TERI

CENTER FOR CLEAN AIR POLICY
November 2006
Greenhouse Gas Mitigation in India:
Scenarios and Opportunities through 2031
INTERNATIONALDEVELOPINGCOUNTRYANALYSISANDDIALOGUE
The Energy and Resources Institute (TERI), New Delhi, India
The Center for Clean Air Policy (CCAP)

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Acknowledgments
TERI would like to acknowledge that the national level integrated energy-modeling framework prepared
under the project “National Energy Map - Technology Vision 2030” was adopted and used for this project
to develop GHG mitigation scenarios. The Principal Scientific Advisor (PSA) Office to Government of
India wholly sponsored the project “National Energy Map – Technology Vision 2030”. This modeling
framework, which was developed by TERI, provided a big support to a project of this magnitude.
TERI would also like to thank Jos Wheatley and Aditi Maheshwari of the UK Department for
International Development (DFID) for their generous financial support for the project
TERI would also like to acknowledge the high level technical inputs provided by various national experts
in the development of the model and providing useful guidance in the matter. TERI would like to
specially thank Mr. Kamal Kapoor (National Hydro Power Corporation), Prof Brahmbhatt (IIT, Kanpur),
Mr. R. K. Batra (TERI), Mr K Ramanathan (TERI), Dr Y.P Abbi (TERI), and the Renewable Energy
Technology Applications and Industrial Energy groups of TERI. In-addition several organizations and
industrial associations also provided their inputs in the development of industrial scenarios and
technology penetrations over the modeling time frame. Some of important organizations that participated
in this exercise were: Bharat Heavy Electricals Ltd., National Hydro Power Corporation, North Indian
Textiles Manufacturers Association, and Indian Aluminum Manufacturers Association, Steel Authority of
India, Cement Manufacturers Association, Confederation of Indian Industries and Indian Paper
Manufacturers Association.
TERI also acknowledges the valuable comments and suggestions received from several individuals
during the course of the workshops, where the results were presented. The suggestions helped the project
in the refining the results and analyses. Some of important contributors were Dr S K Sikka (PSA), Mr
Surya P Sethi and Mr Arvinder S Sachdeva (Planning Commission), Dr Prodipto Ghosh (Ministry of
Environment and Forests), Dr Ajay Mathur (Synergy Global), Dr Deep N Pandey (Centre for
International Forestry Research), Prof P S Ramakrishnan (Jawaharlal Nehru University), Mr Dilip
Chenoy (Society for Indian Automobile Manufacturers), Sudhinder Thakur (Nuclear Power Corporation),
P K Modi (NTPC limited), Dr Alok Saxena (Forest Survey of India), Mr Deepak Bhatnagar (Technology
Information, Forecasting and Assessment Council), Mr Pradeep Kumar (National council for Cement and
Building Materials), Dr D C Uprety (Indian Agricultural Research Institute), Mr Tanmay Tathagat
(International Institute for Energy Conservation), Mr S C Sabharwal (Bureau of Energy Efficiency), Dr P
K Gupta (National Physical Laboratory), and Mr Vijay Kumar Aggarwal (former Chairman, Railway
Board).
TERI would also like to acknowledge several of its professionals working in various divisions and areas
who have been a great help in providing valuable information on technological and economic parameters.

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TABLE OF CONTENTS
I. INTRODUCTION ...........................................................................................................................................1
I.A PURPOSE AND DESCRIPTION OF PROJECT .......................................................................................................1
I.A.1 Background............................................................................................................................................1
I.A.2 Phase I: GHG Mitigation Option and Cost Analysis.............................................................................1
I.A.3 Phase II. Policy and Implementation Strategy.......................................................................................3
I.B REPORT STRUCTURE ......................................................................................................................................4
II. COUNTRY OVERVIEW ...............................................................................................................................5
II.A POPULATION & ECONOMY, AND EMISSIONS...................................................................................................5
II.A.1 Population & Gross Domestic Product .................................................................................................5
II.A.2 International Trade and Role/Position in the World Economy..............................................................5
II.A.3 Geography .............................................................................................................................................6
II.A.4 Rural vs. Urban Issues...........................................................................................................................7
II.A.5 Poverty and Development......................................................................................................................8
II.A.6 Sustainability and Development ............................................................................................................9
II.A.7 India’s Role to Date in Climate Policy Negotiations...........................................................................10
II.B HISTORICAL SUMMARY & EXPLANATION OF THE COUNTRY’S NATIONAL ENERGY AND EMISSIONS PROFILE 11
II.B.1 Total annual fuel consumption by sector and fuel type from 1990 to 2000 .........................................11
II.B.2 Energy intensity (per unit of GDP) from 1990 to 2000 .......................................................................11
II.B.3 Annual GHG emissions inventory for 2000 .........................................................................................12
II.B.4 Geographic breakdown or discussion of emissions.............................................................................14
II.B.5 Emissions Intensity (per unit of GDP and per capita) from 1990 to 2000 ..........................................15
II.C COMPARISON WITH REST OF WORLD ABOVE AREAS......................................................................................16
II.C.1 Ranking................................................................................................................................................16
II.D BACKGROUND FOR OVERALL ANALYSIS.......................................................................................................17
II.D.1 Discussion of all cross-cutting macro assumptions used and sources for assumptions ......................17
II.D.2 Analytical approach and methodology used........................................................................................23
II.D.3 Description of computer models and other tools used.........................................................................23
II.E LIST OF SECTORS TO BE COVERED IN ANALYSIS............................................................................................23
III. ELECTRICITY SECTOR ANALYSIS AND RESULTS ..........................................................................25
III.A SECTOR OVERVIEW ......................................................................................................................................25
III.A.1 Summary and Explanation of Economic Statistics...........................................................................25
III.A.2 Quantitative and qualitative characterization of sector ..................................................................28
III.B EMISSIONS OVERVIEW OF SECTOR ...............................................................................................................32
III.B.1 Background and discussion of emissions, main sources/causes/drivers, trends..............................32
III.B.2 Annual GHG emissions inventory for a recent year ........................................................................32
III.B.3 Historical annual fuel consumption & GHG emissions trends by fuel type from 1990 to 2000......33
III.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS .................................................................................33
III.C.1 Baseline with policies adopted before 2000 ....................................................................................33
III.C.2 Baseline with policies adopted between 2000 and 2005..................................................................33
III.D BASELINE (BUSINESS-AS-USUAL) FORECASTS FOR SECTORS.........................................................................37
III.D.1 Production/output forecast ..............................................................................................................37
III.D.2 Energy and fossil fuel consumption (by type) forecast ....................................................................40
III.D.3 Annual GHG forecast ......................................................................................................................41
III.D.4 Energy intensity and CO2 intensity forecast (per unit of output) ....................................................41
III.E GHG MITIGATION OPTIONS AND COSTS ......................................................................................................41
III.E.1 Overview of each mitigation option evaluated.................................................................................41

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III.E.2 Marginal abatement cost curve .......................................................................................................46
III.F ANALYSIS OF GHG MITIGATION SCENARIOS ...............................................................................................49
III.F.1 GHG Advanced Options (Mitigation) Scenario #1: zero- or negative-cost mitigation options.......49
III.F.2 GHG Advanced Options Scenario #2: All mitigation options costing less than $5 per metric ton..50
III.F.3 GHG Advanced Options Scenario #3: All mitigation options costing less than $10 per metric ton52
III.F.4 GHG Advanced Options Scenario #4: All Feasible Mitigation Options .........................................53
IV. CEMENT SECTOR ANALYSIS AND RESULTS.....................................................................................57
IV.A SECTOR OVERVIEW ......................................................................................................................................57
IV.A.1 Summary and explanation of economic statistics ............................................................................57
IV.A.2 Quantitative and qualitative characterization of sector ..................................................................59
IV.B EMISSIONS OVERVIEW OF SECTOR ...............................................................................................................63
IV.B.1 Background and discussion of emissions, main sources/causes/drivers, trends..............................63
IV.B.2 Annual GHG emissions inventory for a recent year ........................................................................63
IV.B.3 Historical annual fuel consumption and GHG emissions trends by fuel type from 1990 to 2000 ...63
IV.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS .................................................................................64
IV.D BASELINE (BUSINESS-AS-USUAL) FORECASTS ..............................................................................................66
IV.D.1 Production/output forecast ..............................................................................................................66
IV.D.2 Energy and fossil fuel consumption (by type) forecast ....................................................................67
IV.D.3 Annual GHG forecast ......................................................................................................................68
IV.D.4 Energy intensity and CO2 intensity forecast (per unit of output).....................................................68
IV.E GHG MITIGATION OPTIONS AND COSTS ......................................................................................................69
IV.E.1 Overview of each mitigation option evaluated.................................................................................69
IV.E.2 Marginal abatement cost curve .......................................................................................................69
IV.F ANALYSIS OF GHG MITIGATION SCENARIOS ...............................................................................................71
IV.F.1 GHG Advanced Options (Mitigation) Scenario #4: All Feasible Mitigation Options.....................71
V. IRON & STEEL SECTOR ANALYSIS AND RESULTS..........................................................................73
V.A SECTOR OVERVIEW ......................................................................................................................................73
V.A.1 Summary and explanation of economic statistics ................................................................................73
V.A.2 Quantitative and qualitative characterization of sector ......................................................................78
V.B EMISSIONS OVERVIEW OF SECTOR ...............................................................................................................79
V.B.1 Annual GHG emissions inventory for a recent year............................................................................79
V.B.2 Historical annual fuel consumption & GHG emissions trends by fuel type from 1990 to 2000..........79
V.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS .................................................................................81
V.C.1 Baseline with policies adopted before 2000 ........................................................................................81
V.C.2 Baseline with policies adopted between 2000 and 2005......................................................................81
V.C.3 Description of analytical approach and methodology used.................................................................82
V.C.4 Selection criteria for consideration of mitigation options ...................................................................83
V.D BASELINE (BUSINESS-AS-USUAL) FORECASTS FOR SECTORS.........................................................................83
V.D.1 Production/output forecast ..................................................................................................................83
V.D.2 Energy and fossil fuel consumption (by type) forecast ........................................................................84
V.D.3 Annual GHG forecast ..........................................................................................................................86
V.D.4 Energy intensity and CO2 intensity forecast (per unit of output).........................................................86
V.E GHG MITIGATION OPTIONS AND COSTS ......................................................................................................87
V.E.1 Overview of Mitigation Options Considered .......................................................................................87
V.F GHG MITIGATION COSTS.............................................................................................................................89
V.F.1 Marginal abatement cost curve ...........................................................................................................89
V.G ANALYSIS OF GHG MITIGATION SCENARIOS ...............................................................................................91
V.G.1 GHG Advanced Options (Mitigation) Scenario #4: All Feasible Mitigation Options.....................91
VI. PULP & PAPER SECTOR ANALYSIS AND RESULTS .........................................................................93

