Outline. Introduction: What should China and India do? Current State of India Current State of China What is Carbon taxation? Why Carbon Taxation and not Cap and Trade? What we aim to do and why Results Conclusions. The Chinese Economy.
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Environmental degradation growing problem
Largest population in the world: 1.31 billion people (2005)
Coal is backbone of energy system
Total energy consumption increased by 9.3% over 2005.
If all nuclear power stations that have been planned to date are completed, total installed capacity will exceed 10GW in 2010, and total approximately 32GW in 2020
2020 plans (NDRC)
Target: 40GW by 2020
Target: 300 GW by 2020
Solar and Wind
Target: over 60GW by 2020
11th Five-Year Plan (2006-2010)
Natural Gas (BCM)
India’s 2030 energy projections remain bellow world’s 2004 average
78,577 MW capacity addition (123,668 MW as of 2005-06) during the 11th Plan of 14,000 MW through renewables and another 12,000 MW from captive route.
Massive Investment Requirements:
To deliver sustained GDP growth of 8.0% till 2031-322, the requirements are:
- Growth in primary energy supply by 3-4 times over
- Electricity Installed Capacity should increase by 6-7 times
- Annual coal requirement: Nearly 3 times over current
Eleven scenarios based on source availabilities
and technological development but not incentives
Representative Trajectory sampling various energy mixes.
Normalized Cost and CO2 output are the Cost and CO2 of a particular
mix divided by the Cost or CO2 of the initial Distribution
Initial Distribution based on IEA Alternative Reference Scneario
Simulation is observed to converge to a distribution with a stable minima
in the cost and in CO2 Emissions
Both countries are capable of meeting their Energy Demand in ways that significantly reduce negative environmental impact and externalities
These changes in Infrastructure can be made financially appealing if the
social cost of CO2 Emissions is internalized through a modest Carbon Tax in China,
particularly if Clean Coal is developed as an option
Due to current limitations in domestic resources and technology, it seems
that changing Infrastructures in India is more costly, and a larger Carbon Tax may
be necessary to effectively internalize the social costs and provide incentives to
change; however, their potential to grow seems promising and perhaps renewable
options will become less costly with time
Nuclear is the most cost competitive energy source and the most promising source to mitigate carbon emissions in the near future in both countries