, of course, the relationship between climate change and population growth is not simple. The growth of greenhouse-gas emissions is responsive to a wide range of factors beyond population growth, including the energy-intensive consumption patterns in industrialised countries, economic growth, technological change and changes in land use. Other demographic factors, such as urbanisation and aging, are also important. Even though the per-capita emissions of Southasian countries are lower than those of many industrialised countries, a large population base has a critical impact on the warming of the environment – local and global – especially when these countries begin to industrialise further. While technology and energy conservation can alleviate greenhouse-gas emissions, growing populations as well as growing affluence are likely to negate these improvements.
It is just not the population growth, but the high population densities, that are of particular concern in Southasia. Throughout the region, the person-to-land ratio is among the highest in the world, particularly in the rural areas. Given that the Subcontinent is susceptible to environmental risk due to its current development path and impacts of climate change, population growth will not only increase the numbers of the vulnerable. It will also contribute additional stress to resources, especially water, land and forests. Yet, perhaps ironically, it is only human ingenuity that can help us in tackling the climate-change challenge. In this, the Southasian population will play a critical role in the future because of its large size, as well as in how it reacts to upcoming environmental changes.
Beyond piecemeal policies
The energy sector in Southasia faces a number of challenges, and climate change is only one of them. Meeting these challenges simultaneously will be a complex task, and one that will require an integrated approach to energy policy. But such an approach, including assessing the challenges of climate-change mitigation and adaptation, has yet to begin on any serious level in the region. Indeed, these kinds of studies are only now being undertaken even in the US and Europe.
In Southasian countries, meanwhile, the enormous breadth of the energy sector has often led to a piecemeal approach. This will only make the eventual task of integration that much more arduous. In India, for instance, at the central level in New Delhi every major energy resource currently has its own ministry, and power and environmental issues are covered by separate ministries; furthermore, climate-change issues and negotiations are often directed out of the prime minister’s office. These departments are often at odds with each other, and it has proven difficult to get any integrated planning process initiated in the government. The highly touted Integrated Energy Policy document, released by the Indian Planning Commission in 2006, has been only marginally successful, and even it did not include any serious proposal on how the country’s energy needs would be met while mitigating environmental and climate-change impacts.
The need to increase energy supply has always been a high priority in Southasian energy policies, which have particularly focused on enhancing commercial supply, especially fossil fuels for electric power and transportation. This inherently presents a conflict with climate-change issues. There has been substantial attention paid to power-sector reforms in India and other Southasian countries over the past decade, most of which have been aimed at promoting economic efficiency and an investment-friendly climate. But this has often precluded appropriate consideration of energy efficiency on the end-use side.
In general, power-sector reforms have shown only mixed success, with the agenda often driven by aid agencies and multinational institutions, consonant with the general worldwide shift towards market-based and private-sector-led approaches. Unfortunately, this has marginalised indigenous approaches – for instance, public-sector enterprises (PSEs), which had formed the backbone of India’s development since Independence. Indeed, although market-based reforms and greater competition in Indian PSEs (such as the state electricity boards) were badly needed, it would have been more fruitful to have focused on internally developed approaches.
Such overarching approaches do exist. For example, in 2002 a new paradigm for the power sector was offered by T L Sankar, a retired Indian Administrative Service officer. He proposed to dedicate specific generators for specific consumers: low-cost hydroelectricity and older coal-based plants would supply electricity to agricultural pumps and rural electricity, whereas the more expensive and newer coal- and gas-based power would supply industry and commercial consumers. But ideas such as these were not seriously considered in the debates preceding the Indian Electricity Act of 2003, which was the culmination of the reforms process initiated by the World Bank and others in early 1990s. In general, while economic reforms have been well accepted by Southasian governments, few have paid much attention to broader environmental or social justice concerns.
Finally, it should be noted that the prevalent single-minded focus on the commercial energy sector frequently ignores the issue of energy poverty, as defined above. There have been some efforts towards tackling this problem, and there have been a wide range of programmes aimed at providing services to the poor. But in general, these have not been commensurate with the magnitude of the challenge. Unlike China, which has, for instance, been quite successful in deploying improved cookstoves, similar Indian efforts have been far from triumphant. In some senses, the issue of climate change has further marginalised the need to eliminate energy poverty, since domestic and international concerns have been directed towards the growth of greenhouse-gas emissions in developing countries – a problem primarily of the motorised and electrified urban areas. Hence, more than half a billion people in Southasia have been overlooked due to the fact that they, by the virtue of their involuntarily low-energy-consuming lifestyle, are contributing to the low per-capita CO2 emissions in the region. Up to this point, much of the attention regarding climate change has been focused on the polluters, while the non-polluters get ignored.