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VI.A SECTOR OVERVIEW ......................................................................................................................................93
VI.A.1 Summary and explanation of economic statistics ............................................................................93
VI.A.2 Quantitative and qualitative characterization of sector ..................................................................95
VI.B EMISSIONS OVERVIEW OF SECTOR ...............................................................................................................98
VI.B.1 Background and discussion of emissions, main sources/causes/drivers, trends..............................98
VI.B.2 Historical annual fuel consumption & GHG emissions trends by fuel type from 1990 to 2000......98
VI.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS .................................................................................99
VI.C.1 Baseline with policies adopted before 2000 ....................................................................................99
VI.C.2 Baseline with policies adopted between 2000 and 2005..................................................................99
VI.C.3 Description of analytical approach and methodology used.............................................................99
VI.D BASELINE (BUSINESS-AS-USUAL) FORECASTS FOR SECTORS.......................................................................101
VI.D.2 Energy and fossil fuel consumption (by type) forecast ..................................................................102
VI.D.3 Annual GHG forecast ....................................................................................................................103
VI.D.4 Energy intensity and CO2 intensity forecast (per unit of output)...................................................103
VI.E GHG MITIGATION OPTIONS AND COSTS ....................................................................................................104
VI.E.1 Selection criteria for consideration of mitigation options .............................................................104
VI.E.2 Overview of each mitigation option evaluated...............................................................................104
VI.E.3 Assumptions and sources...............................................................................................................105
VI.E.4 Marginal abatement cost curve .....................................................................................................105
VI.F ANALYSIS OF GHG MITIGATION SCENARIOS .............................................................................................108
VI.F.1 GHG Advanced Options (Mitigation) Scenario #4: All Feasible Mitigation Options...................108
VII. TRANSPORTATION SECTOR ANALYSIS AND RESULTS...............................................................110
VII.A SECTOR OVERVIEW ....................................................................................................................................110
VII.A.1 Summary and explanation of economic statistics ..........................................................................110
VII.A.2 Quantitative and qualitative characterization of sector ................................................................118
VII.B EMISSIONS OVERVIEW OF SECTOR .............................................................................................................120
VII.B.1 Background and discussion of emissions, main sources/causes/drivers, trends............................120
VII.B.2 Annual GHG emissions inventory for a recent year ......................................................................120
VII.B.3 Historical annual fuel consumption & GHG emissions trends by fuel type from 1990 to 2000....123
VII.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS ...............................................................................125
VII.C.1 Baseline with policies adopted before 2000 ..................................................................................125
VII.C.2 Baseline with policies adopted between 2000 and 2005................................................................125
VII.C.3 Description of analytical approach and methodology used...........................................................126
VII.D BASELINE (BUSINESS-AS-USUAL) FORECASTS FOR SECTORS ......................................................................129
VII.D.1 Production/output forecast ............................................................................................................129
VII.D.2 Energy and fossil fuel consumption (by type) forecast ..................................................................133
VII.D.3 Annual GHG forecast ....................................................................................................................135
VII.D.4 Energy intensity and CO2 intensity forecast (per unit of output)...................................................135
VII.E GHG MITIGATION OPTIONS AND COSTS ....................................................................................................139
VII.E.1 Mitigation Options.........................................................................................................................139
VII.E.2 Marginal abatement cost curve .....................................................................................................140
VII.F ANALYSIS OF GHG MITIGATION SCENARIOS .............................................................................................143
VII.F.1 GHG Advanced Options (Mitigation) Scenario #4: All Feasible mitigation options ....................143
VIII. COMMERCIAL SECTOR ANALYSIS AND RESULTS .......................................................................145
VIII.ASECTOR OVERVIEW ....................................................................................................................................145
VIII.A.1 Quantitative and qualitative characterization of sector ................................................................145
VIII.BEMISSIONS OVERVIEW OF SECTOR .............................................................................................................145
VIII.B.1 Historical annual fuel consumption & GHG emissions trends by fuel type from 1990 to 2000....145
VIII.CBACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS ...............................................................................146

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VIII.C.1 Analytical Approach and Methodology .........................................................................................146
VIII.DBASELINE (BUSINESS-AS-USUAL) FORECASTS FOR SECTORS.......................................................................149
VIII.D.1 Energy and fossil fuel consumption and GHG forecast.................................................................149
IX. RESIDENTIAL SECTOR ANALYSIS AND RESULTS.........................................................................151
IX.A SECTOR OVERVIEW ....................................................................................................................................151
IX.A.1 Summary and explanation of economic statistics ..........................................................................151
IX.A.2 Quantitative and qualitative characterization of sector ................................................................151
IX.B EMISSIONS OVERVIEW OF SECTOR .............................................................................................................151
IX.B.1 Background and discussion of emissions, main sources/causes/drivers, trends............................151
IX.B.2 Annual GHG emissions inventory for a recent year ......................................................................151
IX.B.3 Historical annual fuel consumption and GHG emissions trends by fuel type from 1990 to 2000 .151
IX.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS ...............................................................................155
IX.D BASELINE (BUSINESS-AS-USUAL) FORECASTS FOR SECTORS.......................................................................156
IX.D.1 Energy and fossil fuel consumption (by type) forecast ..................................................................156
IX.D.2 Annual GHG forecast ....................................................................................................................163
X. AGRICULTURAL SECTOR ANALYSIS AND RESULTS ...................................................................164
X.A SECTOR OVERVIEW ....................................................................................................................................164
X.A.1 Summary and explanation of economic statistics ..............................................................................164
X.A.2 Quantitative and qualitative characterization of sector ....................................................................165
X.B EMISSIONS OVERVIEW OF SECTOR .............................................................................................................166
X.B.1 Background and discussion of emissions, main sources/causes/drivers, trends................................166
X.B.2 Annual GHG emissions inventory for a recent year..........................................................................167
X.B.3 Historical annual fuel consumption and GHG emissions trends over time.......................................168
X.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS ...............................................................................169
X.C.1 Sources for assumptions ....................................................................................................................169
X.C.2 Description of analytical approach and methodology used...............................................................170
X.D BASELINE (BUSINESS-AS-USUAL) FORECASTS FOR SECTORS.......................................................................171
X.D.1 Energy and fossil fuel consumption (by type) forecast ......................................................................171
X.D.2 Annual GHG forecast ........................................................................................................................173
X.D.3 GHG Mitigation Options and Costs ..................................................................................................174
XI. FORESTRY SECTOR ANALYSIS AND RESULTS ..............................................................................177
XI.A SECTOR OVERVIEW ....................................................................................................................................177
XI.A.1 Summary and explanation of economic statistics ..........................................................................177
XI.A.2 Quantitative and qualitative characterization of sector ................................................................178
XI.B EMISSIONS OVERVIEW OF SECTOR .............................................................................................................178
XI.B.1 Background and discussion of emissions, main sources/causes/drivers, trends............................178
XI.B.2 Annual GHG emissions inventory for a recent year ......................................................................178
XI.C BACKGROUND ASSUMPTIONS FOR SECTOR ANALYSIS ...............................................................................179
XI.C.1 Baseline with policies adopted before 2000 ..................................................................................179
XI.D GHG MITIGATION OPTIONS .......................................................................................................................180
XII. MACRO-ECONOMIC ANALYSIS OF GHG MITIGATION OPTIONS ............................................182
XII.A METHODOLOGY..........................................................................................................................................182
XIII. POTENTIAL PHASE II POLICY OPTIONS..........................................................................................184
APPENDIX I: INTEGRATED MARGINAL ABATEMENT COST (MAC) CURVES...................................191
APPENDIX-II CO2 MITIGATION FROM ELECTRICITY CONSUMPTION IN END USE SECTOR ....193

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APPENDIX-IIIOIL PRICE ASSUMPTIONS......................................................................................................195
APPENDIX-IVWORKSHOP SUMMARIES AND PARTICIPANTS ..............................................................196

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I. Introduction
I.A Purpose and Description of Project
I.A.1 Background
At the annual United Nations Framework Convention on Climate Change (UNFCCC) meeting in
Montreal in November 2005, Parties agreed to begin formal discussions under both the Kyoto Protocol
and UNFCCC on the future international climate policy structure for the post-2012 period. A key
element of this discussion will be what role developing countries will undertake in the international
response to climate change. In many developing countries discussions about, as well as concrete policy
steps to, reducing GHG emissions are already being undertaken, often out of concern over such issues as
energy security, air quality, and economic development.
In February 2005, with financial support from the United Kingdom’s Department for International
Development (DFID), the Tinker Foundation, and the Hewlett Foundation, the Center for Clean Air
Policy (CCAP) and leading partner organizations in four key developing countries (Brazil, China, India,
and Mexico) launched the Assisting Developing Country Climate Negotiators through Analysis and
Dialogue project. For this ongoing project, this team is working in concert to develop a comprehensive
analysis of greenhouse gas (GHG) projections and potential mitigation options, costs, co-benefits, and
implementation policies in these four countries. The project represents an important step in the
discussions on the post-2012 international response to climate change, by providing concrete analysis and
results to help both the internal deliberations in these four countries and the international community.
This project has two phases, briefly described later in this section.
The in-country partners in this project consist of:
• a multi-disciplinary team from Brazil that cooperated on the recent Brazilian National
Communication, including Haroldo Machado Filho, Special Adviser of the General Coordination
on Global Climate Change at the Ministry of Science and Technology, Emilio Lèbre La Rovere,
leading the team of the Center for Integrated Studies on Climate Change and the Environment
(Centro Clima) at the Institute for Research and Postgraduate Studies of Engineering at the
Federal University of Rio de Janeiro (COPPE/UFRJ), Thelma Krug of the InterAmerican Institute
for Global Change Research, and Magda Aparecida de Lima, Luiz Gustavo Barioni, and Geraldo
Martha of the Brazilian Agricultural Research Institute (Embrapa);
• a team from the Institute for Environmental Systems Analysis within the Department of
Environmental Science and Engineering at Tsinghua University of China;
• The Energy and Resources Institute (TERI) of India; and
• The Centro Mario Molina of Mexico.
The results of Phase I have been presented in a series of reports. The reports for Brazil, China and India
were released in November 2006. The report for Mexico will be released in 2007. CCAP has also
prepared an integrated report, “Assisting Developing Country Climate Negotiators through Analysis
and Dialogue Project: Final Phase I Report,” which compares and contrasts the results achieved across
the former three countries. This report presents the results of Phase I (GHG Mitigation Option and Cost
Analysis) of the project analysis for India.
I.A.2 Phase I: GHG Mitigation Option and Cost Analysis
In Phase I of this project, the teams conducted individual GHG emission mitigation analyses for major
economic sectors. The sectors analyzed were electricity; cement; iron and steel; pulp and paper;

