Chandra Bhushan

Just Transition in Coal: A Perspective from Jharkhand

Posted on by Chandra Bhushan

This article originally appeared in Vol LVI No. 29 of the Economic & Political Weekly, published on 17 July 2021.

The article discusses why it is an imperative for India to begin deliberation on a just transition from coal in light of some of the compelling factors. It then evaluates what a just transition in India might entail building on an onground study of a coal district in Jharkhand, one of India’s top coal mining states. And fi nally, it outlines the planning and policy considerations that will be necessary to support a
just transition.

Over the past two decades, a growing body of research on climate change has made it clear that a shift away from the fossil fuel economy is inevitable. This will entail a system transition in electricity generation, based on renewable energy sources and simultaneous phasing out of coal-based power by 2050 (IPCC 2018).

However, there are socio-economic consequences of such a transition that cannot be overlooked. A fundamental concern is about the fate of fossil fuel industry workers and local communities who are dependent on it. Just transition as a policy and planning concept tries to address this. Originally advocated by labour unions (Galgóczi 2018), and later merging with the broader debate on environmental justice, the concept underscores the need of ensuring social justice in the shift towards a low carbon, or a carbon neutral future (Morena et al 2019).

The basic idea of a just transition is to secure a sustainable and decent livelihood for the people who are dependent on the fossil fuel industry through proper planning and investments. Simultaneously, there must be efforts to eradicate poverty in those regions, and to build thriving and resilient communities (ITUC 2017). It insists on the idea that a healthy economy and a clean environment can and should coexist (Just Transition Alliance 2018).

The socio-economic aspect of the energy transition is now an essential component of the climate change discourse. In 2015, just transition was included in the preamble of the historic Paris Agreement (2015) as, taking into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.

Since then, it has become an important policy component of climate change mitigation action. Countries of the global North are coming up with just transition policies and plans. In most countries of the global South, including India, the discussion on a just transition is either in its infancy or has not been initiated (Pai et al 2020).

India and Just Transition
In India, a policy discourse on a just transition has not been initiated yet because of our high dependence on coal for energy security and industrial growth. However, it is time for such a discussion to begin considering five compelling factors.

First, in India, coal is losing its edge progressively. While overall coal mining is still profi table, with the country’s largest coal producer Coal India Limited (CIL) recording profi ts, about two-thirds of the CIL-operated coal mines are unprofi table and are closing down (Bhushan et al 2020). These are primarily low yielding underground mines, which are a disproportionately high number compared to their cumulative production capacity. As per the latest information of the company, of the 352 mines CIL and its subsidiaries currently operate nearly 45% are underground mines (158 mines). However, they account for only about 5% of the company’s raw coal production (CIL 2020). The employee liability of these mines is very signifi cant, as they employ about 40%–45% of CIL’s total workforce. As per internal inputs, the loss from continuing with these mines is about 16,000 crore per year, about the same as the company’s annual profi t in 2018–19. The alarming issue is that these unprofi table mines are closing down in an unplanned manner (Bhushan et al 2020). Besides underground mines, old opencast mines are also proving to be unprofi table and are either closed or temporarily discontinued. For example, in Jharkhand, one of India’s top coal producing states, more than 50% of the coal mines are currently closed, including both opencast and underground mines (Department of Mines and Geology 2020).

Second, coal is facing a major challenge due to the growing cost competitiveness and reliability of power from renewable energy sources. The installed cost and tariffs of utility-scale solar photovoltaic plants in India have fallen by 85% since 2010 (Henbest 2020). In 2019, it stayed around 2.50–3.00/kWh, depending on the location of the offtake risk (Saran et al 2019). This is 20% to 30% cheaper than the cost of power from existing coal plants. Solar power prices are expected to fall further in the coming years to around 2.00/kWh by 2030, while the cheapest pithead coal power price is likely to rise to `4.85/kWh by that time (CPI and TERI 2019).

The third reason is the pollution and environmental burden of coal-based power and coal mining. Coal-based power plants are the largest source of industrial pollution in India. Of the entire industrial sector, they alone account for 60% of suspended particulate matter (SPM) emissions, 50% of sulphur dioxide (SO2), 30% of nitrogen oxides (NOx), and 80% of mercury (Hg) emissions (Bhushan et al 2015). Considering this, the environmental standards of coal-based power have been made progressively stringent. In 2015, the Ministry of Forest, Environment and Climate Change (MoEFCC) imposed new standards on coal power plants to limit their emissions of SO2, NOx, PM and Hg. The estimated capital expenditure required to meet these standards is about 86,135 crore. This will add between 0.32/kWh and `0.72/kWh to the existing power tariffs (or around 9% to 21% to their average generation tariff) depending on the size of the units and other factors (Garg et al 2019). For coal mining, MoEFCC in 2010 had identifi ed most of the top coal mining areas as critically polluted areas. These include Hazaribagh and Dhanbad in Jharkhand, Singrauli in Madhya Pradesh, Korba in Chhattisgarh, and Angul (Talcher coal-fields) in Odisha, among others (Bhushan and Banerjee 2015). In addition, coal mining remains one of the major factors for forest-land diversion. On an average, an estimate of the last 40 years shows that 20%–25% of total forest land diversion is due to mining, and about half of that is for coal (Bhushan etal 2020).

Fourth, we need to plan a transition away from coal to reverse the legacy problem of resource curse in the coal regions. Most of India’s top coal mining districts suffer from this, with the local people facing displacement and deprivation due to resource extraction. In many of India’s top coal mining districts there is a high proportion of deprivation and poverty. For example, in districts such as Singrauli, Sidhi, Chatra, Godda, Surguja, Korba, and Sonbhadra, about 40% or more of the people are multidimensionally poor, exhibiting very poor status of health, education, and living standards (as per Oxford Poverty and Human Development Initiative multidimensional poverty index calculator). This is nearly twice the all-India average of 27.9% (Oxford Poverty and Human Development Initiative 2020).

Finally, is the urgency of climate change action. For India, this becomes necessary not only considering our environmental obligations, but also given the economic and social costs of the climate crisis. India is the fi fth most vulnerable country to climate change impacts, as per the Global Climate Change Risk Index 2020 (Eckstein 2019). Under business-as-usual scenario, climate change will increase the stress on the country’s natural ecosystems, agricultural output, and freshwater resources, while also causing escalating damage to infrastructure. These will have severe consequences for the country’s food, water and energy security, public health, and for sustaining the country’s economic growth (Bhushan et al 2020). In 2018, India’s economic losses due to climate change were the second-highest in the world, with the estimated loss at 2.7 lakh crore, which is equivalent to about 0.36% of its gross domestic product (GDP) (Eckstein 2019). The Ministry of Finance (2020), has further estimated that the cumulative costs of climate change adaptation till 2030 will be 85.6 lakh crore, equivalent to nearly 58% of India’s GDP in 2019–20 at constant prices (National Statistical Offi ce 2020).

Global experiences of successful coal transitions show that if a transition is planned in a timely and deliberative manner, it will not be a tradeoff between

the environment and economy, and can lead to positive social and environmental outcomes (Bhushan et al 2020). In fact, just transition will be an appropriate policy move for the Government of India (GOI) to complement its vision of energy transition and to meet the Sustainable Development Goals (SDGs).

Evaluating a Just Transition
In countries of the global North, the experience on just transition has been primarily related to the formal workforce of the coal industry and associated socio-economic factors (Bhushan et al 2020). However, in India, the situation is different considering that most of our key economic sectors are based on an informal economy (Labour Bureau 2014). Global experiences also suggest that there is no one standardised approach for a just transition. The dependence on fossil fuel, and the nature of the transition will vary from country to country and from region to region within a country. Any approach to a just transition thus needs to be evaluated in a country-specific manner and planned in the context of respective fossil fuel/coal mining regions (Bhushan et al 2020).

