Infrastructure for a low-carbon economy: future scenarios and policies for India

Abstract

Infrastructure is the backbone through which energy flows in an economy. Hence, the policies in fluencing their choice are crucial to future energy and carbon in tensity of the economy. Major in frastructure investments are projected in India, in line with the future economic growth. It is therefore imperative to make in frastructure choices including their long term environmental costs and benefits. The current research assesses and delineates infrastructure sector priorities which can influence the long-term energy system equilibrium in India. The specific research questions addressed are: 1. What key infrastructures have a decisive influence on energy and emissions profile? How have these infrastructures evolved in India? 2. What infrastructure choices will be made under business-as- usual {BAU) development policies? What will be the long term energy and emissions trajectories for India under the BAU dynamics? 3. What should the infrastructure choices be under plausible global carbon emissions concentration stabilization targets? 4. What would be potential energy security and other sustainability co - benefits in India from alternate infrastructure choices? To address these questions, an integrated framework of analysis is developed, which comprises of scenario building and policy analysis by soft linking multiple models: i) a global integrated assessment model, ii) a bottom-up energy system model for India, & iii) an energy accounting model at city level. Case studies were conducted at the national, city, and project level to assess and endogenize infrastructure transitions in the scenario modeling exercises spanning time horizon till the year 2050. The energy security and other co-benefits are assessed using a select set of indicators. The key findings of the research are: 1. US$ 3 Trillion investment in energy infrastructures is needed till 2050, under the BAU scenario, most of which is in the power sector. 2. Delayed actions towards low carbon transitions result in infrastructure 'lock-in' that acts as barrier to transit the economy to an efficient frontier. 3. Low carbon transition under a 'climate-centric' conventional policy scenario needs additional US$ 1.5 Trillion investments in low carbon power generation, carbon capture & storage, and smart grid infrastructures. 4. Low carbon transition under a 'sustainable' scenario calls for demand - side infrastructure in-vestments like shift to low carbon mass transport infrastructures {e.g. train & pipelines). 5. The marginal abatement cost in the 'sustainable' scenario is significantly lower than the carbon price trajectory of the conventional 'climate centric' scenario. 6. Low carbon infrastructures rest on diversified energy portfolio, having less reliance on fossil fuels, which delivers positive spill-over such as better local air quality and energy security. 7. Following a portfolio approach, the research identifies carbon mitigation potential and costs of alternate infrastructures, whereby cheaper options {e.g. BRTS), are chosen up to their potential, over more expensive options (e.g. Metro rail). Such low carbon infrastructures may also receive preferential funding from international carbon funds. The key methodological contribution of this research is the development and application of an integrated modeling framework wherein the demand-side infrastructure transitions at national level are modeled by endogen icing the information from case studies conducted at sectorial and sub-national level. The research contributes to development of databases of energy infrastructure at city and national level and GIS mapping of key infrastructure projects. The overall contribution of the research is a policy roadmap for transport and energy infrastructure which explicitly takes into account the global greenhouse gas emissions stabilization targets and national sustainability goals, together with the impact of these policies on country's long-term energy security.