- The Energy Mix - https://www.theenergymix.com -

India ‘Can’t Escape’ Coal Phasedown, Needs Funding to Drive Just Transition for 33 Million Workers

A senior official in India says his country “cannot escape” phasing down coal production, but will need an accompanying just transition plan to support the more than 10 million people who depend on the country’s coal economy.

“Now there is an international consensus,” said Coal Secretary Anil Jain. “There is a goal: phasedown, which will happen. India is a signatory to that. I’m sure in the coming years the pressure will be to quantify the phasing down. We cannot escape that and nor does India intend to dilute its commitment.”

Though India joined China in watering down the final COP 26 agreement to call for a coal “phasedown” rather than a “phaseout,” it also pledged to increase its share of electricity generation from renewable sources to 50% by 2030 and reach net-zero emissions by 2070. A new report on the socio-economic impacts of the coal transition from the non-profit National Foundation for India (NFI) says the net-zero pledge alone “sounds the death knell for coal expansion in the country.”

But achieving these ambitious goals requires that India ensure “a policy environment that is conducive to accelerating the offtake of renewable energy,” writes the Institute for Energy Economics and Financial Analysis (IEEFA).

Renewable energy is becoming a favourable option for the country’s energy infrastructure, with the cost of renewable production falling while coal prices surge—the recent coal shortage increased coal import costs from US$60 per tonne in March, 2021 to US$200 per tonne by September and October.

“With cost economics favouring renewable energy, it’s clear that sustainable energy choices can and should lead on the path to economic growth,” IEEFA writes. 

But conservative estimates indicate that “more than 13 million people—nearly the size of the population of Zimbabwe—depend on the coal economy,” says Climate Home News. That number excludes an additional 20 million people who will be indirectly affected by the transition.

According to NFI, India does not have the resources to fund this transition without international support.

“An $8.5-billion transition package mobilized for South Africa could provide a model for India,” Climate Home writes. But a similar approach would first require India’s government to determine how much money it would actually need to implement the transition and support existing workers.