Determining the Feasibility of Decarbonization and Economic Growth in Developing Countries: A Case Study on Vietnam, India and Madagascar

Mitigating climate change is a global necessity, yet wealthy and developing countries are positioned differently in their abilities to contribute. As these developing nations (low and lower-middle income) continue to grow both in population and economically, it is of utter importance to understand how they can decarbonize their energy generation without harming their economic prospects. This thesis is a case study on three developing countries, Vietnam, India and Madagascar, that aims to determine the feasibility of them both reducing CO2 emissions and becoming upper-middle income nations. These three countries were chosen to represent different types of developing nations. Vietnam is one of the wealthiest nations within developing countries, yet it presents one of the most carbon-intensive energy systems. India is the largest CO2 emitter in this group, thus holding vital importance in global stakes of climate change. Madagascar is one of the poorest countries in the world, and its selection is crucial in understanding how the world’s Least Developed Countries (LDCs) will have to balance both reducing their emissions and exiting poverty. This study projected three different pathways through 2070 concerning how each country’s CO2 emissions and GDP per capita will evolve: a “business as usual” scenario that continues past trends, a fossil fuel scenario that projects enhanced carbon intensity and an ideal scenario in which CO2 emissions are reduced by 99% and GDP per capita reach upper-middle income level. The Kaya Identity was the main framework used to model the pathways, altering the growth rates of GDP per capita, carbon intensity and energy intensity according to the targets of the different scenarios. The different growth rates resulted in different values for GDP per capita and CO2 emissions for the years between the last available historical data (2021) and 2070. Additionally, by forecasting the projected energy consumption to 2070 through the Kaya Identity, the necessary capacity of renewable energy needed was determined assuming full decarbonization. This study found that achieving both economic growth and decarbonization is very unlikely for all three countries, yet Vietnam and India presented favorable conditions for becoming upper-middle income countries. Decarbonization was found to be heavily constrained by the necessary rates of change needed for carbon intensity and energy intensity, in addition to the high costs of an energy transition, the rates of renewable energy capacity deployment and reaching desirable levels of energy per capita consumption. These results point to the urgency faced by developing countries in finding the adequate resources and developing achievable energy transition plans that can complement economic growth.