India and coal

2018-08-20

in Canada, Economics, Politics, The environment

One frequent talking point from people who see no problem with continuing to enlarge the bitumen sands is that action by countries like Canada is pointless as long as larger places like India and China continue to build large amounts of coal capacity.

The Economist recently reported (in an issue with a cover story about how “the world is losing the war against climate change“):

Although coal is horribly filthy, India is utterly dependent on it. It generates more than three-quarters of the country’s electricity. Mining it and turning it into power accounts for a tenth of India’s industrial production. It provides jobs as well as power. Coal India, a state-owned coal miner that is the world’s largest, employs, at last count, 370,000 people, and there are up to 500,000 working in the coal industry at large. Far from reining in production, Coal India plans to increase it, from 560m tonnes in 2017 to 1bn tonnes by 2020. The government’s target for national production is 1.3bn-1.9bn tonnes by 2030.

Coal’s life will be made harder by increased competition from cheap solar and wind. Because of that, Mr Subramanian suggests that Mr Modi, his solar-evangelist boss, should slow down his roll out of renewable energy. “In my ideal world India should do a bit less renewable and a bit more coal for the next 10-15 years,” Mr Subramanian said in May. Some dismiss his comments as deliberately provocative. Yet he has rubbed salt into the wounds of environmentalists by describing efforts to wean energy-poor countries such as India off fossil fuels as “carbon imperialism”.

Coal’s staying power may be reinforced by India’s sense of immunity from international pressure to clean up its act. India resists the idea that it cannot put carbon dioxide into the atmosphere simply because the rich world, which produced much more per head during its own development, has used up all the available “carbon space”. In fact, the government continues to support coal projects to keep them afloat. A report by the Centre for Financial Accountability, a think-tank focused on India, says that coal projects in India received almost three times as much support as renewable-energy projects in 2017, mostly from government-owned banks.

Dealing with climate change is only possible on the basis of broad and effective international cooperation. States like India which are still building huge amounts of new energy infrastructure have the capacity to make choices that will make avoiding catastrophic climate change impossible. Persuading them to make different choices requires many things, including financial and technical assistance, but critically it requires that countries like Canada be willing to move first and accept what seems like an economic sacrifice for the sake of a better future for everyone. I say “seems” like a sacrifice because in a world with extreme climate change the cash Canada is banking through continued fossil fuel development is liable to be meaningless.

Everyone who has to give something up or adjust their lifestyle about decarbonization seems to raise some kind of ‘fairness’ argument: why should I give up what I feel I deserve? Why should I act when others aren’t doing so? Countries like India where extreme poverty remains widespread have a genuine and convincing case that they should not have to sacrifice important human welfare developments for the sake of global decarbonization. Still, coal is so awful once you add up the health, environment, and climate costs that even the poorest places with the worst problems should not still be deploying it. For Canada and other rich states to credibly encourage that requires both far more aggressive domestic action to stop fossil fuel development and the determination to provide sufficient technical and financial assistance to help states like India decarbonize quickly enough to help us all avoid global catastrophe.

{ 2 comments… read them below or add one }

. August 20, 2018 at 6:39 pm
. October 1, 2018 at 2:30 pm

Coal in India

“The black hole of coal” (August 4th) correctly argues that fossil fuels will persist in India. But India is likely to burn far less coal in the future than anticipated because it is building fewer plants. Credible estimates from just two years ago suggested India would build 243GW of new coal capacity. However, as your article notes, in fact 48GW, or one-fifth the earlier projected capacity, is in the construction pipeline. Government planners think this should be sufficient for India’s needs until 2027. Also, private investors are less interested in coal plants.

This does not mean that coal use will cease overnight in India. But a necessary first step is to stop building new plants. India appears to be reaching this point faster than anyone thought likely a few years ago, and consequently will lock into less coal capacity.

PROFESSOR NAVROZ DUBASH
Centre for Policy Research
Delhi

* You offered an alarming account of the harm caused by coal in India. However, not all fossil fuels are created equal and you overlooked the considerable economic, environmental and social opportunities afforded by a combination of natural gas and renewables.

Air pollution is killing 2.5m people in India each year. Displacing coal with natural gas is already reducing pollution, in power generation and industry, but also by replacing biomass in homes and substituting oil in the transport system. This will be increasingly important as 300m people move to cities in India over the next 25 years.

Natural gas is also playing a critical role supporting India’s commitment to the Paris accord, emitting around half the greenhouse-gas emissions compared with coal when used to generate electricity. The flexibility of natural gas will also help India meet its commendable renewable-energy target, providing reliable support for the integration of an increasing share of variable wind and solar generation at lowest cost.

Even as new coal-fired power stations are being built, the average utilisation of existing coal-fired plants is decreasing, down 10% in the past four years. This raises the ugly prospect of stranded investments, an unwelcome economic risk as the country endeavours to lift 200m people out of energy poverty.

Natural gas is also helping to fuel India’s rapid economic growth. India’s Petroleum and Natural Gas Regulatory Board is targeting a fuel mix with a 20% share of natural gas by 2025, up from 6.5% today. It will require strong leadership to put in place the regulations and infrastructure to receive, transport and distribute the required natural gas, but India has the opportunity to lead in the transition to a cleaner energy system in Asia.

PROFESSOR JOO-MYUNG KANG
President
International Gas Union
Barcelona

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