transportation; commercial; residential; agriculture; and forestry. Specifically, each country analysis
included the following elements.
• Development of a current overview of each economic sector, including annual number of units
and production capacity, production, fuel consumption, GHG emissions, energy intensity, and
GHG emissions intensity.
• Development of long-term (through the year 2025 or 2030) individual GHG emission
projections under several baseline scenarios for each economic sector. This includes annual
scenarios of production, fuel consumption, GHG emissions, energy intensity, and GHG emissions
intensity.
• Development of detailed marginal abatement cost curves for key technologies and mitigation
approaches in each sector. This includes the total GHG emissions reduction potential and cost
(per metric ton GHG reduced) for 2010, 2015 and 2020.
• Evaluation of the impact of implementation of select packages of GHG mitigation options. The
results to be provided include the annual changes (through 2030) in energy consumption and
intensity, GHG consumption and intensity, total costs and production costs, as well as co-benefits.
• Assessment of economy-wide cost and economic impacts of mitigation packages on parameters
such as GDP, employment, consumer prices, structure of economy, and distribution, using
macroeconomic models and optimization frameworks that incorporate the detailed cost and GHG
emission reduction potential data for key technologies.
• Preliminary analysis of potential domestic policies for implementation of each mitigation option,
including the domestic legal and regulatory framework, political/economic/technical/legal
barriers to implementation, potential key actors and institutions involved, and potential funding
approaches.
• Evaluation of potential international policy options and the implications of the results for each
economic sector for specific international approaches.
The GHG mitigation analysis was conducted using country-specific scenarios for annual population and
gross domestic product (GDP). The teams developed two alternative GHG reference case scenarios for
each sector, partly based on the A2 and B2 scenarios in the Intergovernmental Panel on Climate Change
(IPCC) Special Report on Emissions Scenarios (SRES). The A2 and B2 scenarios were chosen because
the teams felt that these represented divergent scenarios that each had a reasonable probability of
representing the future reality. The A2 scenario is characterized by relatively lower trade flows, slow
capital stock turnover, and slower rates of technological change; the B2 world is characterized by
comparatively greater concern for environmental and social sustainability.1
These two IPCC SRES
scenarios were adapted specifically to India by the TERI team.
It was also desired to develop scenarios that would display the impact of policies and measures
undertaken in the past five years; these may include national energy and other policies, as well as projects
undertaken as part of the Clean Development Mechanism (CDM) of the Kyoto Protocol. Accordingly,
each of the two baseline scenarios was further divided into a scenario assuming implementation of only
those policies and projects announced prior to 2000—“Pre-2000 Policy” scenario—and another scenario
with implementation of all policies announced before 2006—“Recent Policy” scenario. Both scenarios
begin in 2000. A scenario was then developed that assume implementation of select packages of GHG
mitigation options in years after 2005—called the “Advanced Options” scenario. Where appropriate,
each country analysis conducted up to four variations of the Advanced Options scenario based on the
potential cost effectiveness (measured in $/metric ton CO2e reduced) of the mitigation measures analyzed.
The first three Advanced Options scenarios assumed implementation of all measures costing, respectively,
1
IPCC Special Report on Emissions Scenarios, Chapter 4, “An Overview of Scenarios.” Available at
http://www.grida.no/climate/ipcc/emission.

<$0 per tonne, <$5/tonne, and <$10/tonne. The fourth scenario was the most aggressive, and considered
all feasible mitigation options.
An important component of this project is an ongoing series of consultations, meetings and workshops to
ensure the involvement of key governmental, industry and non-governmental officials and institutions in
each country. Regular contact with policymakers provided a direct link to the government and policy
process in each country, and has helped to ensure a realistic analysis and the evaluation of the most
appropriate set of mitigation options and policies. At the start of the technical analysis, workshops was
held in each country (the Beijing workshop was held in July 2005, the Brasilia and Delhi workshops in
August) to obtain feedback and guidance from government policymakers and other stakeholders. This
information was incorporated into the analysis. In March 2006 in Beijing and Delhi and in April in
Brasilia, another series of workshops were held where the results were presented to a large group of
government officials and representatives from industry, universities, think tanks, and non-governmental
organizations. The stakeholders also provided significant input and guidance regarding the mitigation
options and policies to be analyzed for Phase II of the project (see below).
An additional important foundation of the project is that it links directly with international climate change
negotiators through CCAP’s Dialogue on Future International Actions to Address Global Climate
Change—the Future Actions Dialogue or FAD (Box 1) — the leading international dialogue on climate
policy over the last five years. Preliminary results of this project have been presented at various FAD
meetings and final results will be presented at future meetings of the group to help shape and inform these
deliberations.
Box 1. Dialogue on Future International Actions to Address Global Climate Change
The Future Actions Dialogue brings together key senior negotiators from 15 developing and 15 Annex I
countries several times each year to discuss options for future international response to climate change.
This project includes six components:
(1) A series of joint dialogue meetings among high-level negotiators from developed and developing
country Parties and select company representatives;
(2) a series of dialogue meetings, back to back with joint dialogue meetings, for only developing country
negotiators to build capacity, develop policies that countries can implement to meet both climate and
national sustainable development goals, and facilitate an exchange of ideas that will lead to more
fruitful discussions with industrialized countries;
(3) Regional workshops to broaden the network of countries and individuals that understand and
contribute to the design of post-2012 options;
(4) in-depth analysis to identify, elaborate, and test options for designing climate change mitigation
actions by industrialized and developing countries;
(5) Working groups of interested Dialogue participants to explore issues in-depth in between meetings;
and
(6) Production of FAD working papers and a final compendium that presents the comprehensive
analytical findings and policy recommendations developed throughout the project.
For more information on the process, including presentations and papers from the meetings see:
www.ccap.org/international/future.htm
I.A.3 Phase II. Policy and Implementation Strategy
In the next phase of the project, to be conducted from mid-2006 through 2007, CCAP and its in-country
partners will build upon the work and policy connections developed during Phase I. In consultation with
in-county policymakers CCAP and its partners will select a number of the most promising options for

GHG mitigation and conduct a more detailed and in-depth analysis of issues associated with
implementation. This will include an evaluation of the implications of specific international climate
change policy options for GHG mitigation in these four countries; development of a suite of potential
policies and approaches for implementation of each option; and comprehensive and in-depth analysis of
the key actors, barriers and co-benefits associated with each. Phase II will include a series of workshops
in each country to obtain the views of and share results with domestic policy makers and stakeholders. It
will culminate in two international workshops, one in Latin America and one in Asia, to disseminate the
results of the project to a wider regional audience and expand its policy relevance by allowing other
countries to gain from the experience of this project. The results of Phase II for each country will also be
available in a set of individual reports.
I.B Report Structure
This report begins in Chapter 2 with an overview of India, including population and economic statistics
and a profile of its historical energy consumption and GHG emission trends. The chapter concludes with
a summary of the macro assumptions, analytical methodologies and computer modelling tools used in the
analysis. Chapters 3 through 11 present the assumptions and results of the GHG mitigation option and
cost analysis for the individual sectors, and Chapter 12 presents an analysis of the potential impact of
mitigation in the individual sectors on GDP and other macroecnomic variables. The report concludes
with a discussion of the proposed areas that may be focused on for the policy analysis of Phase II.

II. Country Overview
In this section, we provide a brief description of key statistics of India.
II.A Population & Economy2
, and Emissions
II.A.1 Population & Gross Domestic Product
In 2000, India’s population was about 1 billion, accounting for about 17% of the world population.3
In
that same year, India’s gross domestic product (GDP) was approximately US $457 billion, accounting for
1% of the world economy. Indian GDP per capita was about $450 in 2000, which is less than one tenth of
the world GDP per capita of $5,217. Indian GDP in terms of power purchasing parity was higher, at $2.5
trillion, accounting for 5% of the world economy (see Table 1.1.)
Service4
sector contributed the largest share of value added to the Indian national economy in 2000: its
$304 billion accounted for 49% of the economy-wide value added. Industry5
sector of 111 billion USD
attributed 27% of the national value added, followed by agricultural6
sector of $103 billion attributing
25% of the national value added. The global shares of Indian economy in these sectors were 2% for
services, 1% for industry, and 9% for agriculture.
Table 1.1. Population and gross domestic product of India in 2000.
Population GDP GDP per capita
Billion % World Billion US$ % World US$ rel. % world
India 1.02 17% 457 1% 450 9%
WORLD 6.05 100% 31,573 100% 5,217 100%
Source: World Development Indicator 2005 (World Bank, 2005)
II.A.2 International Trade and Role/Position in the World Economy
India’s international trade in goods accounted for approximately 21% of its GDP7
in 2000. India was a
net importer of merchandise goods, importing about $45 billion and exporting $37 billion. Manufactures
accounted for most of the traded merchandise at 12.5% of India’s GDP, driven by more exports (7.1%)
than imports (5.4%). Fuel imports made up the next large shares of merchandise trades, accounting for
more than a third of imported merchandise and 4.1% of India’s GDP. Other traded goods were relatively
marginal, each accounting for mostly less than 1% of India’s GDP (Table 1.2).
In 2004, India produced 0.8 million barrels per day (bbl/d) of oil and consumed 2.5 million bbl/d,
importing about 1.7 million bbl/d (EIA, 2005).8
The country’s oil consumption has steadily grown in the
past, from 1.5 million bbl/d in 1994 and 2.0 million bbl/d in 1999, and is expected to continue growing to
2
In this section, all financial figures are in constant $2000.
3
Note that in this chapter and in those following, data for a given historical year (e.g., 2000) may have been taken from different
sources. Identical parameters for the same year may therefore differ in different sections.
4
Services include wholesale and retail trade (including hotels and restaurants), transport, and government, financial,
professional, and personal services such as education, health care, and real estate services (World Bank, 2005).
5
Industry includes mining, manufacturing, construction, electricity, water and gas (World Bank, 2005).
6
Agriculture includes forestry, hunting, and fishing, as well as cultivation of crops and livestock production (World
Bank, 2005).
7
Trade in goods as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all
in current U.S. dollars.
8
Energy Information Agency (2005). US. DOE. Country Analysis Briefs: India.
http://www.eia.doe.gov/emeu/cabs/India.html

