Clamour For India To Cut Its Reliance On Coal Betrays Hypocrisy

Has that happened? No, it has not. Worse, countries in the West have set their own times to exit from fossil fuels and given themselves maximum flexibility when transitioning to renewables. 

But they are hyperventilating about India. Why? This is nothing but total hypocrisy. Consider the case of Germany, considered by many as the West’s green poster child. It will record its biggest jump in emissions in three decades this year. And this will happen mainly due to a sharp rise in coal use. Germany will not tell the world that it generates 27% of its electricity from coal. And this figure will increase once it shuts down all its nuclear plants. Once that happens, an additional 60 million tonnes of carbon emissions will happen annually as more coal and gas will be needed to meet the demand for electricity. 

The world must know India—a billion-plus nation and the world’s third largest emitter—is trying hard to decarbonise its power sector, it aims to build 450 GW of renewable energy capacity by 2030. It has plans to use technologies like improved battery storage to make renewables more dependable. Installations of solar, wind, hydro, biomass and nuclear plants will reach more than 500 gigawatts by 2030, which will be almost tripling of current levels, and account for 64% of India’s generation capacity. 

New Delhi wants to be a global hub for production of green hydrogen and green ammonia. Yet, coal will account for half of India’s electricity generation till 2030, it will remain the country’s largest source of electricity. India will need as much as 46 gigawatts of additional capacity alongside new renewables. India has plans to phase out 2 gigawatts of coal-burning plants by 2030, the final plan is to shut down 25 gigawatts of old plants. 

And then there are taxes. The coal industry pays a myriad of taxes to the state and central governments including royalty, goods and services tax, GST compensation cess, and a host of other cess. In India, the central and state governments’ dependence on coal is at 25% and 13% of their tax revenues. Coal is responsible for 10% and 2% of the central and state governments’ energy tax revenues, respectively. Electricity— majorly generated from the coal sector —also contributes 7% and 15% of the energy tax revenues to the central and state governments respectively. This totals to thousands of crores on an annual basis. So, in short, to phase out coal, as targeted at the Conference of Parties in Glasgow, will severely impact taxes collected by the governments. Worse, it could eventually negatively impact the economy down to a micro-economic scale. 

The critical West needs to take into account all of these before resuming their rant. India will phase out coal but, like the western nations, it must do it on its own terms.

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