Harnessing technology’s power
Source: World Bank Human Development Network (Base year (mid-2000)
Resolving many of the contradictions and challenges in the energy sector will require the implementation of a range of new technologies and practices. These need to include more-efficient ‘conversion’ and use of energy, and the development and deployment of low-pollution and low greenhouse gas emitting technologies, especially renewable-energy technologies. In addition, better environmental practices in the energy sector, as well as improvements in land use and forestry practices, will be necessary.
Fortunately, many of the required technologies already exist. We also know about the practices that we need to implement, including energy efficiency, environmental-impact assessments and the like. The appropriate use of currently available technologies, coupled with better practices, could do much to help to resolve many of Southasia’s energy challenges. Moreover, with increased investment in research and development of new technologies – such as carbon capture and sequestration (ie, scrubbing CO2 from power plants, compressing it into a liquid, and then pumping it into saline aquifers underground), genetically altered biofuels, artificial photosynthesis, high storage batteries, etc – there is also the potential of doing more for the environment at less cost. In this, however, two critical questions remain: When will these technologies and practices actually be deployed? And who will take the political risk in changing the status quo?
It is clear that every advanced technology has its own niche, and there is no silver bullet that can meet all of the challenges. In fact, the challenge of climate change is so great that nearly all greenhouse-gas-reducing technologies must be considered and given their due. This includes both renewable and fossil-fuel-based technologies, assuming that these are highly efficient and are potentially able to capture and sequester CO2. It is often believed that renewables and energy efficiency by themselves can meet our energy needs, and that fossil-fuel use must be drastically reduced immediately. However, given the enormous dependence of our current energy system on fossil fuels, one must slowly wean away from these in order not to cause abrupt disruptive changes. Fossil fuels must be considered as a bridge to a future energy system that is minimally based on their use.
In terms of ‘alternate’ technologies that exist today, there are several key options. In the power sector, these include small-scale versus large hydroelectric installations; advanced coal technologies versus inefficient coal-powered technologies; and increased use of nuclear, solar photovoltaic, thermal, wind and so-called advanced biomass technologies. In the transportation sector, these include more mass transport (rail and buses) versus personal transport (cars), more-efficient and hybrid-electric vehicles to replace inefficient and dirty diesel vehicles, and increased use of public urban transport and railways (as opposed to roads) for goods transport. In the household and building sector, these include highly efficient appliances (such as later model air conditioners, fans, televisions, refrigerators and microwaves), efficient lighting (such as CFL and LED light bulbs) versus incandescent bulbs, solar water heaters, more-efficient motors for household water-lifting, rainwater harvesting, and the use of trees and innovative landscaping to cool buildings. Greater penetration of such efficient technologies would clearly reduce energy consumption.
Source: World Bank World Development Indicators (2007)
Each country in Southasia will have specific issues to deal with regarding the different technologies, and hence technology assessments will necessarily have to be tailored for each local use. At the moment, however, energy-technology policy in the region is not driven by such systematic technology assessments. For example, the Southasian power sector is primarily driven by the need to increase generating capacity, which inevitably has the result of deploying the least risky and cheapest technology. In India, for instance, the focus is primarily on continuing to build coal-fired power plants. Technology decisions in the region also continue to be made chiefly by small groups of experts and technocrats, without much (if any) broader participation and stakeholder discussion and input – especially from environmental groups and local communities.
Given the current rhetoric in the region, particularly critical focus needs to be placed on one technology in particular – hydroelectricity. After losing public acceptance decades ago, hydro has been getting something of a makeover in recent years, as it is touted as a renewable source of power supply, without any carbon emissions. Given the water resources and hydropower potential in Southasia, this power source is attracting a significant amount of attention from funders such as the World Bank, which had previously been forced to pull out of some projects due to hydro’s inherent social and local environment impacts. But this renewed excitement could be misplaced.
India and China are currently looking at other Southasian countries, such as Nepal, Bhutan and Burma, as their hydro ‘powerhouses’. Not only do these latter countries have massive surplus hydro capacity at the moment, but India and China are even hungrier to use this excess capacity due to the national and international criticism they have faced for their own hydro projects, such as the Narmada and Three Gorges installations. In turn, the Himalayan countries with high hydro potential see this as a massive revenue-generating opportunity. Recently, the Nepali Prime Minister Pushpa Kamal Dahal stated that his country aimed to boost its hydropower-generation capacity more than 15-fold in the coming decade, to build some 10,000 megawatts of hydropower plants by 2020 – from around just 630 MW today.