3.1 million bbl/d by 2010. India is attempting to expand domestic exploration and production to curb
down its dependence on imported oil.
Table 1.2. India’s merchandise trading by category in 2000
Exports Imports
Billion
US$
% of GDP
% of World
Trading
Billion
US$
% of GDP
% of World
Trading
Merchandise TOTAL 37.4 9.3% 0.7% 45.4 11.3% 0.8%
Agricultural Raw Material 0.5 0.1% 0.4% 1.6 0.4% 1.3%
Food 4.8 1.2% 1.2% 2.2 0.5% 0.5%
Fuel 1.6 0.4% 0.3% 16.7 4.1% 2.7%
Manufactures 28.6 7.1% 0.7% 21.8 5.4% 0.5%
Ores and Metals 1.0 0.3% 0.6% 2.4 0.6% 1.3%
Other 0.8 0.2% 0.6% 0.9 0.2% 0.6%
In terms of financial flow, net foreign direct investment (FDI)9
of $2.7 billion accounted for about 1% of
India’s GDP in 2000, almost exclusively driven by the FDI inflows (see Table 1.3). With portfolio and
other investment inflows and outflows, the total private capital flow accounted for 7.5% of its GDP,
which is about a quarter of the world’s gross private capital flow at 28.4% of its GDP.10
Official
development assistance and official aid11
accounted for a very small part of the financial flow in India,
accounting for only 0.3% of the GDP in 2000.
Table 1.3. Key statistics of financial flow in and out of India in 2000
Foreign Direct Investment
Net Net inflows Net outflows
Gross Private
Capital Flows
Official Development
Assistance and
Official Aid
BoP*,
Billion US$
BoP*,
Billion US$
% of
GDP
BoP*,
Billion US$
% of
GDP
% of GDP Billion US$
% of
GDP
India 2.7 3.2 0.8% 0.4 0.0% 7.5% 1.3 0.3%
World 134.7 1,335.5 4.9% 1,200.8 4.3% 28.4% 51.4 0.2%
*BoP: Balance of Payment
II.A.3 Geography
Covering 3.28 million square kilometres, India accounts for 2.4 % of world’s geographic area and 16.2 %
of world’s population. The country is endowed with varied soils, climate, biodiversity and ecological
regimes (MoEF, 2004). It can be classified into four broad geographical areas including the Himalayas
9
Foreign direct investment (FDI) are the net inflows of investment to acquire a lasting management interest (10
percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the
sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the
balance of payments (World Bank, 2005).
10
Gross private capital flows are the sum of the absolute values of direct, portfolio, and other investment inflows
and outflows recorded in the balance of payments financial account, excluding changes in the assets and liabilities of
monetary authorities and general government. The indicator is calculated as a ratio to GDP in U.S. dollars.
11
Net official development assistance (ODA) consists of disbursements of loans made on concessional terms and
grants by official agencies of the members of the Development Assistance Committee (DAC), by multilateral
institutions, and by non-DAC countries to promote economic development and welfare in countries and territories in
part I of the DAC list of recipients (World Bank, 2005).

(East and West), Indo-Gangetic Plains, the Thar Desert and the Southern Peninsula flanked by the
Western and Eastern Ghats. In addition, there are also the island systems of Lakshadweep, Minicoy
Islands in the Arabian Sea and the Andaman and Nicobar Islands in the Bay of Bengal. 14 major river
systems, besides a number of smaller water bodies, drain through the land mass of the country (MoEF,
2002b).
II.A.4 Rural vs. Urban Issues
Although the Indian economy is experiencing high levels of urbanization with around 28% of the
population residing in urban areas, a little less than three-fourths of the population is concentrated in rural
areas. The indicators reflecting the disparities between the rural and urban areas are per-capita
consumption expenditure, employment indicators, incidence of poverty, access to electricity, shelter and
quality of housing, sanitation (access to toilet facilities), access to safe drinking water and road
connectivity (GoI, 2002b)
Per Capita Consumption Expenditure: At the national level, the monthly per-capita expenditure has
increased in real terms by nearly 25% in rural areas from Rs.78.90 to Rs.98.49 and over 29% in urban
areas from Rs.111.01 to Rs.143.49 between 1983 and 1999-2000. The proportion of expenditure on food
is expected to decline with economic prosperity. Although, the share of expenditure on food declined
from 65.6% in 1983 to 59.4% in 1999-2000 in rural areas, there was corresponding decline of 10% in
urban areas from 58.7% in 1983 to 48.1% in 1999-2000 (GoI, 2002b).
Employment indicators: The growth of employment for persons employed in the age-group above15
years was 1.3% for rural areas and 2.4% for the urban areas during the period of 1980 to 1999-2000.
Similarly, during the period 1983 to 1999-2000, the incidence of unemployment has increased from 2% in
1983 to 2.3% in 1999-2000 at the national level. There was an increase in the incidence of unemployment
in rural areas. In the case of urban areas, however, the incidence of unemployment has declined from
5.1% from 1983 to 4.8% in 1999-2000 (GoI, 2002b).
Incidence of poverty: The Government of India’s Planning Commission currently uses a minimum
consumption expenditure level reflected in an average (food) energy adequacy norm of 2,400 and 2,100
kilo calories per capita per day to define poverty line separately for rural areas and urban areas. These
poverty lines are then applied on the National Sample Survey Organization’s (NSSO) household
consumer expenditure distributions to estimate the proportion of poor in the rural and urban areas. In
absolute terms, the number of poor declined from about 323 million in 1983 to 260 million in 1999-2000.
While the proportion of poor declined from 45.65% in 1983 to 27.09% in 1999-2000, the corresponding
decline in urban areas has been from 40.79% in urban areas to 23.62% during the period (GoI, 2002b).
Access to civic amenities
a) Shelter and quality of housing: The proportion households living in houses with two or less rooms were
marginally higher in rural areas at 71.47% as compared to 69.92% in urban areas. With respect to the
quality of housing, the data provided by the Phase II of National Family Health Survey (NFHS-II) in
1998-99 indicates that nearly 32% of the households lived in pucca12
(houses at an All-India level. It was
only 20% of the households in rural areas and two-thirds of the households in urban areas GoI, 2002b)
12
A house is classified as a pucca house if both the walls and roof are made of pucca material .A wall is considered
pucca when the material used in it is burnt brick, G.I. sheets or other metal sheets, stone or cement concrete. A roof
is considered pucca when the material used includes tiles, slate, cement sheets, bricks, lime and stone or RBC/RCC
concrete.

(b) Access to sanitation: As per the 1991 census, less than 25% of the country’s households had toilet
facilities within the premises of their residences. The proportion was less than 10% for rural households
and around 64% for urban households. As per the data provided by the NFHS-II, 1998-99, less than 20%
of the rural households and over 80% of urban households had access to toilet facilities (GoI, 2002b).
(c) Access to drinking water: In the 1991 Census, over 81% of the urban households and 56% of the rural
households had access to safe drinking water. However, the data from the 2001 census results and the
NFHS-II conducted in 1998-99 reveals that proportion of population having access to safe drinking water
was significantly higher in urban areas at 93% as against rural areas where it was 72% (GoI, 2002b).
(d) Access to electricity: The rural-urban gap is quite striking with regards to access to electricity. In 1991,
at the national level, 75% of the urban households had access to electricity whereas only 30% of those
living in the rural areas had access to this facility. The data from NFHS-II indicates that there has been a
considerable improvement in the pace of coverage of electricity at the household level in the 90s. About
91% of the urban population had access to electricity whereas the corresponding figure for rural areas was
48% (GoI, 2002b).
II.A.5 Poverty and Development
In India, a considerable proportion of people depend, for their livelihood, primarily on the natural
resource base of their immediate environment. Therefore, poverty and a degraded environment are closely
inter-related. Restoring natural systems and improving natural resource management practices at the
grassroots level are central to any strategy to eliminate poverty.
Over the years, India has made substantial progress in human development with the Human Development
Index (HDI) increasing from 0.577 in 2000 to 0.602 in 2003. Poverty reduction has been one of the
important goals of development policy of the country. Various programmes have been launched over the
years aimed at poverty alleviation through employment generation activities (including self-employment
through skill development and training), welfare of weaker sections, women and children, and provision
of basic services. Micro-finance programmes have also emerged as effective instruments of poverty
alleviation in India.
The proportion of poor people (people below the poverty line) has declined considerably in India from
54.88% in 1973-74 to 51.32% in 1977-78, 44.48% in 1983, 38.86% in 1987-88, 35.97% in 1993-94 and
26.10% in 1999-2000 (MoEF, 2004).
An increase in per capita income over time is also an indicator of reduction in poverty. The Economic
Survey, 2005-06 states that India’s Per Capita Net National Product (NNP) at 1999-2000 prices increased
from US$ 355 in 2000-01 to US$ 430 in 2004-05.13
One of the main objectives of the national development strategy is to reduce the incidence of poverty to
10% by 2012. This implies doubling of per capita income during the current decade at the targeted GDP
growth rate at 8%. Achieving these development priorities will require a substantial increase in energy
consumption at both the macro and micro levels.
13
The exchange rate used is US $ 1 = Rs. 45.68 (pertaining to the year 2000) to convert the figures from Indian
rupees to US dollars.

