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Special Report
Indian and Chinese Energy Policies: Addressing Energy Needs and Climate Change
IPCS_SR188_Indian_and_Chinese_Energy_Policies_June2017.pdf
 


Foreword

Energy-related issues have been central to human civilisation's material growth. The Industrial Revolution in Europe made energy one of its centrepieces, projecting the region on to the global stage. While the search for energy resources in West Asia and Africa contributed to mutual inter-dependence, it also brought into acute focus the sustainability and affordability of energy supplies to distant consumers. Recent developments have added another layer: that of environmental issues, given the link to increased energy consumption, specifically coal and oil, to carbon emissions. Many a country today is concerned about the sharp variations in global energy prices, distribution networks and environmental issues.

As rising powers, India and China have, for the past three decades, sought the right mix for their energy baskets in their respective models of development. This dilemma has resulted in intense debate about the appropriate energy policies to be adopted, programmes to be followed, and mechanism to be implemented – a theme constantly and competently explored by the paper presenters in this seminar.

Traditionally, both India and China have been heavily dependent on coal for their energy needs, although in recent decades, the oil mix in their energy basket has increased. China’s energy import dependence in 2016 was over 64 per cent, increasing from 334 million tonne (mt) in 2015 to about 360 mt in 2016. This is only expected to increase to over 66 per cent by 2020, i.e. to over 390 mt. Much of these imports will come from Saudi Arabia and Angola, although for the first time, Russian exports accounted for 23 per cent of total Chinese imports, displacing Saudi Arabia. India consumed 165 mt of oil in 2015 and 183 mt in 2016, and consequently, its oil import dependence increased from 78 per cent in 2015 to 81 per cent in 2016 – importing 202 mt of crude oil in 2016 at a cost of USD 64 billion. Much of these imports are from Saudi Arabia and other West Asian countries, although, unlike China, these import destinations are closer for India – suggesting lesser transportation costs and the attendant vulnerabilities.

The exploration of renewable energy resources – a recurring theme in this seminar – has been a major driver in Indian and Chinese policies, given concerns regarding environmental degradation. Indeed, both India and China announced ambitious policies to enhance the renewable content in their energy baskets as reflected in missions related to solar power, hydro-power and wind energy. Both have also embarked on expanding their civilian nuclear power potential despite the setbacks following Fukushima.

Focusing thus on this important topic, the objective of this seminar was to highlight the diversified policies being adopted by India and China in changing their energy mix, and also provide policy choices for the decision-makers. As their material strength is enhanced, it is clear that India and China will continue to address these energy issues for years – and decades – to come.

Prof Srikanth Kondapalli Chairperson, Centre for East Asian Studies, JNU, and Distinguished Fellow, IPCS

 

 

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