While hydropower might be good for climate-change mitigation, hydropower is also among the most vulnerable to the impacts of climate change, as water resources are closely linked to the changes in climatic system. In a hotter world, there may be less snow and ice in winter, thereby adversely affecting river flows the rest of the year. In Nepal, China and elsewhere, the water stored in glaciers could well decrease, and seasonal discharge rates would thus gradually change. The hydrology of these Himalayan rivers could likewise experience increased year-to-year variability, thus adversely affecting the hydropower-generation potential. The expected increase in climate variability may also trigger extreme climate events such as floods and droughts, thus risking not only the dam but also the huge populations living downstream. In the end, the majority of the answers to Southasia’s pressing energy concerns might have to be found elsewhere from the region’s large water resources. When hydropower is utilised, it may need to function more as a cushion to the development of other sectors.
Energising the aam janata
The development of new energy technologies and their introduction into the marketplace often requires long time scales and significant investment in their development. This is very different from the development and introduction of consumer electronics, for instance within the cell-phone industry. In the energy sector, private players are often unwilling to invest the resources necessary to develop suitable technologies, even if these benefit society more widely. Such interests need to be assured of a suitable market for their investment, and hence new technologies are often extremely expensive in the initial stages.
For these reasons, the scale and complexity of these energy technologies often requires the government to play a role in their development. For example, given the large investments needed for building power plants, without government support the private sector would be unlikely to invest in cleaner and more-efficient – but also more expensive and technologically risky – technologies. Examples of such technologies include coal-gasification-based power generation, carbon capture and sequestration, large scale solar PV, off-shore wind, etc. Government support, meanwhile, can come about through research and development, subsidies or regulations.
Source: McKinsey and Vattenfall analysis
While there is a strong rationale for government policies that support the research, development, demonstration and deployment of appropriate energy technologies, those in the capitals of Southasia also cannot continue their business-as-usual attitudes. What is needed is a well-thought-out and robust technology policy based on empirical data and analysis. Such a policy would not choose technologies, but rather would allow companies (private and public) to choose amongst the available technologies (worldwide and developed indigenously). At all times, they would need to keep in mind the particular historical trajectory in Southasia and its current and future needs, challenges and constraints.
Once there is a consensus on what might be the best (set of) technologies for a country to pursue, there is still the question of what is the best approach to move down that path. A good policy will, for any given choice, help in resolving the question of whether to import, adapt or indigenously develop the technology. It is also clear that India, as the largest energy consumer in the region, has to make such research-and-development investments – investments that can subsequently help its neighbours. One way or another, a rational energy policy for both India and the rest of Southasia must view energy as a means of achieving individual countries’ social and developmental goals, and not an end in itself. In fact, by getting the energy policy ‘right’, one can get the policies in other spheres to also fall into place.
It is understandable that such a democratic process is difficult. This is especially the case in the energy sector, given the urgency of the energy need and the inherent complexity of the sector. In fact, some may be of the view that strong centralisation is necessary for the energy sector to improve. While such a centralised process would indeed be useful in terms of implementation (in this, China is a notable example), it should not be allowed to prevent new ideas or stakeholder involvement. Currently, the mode of operation is one in which the government proposes, and the people and local-level NGOs oppose. This must change. Local interests, environmental groups, the bureaucracy and the politicians all need to make compromises. The longer it takes for this to happen, the longer the region’s energy problems will extend.
At the same time, the aam janata, or common people, must begin to hold their politicians and bureaucrats accountable for their energy-related decision-making, beyond just at the voting booth. The public must become more educated and be willing to take part in public debates. All technology choices have opportunity costs, and choosing any particular policy and technology trajectory has its inherent pros and cons. For instance, increasing nuclear energy means having to deal with more nuclear waste, greater dependency on uranium imports, and greater potential for nuclear terrorism; greater wind deployment requires a much better transmission grid with which to carry the power from windy areas to areas of demand, as well as more gas-based power plants to compensate for wind variability; more coal plants means more coal mining and its associated problems, and eventually the capturing of CO2 and storing it underground; and increasing solar PV means more costly electricity, which the poor may not be able to afford. At the same time, more nuclear, wind and solar gives us electricity without carbon emissions, and more coal plants allow us to continue to use domestic resources.