II.A.6 Sustainability and Development
Integrating the national development goals with the sustainable development objectives have been
regarded integral to the national planning process. Economic development, social development and
environmental protection are the three interdependent and mutually reinforcing pillars of sustainable
development.
Source: Adapted from Munasinghe, 1992; 1994
The Indian Government is committed to each of these three goals of sustainable development as
highlighted in its various plans and policies.
II.A.6.i Social Development
The Tenth Five-Year Plan (2002-07) of the Government of India emphasizes that while India must target
for a high rate of economic growth, it should simultaneously strive for the enhancement of human well-
being (GoI 2002a). This includes adequate provision of consumer goods, equitable access to basic social
services (education, health, drinking water and basic sanitation), reduction of disparities and greater
participation in decision making. These targets form the cornerstone of social development aspect of
sustainable development.
II.A.6.ii Economic Development
The Indian economy is poised to grow at an average annual growth rate of 8% per annum as envisaged in
the Tenth-Five Year Plan of the Government of India. India is emerging as a global market player
undergoing rapid structural transformation manifesting itself in the form of higher share of value added
by the services sector (more than 50%) in aggregate Gross Domestic Product (GDP). The sustainability
aspect of economic growth lies in the fact that the economy is able to sustain the high rate of economic
growth with 8% GDP growth rate being the minimum threshold level of the GDP growth rate of the
economy.
II.A.6.iii Environmental Protection
The Ministry of Environment and Forests (MoEF) is India’s apex administrative body for environmental
policy-making. In 1976, environmental concerns were incorporated into the Directive Principles of State
Policy and Fundamental Rights and Duties. In 1992, the MoEF brought out the Policy Statement for
Abatement of Pollution and the National Conservation Strategy and Policy Statement on Environment
and Development (MoEF, 2002a). These are aimed at developing and promoting initiatives for the
protection and improvement of the environment. The Environmental Action Programme was formulated

in 1993 with the objective of improving environmental services and integrating environmental
considerations into economic development. Since then, the Indian Government is taking initiatives to
achieve environmental sustainability by promoting energy-efficiency in the energy consuming sectors,
forest conservation activities and protecting bio-diversity
II.A.7 India’s Role to Date in Climate Policy Negotiations
The Government of India has been a key player in international climate change negotiations and in the
drafting of the United Nations Framework Convention on Climate Change (UNFCCC). India ratified the
UNFCCC in November 1993 and since then has been playing an active role in climate change
negotiations representing the developing country perspective. The Government of India acceded to the
Kyoto Protocol of the UNFCCC in August 2002. Being a Party to the UNFCCC and the Kyoto Protocol,
the country takes all practical measures to contribute in addressing global climate change despite the fact
that its contribution to the historical GHG build up in the earth’s atmosphere is very small compared to
the developed countries. The per capita emission from the country is one tonne of CO2 compared to world
average of 4 tonnes, and 20 tonnes for the USA.
To fuel the high rate economic growth (GDP) of 8% per annum, energy consumption needs to be
augmented. However, the country is introducing different measures particularly in the energy and
environment sector driven by national priorities and goals. Some of these measures for reducing GHG
emissions are described below and they have also other co-benefits:
• Improved energy efficiency
• Power sector reforms
• Promotion of clean coal technologies
• Promoting hydro and renewable energy
• Cleaner and lesser carbon intensive fuel for transport
• Environmental quality management
The proactive approach of the Government of India regarding climate change has led to the country
representing important positions in the climate change arena e.g. Clean Development Mechanism (CDM)
Executive Board membership was offered to India. Recently, India has been nominated as the Chair of
the Methodology Panel of the CDM Executive Board and has been given membership in the Joint
Implementation (JI) Supervisory Committee which was set up during the COP11.
The Government of India has a key role to play in the recently initiated dialogue on the post 2012 climate
regime. The Government of India is emphasizing the adoption of sustainable development policies.
Further, through transfer of clean and energy efficient technologies from Annex I countries and incentive
mechanisms such as CDM participation of developing countries in addressing climate change may further
be catalyzed.
The analysis carried out in following sections outlines the contribution of such policies and measures in
bringing down the GHG emissions.

II.B Historical summary & explanation of the country’s national energy and
emissions profile
II.B.1 Total annual fuel consumption by sector and fuel type from 1990 to 2000
The total annual final energy consumption in India has steadily increased from less than 5230 PJ in 1990-
91 to more than 8480 PJ in 2000-01. Its break-up by sectors and by fuel type is given in the following
tables
Table 2.1: Total Annual Energy Consumption by Sector from 1990 to 2000
Total annual Energy consumption (in PJ)
Sector 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Agriculture 205 235 255 285 324 352 349 366 719 747 778
Industry 2634 2759 2868 2973 3138 3245 3515 3521 3921 4068 4091
Transport 1172 1227 1281 1323 1397 1557 1674 1740 1311 1316 1400
Residential 528 549 574 599 638 639 675 721 829 995 934
Other energy uses 163 168 172 184 193 286 291 316 291 206 330
Non-energy uses 528 536 561 532 571 590 662 708 869 984 948
Total 5229 5472 5711 5895 6260 6668 7165 7372 7940 8314 8480
Source: TEDDY (various issues)
It is clearly evident that industry consumes a large proportion of final energy in the country followed by
the residential sector and non-energy uses.
Table 2.2: Total Annual Commercial Energy Supply by Type from 1990 to 2000
Total annual commercial energy supply (in PJ)
Energy Type 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Coal 4379 4698 4961 5254 5525 5833 6137 6303 5775 6134 6432
Oil 2407 2474 2554 2634 2846 2945 3351 3480 3667 3997 4331
Natural Gas 645 670 649 657 695 801 816 948 984 1020 1057
Hydro Power 251 255 247 247 292 256 215 263 263 284 263
Nuclear Power 21 21 25 21 20 28 32 36 35 47 60
Total 7704 8118 8436 8813 9378 9862 10550 11028 10724 11482 12143
Source: TEDDY (various issues)
II.B.2 Energy intensity (per unit of GDP) from 1990 to 2000
The Table 2.3 below clearly indicates that the energy intensity per unit of GDP (expressed in terms of
MJ/US$ of GDP) for Indian economy has declined from 50.8 MJ/US$ in 1990-91 to 46.5 MJ/US$ in
2000-01.
There has been a decline in the energy intensity of GDP by around 10 percentage points during the 10
year period from 1990 to 2000. It can be inferred that to produce one unit of economic output, there has
been a corresponding decline in amount of energy input during the period 1990 to 2000. Thus even while
the economy is heading towards attaining high GDP growth rate, it is exhibiting energy-efficiency.

Table 2.3: India’s Energy Intensity per Unit of GDP
Year Energy Intensity
14
(MJ/$)
1990 50.8
1991 52.8
1992 52.2
1993 51.5
1994 51.1
1995 50.1
1996 49.7
1997 49.6
1998 45.3
1999 45.7
2000 46.5
Source: MoF, 2002 and TEDDY (various issues)
II.B.3 Annual GHG emissions inventory for 2000
Information on India’s GHG emissions and CO2 removal by sinks is available only for the year 1994
(MoEF, 2004). In order to prepare a transparent and comparable inventory, the Government of India has
used the Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories. The sources from
which the emissions have been estimated include energy, industrial processes, agriculture, land use, land
use change and forestry (LULUCF), and waste. The gases covered are carbon dioxide (CO2), methane
(CH4), and nitrous oxide (N2O).
II.B.3.i Total national GHG emissions by greenhouse gas type and source
Table 2.4: GHG emissions / Sequestration (Million Tonnes) by Greenhouse Gas Type-1994
Greenhouse Gas Type
Emissions
(million tonnes)
Emissions
(CO2 Equivalent
15
)
Emissions (%)
CO2 Emissions 817.02 817.02
CO2 Removals 23.53 23.53
Net CO2 Emissions 793.49 793.49 64.59
CH4 Emissions 18.08 379.73 30.91
N2O Emissions 0.18 55.32 4.50
Total 1228.54 100.00
Source: India's Initial National Communication to the UNFCCC, MoEF, 2004
Table 2.5: GHG Emissions / Sequestration (million tonnes) by Source – 1994
GHG Sources and Sink
Categories
CO2 Emissions
(million tonnes)
CH4
Emissions
N2O
Emissions
CO2 equivalent
emissions
CO2
Removals
All Energy 679.47 2.90 0.01 743.82
Industrial Processes 99.88 0.00 0.01 102.71
Agriculture 14.18 0.15 344.49
LULUCF 37.68 0.01 0.00 14.29 23.53
Waste 1.00 0.01 23.23
Total 817.02 18.08 0.18 1228.54 23.53
14
Energy Intensity is estimated by dividing the figures of the total commercial energy supply for by the
corresponding figures of Gross Domestic Product (GDP).
15
Converted by using GWP (global warming potential) indexed multipliers of 21 and 310 for
converting CH4 and N2O respectively

II.B.3.ii Total national GHG emissions/sequestration by greenhouse gas type
N2O Emissions
5%
CH4 Emissions
31%
Net CO2
Emissions
64%
Figure 2.1: GHG Emissions by Greenhouse Gas Type – 1994
II.B.3.iii Total national GHG emissions/sequestration by source
All Energy
61%Industrial
Processses
8%
Agriculture
28%
Waste
2%
LULUCF
1%
Figure 2.2: GHG Emissions by Source – 1994
II.B.3.iv Total national CO2 emissions by fuel type
The latest national GHG emissions inventory is available for the year 1994 (MoEF, 2004). Thus the
national CO2 emissions for the year 2000-01 have been calculated by multiplying the environmental
coefficients (as per IPCC Guidelines) of respective fuels by the amount of each one’s availability or
consumption (as given in various volumes of TEDDY). The total CO2 emissions in the country were
nearly 880 million tons in 2000-01. The fuel-wise break-up is given below.
Table 2.6: CO2 Emissions by Fuel Type for the Year 2000-01
Fuel
CO2 emissions
(million tonnes)
Coal (including all types of coal and lignite) 550
Natural Gas 59
Liquefied Petroleum Gas 19
Naphtha 27
Motor Gasoline 21
Aviation Turbine Fuel 7
Kerosene 34
High Speed Diesel 114
Light Diesel Oil (including other petroleum products) 29
Fuel Oil 20
Total 880
63 % of total CO2 emissions in the country are accounted for by coal, 13 % by diesel, 7 % by natural gas
and 1 to 4 % each by other fuels.

