Future of India's coal ecosystem
Future of India's coal ecosystem
- India is the third largest economy in Asia, in terms of Gross Development Product.
- To keep the national GDP at somewhat higher level, coal has played a major role.
- Coal currently provides over 70% of India’s electricity and over 50% of its primary energy.
- However, still millions live in energy poverty, and India’s energy demand will soar as the country urbanizes and provides more energy services.
- Coal is the most polluting form of fossil fuels.
- In India, coal-fired power plants contribute 40 per cent of India’s fossil fuel emissions and 13 per cent of the ambient PM 2.5.
- The increase in availability of alternatives such as solar and wind, have pushed the demand further to phase out coal.
- Coal is a reliable energy source, especially when compared with the seasonal and diurnal variability of renewables.
- The sector generates taxes and revenues, jobs, pensions, and Corporate Social Responsibility (CSR) spending.
- Coal mining and power companies pay taxes and royalties to the central, state, and district governments.
- Coal India Limited and National Thermal Power Corporation (NTPC), collectively contribute 3% of the Centre’s total annual revenue.
- Coal India Limited (CIL) is the largest coal miner in the world; it pays around INR 40,000 crore annually in royalties, cesses, and levies.
- The Indian Railways is acutely reliant on revenues from coal transport.
- Coal is also a key source of revenue for at least six states and 50 districts.
- Coal mining and power sectors also provide nearly four million direct and indirect jobs.
- Apart from this,
- Millions work in coal based industries such as steel, cement and brick;
- Hundreds of thousands provide services to meet the consumption needs of directly and indirectly employed coal workers.
- Several million informal coal workers who scavenge coal for self-use or to sell on the open market.
- there are nearly 600,000 coal pensioners whose pensions rely on the survival of the coal industry.
- In 2020, coal and power companies spent over ₹1,000 crore building schools, hospitals, and roads.
- Overall, nearly 40% of Indian districts have varying levels of coal dependency.
- The most pronounced dependency prevails in the eastern and central Indian states of Jharkhand, Chhattisgarh and Odisha.
- In India, a just transition may be a challenge due to the country’s massive regional coal-dependency and limited financial and technical capability.
- Such transitions require long-term and multi-decadal commitments.
- Any unplanned coal phase down might adversely impact the entire coal ecosystem by;
- Affecting local jobs
- Cutting state government revenues
- Lowering railway revenues.
- Numerous global studies show that closures can turn coal-dependent regions into ghost towns, with massive consequences for people and communities.
- To start the just transition planning process, the central government should initiate the creation of a multi-stakeholder body to guide the process.
- This has been done successfully in other countries such as South Africa that are also navigating coal transitions.
- To ensure that the planning process is inclusive, the body should have representatives from various central ministries, state/district governments, coal companies, local communities, civil society, and trade unions.
- The Centre will need to take the lead in coordinating just transition policies and providing finance for policy implementation.
- A recent just transition study focusing on Jharkhand (where 11 out of 22 districts are coal-dependent) found that the state has the potential to diversify into sectors such as tourism, non-coal industries and renewable energy.
- However, this diversification process will require evidence-based policies, and massive investments.
- There is an urgent need to sensitize and build capacity among state-level stakeholders, as they will lead the implementation process for just transition policies.
- This is a key step and will require support from national and international actors.
- India can seek funding from rich countries, if it can lay the groundwork for just transition planning and implementation.
- Recently, a coalition of European countries and the US committed to an $8.5 billion fund that will support South Africa’s just energy transition programmes.
- Indonesia has made its coal phase-out conditional on climate finance from rich countries.
- Developing the agroforestry, fishery and ecotourism sectors could provide alternative sources of employment and economic opportunities to coal-dependent communities
- India, being a tropical and a peninsular country, has wider access to various renewable energy sources like solar, wind and tidal energy.
- Thus, with proper investment and clear pathway, India has the potential to steer away from coal based economy and achieve its individual climate goals.
Posted on 06-12-2021 • By Admin