In the end, no matter what choices Southasian governments ultimately make, they must be able to defend these choices publicly. In explaining the complexity of our energy system, its interconnections to the economy, and ways in which decisions are being made in the government, the media must be a conduit through which public debates can take root, not one in which mere sensationalism prevails.
An actionable plan
As always, in terms of a regional energy policy it will be crucial to see how India’s own approaches evolve, not only as the largest economy in the region but also the physical link between all of the neighbouring countries. It is important to note that Southasian elites as a whole have similar consumption patterns; but even here, what India does others follow. Beyond this, any feasible and practical plan of re-energising Southasia will require short-term (within five years) and longer-term (10+ years) activities. First and foremost must be to increase efficiency in all stages of the energy sector – at the extraction of energy resources, converting these resources into usable energy, transmission and transportation of energy, and at the end-use stage. Efficiency will give time and space for the process of coming up with new options and polices for reorienting the Southasian energy sector.
Despite the obvious benefits of efficiency – reducing the pressure to expand energy supply, increasing energy security, reducing greenhouse-gas emissions, and decreasing local air and water pollution – it is yet to be taken up by policymakers at the level required. A good example is the Indian Bureau of Energy Efficiency (BEE), which has made great strides towards the labelling of appliances for efficiency and deciding on standards for various industries, and it has come up with an innovative market mechanism for promoting energy efficiency. Yet in spite of its laudatory work, BEE remains a small statutory unit within the Power Ministry, a placement that could easily hobble its work. Its resources are limited, precisely at a time when an organisation such as this needs significantly more funding and human resources in order to make a real dent in Indian energy consumption. Similarly, other Southasian countries also have much work to do as well in raising their energy efficiency.
In addition to efficiency, the transmission and distribution (T&D) system for electricity needs to be overhauled. According to the Indian Planning Commission and the CEA, the sum of technical T&D losses and commercial losses (theft and non-payment) in India are estimated to vary from 18 to 62 percent, with the average for the country somewhere in the range of 34 to 40 percent. In contrast, technical T&D losses average around just four to eight percent in most industrialised countries. The CEA estimates that reducing India’s losses to a more manageable 10 percent would release the power equivalent to up to 12,000 MW of capacity. Although reducing theft and non-payment would not significantly reduce demand, it would increase revenues for the utilities and improve their precarious financial condition.
Regardless of the importance of T&D improvements, the focus in India today still remains capacity additions. In India’s 10th Five-Year Plan, outlays for T&D were half those for generation. While there have been continued efforts to improve the grid in Southasia, which has trans-national aspects, the resources put into the effort are not yet at a level comparable to the challenge. Improving the grid is also particularly challenging because there is already an existing grid to start with – redesigning and improving an existing grid is far more challenging than building a new one from scratch.
Beyond efficiency and T&D improvement, all Southasian countries need to start mapping a route to a new energy future – one that does not reject fossil fuels completely, but that is significantly less dependent on fossil fuels and more on renewables and carbon-neutral resources. No resource or technology should be dismissed without a period of significant exploration or its merits. However, the policy decision to support any technology, and more important how to support them, must be take place only after detailed assessments are undertaken of an entire range of technological options. What the technology choices are will depend on the particular vision for specific sector (see box). For example, in the power sector, a vision without greenhouse-gas reduction will have no place for carbon capture and sequestration technologies; a vision focused only on indigenous technologies will not include advanced wind turbines or nuclear plants; a vision with cheap electricity will only focus on coal power plants or hydropower. Hence, it is very important for Southasian countries to undertake ‘visioning’ exercises for each specific energy sector, where a broad range of stakeholders are included.
India in particular will continue to depend on coal for power generation for some time to come. The focus at the moment must thus be to utilise India’s coal resources efficiently, and to practice socially and environmentally sensitive mining. A recent study by researchers at Carnegie Mellon University in Pittsburgh indicates that the inclusion of better mining practices that reduce environmental impacts would increase the cost of coal by two to six times – thereby increasing the cost of power. Similarly, scrubbing CO2 out of power plants could further double power costs. Although carbon capture and sequestration in Indian coal-fired power plants is premature at the moment, the power sector must begin preparing for it over the coming decade. While coal may need to be phased out in the very long term, it is not feasible to do so in the next several decades.
