Improved energy sector planning to respond to climate change

1. Improved energy sector planning to respond to climate change Rohit Khanna ESMAP Program Manager

2. How to convert global scenarios to national actions

3. Consensus building • A complex process • Principal stakeholders involved in India’s low carbon planning

4. Multiple tools required • Multi-region • CGE • Dynamic • Stochastic • GE Questions: Abatement opportunities Technologies/investments Marginal abatement cost EFFECT TAMT MACtool LULUCF Questions: Impact on economic growth, employment, trade, production choices, etc. Bottom-up vs. Top-down

5. Establish a macroeconomic outlook • Build a picture of the sector • Develop a forecast • Establish alternative development scenarios • Identify financing needs and options EFFECT Model for Planning and Consensus Building

6. MAC Tool Graphs : Wedges, Installed Power Capacity, Investments

7. Case study: Mexico • Context: Government had previously established a national climate change strategy; were in the process of preparing an Action Plan for specific sectoral LCD interventions (PECC) • Methodology: WB was asked to contribute to PECC by looking at economic cost and investment requirements of alternative LCD scenarios • Conclusions: A number of high potential and low cost measures: public transport and vehicle efficiency, efficiency measures and low-cost electricity supply options – but barriers prevent implementation • Impacts: • $500 million Climate Change DPL, April 2008 • $300 million Environmental sustainability DPL, Dec. 2008 • $1.5 billion Green Growth DPL, Oct. 2009 • $400 million Low Carbon Growth DPL, Nov. 2010 • 2 RE / EE SILS + 2 CIF operations

8. Case study: Poland • Context: Government concerns over cost of climate change mitigation • Methodology: • undertook a bottom-up study with addition of a linked macroeconomic analysis to address economic growth and fiscal concerns • drawing on best practices in other EU countries was particularly helpful • Conclusions: good policies could make a big difference by focusing on energy efficiency and low cost renewable energy to 2020 – other options not feasible in this time period • Impact: $1.1 billion RE / EE DPL approved June 2011

9. HEAT: Assessing Climate Impacts on Energy Systems

10. Lessons and experience • Low carbon planning is a gradual process built on long-term relationships • Small investments in tools and planning can have a big payback in terms of scaling up deployment • Avoid reinventing the wheel - make use of existing models and tools • Be bold, but don’t underestimate the challenge of turning plans into investments and policy change • The need to tailoranalysis to the country’s needs – sub-sectoral work can be equally valuable

11. Future priorities • Coordinate low carbon planning activities to maximize learning and share tools • Need to focus on operationalizing plans to prepare investments for climate funds (CIFs, Energy+) • Improve understanding of climate resilience – and implications for investments