The big, global push to paint India as a climate bugbear has started taking shape. All fingers are pointing at India, criticisms are growing on New Delhi's energy policy and how it is apparently not in sync with global standards. Surprisingly, these experts - activists and policymakers - are asking India to follow standards they would never follow for life.
Isn't it strange?
No wonder the debate is terribly lopsided. And all those clamouring that India is the world's third-largest emitter of greenhouse gases are missing the forest for the trees. New Delhi is aware that burning coal is bad for the environment, but it is evident that India cannot bear the humongous human costs of exiting from a carbon-based economy. The big issue which needs to be highlighted is about the developed nations and whether they have made significant emission reductions? So why push India to wean off coal?
Let me further the argument with some interesting statistics.
India needs power to lift an estimated 75 million pushed into poverty due to the pandemic. These 75 million continue to live on less than $2 per day. Power is crucial to lift these people out of poverty, and the rest of the population. Power is crucial to end malnutrition, improve health, education, and raise industrial and agricultural productivity. And coal is super important in India to generate power, ostensibly because the alternatives are just not there.
And then look at India's consumption of electricity. India's annual per capita electricity consumption is 972 kilowatt-hours, which is a mere 8 per cent of what Americans and 14 per cent of what Germans consume. There's the electricity grid, and - of late - Indians have started vigorously using bottled cooking gas that is considered a cleaner fuel. More importantly, it checks indoor air pollution. Bottled cooking gas is widely used across the developing world. If you look at India's demand, you will realise India will need loads and loads of energy; by 2040 India will have the largest growth in energy demand across the world. It is a figure certified by the Paris-based International Energy Agency. In short, India will need a variety of conventional and renewable energy sources. And it is here the need for coal is felt uppermost because it powers 75 per cent of India's electricity generation. The rest is wind and solar power, still in the developing stage.
India has an estimated 100 billion tonnes of coal reserves and just one company, the state-owned Coal India - the world's largest miner - produces approximately 600 million tonnes of coal a year. And coal is a vital source for jobs and economic growth; it is a big driver of India's industrialisation programme. Over four million people are linked with the coal sector in India. Apart from generating electricity, coal contributes to several non-power sectors such as cement, brick, fertilisers, steel, sponge iron and various other industries. Almost half of India - over 800 districts - have coal dependency. The situation is exactly the one the developed nations experienced around the time they pushed their economies to greater heights.
But now these very nations are hating India's coal policy. They do not want to know how costly it can be to transition to green power. For the records, closed coal mines have created mass unemployment and devastated local communities in the US. The experts lecturing India do not know it is not easy to transfer millions to green jobs. These experts do not want to remember that the UN Secretary-General Antonio Guterres has asked the developed nations to be the first to phase out coal, not countries like India.
Has that happened? No, it has not. Worse, countries in the West have set their own times to exit from fossil fuels and given themselves maximum flexibility when transitioning to renewables.
But they are hyperventilating about India. Why? This is nothing but total hypocrisy. Consider the case of Germany, considered by many as the West's green poster child. It will record its biggest jump in emissions in three decades this year. And this will happen mainly due to a sharp rise in coal use. Germany will not tell the world that it generates 27 per cent of its electricity from coal. And this figure will increase once it shuts down all its nuclear plants. Once that happens, an additional 60 million tonnes of carbon emissions will happen annually as more coal and gas will be needed to meet the demand for electricity.
The world must know India - a billion plus nation and the world's third-largest emitter - is trying hard to decarbonise its power sector. It aims to build 450 gigawatt (GW) of renewable energy capacity by 2030. It has plans to use technologies like improved battery storage to make renewables more dependable. Installations of solar, wind, hydro, biomass and nuclear plants will reach more than 500 GW by 2030, which will be almost tripling of current levels, and account for 64 per cent of India's generation capacity.
New Delhi wants to be a global hub for production of green hydrogen and green ammonia. Yet, coal will account for half of India's electricity generation till 2030, and remain the country's largest source of electricity. India will need as much as 46 GW of additional capacity alongside new renewables. India has plans to phase out 2 GW of coal-burning plants by 2030; the final plan is to shut down 25 GW of old plants.
And then there are taxes. The coal industry pays a myriad of taxes to the state and central governments including royalty, Goods and Services Tax (GST), GST compensation cess, and a host of other cess. In India, the central and state governments' dependence on coal is at 25 per cent and 13 per cent of their tax revenues. Coal is responsible for 10 per cent and 2 per cent of the central and state governments' energy tax revenues, respectively. Electricity - majorly generated from the coal sector - also contributes 7 per cent and 15 per cent of the energy tax revenues to the central and state governments, respectively. This totals to thousands of crores on an annual basis. So, in short, to phase out coal, as targeted at the Conference of Parties (COP 26) in Glasgow, will severely impact taxes collected by the governments. Worse, it could eventually negatively impact the economy down to a micro-economic scale.
The critical West needs to take into account all of these before resuming their rant. India will phase out coal but, like the Western nations, it must do it on its own terms.
(Shantanu Guha Ray is the Asia Editor of Central European News, UK. His book on the Indian coal market, Black Harvest, will hit the stands soon.)
Disclaimer: These are the personal opinions of the author.