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According to a study conducted by the environment and climate change research think-tank iForest (International Forum for Environment, Sustainability and Technology), the cost of just transitioning away from coal is very high for India.
It is a concept which ensures that no one is left behind during the transition process from a fossil fuel-dependent economy to a more sustainable and low-carbon economy.
There is a huge dependence of the Indian economy on coal and Coal is the most important fossil fuel in India, accounting for 55-61% of the country's energy needs as per the ministry of Power reports.
This makes it necessary to shift away from coal to diversify the energy basket of India.
Commercial energy consumption in India has seen a growth of about 700% in the last four decades.
The current per capita commercial energy consumption in India is about 350 kgcal/year
however this is poised to increase due to rising population, expanding economy and improved standard of life.
The total India Production of coal in 2023-24 was 997.83 MT with a growth of 11.71%.
Total coal import in the same period of 2023-24 was 261 million tonnes.
However, India exported just 1.316 million metric tons of coal in 2021–2022 and it shipped 1.163 million MT in the 2023-23 period.
India still depends on coal to meet its demands. Among the G20, India is the third-largest importer of coal. Furthermore, 12% of the world's imports of coal are accounted for by India only.
Over 369,000 people are employed in public sector coal enterprises only and there are additional jobs in the associated sector.
The IPCC's Special Report Global Warming of 1.5 °C states that in order to keep global warming to 1.5 °C, coal must be phased out by 2050.
Coal contributes significantly to air pollution and causes over 800,000 premature deaths annually worldwide. Millions fewer incidences of serious and mild illnesses will result from the phase-out of coal.
As per the iForest (International Forum for Environment, Sustainability and Technology) study, Coal will remain central to India’s energy mix for at least another decade due to high dependence on the coal sector in the Indian Economy. This also increases the cost of just transition.
India’s coal reserves and productionThe total estimated coal reserve of India is 378.21 billion tonnes as of March 2023, according to the National Coal Inventory of 2023. Presently, India ranks second in the world for coal production. India has the world's fifth-largest coal reserves. India is home to about 7% of the world's proven coal reserves. More than 48.3% of India's energy mix comes from the coal industry. On the other hand, about 44.3% of India's energy comes from renewable sources. For more on this please refer to: https://www.iasgyan.in/daily-current-affairs/coal-sector-29#:~:text=About%2044%20per%20cent%20coal,2019%20in%20the%20corresponding%20period. |
As per the iForest (International Forum for Environment, Sustainability and Technology) study, the cost of just transition for India is over $1 trillion or Rs 84 lakh crore, which is required over the next 30 years.
The transition to Net Zero by 2070 must support those relying on coal for their livelihoods.
Green Investments of approximately 48% of the $1 trillion allocated for energy infrastructure in India would be required for just transition.
Just transition requires a mix of Public and Private Contributions. A combination of grants, subsidies, and private investments focused on energy costs will be needed.
District Mineral Foundation Funds have nearly $4 billion available along with Corporate Social Responsibility (CSR) funds for community support. This fund is channelled for just transition in India.
International Approaches- Case StudiesSouth Africa: South Africa has developed a framework called Just Energy Transition Investment Plans (JET-IP) for transitioning away from coal to reduce reliance on fossil fuels. It sought to invest $98 billion over the next 20 years, with $8.5 billion allocated for the initial period of 2023-2027. The majority of the funding will be given towards green energy investments, supporting communities affected by coal phase-out, and reskilling workers. Germany: Germany enacted laws to phase out coal by 2038 to ensure a structured and fair transition in coal-dependent regions. The government has sanctioned over $55 billion for closing the coal mines and plants at the same time ensuring economic development in affected areas. The transition plan of Germany emphasises social protection for workers and investment in alternative economic activities to replace coal sector jobs. Studies from India The study on four coal-dependent districts viz. Korba (Chhattisgarh), Bokaro and Ramgarh (Jharkhand), and Angul (Odisha), were done to assess their reliance on coal and estimate the costs of a just transition. Bokaro, Jharkhand The coal-based economy in Bokaro accounts for about 54% of the district's Gross domestic product and it is supported by several coal plants and an integrated steel plant. More than 139,000 workers are employed in coal mining and associated sectors. A full phase-down of coal or the transition cost is projected to be Rs 1.01 lakh crore for worker rehabilitation and green energy initiatives. Similarly, Korba in Chhattisgarh, Angul in Odisha and Ramgarh in Jharkhand are significant coal-producing districts, and house multiple coal mines and power plants. A large workforce is engaged in coal mining and related industries and they rely largely on coal for local economic stability. Just transition in these districts will require a significant amount of capital. |
Important articles for reference
Just Energy Transition Partnership deal
Sources:
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PRACTICE QUESTION Q.Defining the concept of Just Transition in the context of India’s reliance on coal, critically analyse the challenges associated with transitioning away from coal. (250 words) |
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