Ramgarh district of Jharkhand constitutes a representative case to evaluate what just transition means for India. One of Jharkhand’s top coal mining districts, Ramgarh produces about 13 million tonnes of coal per year. However, production has been steadily declining over the past four years. Currently 50% of the total of 24 coal mines in the district are closed or have been temporarily discontinued due to various reasons, including unprofitability. 1 The remaining mines have a productive life of 10–25 years, and there are very few new ones in the pipeline ( Department of Mines and Geology 2020). Therefore, coal mining activities in the district will largely be phased out in the next decade or two. While coal still remains central to the district’s economy, Ramgarh is as an appropriate case to understand what a coal phase-out will look like, and what it will entail.

Study Approach
The Ramgarh study is based on a mixed approach of primary and secondary research. A primary survey was conducted of 406 households in the district, that were selected through a process of strati fi ed random sampling.2 Samples were chosen from three geographic strata: 0–3 kilometre (km), 3–10 km, and beyond 10 km, from the mine/mine cluster, to minimise the possibility of clustering and selection bias.3 Besides, 14 focus group discussions were conducted with various stakeholder groups in the three main coal mining blocks, namely Mandu, Patratu and Chitarpur, covering 138 participants. Personal interviews were also conducted with state government representatives, the district administration, public representatives, panchayati raj members, labour unions, coal industry officials, and civil society groups.
Secondary data was obtained for understanding the coal industry profi le in Jharkhand and Ramgarh, and for analysing the demographic distribution, economic status, social infrastructure, and key development parameters in Ramgarh. The data also helped to evaluate the political economy of coal mining in the region, and to identify the various stakeholder groups that will be affected, and are related to the just transition process.

Key Observations
The Ramgarh case study brings out four key observations that are important for understanding just transition in India.
First, the dependence on coal mining for income is signifi cantly high. Out of the total surveyed households, 27% (equivalent to 54,000 households in the district) depended directly on coal for an income. Nearly three-fourths of them (71%) were part of the informal coal economy, including coal gatherers and sellers, casual labourers, and other contractual workers (including businesses). Only 29% had formal employment with coal companies.

Majority of the people belonging to the informal economy also fall within the low-income group, with a monthly household income between 5,000 and 10,000. This group of people also lack labour protection or social safety.

Second, income dependence on coal is spatially concentrated. While more than 40% of the households within a radius of 3 km from the mines derived direct income from coal, this proportion sharply declined to less than 17% for households living beyond 3 km of a mine. In fact, beyond 10 km from coal mining areas, agriculture was observed to be the most signifi cant source of employment. The district’s overall worker distribution, as per government data, also indicated high agricultural dependence, particularly in the rural areas, which is as high as 75% of the total main workers.

Third, the distributional impact of coal mining in the region has been extremely limited, benefi ting only a few. The district remains extremely poor in terms of social infrastructure or access to basic amenities. For example, there is nearly a 50% defi cit in the required number of primary healthcare centres. Moreover, even the existing ones do not meet the necessary Indian public health standards in terms of medical staff, treatment facilities, etc. The same situation is with access to education. Only 16% of the schools offer secondary/higher secondary education, with average enrolment below 50%. With respect to people’s access to basic amenities, such as clean drinking water, only about 17% of households in rural areas have access to the piped water supply. These are the areas which are also affected by mining. In fact, Ramgarh falls in the list of aspirational districts of the NITI Aayog, given its poor human development indicators (NITI Aayog 2018).

Besides social infrastructure, coal mining has also not improved the overall economic status of the district. Ramgarh’s per capita GDP is nearly half of the all-India average. This places the district among the low-income category as per global standards. Over 63% of the district’s households have a monthly income below `10,000 (Bhushan et al 2020).

Finally, and most importantly, a focus on coal mining and related industry over decades has stymied the development of other sectors and the diversifi cation of the economy. Coal remains the single largest contributor to the district’s GDP, with a share of about 21%. In addition, other industries are also coal-reliant, such as coal washeries, thermal power plants, sponge iron units, refractories, etc. On the contrary, other potential sectors such as agriculture, forestry, fi sheries, and service sectors remain grossly underdeveloped. The situation has also contributed to a perceived sense of coal dependence in the mining areas. This is evident from the fact that while 27% households reported a direct income from coal, nearly three-fourths of the surveyed households expressed a sense of “perceived” dependence.

All of the above-mentioned factors, such as high proportion of informal workforce, low-income, poor social infrastructure and development indicators, a coal-centric economy, and underdevelopment of other economic sectors puts the district at a high risk from an unplanned coal mine closure. It therefore becomes imperative to plan a transition that is timely, deliberative and just.

Developing Policy Mechanisms
Just transition planning in India will not be a linear question of substituting a “mono” industry (coal) along with its workforce. Considering the nature of dependence and the poor socio-economic status of most coal mining areas in India, just transition will require “structural changes” to support a broad-based socio-economic transition. An integrated approach will be required to reverse the “resource curse” in coal mining areas, create sustainable economic opportunities, and build climate resilience. The Ramgarh experience also clearly brings out that, considering the socio-economic complexity of the coal regions and the varied stakeholders, planning for a just transition must be a phased and deliberative process.

There will be six key components of just transition planning at the district level. This includes, defi ning a time frame for a just transition (including of phased closure of coal mines and coal-based power), establishing an inclusive transition planning mechanism, providing alternative employment opportunities for formal and informal workers in the short term, planning economic diver-sifi cation (including industrial restructuring) for the long term, improving social and physical infrastructure to build community resilience, and securing fi nancial resources to support a just transition.

However, a just transition plan cannot be implemented at the district level in absence of a well-structured governance mechanism, which is based on utmost principles of cooperative federalism between the union and the state governments, and an inclusive decision-making process by engaging various stakeholders.

The governance framework of just transition must include eight key pillars. These include strong support of the union and state government(s) on developing policies and mobilising financial support, a diverse coalition among various actors and stakeholders, an effective communication strategy on just transition to build stakeholder confi dence, economic diver-sifi cation and social sec urity planning, coal sector transition planning, development of social and physical infrastructure development, and securing public and private investments for the transition.
On the policy front, a crucial aspect will be developing a “national just transition policy.” The union government should develop the policy, including components of coal phase-out strategy at the national- and state-levels, plan for phasing out coal-based power and simultaneous incentivisation of clean energy, and regulatory revisions of the coal industry pertaining to mine closure and reclamation, leasing/lease transfer, la-bour, etc. The union government’s support will also be crucial for building on existing laws and schemes to enable locally deliverable actions, providing a financial package, and pushing for an international framework at the United Nations Framework Convention on Climate Change (UNFCCC) to support just transition in developing countries.
The state government, on the other hand, will be at the front line for dealing with just transition. This will require building a broad-based consensus, and a strategic action plan to phase out coal mining and coal-based power, develop-ing economic and industrial strategy to steer away from coal dependence in terms of revenue, employment, and industries, and develop a state-level policy on just transition aligned with the national framework.

The actual planning and implementation will happen at the district level, where all stakeholders will need to engage through a participatory process.

Conclusions
The overall scenario of coal mining and coal-based power in India, and specifi -cally the Ramgarh experience, shows that just transition is not a consideration of the future anymore. The issue is here and now. The Ramgarh study is a telling case of the subnational status of coal mining and coal regions. In many coal districts, mines are being temporarily or permanently closed without any framework in place to support the local economy and restore the local environment. Therefore, there is an immediate need to develop just transition plans and a policy framework for these areas to avoid economic and social disruptions. A well-planned just transition is also necessary to compliment India’s ambitious plan for energy transition, and enhance its efforts of climate change mitigation action.

 

 

Single-use-plastics bans have failed. Relying on command and control to fix environmental problems is taking us nowhere

Posted on by Chandra Bhushan

Exactly three years back, single-use plastics (SUPs) took centre stage in India when PM Modi, on June 5, 2018, announced that the country would completely phase out these products by 2022. Now, barely a year before the deadline, the Union environment ministry has issued a draft notification to impose a nationwide ban by July 1, 2022.