A significant issue is that of decentralising power generation. While centralised power generation will continue to be a norm for a long time to come, so-called distributed power generation is another important class of technologies that could become increasingly relevant in the region. Actually, at the moment such distributed generation is already well entrenched – namely, diesel generation sets in villages and suburban areas. In many urban areas, these are used for backup power, and in some cases in rural areas they are the primary source of electricity. Subsidies for diesel and easy availability of the technology and its maintenance have led to its rapid deployment. Indeed, lessons from the usage of diesel generators would be useful for getting similar distributed generation technologies based on solar, wind and biomass. Similar to diesel, these distributed renewable technologies will also require subsidies to make them cost competitive, and greater deployment will help in making them technologically robust.
In the medium- to long term, pricing of the entire energy sector needs to be changed to make it more uniform and consistent, and the price should include socio-environmental costs. In many ways, the current socio-environmental costs have been subsidised, mainly by the poor and the indigenous communities who have been devastated by mining and deforestation. In many cases, these pricing reforms would only occur with broader institutional and regulatory reforms. However, these changes need to come from within the region’s countries, and not be driven from the outside. Existing institutions may have to take on new roles, and in some cases multiple new institutions may have to be created. All of this, again, needs political will, which is possible to build with large stakeholder consensus.
Leadership in transition
Dealing with climate change will be most difficult in Southasia, given the politics surrounding the issue, both globally and regionally. Currently, Southasia has no long-term vision, by country or regionally, that includes dealing with the impact of climate change and the mitigation of carbon emissions. Clearly, this must change. Climate-change mitigation and adaptation must be a key element of any future energy strategy; although in this region, it should be noted, dealing with local pollution and socio-environmental issues might be more critical in some cases. Climate change is particularly challenging since Southasia (and other developing regions) have contributed little so far in creating the problem. Yet there is immense pressure on them (especially India) to take on carbon-mitigation commitments, driven in large part by the US, which has thus far linked its own intransigence to lack of formal commitments by developing countries. India has so far not had any traction for its support of equal per-capita allocation, and there is great pressure to get agreement on a post-Kyoto climate treaty within a year or two.
Given its relative size in Southasia,
India would be most affected by any climate change treaty. India, like
all other major economies, will have to alter its
greenhouse-gas-emissions trajectory, despite the fact that India’s
energy economy will be strained by these efforts. In fact, it is in
India’s interest that the global negotiations produce a stringent
climate treaty for everyone, given the disproportionate impacts of
climate change in Southasia. Carbon mitigation in India would mean
increased energy prices in the short term, deploying more renewable and
nuclear energy sources, and greater research-and-development
expenditure on carbon capture and sequestration. In the longer term,
India will also have to deal with the more-difficult political
decisions on how to deal with climate migrants, both internal and
The world is today in the midst of an energy transition. The success of this transition is yet to be determined, but we now have a good sense of what the challenges are and what our new technologies need to do. More recently, we have even begun to acknowledge some lifestyle changes that we need to make. The transition is inevitable, but key questions remain regarding just how quickly and how willingly different regions of the world are going to embark on this transition. Although the path may not yet be apparent, the questions for the people of this region are perfectly clear: Will Southasia embrace the looming change and be a global leader, or will it resist and be a laggard? Will the path forward be led by democratic means, or will it be forced upon the countries of the region by events beyond their control?
India’s Climate Action Plan
On 30 June 2008, Prime Minister Manmohan Singh released India’s first National Action Plan on Climate Change (NAPCC), outlining existing and future policies and programmes addressing climate mitigation and adaptation. Emphasising the overriding priority of maintaining high economic growth rates to raise living standards, the plan “identifies measures that promote our development objectives while also yielding co-benefits for addressing climate change effectively.” The NAPCC aims to promote the development and use of solar energy for power generation and other uses, with the ultimate objective of making solar competitive with fossil-based energy options. It also aims to deploy at least 1000 MW of solar thermal power generation, and includes initiatives to build on the Energy Conservation Act of 2001. In brief, the plan recommends:
• Mandating specific energy-consumption decreases in large energy-consuming industries, with a system for companies to trade energy-savings certificates;
• Energy incentives, including reduced taxes on energy-efficient appliances; and
• Financing for public-private partnerships, to reduce energy consumption through demand-side management programmes in the municipal, buildings and agricultural sectors.
There are also plans for mandating the retirement of inefficient coal-fired power plants, and supporting the research and development of synthetic-gas power plants and supercritical technologies. In addition, under the Electricity Act of 2003 and the National Tariff Policy of 2006, the central and state electricity regulatory commissions must purchase a certain percentage of grid-based power from renewable sources.
Based on a summary by the Pew Center
A new vision for coal
Ananth Chikkatur is with ICF International, in Virginia. The views expressed here are those of the author alone.
Sunita Dubey is with GroundWork USA, in Boston.
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