The Economist explains
Why is India clinging to coal?
Growing demand, entrenched interests and a sense of historical injustice keep it hooked
IN THE LAST minutes of COP26, with a deal in sight, India hit the pause button. With the backing of China and a few other countries, it insisted on replacing a commitment to “phase out” coal with a pledge merely to “phase down” its use. This one-word shift had potentially big implications. The phase-out promise had been seen as an important step towards ridding the world of its filthiest fuel. India knows the cost of coal. Emissions from burning the black stuff kill 112,000 Indians each year, by one estimate. With this in mind, India has ramped up investment in renewable energy: over the past decade, its capacity has more than quadrupled. Why then does it still burn so much coal?
The first reason is that it needs to keep the lights on. India’s population, currently 1.4bn, is growing and electricity use is soaring. India needs to add capacity equivalent to all of the EU’s output, over the next 20 years, according to the International Energy Agency. Today 70% of the country’s electricity comes from coal. The government has promised to increase renewable-energy capacity to 500 gigawatts by 2030, more than doubling the current output. But this would still account for just half of anticipated need. The creaking electricity grid needs an upgrade too. Distribution companies, straddled with a collective debt of $80bn, are ill-equipped to make the investments required to store and transmit renewable energy reliably. That makes solar power, an apparently obvious solution for India, harder to implement at scale.
Other countries also dread the prospect of unmet energy demand, which could stunt economic growth. That is why China joined India in pushing for a mere phase-down of coal, a rare moment of solidarity in an otherwise bristly relationship. The two countries are united by a sense of historical injustice. Their leaders feel that the West, after blazing through mountains of coal on its way to becoming rich, is unfairly trying to prevent them from doing the same. Indians, especially, feel hard done by. Though it is the world’s second-biggest consumer of coal, on a per person basis it burns a little more than a third of what America does.
India has another reason for hanging on to coal: politics. The black stuff is big business, making it ripe for graft. In the 1990s and 2000s mining contracts were handed out to government cronies at knockdown prices, a scandal that became known as “Coalgate”. Mining also provides a rich seam of votes. According to one study, between 10-15m Indians depend on coal for their livelihood, many of them miners in the country’s poorest states, Jharkhand and Chhattisgarh.
All this makes it fiendishly difficult to scrub coal from India’s economy. But more could be done. For a start, India could refurbish existing plants so they would burn coal more cleanly. If it improved distribution infrastructure, it could exploit its solar potential more quickly. That would still leave the workers who depend on coal mining. At some point the rosy projections that have India clamouring for more energy ought to provide them with better job opportunities—and the luxury of planning a healthier future for their children.
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