Skip to main content

India's fossil fuel, especially coal subsidy equaling 2.7% of GDP, main hurdle in climate change target: Report

By Rajiv Shah
A new report, “Thermal Coal in Asia – Stopping the Juggernaut”, by top international energy consultants, Energy Transition Advisors Pty Ltd, has raised the alarm that India’s fossil fuel subsidies, especially those related with coal, remain a major hurdle in the country’s contribution to achieving climate change target of limiting global warming to 2 degrees centigrade.
Pointing out that the fossil fuel subsidies are a huge drain on India’s finances, too, the report says, “The accumulated losses of India’s power distribution utilities equates to about 2.7 per cent of GDP, largely owing to the provision of free or underpriced power.”
Suggesting that this is a populist subsidy, the report says, “India has long suffered from an overall shortage of generation capacity” with 300 to 400 million people not having access to electricity. Yet, it adds, ironically, “the official peak demand (approximately 145GW) and installed capacity (around 290GW) create an opposite impression—i.e. that of a surplus.”
Pointing out that this is because “coal-based thermal generation capacity operates at remarkably low capacity utilization factors of approximately 60 percent”, the report believes, this is happening at time when the Government of India provides subsidies to coal-fired power plants.
Thus, according to the report, “The estimated value of subsidies to coal production was $99 million on average in 2014 and 2013”, calling this an underestimation, because, “many fossil fuel production subsidies have not been quantified due to a lack of publicly available data.”
“In addition to direct spending by government agencies, the government owns the majority of India’s banks, resulting in a large number of institutions in India providing public finance as defined in this report”, the report points out.
It underlines, “We identified coal financing at 8 of India’s largest public finance institutions and state-owned banks – for coal projects including mining, transportation and/or combustion. On average per year in 2013 and 2014 support provided through Indian public finance institutions and state-owned banks was $2.3 billion.”
“Investment by state owned enterprises (SOEs) in coal mining and coal-fired power was $4.4 billion on average per year in 2013 and 2014”, the report says, adding, this is happening when “fossil fuel consumption subsidies in India are significant, and in many cases provide additional support to fossil fuel production.”
While noting that the government has begun to reform gas pricing and to deregulate downstream activities, the report regrets, “Although fossil fuel producers take on the burden of some of these costs, much of the cost of price fixing is covered by payments from government budgets.”
“In spite of the deregulation of petrol prices (in 2010) and diesel prices (in 2014) and the global fall in oil prices, costs to the government of price fixing still remained substantial at $11 billion in 2014–15”, the report says.
“Similar consumer subsidies of approximately $12 billion in 2012–13 existed in the primarily fossil fuel based electricity sector. These subsidies may drive demand for further production of fossil fuels and electricity (the majority of which is fossil fuel-based)”, the report says.
“If the ‘true cost’ of coal in terms of health and environmental impacts is included in the definition of a subsidy, the scale of subsidies in India has a greater order of magnitude”, the report says, adding, “The International Monetary Fund’s analysis showed that global energy subsidies in 2015 amounted to $5.3 trillion, of which India accounted for $277 billion mostly costs associated with the air pollution and GHG emissions.”

Comments

Tusky80 said…
Convert these numbers to percapita and compare instead of with GDP.

TRENDING

How Hindutva and the Taliban mirror each other in power and ideology

By Bhabani Shankar Nayak*  The recent visit of Taliban-appointed Afghan Foreign Minister Amir Khan Muttaqi to India and the warm reception extended to him by the Modi government have raised questions about India’s foreign policy direction. The decision appears to lend legitimacy to the Taliban regime, which continues to suppress democratic aspirations in Afghanistan. 

Celebrating 125 yr old legacy of healthcare work of missionaries

Vilas Shende, director, Mure Memorial Hospital By Moin Qazi* Central India has been one of the most fertile belts for several unique experiments undertaken by missionaries in the field of education and healthcare. The result is a network of several well-known schools, colleges and hospitals that have woven themselves into the social landscape of the region. They have also become a byword for quality and affordable services delivered to all sections of the society. These institutions are characterised by committed and compassionate staff driven by the selfless pursuit of improving the well-being of society. This is the reason why the region has nursed and nurtured so many eminent people who occupy high positions in varied fields across the country as well as beyond. One of the fruits of this legacy is a more than century old iconic hospital that nestles in the heart of Nagpur city. Named as Mure Memorial Hospital after a British warrior who lost his life in a war while defending his cou...

History, culture and literature of Fatehpur, UP, from where Maulana Hasrat Mohani hailed

By Vidya Bhushan Rawat*  Maulana Hasrat Mohani was a member of the Constituent Assembly and an extremely important leader of our freedom movement. Born in Unnao district of Uttar Pradesh, Hasrat Mohani's relationship with nearby district of Fatehpur is interesting and not explored much by biographers and historians. Dr Mohammad Ismail Azad Fatehpuri has written a book on Maulana Hasrat Mohani and Fatehpur. The book is in Urdu.  He has just come out with another important book, 'Hindi kee Pratham Rachna: Chandayan' authored by Mulla Daud Dalmai.' During my recent visit to Fatehpur town, I had an opportunity to meet Dr Mohammad Ismail Azad Fatehpuri and recorded a conversation with him on issues of history, culture and literature of Fatehpur. Sharing this conversation here with you. Kindly click this link. --- *Human rights defender. Facebook https://www.facebook.com/vbrawat , X @freetohumanity, Skype @vbrawat

