Saturday, December 4, 2010

What is Business as Usual for China and India?

My paper with Frank Jotzo in Energy Policy argued that while India's goal of cutting emissions intensity by 25% between 2005 and 2020 was likely to be similar to the business as usual reduction in emissions, China's goal was much more ambitious. China aims to reduce emissions intensity by 40-45% over this time frame, while we estimated it would decline by 24% under business as usual.

By contrast, many commentators argued that China's goal was just business as usual. This was because China's strong policies to reduce energy and carbon intensity were already included in standard scenarios.

I am now revising my paper with Ross Lambie on where it is cheapest to cut carbon emissions. We will use the results of the 22nd Energy Modelling Forum (EMF22) in this revised version. So I was curious what the business as usual scenarios developed by the participating models said about China and India in the 2000-2020 period:

On average they predict a 25% reduction in emissions intensity in China from 2000 to 2010, increasing to a 27% reduction in 2010-2020. We estimated 1% and 15% reductions in these periods under BAU. There is no way that China will end up with a 25% reduction from 2000-2010. Emissions intensity rose from 2000 to 2005 and China is struggling to achieve its goal of reducing energy intensity by 20% from 2005 to 2010. Our estimates for India are pretty close to the EMF averages. The results also show a large variation in the scenarios. There is a lot of uncertainty about what is BAU.

China might achieve a 27% reduction in emissions intensity relative to 2010 by 2020 (the average given by the EMF22 models above). But it will be the result of policy action, not business as usual.

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