The Draft Plastic Waste Management (Amendment) Rules, 2021, published just before the second wave of the pandemic hit the country, proposes to ban SUPs in three stages. Plastic carry bags of less than 120 micron thickness will be phased out by September 30, 2021. Plastic earbuds, sticks, flags, and thermocol decorations will be banned from January 1, 2022. Lastly, plastic and thermocol plates, cutlery, wrapping films, and banners will be prohibited from July 1, 2022.

The draft rule is a significant change in strategy, as the Centre, until now, had encouraged states to phase out these products. Consequently, 30 states/ Union territories have enacted laws to ban various SUPs. As the state-level bans have been largely unsuccessful, the Centre has decided to step in. But the question is, if the state bans have failed, will a similar national ban work?

Restrictions on SUPs have been attempted in India from 1999, when the sale of thin polythene bags was prohibited. Since then, three national laws and numerous state laws have been enacted to phase out these products. But in the last 22 years, we have not been able to eliminate even one product. Why? Is this because of poor enforcement (an oft-mentioned reason) or because of some other factors?

A closer look at SUP bans by states shows that the enforcements were carried out in fits and starts, and hence, it did contribute to the failure. But this was not the main factor; the absence of a strategic approach seems to be a bigger problem.

The foremost factor is the lack of alternatives to SUPs and the government’s failure in promoting them. So far, the thinking within the government has been that once the ban is enforced, alternatives would emerge to fill the gap. But this has not happened simply because there is no supportive infrastructure and incentive to produce alternatives in volume. Alternatives have remained a niche business as the government never had a policy to mainstream them.

The unrealistic time frame for phasing out these products is the second important factor for the failure. Bans have been imposed either immediately or within few months, providing little time to the industry and users to adapt. This time as well, most states/ UTs imposed an immediate ban, threatening the livelihoods of millions of people.

Experience worldwide shows that a total ban on widely-used products requires an incremental approach to change the economy and public behaviour. This is precisely the reason why European countries have given themselves at least a decade to eliminate SUPs. We, on the other hand, want to do it in months!

The success of bans is also linked to local waste management practices, the third factor. States like Kerala and Sikkim had more success than others because of their long-running campaign on waste management. Therefore, a sound waste management ecosystem, including segregation, collection, and recycling, is a prerequisite to manage SUPs, which doesn’t exist in most states.

The fourth important factor is an overreliance on bans while ignoring other instruments such as fiscal incentives and disincentives, certification and labelling, and extended producer responsibility. Our propensity to rely only on command and control to fix environmental problems is taking us nowhere. We need to use both carrots and sticks to eliminate SUPs.

Lastly, reducing SUPs requires a long-term vision, strategy and targets for the plastic industry. While on the one hand, the central government is proposing to ban SUPs, on the other, it is also promoting the plastic industry. This contradiction is at the heart of the SUP conundrum. To resolve this, India needs a comprehensive national strategy that embeds the circular economy principles in the plastic industry. The goal is not just to eliminate SUPs but also to reduce plastic production and consumption, improve waste management and reduce plastic pollution.

As India approaches the 2022 deadline, the pressure on the central government is mounting to do something. A note of caution at this point is that hastily enacted legislation has not worked in the last two decades and is not likely to deliver in the future as well. Therefore, the environment ministry must carefully examine past successes and failures before enacting another law to ban SUPs.

Who’s afraid of net zero target?

Posted on by Chandra Bhushan

A storm is brewing on the climate diplomacy front that India needs to navigate carefully to avoid becoming a fall guy. The issue at hand is the pledge by countries to achieve “net zero” emission by the mid-century. Over 120 countries have already announced their intention to achieve carbon neutrality by 2050. China intends carbon neutrality before 2060, and the US is considering a 2050 pledge. Being the third-largest emitter, there is pressure on India to announce its commitment as well.

Net zero or carbon neutrality means that the amount of CO2 produced by a country is balanced by the amount removed from the atmosphere. According to the Intergovernmental Panel on Climate Change (IPCC), to limit the global temperature increase to 1.5°C, global net CO2 emissions should decline by about 45% by 2030, reaching net zero around 2050.

There is considerable scepticism around net zero in India. Many argue that net zero is not equitable and fair as it does not differentiate between developing and developed countries in sharing the burden of mitigation. Another argument is that it will limit India’s development potential. Some also criticise mid-century net zero as allowing uncontrolled emissions today while relying on uncertain technologies to offset emissions in the future. Finally, many net zero pledges are premised upon trading and offsetting emissions, allowing the rich to continue emitting and buying their way out.

There is some merit to the above scepticism. Historically, developed countries have shifted the goalposts on climate action and reneged on financial and technological promises to developing countries. However, we cannot shy away from net zero, as declaring a carbon neutrality target is inevitable for every country to meet the 1.5°C goals; the only question is when and how.

The first step for India to decide the contours of net zero is to stop reacting to terms set by developed countries. In three decades of climate negotiations, we have primarily been a reactive party, not a proactive one shaping the discussion. With net zero as well, we face a choice – either reject the idea citing equity and fairness or embrace and remould it to achieve climate goals and secure our developmental space. I strongly believe we have an opportunity to develop a fair, ambitious and effective consensus on net zero. Let me propose a five-point agenda that India can consider to set the terms for future global action.

First, net zero should be built on self-differentiation, a cornerstone of the Paris Agreement. It is a no-brainer that if the global net zero deadline is mid-century, then the developed countries’ deadline will be 2040. High-emitting emerging economies like China will have to follow soon and reach net zero before 2050. Countries like India with per capita emissions below the global average will get a little more time – until 2060.

Second, the net zero target has to be flexible. Newer disruptive technologies would allow us to decarbonise faster at a much lower cost than what can be envisioned today. Take, for example, India’s solar energy target. From a modest 20GW in 2010 (enhanced to 100GW in 2015), we are now targeting 450GW of renewables by 2030, largely from solar. That is a 15-fold ambition enhancement within a decade. Countries should therefore revisit their net zero targets every ten years to firm up their commitments.

Third, while net zero is the ultimate goal, the Nationally Determined Contributions (NDCs), due every five years, are the means to achieve the goal. IPCC is very clear; an ambitious 2030 target must accompany net zero. So, countries pledging net zero must also announce enhanced NDCs for 2030.

Fourth, net zero has to be legally binding. Less than ten countries have enacted domestic law on net zero; the rest have made pledges or policy statements. While policy pronouncement is important, compliance can only be assured through a law. This is especially necessary for the US, where climate ambition shifts quickly with change in the political landscape. If the Biden administration is serious about net zero, it should get a law through the US Congress.

Finally, and most importantly, setting a net zero target will not by itself guarantee positive and equitable social and economic outcomes. The rapid transition required in the next 2-3 decades will disrupt the economic and social fabric of fossil-fuel dependent regions. Hence, the net zero targets must be paralleled by an international framework on Just Transition.

Achieving net zero over the next 3-4 decades is very much possible for India. We are developing at a time in history when low/ no-carbon technologies will grow exponentially. A well-designed net zero plan will be an opportunity for us to pole vault to a green future. While there will be an extra cost, studies indicate that these will be modest and compensated by lower adaptation costs and reduced loss from extreme weather events. Besides, it will have enormous co-benefits in reducing air and water pollution and improving forest and soil quality, contributing to overall environmental improvement and human well-being. By announcing our net zero commitment, we will also send a clear signal that we are open to global finance and technology support for a green and just transition.

The bottom line is we are one of the most vulnerable countries to climatic disruptions. It is, therefore, in our interest that a serious effort is made globally to meet the 1.5°C goals. In this endeavour, we can either be a bystander or a leader.