N-power plant at Mithi Virdi: CRZ nod is arbitrary, without jurisdiction

By Krishnakant* A case-appeal has been filed against the order of the Ministry of Environment, Forest and Climate Change (MoEF&CC) and others granting CRZ clearance for establishment of intake and outfall facility for proposed 6000 MWe Nuclear Power Plant at Mithi Virdi, District Bhavnagar, Gujarat by Nuclear Power Corporation of India Limited (NPCIL) vide order in F 11-23 /2014-IA- III dated March 3, 2015. The case-appeal in the National Green Tribunal at Western Bench at Pune is filed by Shaktisinh Gohil, Sarpanch of Jasapara; Hajabhai Dihora of Mithi Virdi; Jagrutiben Gohil of Jasapara; Krishnakant and Rohit Prajapati activist of the Paryavaran Suraksha Samiti. The National Green Tribunal (NGT) has issued a notice to the MoEF&CC, Gujarat Pollution Control Board, Gujarat Coastal Zone Management Authority, Atomic Energy Regulatory Board and Nuclear Power Corporation of India Limited (NPCIL) and case is kept for hearing on August 20, 2015. Appeal No. 23 of 2015 (WZ) is filed, a...

New RTI draft rules inspired by citizen-unfriendly, overtly bureaucratic approach

By Venkatesh Nayak* The Department of Personnel and Training , Government of India has invited comments on a new set of Draft Rules (available in English only) to implement The Right to Information Act, 2005 . The RTI Rules were last amended in 2012 after a long period of consultation with various stakeholders. The Government’s move to put the draft RTI Rules out for people’s comments and suggestions for change is a welcome continuation of the tradition of public consultation. Positive aspects of the Draft RTI Rules While 60-65% of the Draft RTI Rules repeat the content of the 2012 RTI Rules, some new aspects deserve appreciation as they clarify the manner of implementation of key provisions of the RTI Act. These are: Provisions for dealing with non-compliance of the orders and directives of the Central Information Commission (CIC) by public authorities- this was missing in the 2012 RTI Rules. Non-compliance is increasingly becoming a major problem- two of my non-compliance cases are...

Urgent need to study cause of large number of natural deaths in Gulf countries

By Venkatesh Nayak* According to data tabled in Parliament in April 2018, there are 87.76 lakh (8.77 million) Indians in six Gulf countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). While replying to an Unstarred Question (#6091) raised in the Lok Sabha, the Union Minister of State for External Affairs said, during the first half of this financial year alone (between April-September 2018), blue-collared Indian workers in these countries had remitted USD 33.47 Billion back home. Not much is known about the human cost of such earnings which swell up the country’s forex reserves quietly. My recent RTI intervention and research of proceedings in Parliament has revealed that between 2012 and mid-2018 more than 24,570 Indian Workers died in these Gulf countries. This works out to an average of more than 10 deaths per day. For every US$ 1 Billion they remitted to India during the same period there were at least 117 deaths of Indian Workers in Gulf ...

Epic war against caste system is constitutional responsibility of elected government

Edited by well-known Gujarat Dalit rights leader Martin Macwan, the book, “Bhed-Bharat: An Account of Injustice and Atrocities on Dalits and Adivasis (2014-18)” (available in English and Gujarati*) is a selection of news articles on Dalits and Adivasis (2014-2018) published by Dalit Shakti Prakashan, Ahmedabad. Preface to the book, in which Macwan seeks to answer key questions on why the book is needed today: *** The thought of compiling a book on atrocities on Dalits and thus present an overall Indian picture had occurred to me a long time ago. Absence of such a comprehensive picture is a major reason for a weak social and political consciousness among Dalits as well as non-Dalits. But gradually the idea took a different form. I found that lay readers don’t understand numbers and don’t like to read well-researched articles. The best way to reach out to them was storytelling. As I started writing in Gujarati and sharing the idea of the book with my friends, it occurred to me that while...

Caste, employment, and Bihar elections: The tragedy of Musahar child labourers

​By Sunil Kumar*  ​ Bihar 's biggest festival of 'democracy'—the elections—has begun with its full clamor. The announcements from both the ruling party and the opposition create the illusion that the state's suffering will vanish in an instant, and the lives of the people of Bihar will be greatly enriched. As in every election, this time too, caste and employment are emerging as key issues. Every party is unrolling its bundle of promises. But amidst this electoral noise, there are stories that are deliberately kept 'quiet'—because both the ruling party and the opposition benefit from their silence. One such story is the death of four Musahar children.

Creative destruction? The myth of ‘better capitalism’ behind the 2025 Economics Nobel

By Bhabani Shankar Nayak *  The Royal Swedish Academy of Sciences has awarded the 2025 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Joel Mokyr , Philippe Aghion , and Peter Howitt “for having explained innovation-driven economic growth .” According to the Nobel announcement on October 13 , one half of the prize goes to Professor Joel Mokyr “for having identified the prerequisites for sustained growth through technological progress ,” while the other half is shared by Professors Philippe Aghion and Peter Howitt “for the theory of sustained growth through creative destruction .”