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Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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Kicking Coal May Be A Trillion Dollar Challenge For India

  • Coal is currently responsible for about a third of India’s energy mix.
  • A think tank out of New Delhi recently calculated that a just transition away from coal in India will cost approximately $900 billion over the next 30 years.
  • many Indian leaders simply think it’s unfair that they should have to quit coal at all
Coal

On a global scale, coal dependency is the single-biggest barrier to reaching international climate goals. Every feasible pathway to capping global warming to 1.5º-2º Celsius over pre-industrial averages hinges on the complete phase-out of the dirtiest fossil fuel. But kicking coal has proven to be an extreme challenge, especially in developing countries where energy demand is rising, coal is abundant, and funds are limited.  The conversation around the green transition in developing countries is a complicated one, and presents major trade-offs. Moving away from fossil fuels, and particularly coal, is essential for environmental wellbeing, but energy is essential to opportunity growth and human dignity. Without affordable, accessible, and reliable energy, it is impossible for developing countries to do just that: develop. Achieving a “just transition” in such contexts will require an enormous amount of climate financing and social safety nets to make sure that citizens aren’t harmed more than they’re helped by clean energy initiatives.

One of the biggest challenges in this regard is India, which is already one of the biggest greenhouse gas emitters in the world, while still struggling to keep up with energy demand. Coal is currently responsible for about a third of India’s energy mix. India is the third largest coal producer in the world, and has the third biggest coal reserves after the United States and China. Even with these vast amounts of domestic coal, India is also the world’s eighth largest coal importer. Overall, the subcontinent has an annual coal production of 310 million tonnes and imports of almost 25 million tonnes.

Related: Chinese Oil Major Eyes Significant Output Boost

Weaning India off of coal won’t be easy, or cheap. A think tank out of New Delhi recently calculated that a just transition away from coal in India will cost approximately $900 billion over the next 30 years. The International Forum for Environment, Sustainability and Technology, known by the acronym iFOREST calculated that $600 billion would be needed for investments in new industries and infrastructure, and $300 billion would be allocated for grants and subsidies to support coal industry workers and affected communities. These social protections would be of enormous importance. According to the iForest reports, quitting coal overnight would cost Indians over five million jobs. 

The magnitude of this challenge – and its enormous price tag – has led Indian officials to resist agreements calling for the complete phaseout of coal. At the COP26 climate conference in 2021, China and India were instrumental in watering down the language of the final agreement from “phasing out” coal to “phasing down” coal. And at COP27, India negotiated to change language specific to coal to more broadly refer to fossil fuels as a whole. "Natural gas and oil also lead to emission of greenhouse gases. Making only one fuel the villain is not right," a source in India's delegation at COP27 told the Press Trust of India. But others saw this as a rhetorical ploy to alleviate appropriate and necessary pressure on Indian coal. 

Making a climate financing deal with richer nations could be a pathway to achieving just transition in India, but so far Indian officials have been reticent. The history of climate financing is littered with broken promises, leading to great skepticism on the part of Indian leadership. Twelve years ago, at a United Nations climate summit in Copenhagen, rich nations promised to channel US$100 billion a year in climate financing to less wealthy nations by 2020, but they never made good on that pledge. 

What’s more, many Indian leaders simply think it’s unfair that they should have to quit coal at all. There are lots of criticisms about ethics and fairness (or lack thereof) of placing the onus of the green energy transition on countries that have not yet benefited from fossil fuels in the way that developing countries already had the chance to do. The global north has historically been responsible for the lion’s share of emissions, and has benefited greatly from this unchallenged energy use. Now they know better, but it’s too late. And many developing countries say it’s unfair that world powers are now trying to keep poorer countries from following the same trajectory.

By Haley Zaremba for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on April 01 2023 said:
    It is absolutely ludicrous and illogical to expect India to spend $30 bn annually on getting rid of a very important economic and cheap energy source like coal particularly when it has the world’s third largest coal reserves and also when it needs whatever energy sources available to it to ensure energy security and the needs of its economy and people.

    It is far cheaper to invest in carbon-catching technologies and also in renewables at its own pace.

    Moreover, India would prefer to spend $30 bn a year more profitably on creating jobs for its highly educated middle class and also improving the health and living conditions of the poor.

    We are in an energy diversification era where renewables have to compete against fossil fuels and other sources of energy for a share in the global primary energy consumption. The higher the share of renewables the less coal, oil and gas will be needed. This is the logical and practical way of combatting climate change.

    Twelve years ago, at a United Nations climate summit in Copenhagen, rich nations (mostly Western nations who are promoting their green policies) promised to channel $100 bn a year in climate financing to less wealthy nations by 2020, but they never coughed up one dollar.

    If they are now keen for India to wean itself off coal, they should be prepared to help foot the bill for this or stop proffering advice from their ivory towers.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




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