The Glasgow Ambition Cycle — Domestic Considerations

Posted on by Chandra Bhushan, Benito Müller and Xin Li

Political Summary

Two 5-year cycles currently drive the implementation of the Paris Agreement (PA): one of communicating national targets (“Nationally Determined Contributions” NDCs) and one of taking stock of global efforts. In order to complete the ambition mechanism of the PA, which is critical for its full operationalisation and the achievement of its objectives, another 5-year cycle, the “Glasgow Ambition Cycle” (GAC), aimed at ratcheting up the collective ambition of NDCs, has been proposed. It is gaining significant traction and appeal for adoption at COP 26 in Glasgow under negotiations on Common Time Frames (CTF, see Ambition Cycle on course to land in Glasgow).  The GAC provides an elegant and non-controversial solution to the sticking options currently being negotiated, and is meant to start in 2025 when countries would be requested to:

  • communicate (at least) a 2035 NDC (‘with a time frame up to 2035’);
  • re-visit any NDCs communicated earlier to see whether, in light of changed circumstances, their ambition could be increased; and
  • repeat these two steps, ceteris paribus, every five years – thus in 2030 they would be: communicating a 2040 NDC and revisiting (inter alia) the 2035 NDC communicated five years earlier, and so forth.

As recently remarked by Marianne Karlsen (Chair of the UNFCCC/PA Subsidiary Body for Implementation): “Parties are increasingly realizing the importance of the issue [CTF] to the overall dynamics and well-functioning of the Paris Agreement. Of course, it is important to keep in mind that CTF is very much a political issue because establishing timeframes often involves parliaments and cabinets. So, this has to be something that politicians also need to get on the radar to work with.”[1]

This is why this OCP blog post takes a look at domestic considerations and demonstrates that the GAC is flexible enough to be accommodated and workable in three key Parties: India, China and the European Union.

India. India has a well-established revolving five-year electricity planning cycle consisting of Electric Power Surveys (EPS) and National Electricity Plans (NEP). The Surveys involve annual demand projections for the next ten years as well as long-term (‘perspective’) projections for 15- and 20-year time horizons. The Plans contain a detailed growth strategy, including investments in generation, transmission, and distribution, for the next five years and the roadmap for the subsequent five years.

The 20th EPS, to be published in 2022, will contain yearly projections of electricity demand till 2030 and long-term projections for 2035 and 2040. The 4th NEP will be available in 2023; it will contain a detailed plan for 2022-27 and a perspective plan for 2027-32. As the electricity sector is the single largest source of GHG emissions in India, accounting for 47 per cent of the country’s total emissions, its planning cycle can be argued to be already in conformity with the GAC, and therefore in principle, the GAC can be accommodated in India’s NDC communication cycle, given the information in the 20th EPS/4th NEP.

China. China’s overall socio-economic development policy in the first half of the 21st century is dominated by two ‘Centenary Goals’; these mark the centenary of the Chinese Communist Party in 2021 and the centenary of the People’s Republic in 2049. As the mid-point between these two centenaries, 2035 has received special attention in China’s current policy making. The deliberations for the 14th Five-Year Plan (2021-25) include, for the first time, a longer-term vision with a 2035 target, which will set the development pathways for the next 15 years. This combination of short-term and long-term targets in China’s policy making is significant for global climate policy, not least because it is perfectly consistent with the proposed Glasgow Ambition Cycle.

The European Union. A key domestic consideration in the EU for determining the timeframe of climate targets is that implementing legislation can take up to 5 years to be adopted. The 2020 communication of a 2030 NDC update shows that a 2025 communication of a 2035 NDC should (in principle) be possible, even if a 2040 timeframe remains the preferred option among some of the key domestic constituents. Given that the Paris Agreement does not preclude the communication of multiple NDCs, there is no need to choose between the two options: the EU can communicate both a 2035 and a 2040 NDC in 2025, and thus take into account all domestic preferences and do so in a manner consistent with the Glasgow Ambition Cycle. The communication of a 2035 in order to facilitate a harmonisation of the GAC should not be seen as a mutually exclusive option, but rather a demonstration of political flexibility that will not prejudice the substantive essence of the EU’s overall ambition. 

The Case of India: Electric Power Surveys and National Electricity Plans

India has an elaborate system for developing a National Electricity Plan every five years.[2] This system has been codified by an act of parliament – the Electricity Act of 2003 (‘the Act’). The Act obligates the Central Electricity Authority to formulate policies and plans for the development of the electricity sector, and to conduct and publish an Electric Power Survey (EPS) every five years to forecast both the country’s electricity demand and the contribution of various sources of electricity to meet that demand. The Act also stipulates the preparation of a National Electricity Plan (NEP) every five years, in accordance with India’s National Electricity Policy.

The EPS forecasts, every five years, the electricity demand for the entire country and for each State and Union Territory in the short, medium, and long term. Year-wise electricity demand projections are made for the next ten years, while long-term (perspective) demand projections are carried out for 15- and 20-year time horizons. So far, nineteen EPS have been published, the latest one in January 2017. 

The 20th EPS will be published in 2022. It will contain:

  • Annual electricity demand projections for each State, Union Territory, Region, and All India in detail for the years 2021 to 2031 (see figure above);[3]
  • Electricity demand for the terminal years 2036 and 2041.

The NEP contains a five-year detailed plan and a 15-year perspective plan. It includes:

  • Short-term and long-term demand forecast for different regions;
  • Suggested areas/locations for capacity additions in generation and transmission, keeping in view the economics of generation and transmission, losses in the system, load centre requirements, grid stability, security of supply, quality of power (including voltage profile, etc.), and environmental considerations including rehabilitation and resettlement;
  • Integration of possible locations of capacity additions with the transmission system and development of the national grid – including the type of transmission systems and requirement of redundancies;
  • Different technologies available for efficient generation, transmission, and distribution; and,
  • Fuel choices based on economy, energy security, and environmental considerations.

The latest (Third) NEP was published in January 2018. It contains a review of the previous five-years (2012-17), a detailed plan for the next five years (2017-22), and a perspectives plan for 2022-27. 

The Fourth National Electricity Plan will be available in 2023. It will contain a detailed plan for 2022-27 and a perspective plan for 2027-32.

From the above, it is clear that a revolving five-year planning cycle for the electricity sector is well-established in the country. As the electricity sector is the single largest source of GHG emissions in India (accounting for 47 per cent of the country’s total emissions, including LULUCF[4]), its planning cycle could become a basis for India’s NDC communication cycle.

The Case of China: Enhanced Five-Year Planning

At the 15th National Congress of the Chinese Communist Party (CCP) in 1997, President Jiang Zemin introduced two ‘Centenary Goals’ to guide the socio-economic development in China. The first goal refers to the centenary, in 2021, of the founding of the CCP, with the Centenary Goal of building a moderately prosperous society in all respects; the second one referring to the centenary, in 2049, of the founding of the People’s Republic of China, with the goal for China to become a basically modern socialist country.

At the 19th CPC National Congress in 2017, President Xi Jinping brought forward this goal to 2035 as a new mid-term goal, with the second Centenary Goal changing to China becoming fully modernized by 2050.

Three years later, in October 2020, President Xi Jinping introduced, for the first time, a longer-term vision – a 2035 development target – in the course of the discussions on the 14th Five-Year Plan (2021-25) at the 19th meeting of the CPC Central Committee.

This new combination of short-term and longer-term targets in China’ policy making is significant not only for China’s carbon emissions peaking and carbon-neutrality targets, but also for the international climate regime. 

At the time of writing, some provinces, autonomous regions, and municipalities have published their 14th FYP and 2035 long-term policy recommendations. Among these, the important mid-

and long-term policy goals related to climate change include (but are not limited to): clarifying the carbon emissions peaking action plan, limiting coal use, increasing the share of renewable energy sources in the energy mix, promoting the intelligence and digitalization of energy development models, and developing green financial service systems. These targets will become the backbone of climate policy making at regional levels in the near future.