59
550
271
Coal Natural Gas Petroleum Products
Figure 2.3: National CO2 emissions by Fuel Type 2000-01
II.B.4 Geographic breakdown or discussion of emissions
Emissions inventory for various States and Union Territories of India have been estimated for 1995 by
Garg and Shukla (2002). A quick glance at the estimates reveals that bigger states like Uttar Pradesh
(including Uttaranchal), Madhya Pradesh (including Chhattisgarh), Maharashtra, Andhra Pradesh, Bihar
(including Jharkhand), Tamil Nadu and West Bengal account for the highest emissions in the country.
The apparent causes are greater industrial activity and higher vehicular movement in these states. The
States / UTs accounting for very low emissions are mainly those which are not-so-well developed
industrially and are not even densely populated. These include Lakshadweep, Andaman and Nicobar
Islands, Pondicherry, Dadra and Nagar Haveli and the North-Eastern states. The details of the various
types of emissions from different States and Union Territories for the year 1995 are given in the Table
below.

Table 2.7: Emission Inventory for Indian States and Union Territories, 1995
States and Union
Territories
CO2
(million tons)
CH4
(‘000
tonnes)
N2O
(‘000 tonnes)
NOx
(‘000 tonnes)
SO2
(‘000
tonnes)
CO2
equivalents
(million Tons)
Andhra Pradesh 75.0 1307 25.6 319.3 434.1 110.4
Arunachal Pradesh 0.3 26 0.1 3.4 1.8 0.9
Assam 3.3 801 2.4 41.2 30.6 20.9
Bihar 59.3 1778 14.5 244.3 343.7 101.1
Goa 1.4 15 0.1 9.0 17.2 1.7
Gujarat 58.7 844 14.4 232.0 339.6 80.9
Haryana 16.5 339 12.3 88.4 114.9 27.4
Himachal Pradesh 2.9 104 0.9 13.4 13.0 5.4
Karnataka 22.0 778 15.4 134.3 133.1 43.1
Kerala 8.0 296 2.2 66.3 64.6 14.9
Madhya Pradesh 93.7 1894 17.7 337.8 523.4 139.0
Maharashtra 83.0 1671 28.4 390.6 531.0 126.9
Manipur 0.2 33 0.4 2.7 1.5 1.0
Meghalaya 0.5 37 0.2 5.3 3.2 1.3
Mizoram 0.1 13 0.1 1.2 0.7 0.4
Nagaland 0.2 36 0.3 2.7 1.4 1.1
Orissa 33.7 1082 6.2 148.4 236.4 58.3
Punjab 25.7 513 19.8 129.9 186.4 42.6
Rajasthan 27.0 1044 10.5 144.7 176.7 52.2
Sikkim 0.1 9 0.1 0.9 0.8 0.3
Tamil Nadu 69.9 991 10.4 298.9 450.6 93.9
Tripura 0.2 61 0.3 4.1 2.3 1.6
Uttar Pradesh 117.5 2584 55.0 508.0 615.1 188.8
West Bengal 56.6 1457 11.4 226.7 328.5 90.7
Andaman and
Nicobar
0.2 3 0 1.6 1.0 0.3
Chandigarh 1.0 8 0 4.7 4.0 1.2
Dadra and Nagar
Haveli
0.2 4 0 1.9 1.5 0.3
Delhi 18.5 134 0.5 83.5 68.4 21.5
Lakshadweep 0 1 0 0 0 0
Pondicherry 0.6 8 0.3 4.5 4.7 0.9
Jammu and Kashmir 1.6 180 1.3 11.6 7.7 5.8
All India 778.0 18049 251.0 3462.0 4638.0 1234.8
Source: Emissions Inventory of India, Amit Garg and P R Shukla, 2002
II.B.5 Emissions Intensity (per unit of GDP and per capita) from 1990 to 2000
International Energy Agency (IEA) has published data on CO2 emissions from fuel combustion for more
than 140 countries for the years 1971 to 2002 (IEA, 2004a). The 2004 edition of the publication also
provides data on CO2 emissions per unit of GDP as well as per capita.
Table 2.8: CO2 Emissions Intensity (per unit of GDP)16
Year CO2 Emission Intensity (kg / US$)
1990 2.16
1995 2.23
1998 2.09
1999 2.06
2000 2.07
Source: CO2 Emissions from Fuel Combustion - Highlights –1971-2002 (2004 Edition), International Energy
Agency, pp 99.
16
The figures for GDP have been converted to US $ using exchange rates and 1995 prices.

Even though there has been an irregular movement, the CO2 emissions have declined from 2.16 kgs to
2.07 kgs per US $ of GDP over the decade 1990-2000 (see table above). On the other hand, the CO2
emissions per capita have steadily increased from 0.70 tonnes to 0.96 tonnes per capita during 1990-2000
(See table 2.9 below).
Table 2.9: CO2 Emissions Intensity (tonnes/per capita)
Year CO2 Emission Intensity (tonnes / capita)
1990 0.70
1995 0.85
1998 0.90
1999 0.93
2000 0.96
Source: CO2 Emissions from Fuel Combustion - Highlights –1971-2002 (2004 Edition), International Energy
Agency, pp105
II.C Comparison with rest of world above areas
India’s primary energy demand has grown over the last thirty years at an average rate of 3.6% a year (IEA,
2004b). Including traditional fuels, it accounts for about 5% of total world primary energy demand. Coal
is the dominant commercial fuel in India, meeting half of commercial primary energy demand and a third
of total energy demand (IEA, 2004b).
Total primary energy supply in India has been 538 million tonnes of oil equivalent compared to 10376 for
the world, 2290 for USA and 1489 for EU-15. The percentage change in primary energy supply from
1990 to 2002 has been 47% for India as compared to 18.7% for the world, 18.8% for USA and 12.2% for
EU-15 (IEA, 2004b).
Per capita CO2 emissions in India in 2002 were 969 kg CO2 compared to 3890 kg for the world, 16931 kg
for Canada, 19663 kg for USA, 8413 kg for EU-15, etc. Electricity and heat production and the
manufacturing industries and constructions activities were the two sectors contributing maximum to the
CO2 emission from India; whereas on the world level it was electricity and heat production, transport and
the manufacturing industries and construction sector in the decreasing order of their contribution to CO2
emissions (IEA, 2004a).
II.C.1 Ranking
India, despite supporting 17% of the world population accounts for 5.7% of the GDP (based on 1995 US$
prices and PPPs) and consumes only 5.2% of the total primary energy supply the world over. With 1,016
million tonnes of CO2 from fuel combustion in 2002, India is the fifth largest emitter of CO2 after the US,
China, Russia and Japan. This is however only 4.2% of the world CO2 emissions in 2002.
CO2 emission per unit of GDP in India in 2002 has been 0.41 kg CO2 (using 1995 US$ prices and PPPs),
almost 9% lower than its 1990 level (IEA, 2004a). The world average CO2 emissions per unit of GDP has
been 0.56 kg CO2 (using 1995 US$ prices and PPPs) and it has shown a reduction of 17.6% since the year
1990.

II.D Background for overall analysis
II.D.1 Discussion of all cross-cutting macro assumptions used and sources for
assumptions
II.D.1.i Macro assumptions used in the study
The analysis in this study has been conducted for India at the national level for the timeframe extending
from the year 2001 up to 2031 with time intervals of five years each coinciding with the Five Year
Development Plans of the Government of India. Throughout the analysis, the years periods refer to the
financial year commencing from 1st
April ending 31st
March A discount rate of 10% has been used for the
analysis. No sector-specific discount rates have been used.
II.D.1.ii Fuel Prices and availability
The common price trajectory assumptions based on IEA projections for oil have been considered as
presented in table below.
Table 2.10: Common Oil Price Trajectory
Year Oil Price (US$ per barrel)
2000 29.20
2005 33.99
2010 25.00
2015 26.75
2020 28.50
2025 30.31
Source: CCAP Estimates
For imported fuels c.i.f. prices have been considered while f.o.b. prices are taken for domestic extraction
and exports.
For coal and natural gas current prices as discussed with Indian experts are used and assumed not to vary
during the modelling period. For coal, correction factors have been used to represent the difference in
quality (calorific value) of various categories of coal considered in the model (domestic, imported and
exported coal).
Table 2.11: Prices of Different Types of Coal Adjusted for Calorific Value
Fuel Current price (US$/tonne)
Imported 60
Non –coking coal
Domestic 35
Imported 85
Coking coal
Domestic 59
Lignite Domestic 25
For LNG the c.i.f. cost of the latest Iranian deal (US$3.515/mmbtu) with an addition re-gasification cost
of US$ 0.58/mmbtu has been used. For the import of natural gas by pipelines re-gasification cost is not
included. For domestic natural gas f.o.b. price of US$ 3.21/mmbtu has been considered.
The indigenous production of coking coal has remained at around 30 million tonnes over the past few
years and is not expected to increase considerably in the future. The production of non-coking coal in
India was around 299 million tonnes in 2001 and for the year 2036 the maximum production of non-
coking coal is expected to be no more than 550 million tones (TERI estimate). The levels of indigenous
production of different types of coal are shown in Table 2.12.

