2. What is a low-carbon economy?

Historical background and Meaning of Low carbon economy

The concept of Low carbon economy emanates from the concept of the Low carbon emission
development which has its roots in the UNFCCC adopted in the Rio in 1992 .Thus, the low
carbon economy relates to the economy with low carbon emission. The holistic view of the
term refers to the Low- emission development strategies of an economy .More often referred
as LEDS. Which in turn leads to an agreed definition LEDS as to forward-looking
national economic development plans or strategies that encompass low emission and/or
climate-resilient economic growth [1].
If we have a chary look on the definition of the LEDS .It not only relates to strategies
regarding the reduction of carbon in an economy but also encompasses the strategies
relating to provisions to reduce and encounter vulnerability emanating due to climate
change.
The proposal was first introduced by EU in 2008. The proposal was about how the
information on low carbon pathways help providing the information regarding the needs of
funding and spread awareness about the priorities and level of global action
required.(OECD,IEA2010)
The information since then is being included in the negotiating texts under the UNFCCC
since the run up to COP15 in Copenhagen in 2009 and is part of both Copenhagen accord and
the Cancun Agreement took place at UNFCCC in the year 2009 and 2011 respectively.
Making LEDS indispensable to sustainable development
So what the LEDS have done?
LEDS have provided a negotiation text for the voluntary and obligatory restriction upon the
carbon emission which would in turn check the unsustainable development in the developing
world and would help imposing the restriction on the continuous emission of carbon in the
developing world.
What is LEDS philosophy?
The approach the LEDS take in on the restriction is not the Climate first. However, is the
development first? The approach is unique because it tries to retrofit the systems without the
trying to impose a new system.
So, what is development first approach? The development first approach provides the
structural changes required to bring the emission of carbon down without thwarting the
process of development ,an important aspect for the developing countries like India and
China to not to consider this collusive plan of West .For instance , is provides the
infrastructure planning and spatial with low carbon yield. It not focuses on the action required
to bring the emission down but also tries to make the preparation of protection from the
vulnerabilities generated from the action done.

Whether this concept has the mandate of all the countries of the world?
Outside UNFCCC the concept has gained recognition and support from the major world
leaders, including at the Major Economic Forum held in Italy in 2009, where the world
leader declared to make attempts to make the world a better place by preparing the plan of
low carbon growth for their respective countries and enacting upon them.

How effective is it?

It is personal perception .From West the Eastern developing countries may be taken as the
one causing major harm .Moreover, from developing world can argue about harm done by
the developed countries , while in their developing stage . So, would rather not engage in this
argument .Moreover, this reflects on how the parameters should be framed for the developing
and developed countries. So, lets start the discussion from the initiator of the policy (EU)
and trying to end up in a developing county (China or India). I am more willing to compare
INDIA because of the following conditions:
A) Democracy: It tells more about the people .People may argue, it may have nothing to
with political system. However, for me it is the important frame work. As it reflects of the
choice the people make for themselves.
B) Less government Intervention: The system formed is such that it prone to good. As only
14% of institutions are government owned .Thus, principle of Eco-ethics in compatibility
with Adams smith principle could become effective.
Thus, the discussion would be for the EU as the representative of the developing world and
India for the developing. While trying to answer the major questions related to low carbon
economy.
The target is alleviate the temperature rise to only 2 degrees rather that to predicted 4 degrees
E.U. (European Union):
The European commission is looking at the cost-effective ways to make the European
economy more climate-friendly and less energy consuming.
So, what has European Union done to bring this to an effect?
They have put in the legislation to reduce their emissions to 20% below the 1990 levels by
2020.This might look like as a stepping stone. However, the data shows that this could be
might turn into the corner stone of the all further efforts.
The data shows that they are well on the track to achieve this. The happy EU with this
success have even offered a further cut of 10% making this to total of 30%,if other major
economies agree to bring down theirs to similar level.
In 2012, EU-15 emissions stood 15.1% below their base year level. Based on figures for
2012 by the European Environment Agency, EU-15 emissions averaged 11.8% below baseyear levels during the 2008-2012 period. This means the EU-15 over-achieved its first

Kyoto target by a wide margin.-(Source -http://ec.europa.eu/clima/policies/ggas/index_en.htm)

