IPA Newspack
  • Home
  • now
  • politics
  • business
  • markets

IPA /

IPA Special

IPA Special

India And China To Be Most Exposed Due To Stranded Assets

By Dr. Gyan Pathak

India and China would be the most exposed countries in the world to shutting down of fossil-fuel infrastructures in the mitigation pathways to climate change, and if the existing units would continue to be operated as historically, they would entail CO2 emissions exceeding the carbon budget for 1.5 degree C, a new flagship UN report on climate change released on April 4 has warned. It insisted that global greenhouse gas emission would have to peak “before 2025 at the latest, and be reduced by 43 per cent by 2030.”

The option before the world is therefore limited, whether to shut them down or to continue with them. The report of the Working Group III (WGIII) contribution to the Sixth Assessment Report (AR6) of the Intergovernmental Panel on Climate change (IPCC) has indicated that harmful carbon emissions from 2010-2019 have never been higher in human history. It has been even cites by the UN Secretary-General Antonio Guterres as a proof and warning that the world is on a “fast track” to disaster, with scientists arguing that it’s ‘now or never’ to limit global warming to 1.5 degree C. Unless governments everywhere reassess their energy policies, the world will be uninhabitable, he warned.

IPCC has been insisting that all countries must reduce their fossil fuel use substantially, extend access to electricity, improve energy efficiency and increase the use of alternative fuels, such as hydrogen. Unless action is taken soon, some major cities of the world will be under water, heatwaves to reach unprecedented high level, terrifying storms will hit, there would be widespread water shortages, and millions of species of plants and animals would face extinction.

And this horror story would not be a fiction but realty. It is indicated in the report, if the world continue with the current energy policies. We are on a pathway to global warning of more than double the 1.5 degree Celsius limit agreed in Paris in 2015. However, climate promises were broken, and a yawning gap exists between the implementation and the pledges.

Now we need concrete action since there already exists a substantial and growing carbon lock-in today, as measured by committed emissions associated with existing long-lived infrastructure. If we are to mitigate the adverse effects of the climate change, the owner-operators of fossil-fuel infrastructure and societies many choose to retire many of them earlier than in the past, and committed emissions are thus contingent on the competitiveness of non-emitting alternative technologies and climate policy ambition. Therefore, in this mitigation pathways, some fossil-fuel infrastructure may become stranded assets, ie “assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities.”

A systematic map of the literature on carbon lock-in has synthesized quantification of stranded-assets in the mitigation pathways which show first that the coal power plants are the most exposed to risk of becoming stranded. Secondly, if mitigation action is delayed, it would further increase stranded assets. And thirdly, sectoral distribution and amount of stranded assets much differ between countries.

It should be kept in mind that there is high agreement that existing fossil fuel infrastructure would need to be retired earlier than historically, used less, or retrofitted with CCS, to stay within the remaining carbon budgets of limiting warming to 1.5 to 2 degree Celsius.

Studies estimate that cumulative early retired power plant capacities by 2060 can be up to 600 GW for gas, and 1700 GW for coal. Only 42 per cent of the total capital stock of both operating and planned coal-fired power plants can be utilized to be compatible with the 2 degree C target. Moreover, Coal-fired power plants in scenarios consistent with keeping global warming below 2 degree C or 1.5 degree C will have to be retired one to three decades earlier than historically has been the case.

After coal, electricity production based on gas is also projected to be phased out, with some capacity remaining as back-up. It has been estimated that USD 541 billion worth of stranded fossil fuel power plants could be created by 2060 with China and India the most exposed, the new flagship UN report says.

It has also been suggest by some studies that stranded long-lived assets may be even more important outside the power sector. While stranded power sector assets by 2050 could reach up to USD 1.8 trillion in scenarios consistent with a 2 degree C target, there could be USD 5-11 trillion worth of stranded assets in the buildings sectors. Another study has estimated the potential value at risk for global real estate assets up to USD 21 trillion. More broadly, the set of economic activities that are potentially affected by a low carbon transition is wide and includes also energy-intensive industries, transport, and housing.

The mitigation pathways following the current NDCs until 2030 do not show a significant reduction of coal, oil, and gas use compared to immediate action pathways. The report says, if action is not taken now, but delayed, there would be higher stranded assets and the societal, economic, and political strain of strengthening action. Carbon lock-in can have a long-lasting effect on future emissions trajectories after 2030. Immediate action is the only cost-effective pathway to mitigation of climate change.

