Report: Reducing Greenhouse Gas Emissions in India - Financial mechanisms and opportunities for EU-India collaboration

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ISBN: 978-91-86125-19-6
Cover Photo: © Ville Miettinen (wili hybrid)

Preamble

This report was produced on request from the Swedish Ministry of Environment to inform the Swedish Presidency of the EU in preparation for the upcoming EU-India Summit in New Delhion 6 November 2009. It is an independent report from a group of research institutes with the Stockholm Environment Institute (SEI) as lead partner in cooperation with The Energy and Resources Institute (TERI) in New Delhi, Svenska Miljöinstitutet (IVL) in Stockholm, Centre for International Climate and Environmental Research - Oslo (CICERO) in Norway and Linköping University. Funding has been provided from the MISTRA-funded CLIPORE project and from core funds provided to SEI from the Ministry. The presentation and analysis of this work build to a large extent on secondary sources, complemented with results from discussions and interviews in New Delhi during August 2009 with a number of actors concerned with climate change policies and financial mechanisms, including:

• Ambassador Chandrashekhar Dasgupta, Distinguished Fellow, TERI
• Dr Ajay Mathur, Director General, Bureau of Energy Efficiency, Government of India
• Shri. Deepak Gupta, Secretary, Ministry of New and Renewable Energy, Government of India
• J. M. Mauskar, Additional Secretary, Ministry of Environment and Forests (MoEF), Government of India
• Anders Sjöberg, Minister and Deputy Head of Mission, Embassy of Sweden, New Delhi
• Arati Davis, National Programme Officer, Environment and Energy, Embassy of Sweden
• Dr Stefan Jonsson, Office of Science and Technology, Embassy of Sweden
• Claes Leijon, Sida Resident Representative, Embassy of Sweden
• Maria Helling, Second Secretary, Commercial and Cultural Affairs, Embassy of Sweden
• Fergus Auld, First Secretary, Climate Change and Energy, British High Commission € DFID, New Delhi
• Dr Prodipto Ghosh, Distinguished Fellow, TERI
• Dr Leena Srivastava, Executive Director, TERI
• Suruchi Bhadwal, Area Convenor and Fellow, TERI
• Suman Kumar, Deputy Director, Confederation of Indian Industry (CII)
• Navroz Dubash, Senior Fellow, Centre for Policy Research, New Delhi
• Muthukumara Mani, Senior Environmental Economist, World Bank, New Delhi

The recommendations presented in section 7 of the report are those of SEI.

Executive Summary

This report illuminates potential areas for collaboration between the EU and India on actions that reduce greenhouse gas emissions in India. If human-induced climate change is to have any hope of being limited to 2 degrees, it is essential that ways are found to address rapidly rising greenhouse gas emissions in India, as elsewhere. This is a challenging proposition: even though India's per capita emissions are very low, her 1.15 billion people are collectively a major source of greenhouse gas emissions. This fact, coupled with the immediate task of tackling widespread poverty, means that the international community must play a major role in providing financial and technological resources to support India's domestic efforts.

As India's 2008 National Action Plan on Climate Change recognises, tackling the country's greenhouse gas emissions means not least finding ways to transform a rapidly growing energy sector. International financial mechanisms such as the Clean Development Mechanism and the Global Environment Facility have been unable to deliver the scale of transformative change needed to shift India's emissions trajectory. While the Indian government has already initiated some ambitious policy measures - particularly pertaining to solar energy and energy efficiency - the effectiveness of international finance mechanisms and other forms of international partnership will be crucial in determining the success of greenhouse gas mitigation efforts.

The EU India Summit is held a month before COP15 negotiations in Copenhagen. While this provides challenges in terms of seeking concrete agreements on questions of finance, it is also an important opportunity to devise complementary efforts outside the UNFCCC process. Genuine, productive collaboration could not only be used to foster the sorts of transformative changes that are needed in India's growing economy but could also create a spirit of cooperation that spills over into UNFCCC negotiations.

Successful EU and India collaboration will necessarily be focused in areas of common interest. While a primary aim of the EU is to catalyse large GHG emission reductions, India's key interests are in supporting economic development and enhancing technology transfer. Areas of collaboration must therefore lie at the intersection of these objectives. This report recommends several specific areas that could prove productive sites for collaboration between the parties, namely:

• Implementing a clean-cooking stoves program to reduce both the health and climate impacts of black carbon ("soot") emissions from India's very large non-commercial energy sector, and to provide an understanding of the technological, economic and policy conditions needed to dramatically scale up the deployment of cleaner stoves.
• Developing a concrete package for supporting solar energy development and deployment, consisting of financial resources raised and delivered through European Development Banks as well as a joint research program to drive down technology costs and foster local manufacture; and,
• Supporting implementation of the National Mission on Enhanced Energy Efficiency, in particular by using credit lines to Indian financial institutions for targeting lending to EnergyService Companies, and by establishing EU-India research teams to work on identifying and tailoring high efficiency technologies for deployment in the small and medium-sized industry sector.

This publication may be reproduced in whole or in part and in any form for educational or non-profit purposes, without special permission from the copyright holder(s) provided acknowledgement of the source is made. No use of this publication may be made for resale or other commercial purpose, without the written permission of the copyright holder(s).

Copyright © October 2009 by Stockholm Environment Institute

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TERI - The Energy and Resource Institute Centre for Global Environment Research (CGER)

CICERO - Center for International Climate and Environmental Research O

SEI - Stockholm Environment Institute