Since, they achieve or over achieved target .Let see how the EU looks at low carbon society
or we can say EU perspective of Low carbon Society.
According to EU perspective of low carbon economy we work in low-energy, low-emission
buildings with intelligent and cooling systems .The suggestion is to use electric and hybrid
cars and live in cities with less air pollution.
The EU perspective calls for the innovation and investment in the clean technologies and
the Zero-carbon energy The low carbon economy further requires the much greater access
to renewable sources of energy, sources of energy with minimal carbon content, the design of
energy efficient building and material .Usage of Hybrid and electric with no carbon
emission, smart grid equipments, low carbon power generator and moreover, the
more efficient carbon capture and storage technologies.
Some technologies exits some does not .So what does it ask for?
It asks for huge investment in technology. Making the role of technology dominant in
achieving the goal of Low carbon emission.
What will be inherent effect to economy perceived from the above changes?
Economically predictions are made the EU need to make an additional Euro 270 billion
investment over next three to four decades. This would result into one of the biggest ever
increase in government spending taking Europe back to growth before the economic crisis.
The prediction are made that up to 1.5 million jobs would be further created from this
investment.
The energy would be saved .If the EU remains successful in continuing the road ahead. The
EU might be using the 30% less energy in 2050 than 2005 this would imply households
and business enjoy more secure and energy efficient services
If this happens EU would become less dependent on the imported oil making it in turn less
susceptible to inflation from oil crisis the number say the EU would be saving around
EURO 175-320 billion annually over next 40 years .
Recovery of Economic Cost of Health:
The economic cost of heath would fall down drastically as the cleaner air would produce
lesser patients with asthma and other respiratory diseases .Around EURO 88 billion a year
could be saved.
The cost and benefits numbers are pellucid enough to provide enough reasons to the
respective oft of the countries to switch to low carbon economy.
However, the world is not so linear .Good actions may not have ubiquitous reaction. Let
me explain

Lets take the example of the developing nation like India:

The questions addressed by the country are:
Is a path of Low-carbon development is interest of the country?
The question is quite obvious and genuine as the country developing might have abandon its
few ambitious projects after switching to Low-carbon development .The apprehensions are
genuine and needed to be addressed :
Some see it as natural obligation:
The vast majority of experts say that switching to low-carbon economy is line on interest of
India. Some even go further, by saying that country has no choice except switching to Lowcarbon economy to achieve sustainable development. According, to them the benefit from the
switch is huge some of them are energy cost savings, mitigating the air pollution in turn
reducing the economic cost of health.[3]
There is no other alternative, its the right thing to do and only thing to do [3]
Some see as an opportunity:
Others foresee, this as an opportunity for the country to trace a different path of development
from the developing world which would make the country development independent from the
sensitivity of the inflation of oil price and economic burden which the developed world face
to reduce its emission maintain the balance in the eco-system.
This also provides the country like India to become a global leader in the clean technology by
leapfrogging the existing technology and developing and innovating more clean technologies.
The example to this is the installation of High-voltage direct cables used to deliver
electricity more efficiently that at the moment installed in U.S.A.
Economic benefits to India:
Making domestic advance would help in improving energy security, improve the health
benefits and even would spur growth and increase the job in the domestic market a precondition to become a global leader.
Disagreement from the pressure:
However, the experts disagree upon the pressure to make the switch obligatory .And see the
India role in the GHG emission would in turn affect it economic and political relation with
the outer world.
The country only fares well, if the oft of the country develops some substantial policies to
spur growth.
Lets discuss some of its current domestic policies:

Solar Mission: As a part of its National Action Plan on Climate Change (NAPCC).The
mission is to install 20,000 MW of solar capacity in India by 2020.
Energy Efficiency Mission:
The another initiative of NAPCC under the National mission for Enhanced Energy
Efficiency (NMEEE) is to provide specific building codes for the any further development
carried and giving out the star rating to development done .In accordance to compatibility
with the environment
A innovative approach of the government calls for energy efficiency in the usage. The
facilities exceeding the energy efficiency requirement will receive a certificate which could
be sold to those for whom their own reduction are more expensive
What does the world say?
India ranks in 122nd in the Global list in terms of the per capita emissions
Lets see from the report of the PWC (Low carbon Economy Index 2014)
Pledges made by respective countries:
China
US
EU
India
Russia
Japan

40-45% carbon intensity

below 2005
17% absolute below 2005
20-30% absolute below
1990
20-25% bellow 2005
15-25% below 1990
25% absolute below 1990

45%
17%
30%
25%
25%
25%

Are we doing enough?

The PwC Low Carbon Economy Index (LCEI) calculates the rate of decarbonisation of the
global economy that is needed to limit warming to 2C. We base our analysis on
The carbon budget estimated by the Intergovernmental Panel on Climate Change (IPCC) for
2C.
Emissions per unit of GDP fell in 2013 by 1.2%, marginally better than the average decrease
of 0.9% since 2000. But with such limited progress in decoupling emissions growth From
GDP growth, the gap between what we are doing and what we need to do has again grown,
for the sixth year running. The average annual rate of decarbonisation
Required for the rest of this century for us to stay within the two degree budget now stands at
6.2%.
Source (http://www.pwc.co.uk/assets/pdf/low-carbon-economy-index-2014.pdf)

Source (http://www.pwc.co.uk/assets/pdf/low-carbon-economy-index-2014.pdf)

Source
[1] http://sustainabledevelopment.un.org/index.php?menu=1448.
[2] Low Carbon Development in India: Challenges and Opportunities (Shakuntala Makhijani

And Alexander Ochs)

[3] Two degrees of separation ambition and reality (PWC)