Table 2.12: Maximum Levels of Domestic Coal Availability
Fuels 2001 2036
Coking coal (million tonnes) 27 50
Non-coking coal (million tonnes) 299 550
Lignite (million tonnes) 25 50
Source: TERI estimates
II.D.1.iii CO2 emission factors
The Table 2.13 below presents the India-specific CO2 emission factors used in the analysis for estimating
the historical CO2 emissions associated with various fuels. Similarly, the projected CO2 emissions are
computed using the same figures for associated with various forms and sources of energy
Table 2.13: India Specific CO2 Emission Factors
Fuel
CO2 emission factor
(tonnes of CO2/TJ)
Crude Oil 72.60
Aviation turbine fuel 70.79
Diesel 73.33
Gasoline 68.61
Fuel oil/ residual fuel oil 76.59
Kerosene 71.15
Natural gas 55.82
Naphtha 72.60
Gas/ diesel oil 73.33
LPG 62.44
Lignite 93.10
Non coking coal domestic 78.65
Non coking coal imported 88.38
Coking coal prime domestic 84.33
Coking coal inferior domestic 84.33
Imported coking coal 87.03
Source: IPCC, 1996; MoEF, 2004
II.D.1.iv Population and GDP Assumptions
• Assumptions regarding GDP
The Tenth Five Year Plan document (covering the period 2002-2007) prepared by Planning
Commission17, Government of India aims at achieving an average growth rate of real Gross Domestic
Product (GDP) of 8% per annum over the period 2002-07. The rationale behind targeting 8% GDP
growth rate is the aim of doubling the per-capita income over the next decade with a more equitable
regional distribution bringing about substantial improvement in the welfare of the entire population. Thus
based on the assumption that the 8% growth rate can be sustained for period extending beyond Tenth-
Five year plan period, the study has projected Gross Domestic Product to grow at an average annual rate
of 8% per annum through the entire modelling period (2001-2036).
17
The Planning Commission is the apex organization under the aegis of Government of India. It is charged with the
responsibility of making assessment of all resources of the country, augmenting deficient resources, formulating
plans for the most effective and balanced utilisation of resources and determining priorities.

As per the convention adopted by the Central Statistical Organization, Ministry of Statistics and
Programme Implementation, Government of India, the Indian economy is divided into different sectors
and sub-sectors by types of economic activity:
(a) Primary sector: This sector comprises mainly of Agriculture and Allied Activities such as
• Forestry and logging, Fishing and Mining and Quarrying
(b) Secondary Sector (Industry): This sector is further classified into following sub-sectors;
• Manufacturing
• Construction
• Electricity, gas and water supply
(c) Tertiary sector: This sector is further subdivided as follows:
• Trade, hotels, transport and communication
• Financing, insurance, real estate and business services
• Public administration and defence and other services
The sectoral composition of GDP has undergone significant transformation starting from the 1st Five year
plan. The share of agriculture sector in aggregate GDP has declined from 41.8% in 1980 to 24% in 2003-
04. This decline can be attributed primarily to decline in the share of gross capital formation (investment)
in the agriculture sector in the early 1990’s from 1.92% of GDP in 1990-91 to 1.31% in 2003-04 thereby
hampering agricultural growth. Thus the predominance of agriculture is reduced by rise in the share of
industry and services in GDP from 21.6% in 1980 to 24.5% in 2003-04 and from 37% in 1980 to 51% in
2003-04 respectively. This is represented in the Figure 2.4 that follows:
Contribution of Sectoral GDP(in %)
0%
20%
40%
60%
80%
100%
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Year
Share(%)
Agriculture Industry Services
Figure 2.4: Share of Sectoral GDP in Aggregate GDP (%)
Source: MoF, 2005
The India Vision 2020 document (Planning Commission) highlights that knowledge resources
(technology, organization, information, education and skills) has replaced capital as the most important
determinant of development. This is prime reason for a rapidly increasing share of services sector in GDP
as the sector is essentially knowledge based. The document lays down the reference levels for sectoral
composition in GDP (%) that India should strive to attain by 2020. The reference levels for 2020 as

presented in India Vision 2020 document (Planning Commission) and TERI estimates 2020 for Sectoral
Composition of GDP (%) are presented in Table 2.14 below:
Table 2.14: Sectoral Composition of GDP (%)
Reference 2020 TERI estimates 2020
Agriculture 6 17
Industry 34 28
Services 60 55
Source: Reference 2020 levels: Based on World development Indicators, 2001, The World Bank
The reference 2020 levels mentioned above are highly optimistic. As per these levels, share of agriculture
in aggregate GDP is projected to decline to a level of 6% in 2020. However, although the contribution of
agriculture in GDP has declined, the proportion of population dependent on agriculture has not declined
in a similar fashion. According to the Census of India 2001, 65% of the total population is still dependent
on agriculture for their livelihood while the other sectors account for the rest. In this context, it is essential
to highlight that 6% share of agriculture, 34% of industry and 60% of services in total GDP implies that
income generated by the agriculture sector would be quite low and hence would necessitate shifts of large
chunks of population engaged in the agriculture activities towards industry and services which employs
skilled labour. Furthermore, given the thrust on accelerating rate of agricultural growth in the 10th
Five
Year Plan by formulating and implementing policies focussed on agriculture growth. Moreover,
achieving food security18
has been a major goal of development in India after independence. Despite the
fact that food production in the country has increased from 51 million tonnes to 211 million tonnes in
2003-04, complete food security at the household level has still not been achieved with 21% of the
population still suffering from under nourishment(FAO, 2004). Thus, the decline in the share of
agriculture sector will not be as rapid as mentioned in Report of the Planning Commission Vision 2020
(GoI, 2002c).
TERI has estimated that rate of growth of the share of services sector in GDP has grown at an average
annual growth rate of 0.51% during year 2003-04. Assuming that the share of services sector in GDP
grows at this rate starting from 2004-05 to 2036-37, the share of services sector in GDP is projected to
grow to 60% by 2036-37. The share of industrial sector in aggregate GDP has increased at an average
annual growth rate of 0.31%. This results in a projected share of 30% in GDP for the year 2036-37. The
rest of the share (10%) is accounted for by the agriculture sector.
The following table shows the sectoral projections for GDP up to 2036 based on 8% growth rate.
Table 2.15: Sectoral GDP and Aggregate GDP at Factor Cost (in US $ Million)19
18
According to World Food Summit 1996,”food security exists when all people, at all times have physical and
economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active
and healthy life”(FAO,1996)
19
The exchange rate used is US $ 1 = Rs. 45.68 (pertaining to the year 2000) to convert the figures from Indian
rupees to US dollars.
Sector 2001 2006 2011 2016 2021 2026 2031 2036
Agriculture 72,958 86,541 116,687 155,690 205,033 265,547 336,413 413,366
Industry 67,766 107,510 160,435 239,412 357,269 533,143 795,595 1,187,246
Services 136,846 200,449 302,530 456,595 689,120 1,040,060 1,569,719 2,369,111
Total 277,571 394,500 579,651 851,697 1251,423 1,838,750 2,701,727 3,969,724

• Assumptions regarding Population
Population projections for India have been estimated by various agencies - both international and national.
Internationally, the Population Division of the Department of Economic and Social Affairs of the United
Nations Secretariat (UNPD) is entrusted with the responsibility of preparing demographic estimates and
projections for all countries and areas of the world, as well as urban and rural areas and major cities, and
serve as the standard and consistent set of population figures for use throughout the United Nations
system. Within India, Population Foundation of India (PFI), Office of Registrar General, India provides a
set of populations projections for India. Renowned demographers of the country like P.N.Mari Bhat have
also made population projections for India. Projections of all these agencies are based on different
assumptions regarding various influencing factors such as the fertility rate, mortality rate and migration.
The table below provides the population (in million) as estimated by various agencies.
Table 2.16: Population Projections by Various Agencies (million)
Source Scenario 2001 2006 2011 2016 2021 2026 2031 2036
Low Variant 1031 1099 1156 1203 1242 1269 1282 1283
Medium Variant 1033 1112 1188 1259 1323 1378 1424 1461UNPD
20
High Variant 1034 1125 1220 1315 1405 1490 1573 1653
Optimistic scenario 1026 1109 1191 1271 1345 N.A
21
N.A N.A
Mari Bhat
Realistic scenario 1025 1103 1173 1244 1320 N.A N.A N.A
PFI 1027 1092 1177 1264 1344 1413 1473 1526
A close look at the estimates reveals that UNPD (medium variant) estimates are not very different from
that of PFI. UNPD projects population to grow at an annual growth rate of 1 percent and PFI estimates
the growth rate to be 1.14 percent for the period 2001-36. Both the agencies have projected the annual
population growth rate to decline over the decades during the forecast period. UNDP projects annual
growth rate of population to decline from 1.41 to 1.08 and to 0.73 during 2001-11, 2011-21 and 2021-31
respectively. PFI’s projections have estimates this growth rate to be 1.37, 1.34 and 0.92 during the same
time period.
However, for the present study PFI estimates are preferred over UNPD due to greater and more country
specific details. UNPD estimates are based on the assumptions that are derived on the basis of experience
of all the countries in the world and thus the assumptions might not reflect the specific characteristics
inherent in Indian demography. PFI estimates on the other hand have been derived on the assumptions
specific to various states. Moreover, the Planning Commission, Government of India also adopts the
estimates of PFI for formulation of plans and policies. Therefore, PFI estimates of population have been
considered for the present study.
Since energy use patterns and choice of fuels etc. varies considerable among rural and urban areas,
categorization of total population into urban and rural categories becomes important. Though India’s
population has gone up 2.84 fold during 1951-2001 i.e. from 361 million in 1951 to 1027 million in 2001,
its rural-urban distribution has undergone structural changes over the period. India’s population in rural
areas has more than doubled (2.47 times) from 298 million during 1951 to 740 million by the year 2001,
whereas population in urban areas has increased more than four times (4.59 times) from 62 million to 287
million during the same time period. The Census of India estimates the percentage of urban population at
34 percent for the year 2016.
20
UNPD projections were available 5-yearly from 2000-2050. Figures presented here are interpolated for 2001 etc. for
comparability
21
N.A.: Not available