The risk of stranded assets has implications for workers depending from those assets, asset owners, assets portfolio managers, financial institutions and the stability of the financial system. Since India is likely to be two of the most exposed countries in this regard, the government obviously should plan its strategy now and look afresh on its commitment and prepone the actions that it has pledged during COP26. (IPA Service)

Politics

Row over Rahul’s meeting with ‘anti-India’ Corbyn

May 25, 2022
Politics

SC asks Jharkhand HC to decide on probe against CM

May 25, 2022
Politics

G-23 leaders in Sonia’s key group to anchor party strategy

May 25, 2022
Politics

Chidambaram’s son alleges witch hunt in new CBI case

May 25, 2022
Business

Quad initiative to monitor Indo-Pacific maritime activities

May 25, 2022
IPA Special

U.S. Sponsored IPEF Is A Counter To Just Not China But To BRICS Also

May 24, 2022
IPA Special

Coming Biennial Elections For 57 Rajya Sabha Seats Significant

May 24, 2022
IPA Special

TRS Supremo K. Chandrasekhar Rao’s Moves On Presidential Poll Make Sense

May 24, 2022
IPA Special

Congress Unit In Uttar Pradesh Starts Implementing Udaipur Decisions

May 24, 2022
IPA Special

Bangladesh Feeling Impact Of Ukraine War On Its Exchange Rate

May 24, 2022
IPA Special

Narendra Modi Is Now Following U.S. President Joe Biden In Most Global Issues

May 24, 2022
IPA Special

Places Of Worship (Special Provisions) Act, 1991 Is Binding

May 24, 2022
IPA Special

Never-Ending Plans To Expand NATO In Europe Threaten World Peace

May 24, 2022
Happening Now

Quad a force for good, Modi tells Tokyo summit

May 24, 2022
Happening Now

TN minister challenges Nirmala Sitharaman on fuel tax cuts

May 24, 2022
Happening Now

Crucial parleys ahead of Rajya Sabha, presidential polls

May 24, 2022
Happening Now

Air India asks staff to vacate govt housing colonies

May 24, 2022
Happening Now

Heavy rain, thunderstorm disrupt flights at Delhi airport

May 24, 2022
Happening Now

Vinai Kumar Saxena to replace Baijal as Delhi Lt Guv

May 24, 2022
IPA Special

Traders Behind Soaring Wheat Prices In India

May 23, 2022

An appeal

The legacy of IPA, founded by Nikhil Chakravartty, the doyen of journalism in India, to keep the flag of independent media flying high, is facing the threat of extinction due to the effect of the Covid pandemic. Only an emergency funding can avert such an eventuality. We appeal to all those who believe in the freedom of expression to contribute to this noble cause.
Click here to learn more

Share

Reply

  • 0
More on IPA

U.S. Sponsored IPEF Is A Counter To Just Not China But To BRICS Also

May 24, 2022 4:45 pm | IPA Staff

By Nitya Chakraborty The announcement made in Tokyo on Monday by the United States President Joe Biden about the formation of a new economic block...

IPA Special

Coming Biennial Elections For 57 Rajya Sabha Seats Significant

May 24, 2022 4:43 pm | IPA Staff

By Kalyani Shankar The Composition of Rajya Sabha will soon mirror Lok Sabha giving an advantage to the ruling BJP. Though it might reach double...

IPA Special

TRS Supremo K. Chandrasekhar Rao’s Moves On Presidential Poll Make Sense

May 24, 2022 4:42 pm | IPA Staff

By Sushil Kutty Whenever Telangana Chief Minister K. Chandrashekar Rao and Delhi Chief Minister Arvind Kejriwal get into a huddle for opposition unity, the first...

IPA Special

Congress Unit In Uttar Pradesh Starts Implementing Udaipur Decisions

May 24, 2022 4:40 pm | IPA Staff

By Pradeep Kapoor LUCKNOW: After Udaipur Chintan Shivir,   the Congress in Uttar Pradesh is looking forward to massive revival plan to face 2024 Lok Sabha...

IPA Special

U.S. Sponsored IPEF Is A Counter To Just Not China But To BRICS Also

in IPA Special
May 24, 2022   ·  

Coming Biennial Elections For 57 Rajya Sabha Seats Significant

in IPA Special
May 24, 2022   ·  

TRS Supremo K. Chandrasekhar Rao’s Moves On Presidential Poll Make Sense

in IPA Special
May 24, 2022   ·  
Follow us on
Up Next: The Task Is Cut Out For The CPI-M At Its 23rd Congress
©2020 -2021 India Press Agency, All Rights Reserved
Newspack by India Press Agency
Posting....
logo
  • Home
  • now
  • politics
  • business
  • markets