Since the formulation of its first five-year plan 70 years ago, China has completed thirteen FYPs, and FYPs will continue to provide guidance to the socio-economic development in China, despite debates on the effectiveness of such administrative economic planning. FYPs fit well with the proposed Glasgow Ambition Cycle, particularly in conjunction with the new longer-term 2035 planning horizon.

In short, the establishment of the 2035 target enables China to play an important role in international climate change negotiations. This is crucial for the ability of China’s own adaptive measures to engage with climate change impacts domestically, and also for the joint efforts of the international community to combat climate change. Combining the carbon emissions peaking and carbon-neutrality timelines, China has the opportunity to demonstrate its contribution to climate change mitigation and also its leadership, in the near future.

The Case of the EU: The Issue of Implementing Legislation

The Glasgow Ambition Cycle crucially requires the communication of a 2035 NDC by 2025. Could this be a realistic option for the EU? A practical way to assess possibilities is to look at precedents – in this case at EU past communications under the Paris Agreement (PA).

On 6 March 2015 (see Table 1 below), the EU communicated their Intended Nationally Determined Contribution (INDC) with a ‘point target’ of emissions in 2030 being at least 40 per cent below 1990 levels, which became its initial NDC on 5 October 2016, when the EU ratified the PA.

This was based on an EU-wide emission trajectory with annual figures from 2021 to 2030, formulated and adopted by EU heads of government in 2014. The subsequent formulation and adoption of the legislation required for implementing the 40 per cent target took almost five years, beginning in July 2015 and ending in December 2020 with the setting of the final 40 per cent target trajectory.

In March 2020, the Commission promulgated the European Climate Law [ECL], which not only mandates the EU to be ‘climate-neutral’ by 2050, but also “proposes the adoption of a 2030-2050 EU-wide trajectory for greenhouse gas emission reductions”[ECL], and five-yearly assessments of “the consistency of EU and national measures with the climate-neutrality objective and the 2030-2050 trajectory”[ECL], synchronized with the Global Stocktakes of the Paris Agreement.

On 17 December 2020, the EU communicated an update of their initial NDC with a new, more ambitious target of at least 55 per cent below the 1990 level for 2030 emissions and – according to the EU Climate Action Progress Report, November 2020 (see also Figure 1) – the Commission is currently determining the annual emissions allocations (AEAs) for each country for the years 2021 – 2030, to take into account the updated, more ambitious, 2030 target.

Figure 1.Emissions in sectors covered by effort-sharing legislation 2005-2030 and Annual Emission Allocations (AEAs), EU-27 (Mt CO2 eq) [Fig. 4 in Climate Action Progress Report 2020]

What is to happen next? In a first instance, new implementing legislation for the 55 per cent target will have to be adopted, and it is expected that this will take (at least) until 2024, which means that in practice the implementation of the updated 55 per cent NDC is unlikely to commence before 2025.

Box 1. Draft by the European Council for the implementing regulation of the ECL (12 December 2020)

Assuming the adoption of the ECL by 2022, the next milestone will be the first of the ECL-mandated assessments in 2023. Following the pattern seen in the run up to the 2015 communication of the (I)NDC, it stands to reason – not least on the basis of the position of the European Council (see Box 1) – that this will be followed by the formulation and adoption of a second ten-year trajectory (2031-40, see Figure 2), presumably based on the 2050 net-zero trajectory mandated in the ECL. 

Figure 2. EU Domestic and Paris Agreement Cycles

According to Art. 4.9 of the PA, all Parties have to communicate an NDC in 2025. The key question in the present context is about what timeframes the EU could realistically consider in light of domestic considerations?

One of the key domestic constraints, the time it takes to adopt the required implementing legislation (up to 5 years, as mentioned above), for one rules out another update of the 2030 NDC.

Given the INDC precedent, one option clearly is the communication of a 2040 NDC. But, to be sure, the 2020 communication of the updated 2030 NDC equally provides a precedent for the option of communicating a 2035 NDC, which seems to be the preferred option of a number of Member States,[5] and is consistent with the GAC. Fortunately, Art. 4.9 allows for multiple NDCs to be communicated simultaneously, so that there is no need to choose one over the other. 

In short, keeping in mind the domestic legislative constraints, it is possible (as illustrated in Figure 2) for the EU to include the communication pattern set in Paris in a cycle that would be consistent with the GAC by communicating both a 2035 and a 2040 NDC in 2025, updating the 2040 NDC in 2030, and communicating a 2045 NDC and the 2050 (‘net-zero’) NDC in 2035.

Table 1. EU Climate Legislation/Regulation/NDC Timetable.  Courtesy of Artur Runge-Metzger

The authors would like to acknowledge, with gratitude, feedback received (in alphabetical order) by Annika Christell, Kishan Kumarsingh, Geert Fremout, and Artur Runge-Metzger.

[1] Source: In conversation with SBI and SBSTA Chairs ERCST.

[2] References:

  • The Electricity Act, 2003 (available at http://www.cercind.gov.in/act-with-amendment.pdf).
  • 19th Electric Power Survey, 2017 (available at https://cea.nic.in/wp-content/uploads/2020/04/summary_19th_eps.pdf).
  • National Electricity Plan, 2018 (available at https://cea.nic.in/wp-content/uploads/2020/04/nep_jan_2018.pdf).

[3] Note that strictly speaking, the projections are made for financial years, starting in April and ending in March of the following calendar year. However, to avoid cumbersome notation, the calendar year of the initial nine months is here used to designate the financial year in question, i.e., ‘2020’ instead of ‘FY 2020-21’.

[4] MoEFCC. (2018). India: Second Biennial Update Report to the United Nations Framework Convention on Climate Change. Ministry of Environment, Forest and Climate Change, Government of India.

[5] See Appendix 3 in Enhance Climate Ambition in 2020: Here’s looking at EU, kid!

Become climate champions: India’s top family conglomerates must play a leadership role in its fight against climate change

Posted on by Chandra Bhushan

The private sector in India has traditionally avoided engagement on climate issues publicly. But this seems to be changing. On November 5, 2020, 24 leading companies signed a ‘declaration of the private sector on climate change’ to tackle the climate crisis. This is an important beginning as the private sector will have to play a crucial role in mobilising resources, knowledge, and innovation. And within the private sector, family-controlled conglomerates are uniquely positioned to lead the low/no-carbon growth trajectory.

Family ownership is the most dominant form of business around the world. Historically, family businesses have dominated the Indian industry. Until the 1990s, a few old business ‘houses’ were dominant, holding diversified business interests across the economy. Their dominance was partly enabled by the planned economy ‘license raj’ model of the time. Since the economic reforms of 1991, these older business houses have been challenged by new families and non-family entrants. But the power of family conglomerates as a business model has not diminished. While some of the older houses did not survive the reforms, many – such as the Tatas, the Bajajs, the Birlas, the Mahindras – did and flourished and are joined by new houses –the Ambanis, the Adanis, the Mittals, and the Jindals.

Presently, India has the third-highest number of publicly-listed, family-controlled companies in the world, after China and the United States. Fifteen of the BSE Sensex – the index of 30 reputed companies listed on the Bombay Stock Exchange – are family-controlled, accounting for more than half of the Sensex combined market capitalisation. Share-price returns of family businesses have also consistently outperformed non-family firms.

One of the key features of prominent family conglomerates in India is that they operate in fossil-fuel intensive sectors and are responsible for a significant share of India’s carbon dioxide emissions.

Today, just seven family conglomerates (Reliance, Adani, Tata, Aditya Birla, Mahindra, Jindal, and Vedanta) are responsible for emitting at least 530 million tonnes of CO2 annually. This is equivalent to 22% of India’s total CO2 emissions. In 2019-20, these seven groups operated 25% of India’s coal-based power plants (50,000 MW); produced 39% of India’s steel (43 million tonnes), 27% of India’s cement (91 million tonnes), and 22% of India’s passenger and commercial vehicles (0.92 million). They also accounted for 30% of oil refining capacity and 25% crude oil production.

