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India's Future Needs for Resources India’s Future Needs for Resources Dimensions, Challenges and Possible Solutions November 2013 Institute for The Energy and Energy and Environmental Resources Institute Research Heidelberg GmbH Consortium IFEU – Institut für Energie - und Umweltforschung Heidelberg GmbH (Lead of Consortium) Jürgen Giegrich, Claudia Kämper, Axel Liebich, Chistoph Lauwigi TERI – The Energy and Resources Institute Dr. Ligia Noronha, Dr. Shilpi Kapur, Arpita Khanna, Ipsita Kumar, Dr. Trishita Ray Barman, Aastha Mehta, Souvik Bhattacharjya, Ankit Narula, Akshima Tejas Ghate, Priyanka Kochhar Dr. Monika Dittrich – Independent Consultant SERI – Sustainable Europe Research Institute Stephan Lutter, Dr. Stefan Giljum Wuppertal Institute Prof. Dr. Raimund Beischwitz, Henning Wilts, Susanne Fischer GIZ – Deutsche Gesellschaft für Internationale Zusammenarbeit Dr. Dieter Mutz, Kristin Meyer, Dr. Ashish Chaturvedi, Enrico Rubertus, Dr. Detlev Ullrich Contents A. Introduction 1 B. Resources: What are we talking about? 3 C. General drivers of demand in India 6 D. Current and future dimensions of India’s resource requirements 10 D.1 Rationale and approaches for efficient use of natural resources 12 D.2 Past and current material requirements in India 15 D.2.1 Methodological and data-related preliminary remarks 15 D.2.2 Past and current material consumption in India 16 D.3 Future material requirements 19 D.3.1 Where will the materials come from? 22 E. Key raw materials within the sectors 33 E.1 Chromite 34 E.1.1 Trends in production, consumption, and trade 34 E.1.2 Supply security concerns for chromite 35 E.2 Molybdenum ores 37 E.2.1 Trends in production, consumption, and trade 37 E.2.2 Supply security concerns 37 E.3 Limestone 38 E.3.1 Trends in production, consumption, and trade 38 E.3.2 Supply security concerns 39 E.4 Copper ores 40 E.4.1 Trends in production, consumption, and trade 40 E.4.2 Supply security concerns 41 E.5 Cobalt ores 43 E.5.1 Trends in production, consumption, and trade 43 E.5.2 Supply security concerns 43 E.6 Conclusion 45 F. Concept of life-cycle thinking to analyse resource efficiency 46 G. Challenges and solutions in the hot-spot sectors – automobile construction, and renewable energy 47 G.1 Automobile Sector 47 G.1.1 Introductory description of the sector in general and in India 47 G.1.2 Development of automobile sector worldwide and in India 47 i G.1.3 Economic relevance of the sector 48 G.1.4 Requirements of natural resources 49 G.1.5 Drivers of demand in the sector 49 G.1.6 Specific description of selected technical aspects 50 G.1.7 Meeting resource efficiency 51 G.2 Housing Sector 59 G.2.1 Introductory description of the housing sector in general and in India 59 G.2.2 Development of the housing sector worldwide and in India, and implications for mineral consumption 59 G.2.3 Economic relevance of the sector 61 G.2.4 Requirements of natural resources in the housing sector 61 G.2.5 Drivers of demand in the sector 64 G.2.6 Specific description of selected technical aspects 65 G.2.7 Meeting resource efficiency 67 G.3 Renewable Energy Sector 75 G.3.1 Introductory description of the sector in general and in India 75 G.3.2 Development of the Renewable Energy Sector Worldwide and in India 76 G.3.3 Economic relevance of the sector 77 G.3.4 Requirements of natural resources in the renewable energy sector 77 G.3.5 Drivers of demand and future prospects 78 G.3.6 Description of selected technical aspects 80 G.3.7 Meeting resource efficiency 81 G.4 Conclusions from the case studies 86 H. Resource efficiency in the context of Asia 88 H.1 India 89 H.2 Resource-effeciency policies around the world 89 H.3 Europe 2020 strategy 90 H.4 UNIDO: Green Industry Initiative 91 H.5 Germany’s Raw Materials Strategy 92 H.6 Germany’s Resource Efficiency Programme (ProgRess) 92 H.7 Japan’s resource agenda 93 H.8 Korea’s resource approach 94 H.9 Taiwan 95 H.10 9. Further initiatives 96 I. Findings and Conclusion 97 J. Outlook and Recommendations 99 References 100 Image Source 109 Annex I 110 Annex II 113 Annex III 115 ii India’s Future Needs for Resources Abbreviations ANS Adjusted Net Savings EITI Extractive Industries Transparency BEE Bureau of Energy Efficiency Initiative BGS British Geological Service EU European Union BIS Bureau of Indian Standards FAO Food and Agriculture Organization BREEAM Building Research Establishment’s GARC Global Automotive Research Centre Environmental Assessment Method GDP Gross Domestic Product BRIC Brazil, Russia, India, China GEF–UNDP Global Environment Facility–United Cafe Corporate Average Fuel Economy Nations Development Programme CAGR Compound Annual Growth Rate GHG Greenhouse Gas Emissions CASBEE Comprehensive Assessment System for GIZ Deutsche Gesellschaft für Internationale Building Environmental