Table 2.17: Rural-Urban Distribution as per Census of India (%)22
Year 2001 2006 2011 2016 2021 2026 2031 2036
Urban 28 30 32 34 36 38 40 42
Rural 72 70 68 66 64 62 60 58
Source: GoI, 2001
Total number of urban-rural households has been estimated by the following formula:
Number of households = Total population/ Household size
The household size has been considered as per Census of India figures for 1991. The average household
size has been observed to follow a decline from 5.5 and 6 in 1991 to 4.05 and 5.70 to 2001 The household
size has been forecasted based on the rate of decrease in the rural and urban household size during the two
census periods, 1991 and 2001.Thus it is assumed to decline further to 4.5 and 4 in 2036 for rural and
urban areas respectively.
Table 2.18: Population and Number of Households (million)
Population Number of Households
Year
Rural Urban Rural Urban
2001 287.75 744.70 138.27 53.69
2006 322.89 788.99 152.45 59.19
2011 377.83 810.14 164.14 70.69
2016 412.15 847.11 178.36 81.33
2021 467.48 855.95 191.16 93.63
2026 530.27 848.34 201.52 107.05
2031 589.20 834.99 209.87 120.81
2036 604.49 856.65 217.41 134.32
II.D.1.v Population and GDP Assumptions
The A2 and B2 storylines provide the qualitative directions for different indicators such as Population,
Economy, Environment, Equity, Technological Change and Globalization. The population level is
assumed to be the same across all the six scenarios corresponding to both the A2 and B2 storylines. In the
A2 storyline, the population across various income categories is distributed evenly across various income
categories. In the B2 storyline, the population’s share in the lowest income category decreases, and is re-
distributed among higher income categories. The focus of the A2 storyline is economic growth and
development without concern for environmental protection. On the other hand, the B2 storyline is driven
by economic growth with concerns for environmental sustainability. The B2 storyline is characterized by
slow and diverse technological change whereas in the A2 storyline, the technological change is
fragmented.
The three scenarios each corresponding to the A2 and B2 storylines are driven by Pre-2000 Policies,
Recent Policies and Advanced Policy Options.
Pre-2000 Policy adopted by the government: This refers to the various policies adopted by the
government before 2000 with regards to various GHG emitting sectors.
Recent Policy scenario: This scenario includes the policies adopted by the Government between 2000 and
2005.
22
Note: The shares were available till 2016, and have been extrapolated for period beyond 2016-2036 based on past trend

Advanced Policy Options scenario: This scenario incorporates the optimistic policies aimed at reducing
GHG emissions to the maximum possible level.
II.D.2 Analytical approach and methodology used
In this study, the analytical framework used for Greenhouse Gas (GHG) mitigation assessment for energy
sector utilizes a bottom-up modelling approach to conduct an in-depth analysis of the various GHG
emitting sectors. The GHG emitting sectors include both the energy-intensive sectors (industry, transport
etc.) and the non-energy sectors such as agriculture, land-use change and forestry. The GHG mitigation
options for each sector have been identified (the relevant sections in the Sectoral Analysis can be referred
to for mitigation options). Based on certain selection criteria such as its consistency with the national
development goals, long-term sustainability of mitigation option, implementability of the option etc and
discussion with the sector experts, the potential GHG mitigation options for each sector are screened. The
MARKAL model is used for evaluating the cost-effectiveness and the emission reduction potential of the
potential sectoral mitigation options. Furthermore, the mitigation assessment of the non-energy sectors
(land-use change and forestry) has been conducted separately.
II.D.3 Description of computer models and other tools used
The MARKAL (MARket ALlocation) model is a bottom-up dynamic linear optimization energy-sector
model. For this analysis, the model database is set up over a 35 year period extending from 2001-2036 at
five-yearly intervals coinciding with the Government of India’s Five-Year plans. The year 2001-02 is
chosen as the base year as it coincides with the first year of Government of India’s Tenth Five Year Plan
(2001/02-2006/07). In the model, the Indian energy sector is disaggregated into five major energy
consuming sectors, namely, agriculture, commercial, industry, residential and transport sectors. The
model would be driven by the demands on the end-use side. The end-use demands are forecast in each of
the five sectors by using a combination of end-use demand estimation methods, process models as well as
econometric techniques.
On the supply side, the model considers the various fuels/energy resources that are available both
domestically and from abroad for meeting various end-use demands. These include both the conventional
energy sources such as coal, oil, natural gas, hydro, nuclear, as well as the renewable energy sources such
as wind, solar, biomass etc. The availability of each of these fuels is represented by constraints on the
supply side. The relative energy prices of various forms and source of fuels dictate the choice of fuels and
play an integral role in capturing inter-fuel and inter-factor substitution within the model. Furthermore,
various conversion and process technologies characterized by their respective investment costs, operating
and maintenance costs, technical efficiency, life etc. to meet the sectoral end-use demands are also
incorporated in the model.
The Greenhouse Gas (GHG) emissions for the end-use sectors over the modelling time frame are
generated from the model. Since the model is used for GHG mitigation analysis only for the energy
sectors, only the CO2 emissions associated with the fuel combustion and energy transformation process
are considered. Thus the impacts of various sectoral mitigation options aimed at emission reduction are
analyzed using the MARKAL model.
II.E List of sectors to be covered in analysis
The analysis covers a wide spectrum of the sectors that are important in spurring economic growth but at
the same time consume energy and emit greenhouse gases in significant proportions. In the ensuing
analysis, the key infrastructure sectors including power-generation and transportation sectors, industrial
sub-sectors comprising of cement, iron and steel, pulp and paper as well as the residential/commercial

sectors. The agriculture sector is analyzed for both the energy related and non-energy GHG mitigation
options. The reduction of CO2 emissions in the agriculture sector is partly the result of reduced fuel
combustion and partly due to reduction of GHG emissions from animal-husbandry, rice production and
fertilizer application. The forestry sector is another land-based non-energy sector that is responsible for
CO2 emissions associated with land-use changes. Furthermore, they can also sequester carbon through
photosynthetic process. These non-energy sectors are responsible for most of the anthropogenic emissions
of the GHG methane and oxides of Nitrogen.

III. Electricity Sector Analysis and Results
III.A Sector Overview
III.A.1 Summary and Explanation of Economic Statistics
III.A.1.i Total output/production
As of 31st March 2004, there were 1,800 power plants (electricity generating units) in the country with an
installed electricity generation capacity of 131.4 GW. Of this, the centralized
23
installed electricity
generation capacity stood at 112.7 GW; the rest 18.7 GW of the installed capacity being accounted for by
the Non-Utilities (or the captive power plants). The installed capacities of thermal (Coal, Natural gas, and
Diesel) power plants form the largest share of the installed generating capacity followed by hydro, wind
and nuclear. The relative percentage of capacity of thermal, hydro, wind and nuclear based power plants
was 73.54%, 22.5%, 1.9% and 2.1% respectively during the year 2003-04 (CEA, 2005).
The total electricity produced in the country including that from captive power plants during the fiscal
year 2003-04 was 633.28 TWh. Of the total electricity generation, the gross electricity generation by the
state-owned (Public sector) utilities was 565 TWh constituting 472 TWh thermal (407.28 TWh steam,
57.93 gas and 3.97 diesel) and wind, 75.24 TWh hydro and 17.78 nuclear. Besides, electricity generation
by the state-owned (public sector) utilities, the captive electricity generation plants of selected industries
produced 68.17 TWh, out of which 67.88 TWh is produced by thermal based power plants (39.61 TWh
from steam, 13.40 TWh from diesel and 14.87 TWh from gas turbine), 0.097 TWh from hydro and 0.188
TWh is generated by wind (CEA, 2005).
III.A.1.ii Employment
As on 31st
March 2004, total manpower engaged in State Electricity Boards (SEBs), DVC and Power
Corporations stood at 784, 508 persons registering an 8% decline from the previous year (CEA, 2005).
The total manpower employed in these SEBs, Damodar Valley Corporation (DVC) and Power
Corporations consist of both the regular and non-regular employees. There exists a hierarchical
organizational structure in these undertakings/boards. While on one hand, the managerial and higher level
executives, technical and scientific officers, technical supervisory staff as well as the technicians and
operating staff are clubbed together under the category of regular employees, on the other hand, the non-
regular employees comprise mainly of the casual labour, technical trainees and apprentices and the
worked charge staff. A decline in the percentage share of the regular employees in total manpower
employed (both the regular and non-regular employees) from 11 to 5% during the period 2003-04 has
been observed. In absolute terms, both the number of regular and the non-regular employees have
declined from 756,085 and 98,217 in 2002-03 to 745,718 and 39,014 in 2003-04 (CEA, 2005).
III.A.1.iii Revenues, share of GDP
As per the convention adopted by the Central Statistical Organization (CSO), GoI, in preparing the
National Income Accounts, the industrial sector is classified into three subsectors namely (1)
manufacturing, (2) construction and (3) electricity, gas and water supply.
The table below presents the historical data of the Gross Domestic Product generated by the electricity
sector (subsector of the industrial sector) in the economy. The figures clearly indicate that the GDP from
23
The centralized installed electricity generation capacity refers to the installed electricity generation capacity of the
power utilities.

the electricity subsector has almost doubled from 3 billion US$ to 5.87 billion US$ during the period
1990/91 to 2003/04 growing at an average annual growth rate of 5.3% during the period.
The figures for GDP from electricity and industry (in billion US$) are presented in the table below:
Table 3.1.1 Time-trend of GDP from Electricity and Industry (1990-2003)
Year
GDP-Electricity
(billion US$)
GDP-Industry
(billion US$)
1990 3.00 37.15
1991 3.28 36.78
1992 3.48 38.35
1993 3.59 40.52
1994 3.81 44.68
1995 4.07 50.15
1996 4.33 54.03
1997 4.62 56.06
1998 4.93 58.23
1999 5.25 61.10
2000 5.47 65.35
2001 5.60 67.78
2002 5.67 72.07
2003 5.87 76.84
Source: MoSPI, 2005
The Table above presents the figures of Gross Domestic Product from electricity sector. The GDP
(measured at 1993-94 prices) from the electricity sub-sector has exhibited a consistently upward-sloping
trend.
III.A.1.iv Role of sector in overall economy as source of inputs to other sectors
The role of electricity sector as a source of inputs to other sectors of the economy can be ascertained from
the consumption side by analyzing the electricity sales to ultimate consumers.
From the sales side, the end-use electricity consuming sectors are classified into the following categories:
• Domestic
• Commercial
• Industry
• Public Lighting
• Traction
• Agriculture
• Public water works and sewage pumping
• Miscellaneous
The graphical representation of the electricity consumption by various categories of consumers served by
utilities during the period 1990-2003 is give in the figure below.

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