If these companies get serious about climate action, India’s emission profile will look fundamentally different. While this ‘seriousness’ primarily comes down to the business argument, there is evidence that family businesses take a more long-term view on investments than non-family firms. Also, studies indicate that they are socially more responsible as they invest in the social and physical infrastructure of the areas they operate in.

The reason why a family conglomerate can take such investment decisions is its unique structure. Unlike other corporates, family businesses are organised around patriarchs/ matriarchs, who bear the ultimate responsibility and hold final decision-making powers. Though the ‘professionalisation’ of family businesses has resulted in hiring competent executives to advise and assist, they still run on the will of the founder or his appointed successor.

To avert a crisis like climate change, forward-thinking and long-term planning is required, for which the value of committed visionary leadership cannot be underestimated. As family conglomerates are organised around visionaries, if they sincerely act on the climate crisis, they can change the trajectory of their own business and that of the sector rapidly. To some extent, they already are doing so.

Mukesh Ambani has recently announced that Reliance Industries would become a net zero-carbon company by 2035. RIL is planning multi-billion dollar investments in hydrogen, wind, solar, fuel cells, and battery to become one of the world’s top “new energy” companies. Tata’s have also strongly signalled that they are moving out of the coal sector and moving into renewable energy, electric vehicles, and hydrogen-based steel making. Similarly, Mahindra has committed to aligning its operations with the science-based targets in the Paris Agreement, and Adani is investing hugely in the solar business to become the “world’s largest” green energy enterprise.

While these announcements and investments are encouraging, it is also a fact that many of these conglomerates continue to invest in fossil fuels. For example, during the recent auction of coal mines, Vedanta, Aditya Birla, Jindal, and Adani made acquisitions of coal assets, despite announcing ambitious renewable energy targets.

This seeming contradiction fits in with another well-known characteristic of Indian family conglomerates – they operate within a broad vision but have mostly grown opportunistically in areas where government incentives to expand are available.  Therefore, even though they are bullish on a low-carbon future, much work needs to be done to move these family conglomerates from merely being followers of government policies to proactive climate champions. This can be a virtuous cycle – these conglomerates have a strong influence on government policy; if they are brought on board, a stronger climate policy is likely to follow.

Given their financial prowess and policy influence, the commitment of these families will be critical for accelerating the transformative changes that climate change requires. Cultivating their next generation to champion climate actions could be an important strategy to move them towards a green future. The business case will be an important part of the engagement, but not the only argument. These industry captains will have to be convinced of the new reality – our children are inheriting a dangerously climate-risked world. Family wealth will not provide infinite protection, but if used wisely, it can certainly contribute to making the world safer for everyone.

Clean up Indian Railways: It must match its climate credentials with sound pollution and waste management

Posted on by Chandra Bhushan

Railways fascinate me. Professionally, I advocate for a massive expansion of rail networks to address the air pollution and climate crisis. Rail transport is not only highly energy efficient compared to road and air transport, it can also completely shift to renewable energy. It will, therefore, play a significant role in reducing emissions from the transport sector. The Indian Railways has recognised this potential and has set a target to achieve net zero carbon emission by 2030, the most ambitious climate target set in the country.

Personally, I love long train journeys. Travelling on the Coromandel Express from Howrah to Chennai, Netravati Express from Mangalore to Mumbai (when it ran on metre gauge), and the Rajdhani from Delhi to Mumbai and Kolkata are some of my favourite travel memories. But during all these times, like most people, I took for granted the noise, the open toilets (now stinking bio-toilets), and the waste along the tracks and stations. But as Indian Railways is expanding, modernising and privatising, environmental issues we overlooked in the past mustn’t be ignored anymore.

Indian Railways is big in every aspect; it runs the fourth largest railway system globally and carries 8 billion passengers and more than a billion tonnes of freight a year. These numbers are projected to increase by 50% over the next 10 years. As it’s already one of the largest consumers of water and energy and generator of waste, its environmental footprint will increase significantly in a business as usual scenario. While Indian Railways has made significant progress in energy efficiency, renewable energy and cleanliness, there are grave concerns of water and noise pollution and waste management.

Let’s first start with the law. For a long time, Railways had taken the view that the country’s key environmental laws – the Water, the Air, and the Hazardous Waste Act – do not apply to its operations. Therefore, no railway station took permits from the pollution control boards (PCBs) or complied with the regulations. A recent National Green Tribunal judgment has categorically rejected this stand and has directed the Railways to abide by the laws. However, the Railways is still reluctant to comply, and most stations are still operating without consent from PCBs.

The situation’s no different with railway sidings/ goods sheds, a major source of air pollution. The majority of these sidings are operated by private companies, but many are working without consent. Reports by the Comptroller and Auditor General and the Central Pollution Control Board (CPCB) have confirmed poor air pollution management at these establishments.

Poor handling of wastewater has also been identified as a significant concern by the CPCB. Since most stations have not installed Effluent Treatment Plants (ETPs), effluents generated from cleaning trains and stations are discharged into municipal drainages or low lying areas. The situation is the same with Sewage Treatment Plants (STPs).

Every day about 5,000-6,000 tonnes of fecal matter is generated from toilets in the trains and on stations. This is equivalent to the fecal waste generated in a large metro city. While 95% of trains have installed bio-toilets, they are “no better than septic tanks” and the water discharged no better than raw sewage. In the absence of STPs at most stations, the sewage is discharged untreated. In a country where hotels with more than 20 rooms are being directed to install STPs, Railways’ failure to install ETPs and STPs is discriminatory, so say the least.

Noise pollution is an even more problematic issue. More noise is considered useful in the railway establishment for accident prevention. There are strict instructions to honk at all gates, turns and at the time of entry and exit from a station. During the night, train drivers are instructed to honk to ensure they’re alert and not sleeping. Though accidents are a real problem because of encroachments and unfenced railway tracks, continuing with the current strategy is counterproductive because of enormous health implications.

High noise levels lead to poor learning, aggression, hypertension and cardiovascular disease. For millions of citizens living near railway stations and tracks, the railways’ current position is an untenable proposition. Indian Railways will have to find a solution that balances imperatives of accident prevention and noise control.

On waste management, Indian Railways has made some progress. It runs ‘Swachh Rail Abhiyan’ for improving cleanliness and waste management. While there’s no doubt that cleanliness has improved significantly, and some of our railway stations match global standards, the same cannot be said about solid waste.

Indian Railways seems to have an ‘out of sight, out of mind’ approach while dealing with solid wastes. Wastes are collected mainly in unsegregated form and disposed of along with the municipal wastes or burnt or dumped near the track. In fact, the Railways has not even enforced the single use plastic rules of various states, including the national ban on polythene bags. Overall, while Indian Railways is doing a lot on energy issues (because it also makes good economic sense), the same cannot be said about pollution or waste.

The fundamental problem seems to be a sense of ‘exceptionalism’. Railways have historically operated independently of the civil administration. It doesn’t follow many of the laws applicable to a similar service industry like the airline industry. It’s time these anomalies are corrected. Indian Railways should comply with environmental laws and work with civil authorities to solve pollution and waste issues. Its low energy footprint must be matched with sound environmental management.

India’s Arctic policy must push Western countries to give up double standards

Posted on by Chandra Bhushan

‘We need to act for the Amazon and act for our planet,’ said Canadian Prime Minister Justin Trudeau when fires ravaged the Amazon rainforest in August 2019. He was joined by many Western countries in preaching the virtues of protecting the ‘global common’ for combating climate change.

But the Western world’s concern for the global commons seems to limit itself, so far, to the sensitive ecosystems in the southern hemisphere. Thus, there is an international treaty to protect the Antarctic, which puts an indefinite ban on mining and hydrocarbon extraction. Furthermore, there is a long-standing demand, pushed by the G7 countries, for an international treaty to protect the tropical forests because they are the most biodiverse regions and ‘Lungs of Earth’.

