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

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Examples of support to Hindu temples, scriptures, saints by 'Muslim' rulers galore

Siya Ram coin issued by Akbar By Bharat Dogra* At a time when the country as well as the world are passing through very difficult times leading to more urgent need for strengthening national unity for meeting several big challenges ahead, unfortunately disputes relating to religious places have been allowed to raise their ugly head once again. It is well-realized by now by many people that it is not historical facts but narrow considerations of political gain and spreading of fanatic ideas of intolerance which are behind such mischief, but due to the increasing threat of mob violence and patronage available at higher levels to groups spreading intolerance many people are reluctant to openly and fearlessly express their views. Hence there is urgent need for broad-based peace committees with wider social support to spread the message of communal harmony and to appeal against the dangers of spreading false messages regarding places of worship which can ultimate

Gyanvapi case: Use of 'illegal' lawfare to keep the communal pot simmering

By Venkatesh Narayanan, Bobby Ramakant, Manoj Sarang* With a steady drumbeat of bad news for the lives of ordinary citizens --  inflation at a multi-year high , rupee at an all-time low , negative job creation and when all forward indicators as seen by industry leaders point to recessionary clouds on the horizon , what’s a serially-incompetent government to do?  Dust out their time-tested-citizen-distraction playbook. The Gyanvapi-Masjid case is all of this -- as a weapon of mass distraction. This zeitgeist of our times is best captured by a recent opinion piece : "The idea is to keep the pot on a perpetual boil, simmering at the top, whirling feverishly beneath. A restless society forever living precariously on the precipice arouses distrst, uneasiness, fear and discomfort, That is a toxic panoply for manufacturing rage, which can then be effortlessly mobilized at short notice. BJP is creating an eco-system of real-time instant delivery of hate-mongers. That is how we are sudde

Targeting mosques, churches: 'Roadmap' for 2025, RSS' centenary year?

416 years old Our Lady of Health Church, Sancoale, Goa  By Fr Cedric Prakash SJ*  Fascists use manipulative strategies aimed at whipping up sympathy and support from the majority community, to which they normally ‘belong’. They do so in a variety of insidious and subtle ways. In the past few months, they have gone overboard in their efforts to denigrate and demonize minorities in India, particularly Muslims and Christians. They have spewed hate and divisiveness through their venomous speeches; incited people to violence and have effectively used officialdom to further their vested interests. The results are there for all to see: greater polarisation of the majority community in a country which prided itself for its pluralism and diversity. Their meticulously planned agenda is in order to gain absolute power of the country in the 2024 national elections. More so it is also a roadmap towards 2025 when the Rashtriya Swayamsevak Sangh (RSS) will complete one hundred years of its existence.

This varsity succumbed to extra-academic mobocracy, 'ignored' Hindutva archives

By Shamsul Islam* Open letter to Sharda University vice-chancellor Sub: Discarding a Question on Linkages of Hindutva with Nazism/Fascism is blatant Academic Dishonesty! Dear Professor Sibaram Khara Saheb, Namaskaar! According to your esteemed University’s portal: “The name of University, 'Sharda' is synonymous to 'Goddess of knowledge and learning-Saraswati'. She is identified with 'veena', an Indian musical instrument and the ‘lotus’, where she resides. The lotus in our logo symbolizes the seat of learning that the University is created for.  "Variety of colours signify the variety of disciplines the university offers and the overlap between petals creating new colours demonstrate the ethos of collaboration between students and teachers of different programme, nationality, creed and colour working towards creating new knowledge…the University's cherished mission to provide education beyond boundaries and to facilitate the students and faculty to achie

Whither climate goal? Increasing reliance on coal 'likely to worsen' India's power crisis

By Shankar Sharma*  Recent news articles, How to shock-proof India’s power sector and Power minister points finger at states for worsening electricity crisis , have highlighted a few current problems for the ongoing power sector issues as in April 2022. However, there is a lot more to it than a few temporary solutions as indicated in the articles. It should also be emphasised that it is techno-economically impossible to completely shock-proof a highly complex and geographically wide-spread vast power network, such as the one in India, which is only getting more and more complex with the passage of each year due to some irrational policies/ practices in the sector. A business-as-usual (BAU) scenario, wherein more and more of conventional technology power plants, including coal power plants, will be added in the near future, will also necessitate the increased complexity in the integrated national grid, and as a result the instances of power shortage/ disruptions can only escalate for

A former Modi ally, Prashant Kishor wanted to enter Congress 'on contract, as trader'

By Anand Sahay*  The Congress Party and the election campaigns specialist Prashant Kishor, whose company has done strategic communications for a host of political parties across ideology, should both count themselves lucky that they could not reach an agreement for Kishor to join the party. News reports suggest that the Congress rejected Kishor’s terms. This is not wholly unexpected. People join a party because they are attracted to it, and wish to serve it in any capacity that the party may see fit. But that isn’t Kishor at all. He gave the impression of entering into a contract, as a trader might. If news reports are to be believed, he sought freedom to report directly to party chief Sonia Gandhi, and sought untrammeled control over party communications. When such ideas did not find favour, the consultant withdrew. It is clear he has no particular love for the Congress, and its ideas, ideology and politics. In contrast, look at the key personae in G-23. They

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Govt of India 'compromising' on mandate to regulate gene technologies, protect nature

Counterview Desk  In a letter sent to the Union Ministry of Environment, Forests and Climate Change (MoEFCC) and other related ministries and departments, the Coalition for a GM-Free India has raised "serious concern" over the guidelines notified for Genome Edited Organisms, in which major exemptions from regulations have been offered to certain categories of Genome Edited Organisms/Plants and products. A letter signed by Sridhar Radhakrishnan and Kapil Shah, co-convenors of the NGO network, addressed to Union Minister for Environment, Forest & Climate Change Bhupender Yadav, said, the Office Memorandum, dated May 17, 2022 of the Department of Biotechnology, Ministry of Science & Technology about Safety Assessment Guidelines, which follows the Office Memorandum dated March 30, 2022 of the MoEFCC, said, the move "essentially amounts to entry of risky GMOs through the backdoor. Text : Coalition for a  GM-Free India is a national volunteer-driven platform of hundre

Dalit scholar's comment on Lord Shiva 'harming' Muslims, 'damaging' secular cause

Shahid Siddiqui, Bobby Naqvi By Our Representative   Bobby Naqvi, who is with the "Gulf News", and is a well-known name among Muslim intellectuals, strongly objecting to the social media post of Prof Ratan Lal, has said that "a big reason for majoritarian hatred against Muslims is irresponsible remarks by people like Prof Ratan Lal of Delhi University." In a Facebook comment , which has attracted paise, among others, from journaliat-politician Shahid Siddiqui, Naqvi said, "Their commentary on Hinduism and icons of Hinduism (while angering religious and liberal Hindus alike) also triggers a massive backlash against Muslims. When the likes of Prof Lal criticize Hinduism on social media, Hindus bring Islam and Islamic practices and ask 'what about this' or 'what about that'." Naqvi insists, "Muslims (without their fault) and Islam get caught in this crossfire between the so called Hindu liberal class and the religious Hindus. And the ult