Efficiency Zusammenarbeit CEA Central Electricity Authority GRIHA Green Rating for Integrated Habitat Assessment CMCR Centre for Macro Consumer Research GWEC Global Wind Energy Council CIA Central Intelligence Agency IEA International Energy Agency CIPEC Intergovernmental Council of Copper Exporting Countries IFEU Institute for Energy and Environmental Research CO2 Carbon Dioxide IMF International Monetary Fund CP Cleaner Production IPCC Intergovernmental Panel on Climate CPWD Central Public Works Department Change CSE Centre for Science and Environment KBA Kraftfahrt-Bundesamt C-WET Centre for Wind Energy Technology LCA Life Cycle Assessment DEMEA German Material Efficiency Agency LCV Light Commercial Vehicle (Deutsche Material Effizienz Agentur) LEED Leadership in Energy and Environmental DGCA Directorate General of Civil Aviation Design DG ENV Directorate General for Environment M&HCV Medium and Heavy Commercial Vehicle DIREC Delhi International Renewable Energy MNRE Ministry of New and Renewable Energy Conference MOEF Ministry of Environment and Forests DMC Domestic Material Consumption MFA Material Flows Accounting DRC Democratic Republic of Congo NAPCC National Action Plan on Climate Change ECBC Energy Conservation Building Code NATRiP National Automotive Testing and R&D EIO eco-innovation observation Infrastructure Project Abbreviations iii NCAER National Council of Applied Economic SNA System of National Accounts Research SRREN Special Report on Renewable Energy NGO Non-Governmental Organization Sources and Climate Change Mitigation NRDC-ASCI Natural Resource Defense Council – SOx Sulfur Dioxide Administrative Staff College of India SUV Sport Utility Vehicle NOx Nitrogen Oxide TC Treatment Charge OECD Organisation for Economic Co-operation TEPA Taiwanese Environmental Protection and Development Administration OEM Original Equipment Manufacturer TERI The Energy and Resource Institute OPC Ordinary Portland Cement TMR Total Material Requirement PPC Portland Puzzolan Cement UBA German Federal Environmental Agency PPP Purchasing Power Parity (Umweltbundesamt) PSC Portland Slag Cement UN United Nations PVC Polyvinyl Chloride UNEP United Nations Environment Programme RC Refining Charge UNIDO United Nations Industrial Development R&D Research and Development Organization RE Resource Efficiency USGS United States Geological Survey RECP Resource-efficient and cleaner production VAT Value Added Tax RPO Renewable Purchase Obligation WBCSD World Business Council for Sustainable Development SCV Small Charter Vehicle WEF World Economic Forum SERI Sustainable Europe Research Institute WTO World Trade Organization SIAM Society of Indian Automobile Manufacturers iv India’s Future Needs for Resources A. Introduction Natural resources are essential for our survival. Agricultural land provides us with food; a sufficient supply of clean and potable water sustains life; and raw material of various kinds is needed for shelter. Natural resources are required not only for meeting our basic needs, but also for fulfilling our aspirations for a better quality of life, for higher standards of living, for comfort and ease, and for economic and social well-being. Every society depends on natural resources like biogenic and mineral raw materials, on energy sources like fossil fuels and solar and wind energy, and on clean water. The environmental media and ecosystems are also understood as being natural resources, with their biodiversity, the different functions of their land areas, and their services. They constitute the essential elements that keep our economy functioning and guarantee an increase in the well-being of mankind. Consequently, we need to devote more attention to resource use, since global demand for various goods and services is increasing, but the resources available to us are finite and limited. Industrialized countries already have high levels of resource consumption, while emerging countries need resources to provide appropriate living standards for their populations. Coordinated and collaborative efforts are required to ensure both availability and conservation of natural resources. Industrialized countries need to demonstrate how they intend to maintain their living standards in the face of considerably reduced resources, and emerging countries need to determine how their economies can continue growing through the most efficient use of scarce natural resources. In this context, GIZ initiated activities with Indian and European partners to understand the significance of the discussion for emerging countries in general, and for India in particular. The perception of managing natural resources efficiently and sustainably is a key consideration in taking future decisions. With a supposed yearly growth rate of 8% of GDP, India’s middle
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