However, when it comes to the northern hemisphere ecosystems, the same countries reject any international intervention. The Arctic is a classic case of this double standard. In 2008, the five coastal states of the Arctic Ocean (United States, Russia, Canada, Norway and Denmark) vowed to block any “new comprehensive international legal regime to govern the Arctic Ocean” in the Ilulissat Declaration.

The Arctic is essential for the stability of the earth’s climate, arguably even more than the Antarctic. Its sea ice helps moderate the global climate. In turn, it is also very sensitive to changes in climate. Consequently, the Arctic is warming more rapidly than the global average, and its sea ice has decreased dramatically since the late 1970s.

The warming of the Arctic is also speeding the melting of the Greenland ice sheet. Recent studies indicate that Greenland’s ice is melting on average seven times faster today than in the 1990s. Therefore, the changes in the Arctic have massive ramifications on sea level rise, aquatic ecosystems, and weather patterns across the world, including the monsoon.

But the sea ice melting has also opened up the fabled Northwest Passage, significantly shortening the route between the Atlantic and Pacific Oceans. In addition, Arctic seabed is now accessible for oil and gas extraction and deep-sea mining. As an estimated 40% of current global oil and gas reserves are in this region, there is a scramble over shipping lanes and resources, especially between the Arctic states. But other countries are also staking claim over the region’s resources, especially China.

India is an observer at the Arctic Council and has recently released a draft Arctic policy. Regrettably, the draft policy lacks objectivity. It is an ‘all-of-the-above’ policy with contradictory goals. On the one hand, the policy envisions India’s role in exploring and exploiting hydrocarbon and encourages investments by Indian companies. On the other hand, it also expresses deep concerns regarding the impacts on the country due to the changes in the Arctic, including on the monsoon, and proposes a slew of research activities. In conclusion, the draft terms the Arctic as ‘the common heritage of mankind’ and calls for ‘sustainable, responsible and transparent’ human activity.

But ‘sustainable, responsible and transparent’ exploitation of the Arctic is an oxymoron. It is impossible to take out oil and gas, burn them, and still keep global warming under check, or open the international shipping lane and expect the ocean to remain pristine. The irony is that the world’s wealthiest people, living in the already wealthy Arctic states, will gain the most by exploiting the resources. However, the costs will be borne by the world’s poorest, living in the coastal areas of the global South.

If India wants to be a serious player in the Arctic, then its policy must address this irony and the double standards of the Arctic states. It is important to realise that we made a mistake by becoming an observer in the Arctic Council, thereby accepting the Arctic states’ sovereign right over the Arctic ocean. We will repeat the error if we join them in exploiting the Arctic.

The bottom line is that India will not gain economically but is likely to lose massively due to coastal flooding, monsoon disruptions and changes in the ocean systems. Therefore, India’s Arctic policy should push for an international legal mechanism, similar to the Antarctic treaty, and save the Arctic’s pristine ecosystem and earth’s climate. In this endeavour, it might find allies in the Biden administration, which has just cancelled the Arctic Refuge oil programme and Keystone pipeline.

Paris agreement isn’t enough: Climate crisis is too important to be left to governments alone. Private sector too must pitch in

Posted on by Chandra Bhushan

The world is not only suffering because of Covid and economic distress. It’s also reeling due to climate disasters. The year 2020 is likely to be one of the three warmest years on record, and 2011-20 will be the warmest decade on record. 2020 has witnessed increasing wildfires, new extreme temperatures on land, sea and especially in the Arctic, a record number of hurricanes in the Atlantic.

But these extremes have not deterred countries from investing in fossil fuels. In 2020, G20 countries have committed over $230 billion in fossil fuel industry to revive the economy, compared to $150 billion in clean energy. The US, UK, Canada, Russia and India are pursuing major expansions in fossil fuel supply.

Therefore, despite a 7% decline in CO2 emissions due to the economic slowdown in 2020, the current policies of the countries have put the planet on a 3.2°C temperature increase trajectory. The ‘Emission Gap Report 2020’, recently released by the UN Environment Programme, finds that the G20 nations, who account for 80% of global greenhouse gas (GHG) emissions, are collectively not on track to meet their modest Paris Agreement commitments and countries like Australia, the US and Canada are falling short of their targets.

So, why is it that five years after the “historic” Paris Agreement was signed, the global efforts to fight climate change are in tatters? And, how can we turn the tide and galvanise global action?

The Paris Agreement is a voluntary agreement in which countries are free to choose their climate targets, called nationally determined contributions (NDCs). Countries are also supposed to self-differentiate based on their responsibility for causing climate change and their capability to mitigate it. Hence, developed countries are expected to take up higher emission cuts than developing countries. But if a rich country doesn’t commit to a higher target, no one can question or demand a revision.

Besides, if a country fails to meet its NDCs, there is no penalty. The only obligation is to submit reports regarding the actions countries are taking to meet their commitments. The Paris Agreement is, therefore, based on goodwill and moral persuasion. The assumption is that goodwill will prevail, countries will enhance their targets, and collective action would meet climate goals.

But herein lies the mismatch. Since the beginning, countries have viewed climate negotiations as an economic and not as an environmental negotiation. So, instead of cooperation, competition is the foundation of these negotiations. Worse still, the negotiations are viewed as a zero sum game.

For instance, Donald Trump believes that reducing emissions will hurt the US economy and benefit China, so he walked out of the Paris Agreement; George Bush did the same with the Kyoto Protocol. China, too, believes in this viewpoint, and despite being the world’s largest polluter, its NDCs are woefully inadequate and compliant with 4°C warming.

The fact is every country is looking out for its own narrow interest. They, therefore, are committing to do as little as possible. This is the Achilles heel of the Paris Agreement. This is the reason why the Agreement will not be able to limit warming below 2°C.

Therefore, the world would make a big mistake by putting all its efforts into the Paris Agreement to meet the climate goals, as pushed by a large section of climate activists post the victory of Joe Biden in the US presidential elections. We need a radically different strategy to stimulate actions from the government, private sector and civil society to put the world on track to the 1.5°C goal.

Thirty years ago, when the UN Framework Convention on Climate Change  (UNFCCC) was being negotiated, we lived in a very different world – where economic growth was intrinsically linked to fossil fuel consumption and carbon emissions. Countries had to increase emissions to grow and, therefore, they had to compete to stake claim over the remaining carbon budget.

But this argument is slowly vanishing. In many sectors, including the most crucial energy sector, economic growth and emission reduction can go hand-in-hand. This is because the costs of renewable energy, batteries, super-efficient appliances, and smart grids are falling so rapidly that they are already cost-competitive or will become competitive very soon with fossil fuel technologies. So, the reason for countries to compete with each other for carbon space is becoming immaterial every passing day. If countries cooperate, the cost of cleaner technologies can be reduced faster, which will benefit everyone.

But this cooperation cannot happen only at one global platform and treaty – UNFCCC and the Paris Agreement. We will need multiple multilateral, regional, and sectoral platforms to drive transformation. In fact, climate action will have to be made part of every existing and new platform and treaty as a distributed global effort.

Similarly, the climate crisis is too important to be left to governments alone. We need concrete actions from citizens (especially the wealthiest 1% who account for more than twice the emissions of the poorest 50%) and the private sector to reduce emissions.

Today, more than two-thirds of the richest 100 entities on the planet are corporations, not governments. And, just 100 companies have been responsible for 71% of the global emissions since 1988, the year Intergovernmental Panel on Climate Change (IPCC) was established. Corporations, therefore, are the problem, but they are also the solution. They have the resources to decarbonise, and they must be held accountable if they fail to do so.

Five years since the Paris Agreement, we are at an inflection point. Delay and prevarication is not an option; the world needs a bold vision and leadership to turn the tide.

