Relevance:
Mains: G.S paper I: Distribution of key natural resources across the world (including South Asia and the Indian subcontinent); factors responsible for the location of primary, secondary, and tertiary sector industries & G.S paper III: Indian Economy & Environment
Context:
Regardless of whether India commits to net zero emissions, coal is on its way out. For a country that depends on it for 70 per cent of its energy, the transition’s social and economic consequences will pose a daunting challenge.
Why in news?
UN Secretary General Antonio Guterres urged wealthy nations to end coal use by 2030. Recently, Jayant Sinha, former Minister of State for Finance, submitted a private bill to the Lok Sabha which urged the Indian government to commit to a net-zero emissions target by 2050.
Subsequently, a torrent of analysis and reports about India committing to net zero emissions surfaced. If India really intends to announce an ambition for net zero, then as a country which uses coal for more than 70 per cent of its energy, it will face daunting challenges.
Detailed Analysis
- There are multiple pathways to achieve net-zero emissions, almost all of them require moving away from coal. Globally, the conversation on net-zero emissions has almost always come after or gone hand-in-hand with a coal phaseout plan.
- Increasingly, this phaseout plan also carries elements of a “just transition”. When it emerged from the labour movements of the 1970s, the term advocated support to workers who were forced to transition due to environmental and social concerns.
- Today, this concept incorporates elements of energy justice, climate justice and environmental justice.
- It recognises that there will be broader social and economic consequences of transitioning to clean energy, and it is imperative that governments manage this transition in a deliberate manner to avoid replicating existing imbalances.
- Most coal phaseout plans include a roadmap for workers and communities dependent on fossil fuels.
- The German coal phaseout plan seeks to end coal burning by 2038 and calls for an investment of more than 50 billion euros for mining and plant operators, impacted regions and employees.
- In the US, President Joe Biden has created a new Interagency Working Group on Coal and Power Plant Communities and Economic Revitalisation which is supposed to deliver resources that will revitalise the coal, oil and gas communities. Canada, too, put in place a Just Transition taskforce in 2018, when it decided to phase out coal by 2030.
- In FY20, India consumed approximately 942 million tonnes (MT) of coal, 730 MT of which was produced domestically. Of this, approximately 666 MT was produced by CIL and SCCL, roughly employing about 2.24 lakh workers.
- This translates to about nine lakh people, based on a four-person household, who are dependent, at least partly, on coal mining.
- This does not include white-collar workers of CIL, discrepancies in mine-wise data, and the fact that not all mines are run for three shifts, underground mines are highly unproductive and older legacy mines have more workers than coal mines.
- Using different employment factors, one study has pegged direct coal jobs at 7,44,984, while another study pegs it at approximately 12,00,000.
- Further, these figures do not include contract employees working for mine development operators (MDOs), captive mines under private players, those employed in coal transportation activities — trucking, railways where coal accounts for about 40 per cent of total freight revenues — not to mention those employed in coal-consuming sectors like power, steel, sponge iron, etc.
- With all this, we have still only covered the formal direct and indirect jobs in the coal value chain.
- To borrow Kuntala Lahiri-Dutt’s concept, there are two more coal economies, statecraft coal (non-legal small scale coal mines in the north east) and subsistence coal (small-scale collieries run on village commons usually bordering formal mines) for which there are no official employment figures.
Challenges:
- The challenge in transitioning coal workers in India is also in factors like education, skill levels, willingness to migrate, and caste.
- Without adequate information on these parameters, it becomes difficult to decide how and where to finance the transition.
- Moreover, revenues from coal and allied activities form a significant portion of receipts in India’s coal-bearing regions. In FY20, the Centre alone collected approximately.
- Rs 29,200 crore in GST compensation cess from coal. These revenue receipts are used for development under different budget heads at the state level. A transition away from coal must account for the loss to the state and district exchequer.
- Further, a number of welfare services in key coal-bearing districts are provided by the coal company operating there.
- India may or may not succumb to the global pressure to announce a net-zero target. Regardless, coal is on its way out. India now needs to decide how it wants to manage the transition.