- The decisions taken at COP26 stress on the need for a just energy transition which opens up opportunities for India.
- India’s coal industry is already being challenged by competition from electricity generated through renewable sources and the unprofitable underground coal mines.
- Diversifying the local economy, investing in new green industries to create jobs, leveraging natural resource bases, repurposing land for economic purposes, and eradicating poverty, underdevelopment, and social exclusion in many coal regions are the features of a just transition.
- The views in this commentary are that of the author.
As the dust starts to settle down on COP26, there’s much discussion on what the climate talks have actually delivered and what should now be the course of action. While there are contentious phrases in the Glasgow Pact, such as on coal phase-down, nonetheless there is a clear recognition that a transition away from fossil fuels is inevitable, and this transition must be just. The phrase ‘just transition’ therefore finds place at more than one instance in the Glasgow Climate Pact.
The Glasgow Pact builds on just transition deliberations since the Cancun Agreement in 2010, thereafter the Paris Agreement in 2015, and the Katowice COP in 2018. The pact while calling upon Parties to accelerate the transition towards low-emission energy systems through a combination of instruments (including technology, government policies and a plan to phase-down coal power and inefficient fossil fuel subsidies), has insisted on the need to support a just transition in the process. It also stresses what a just transition must ensure. It includes, eradication of poverty, creation of decent work and quality jobs, and supporting pathways for sustainable development. For this to materialise, the need for supporting developing countries has been clearly recognised.
On November 4, a Just Transition Declaration was also developed, which was signed by some of the major fossil-fuel dependent countries of the Global North, including the US, Canada, the UK, the European Union, and a number of individual European countries. The intention to support developing countries and emerging economies to achieve a just transition becomes important for India. This will be done by implementing economic diversification, and transitioning to clean, resilient growth and development pathways’. While there is no explicit mention of financial support, this does strengthen the scope to mobilise the much-needed finances and technology to support a just transition in the developing countries.
An opportunity for India to build on
In Glasgow, India nearly took the world by surprise, by declaring a net-zero emissions target by 2070. The Prime Minister’s additional announcements of ambitious nearer-term (2030) energy and emissions targets further exhibited India’s willingness to accelerate climate change action. While, by insisting on coal phase-down on the last day (in place of a phase-out), India’s intention is now facing huge criticism, that in no way means that a fossil fuel transition is a pipe-dream, or a just transition is not an urgency.
Two factors in the domestic front already suggest the challenging situation with the coal industry:
First, coal-based power faces steep competition from renewables for electricity generation. By 2030, it is expected that the cost of electricity from solar power will be less than USD 0.027 per kilowatt hour (kWh), which is half of the cost of electricity produced from coal-based power. This has a clear bearing on the coal power investments and the industry’s future.
Secondly, while the coal mining industry is profitable overall, this profit comes from only the big opencast mining operations of the coal companies, such as Coal India Limited (CIL). There are a huge number of underground mines which are unprofitable, considering their low production and high labour costs. For instance, the 180 operational underground mines (nearly 40% of the total number of coal mines), produce less than 5% of India’s coal. Evidently, continuing with many of these mines have become a liability for the coal companies, as also acknowledged by CIL in their annual report.
The repercussions of this are already being felt in many coal states and districts. For example, in Jharkhand 50% of the mines are lying closed (officially called temporarily closed), and low profit is one of the major issues ailing them.
Therefore, India needs to take account of this reality and start planning for a just transition. A key focus of this should be diversifying the local economy, investing in new industries for creating green and decent paying jobs, building on natural resource base such as forests and agriculture, repurposing land for economic use, and eradicating poverty, underdevelopment, and social exclusion that burdens many of the coal regions.
Just transition should, in fact, be a major component of India’s energy transition plan for the next decade and thereafter. As it stands, India’s renewable energy investments are currently focussed in the western and southern states of the country, none of which are the major coal producers. Therefore, if simultaneous green investments are not planned in the coal states and districts, these areas will spiral into a cycle of joblessness and poverty, worsening the already dire situation.
India’s disproportionate amount of informal workforce in the coal mining and allied industries, and the poor resilience of local communities in the coal districts necessitates early planning. A just transition plan must be in place much before coal mines and power plants close down. Any unplanned and abrupt closure will lead to huge social disruption, which will undermine the gains of a clean energy transition.
For this, financing is certainly a prerequisite. While domestically, public and private funds can be leveraged to kick-start the transition process, global support and co-operation will play a key role. Developments around the Glasgow COP have finally broken important grounds on this.
The announcement of a USD 8.5 billion (initial) support by France, Germany, the UK, US and the EU, to South Africa, to help the country move towards a clean energy and climate resilient economy, is a reassuring one for building ‘international just transition partnerships’.
For India to accelerate its energy transition in a just manner, such long-term partnership(s) and support will be critical. The UNFCCC can play the anchoring role to seek such commitments from the global North for supporting just energy transitions in the global South, while ensuring time-bound action. However, to accelerate action in major fossil-fuel dependent economies to maximise emission reductions, inter-governmental partnerships outside the UNFCCC with targeted intervention goals will also be necessary. The example of South Africa can be a lead for future collaborations.
There are challenges in every climate conference and Glasgow is no exception. However, it is vital to acknowledge the opportunities that have emerged.
The author is the Director of India Just Transition Centre; International Forum for Environment, Sustainability and Technology (iFOREST).
Banner image: Transportation of coal in India. Photo by Suyash.dwivedi/Wikimedia Commons.