Energy transition and Just Transition must go hand in hand – as coal mines become rapidly unprofitable

Posted on by Chandra Bhushan

The writing is on the wall. A few days back, Coal India Limited (CIL), the world’s biggest coal producer and India’s largest CO2 emitter, announced its plans to become a ‘net-zero energy company’ by 2023-24. The company plans to install 3,000 MW of solar power to meet all its electricity demand, which will also reduce its power expenses. The foray into solar is part of CIL’s diversification plans to shift from a coal company to an energy company.

NTPC Limited, India’s largest coal-based power company, has won a bid this week to install 470 MW solar power at Rs 2.01/kWh. This tariff is 40% below the cost of existing coal power in India and less than half the price of new coal-fired power. NTPC has set up a separate renewable energy subsidiary – NTPC Renewable Energy – to build its green energy portfolio.

When the biggest coal mining and coal power companies see their future in renewable energy, it is time for the policy makers to start planning for coal phase-down and Just Transition of coal mining districts.

Just Transition was included in the Paris Climate Agreement in 2015 to ensure that the workers and communities dependent on fossil fuels like coal do not suffer due to the closing of mines and power plants to meet the climate change goals. India has so far not engaged nationally or internationally on coal phase-out and Just Transition because of the country’s high dependence on coal for energy security and industrial growth. But the situation is changing rapidly, and coal mines are being shut down in an unplanned fashion due to various factors, including unprofitability.

In Jharkhand, 50% of mines are closed, and half of the operational mines are unprofitable. Most of the mines have been shut down without proper mine closure and plans for the mining areas’ socio-economic transition. The situation at the district level is even more ominous. In Bokaro, 16 of the 25 mines are already closed, and six of the nine operational mines will exhaust their reserves in the next 10 years. In Jamtara (made famous by the Netflix series of the same name), all five mines are closed. In Ramgarh, a top coal-producing district, 50% of mines are shut, and two-thirds of the operational mines are unprofitable. The situation becomes alarming when one considers the economic dependence of these districts on coal.

Take the case of Ramgarh. Coal mining and coal-dependent industries contribute about 40% of the district’s GDP. Furthermore, one-fourth of the households depend directly on the coal industry for income, mostly informal workers. Therefore, the unplanned closing of mines has real implications on the lives and livelihoods of workers and local communities. The irony is these districts suffered ‘resource curse’ and environmental degradation due to coal mining and are now suffering economically because of its unplanned closure.

But this need not be the case. Experiences worldwide show that Just Transition can be a win-win for the environment and the economy if planned and managed well. A similar effort can be made in India to close coal mines over the next two-three decades and transition coal-dependent districts to a non-coal economy. The good news is that opportunities exist for such a transition planning to start immediately.

About 70% of CIL’s mines are loss-making. Many of these mines are losing more than Rs 1,000 per tonne of coal production (coal price in India is about Rs 3,000 per tonne). These mines (more than 170 in numbers) produce less than 10% of coal, employ about 40-45% of CIL’s workforce and incur an aggregate loss of Rs 16,000 crore per year – about the same as the annual profits of the company. CIL can close these unprofitable mines and use the additional profits to implement Just Transition in these mining areas. Coal cess, which collects about Rs 38,000 crore per year and is used for GST compensation till 2022, can also be used for the socio-economic transition of these mining areas.

All the above can only happen if we accept the inevitability of coal phase-out and put in place a Just Transition policy and planning framework. Just Transition is imperative for India. If we do not start planning for a post-coal future now, our coal-dependent regions and industries will face major disruptions in the coming years.

How to control air pollution from stubble burning

Posted on by Chandra Bhushan

This is a straightforward article to discuss the real issues concerning stubble burning, including its contribution to pollution in Delhi-NCR, and why the solutions promoted by the government are not working.

Let’s start with the contribution of stubble burning to air pollution in Delhi-NCR. While we can bicker over the numbers, stubble burning is a short duration, highly polluting activity that significantly impacts air quality in October and November. The equation is simple: The 15-20 million tonnes of paddy stubble burnt in Punjab, Haryana, and western Uttar Pradesh, emit PM2.5 that is 4-5 times the annual PM2.5 emissions from all vehicles plying on Delhi roads. Let me repeat: PM2.5 emitted from stubble burning in just 60 days is 4-5 times what all Delhi vehicles emit in the entire year.

The intensity of emissions from stubble burning, therefore, is so high that even if a small fraction of these reaches Delhi, it would cause the city’s air quality to deteriorate significantly. This is precisely what happens during the stubble burning season. Wind coming from the northwest picks up pollutants from Punjab and Haryana and brings them to Delhi, worsening its already polluted air.

The next question is, why do farmers burn paddy stubble? First of all, not all farmers burn it; only about 25% of the paddy residues are burnt in Haryana, and this number goes up to 50-60% in Punjab. So, why do some farmers put their fields to flames while others don’t? There are three primary factors, apart from a few minor ones, that are driving this practice.

The most important factor is the technology used for harvesting. Farmers using Combine Harvester (called Combine) are most likely to burn the stubble, whereas those practising manual harvesting don’t. Combines cut the grainy part of the paddy plant (called spike) and leave about 30 cm of stem intact in the field. The farmer either has to manually cut the stem, use some machine, practice in-situ management, or burn it. Among these, burning is the easiest and most cost effective option.

The next factor is the use of the straw. Farmers who are unable to use or sell straw are burning it. In Punjab and Haryana, basmati paddy is mostly harvested manually because its straw is highly valued as animal fodder. The incidence of burning in basmati fields is, therefore, very low.

On the other hand, non-basmati straw is not used as animal fodder and hence is burnt. But there is a growing demand for non-basmati fodder in Rajasthan and Gujarat, and industries are also buying it for energy and other uses. Farmers who can sell their non-basmati straw do not practise stubble burning. Lastly, small farmers and tenant farmers are more likely to burn the stubble than big farmers, as they have fewer resources and risk appetite for using alternative technologies.

Now, let’s come to solutions promoted by the government. It has adopted a carrot and stick approach. On the one hand, it has banned burning and is imposing fines on farmers; on the other, it provides 50-80% capital subsidy to acquire farm machinery to adopt in-situ crop residue management. Unfortunately, neither is working.

It is vital to understand that the farm machinery the government is subsidising is not primarily designed to stop stubble burning. These machines are meant for zero tillage farming, in which stubble can be kept on the field and recycled in the soil. The zero tillage method has significant ecological benefits, including improvements in soil quality and lower water consumption; reduction in stubble burning is a co-benefit.

But zero tillage farming has two problems. First, it is an entirely new method of agriculture for Indian farmers. They have practised tillage agriculture for centuries, and therefore, moving them to zero tillage will not happen quickly. Second, it has a higher upfront cost. Despite subsidies, farmers incur an extra charge of about Rs 2,500 per acre to use these machines, which most can’t afford.

What, therefore, emerges from the above is that the use of Combines, weak market linkages for non-basmati stubbles and promotion of expensive technologies that require a long time for adoption, are sustaining the practice of stubble burning. What we need is a solution that is scientific, affordable, and culturally adaptable.

The easiest and affordable solution is to modify the Combine Harvester itself. We can redesign the Combine to cut the paddy straw from the plant’s base to remove the stem. The straw can either be sold or used as mulch in zero tillage agriculture. We can even incorporate a baling machine to the Combine to bale the straw, which can then be easily transported and sold.

The good news is that some newer versions of Combine already incorporate these features. I am not going to name companies, but I have seen foreign companies selling, in Haryana, precisely the kind of Combine I have explained above. The question is why Indian companies are not modifying their Combines and why the government is overlooking this simplest of solutions?

Ockham’s razor is a problem solving principle which states that the simplest solution is more likely to be correct than complex ones. This certainly is the case with stubble burning. By promoting complex solutions instead of a simpler one, we have botched up the stubble burning problem.

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