Baselines for carbon emissions in the Indian and Chinese power sectors: implications for international carbon trading

Abstract

The study examines the dynamics of carbon emissions baselines of electricity generation in Indian states and Chinese provinces in the backdrop of ongoing electricity sector reforms in these countries. Two Indian states—Gujarat and Andhra Pradesh, and three Chinese provinces–Guangdong, Liaoning and Hubei have been chosen for detailed analysis to bring out regional variations that are not captured in aggregate country studies. The study finds that fuel mix is the main driver behind the trends exhibited by the carbon baselines in these five cases. The cases confirm that opportunities exist in the Indian and Chinese electricity sectors to lower carbon intensity mainly in the substitution of other fuels for coal and, to a lesser extent, adoption of more efficient and advanced coal-fired generation technology. Overall, the findings suggest that the electricity sectors in India and China are becoming friendlier to the global environment. Disaggregated analysis, detailed and careful industry analysis is essential to establishing a power sector carbon emissions baseline as a reference for CDM crediting. However, considering all the difficulties associated with the baseline issue, our case studies demonstrate that there is merit in examining alternate approaches that rely on more aggregated baselines.