India’s context and developmental agenda expose unmistakable fault lines in the search for an equitable and fair transition to clean energy
The year 2020 will live on in infamy as the year of the great pandemic. But while the public health emergency dominated headlines, our era’s other big headache, climate change, will find prominence in the footnotes. As countries scrambled to contend with the economic fallout of COVID-19, the world also floated into the Paris Agreement era, perhaps the most critical juncture in human history.
In somewhat tacit recognition of the moment, several large economies have announced intent to undertake decarbonisation pathways that achieve net-zero emissions by 2050 or 2060. But immediate fiscal revival measures are still dominated by support to traditional emission intensive sectors. This year’s Climate Transparency Report, for example, found that almost 55% of all G20 stimulus spending is going towards fossil fuels, much of it unconditional, and just about 30% is going towards “green” sectors. The report found that apart from India, which has invested heavily in renewables, no other country, including top emitters US, EU and China, are on track to fulfill their Paris commitments.
As plans of transition hopefully translate into action over the next few years, the contours of a new challenge are likely to come into sharper focus – one which intimately involves the realities of a multitude of stakeholders in the transition process. The questions of who gives up and who gains are likely to accompany any objective of transition.
In the international arena, climate change has been contextualised within inequality and uneven extents of development from the beginning. In recognition of this heterogeneity, equity and justice were used as central planks as the guiding principles of the UNFCCC were being framed following the 1992 Earth Summit in Rio de Janeiro, Brazil. The concept of ‘just transition’ represents the evolution of these planks as nations lumber on towards pathways to decarbonise.
A just transition framework situates the climate action within the realms of the people who stand to be most affected by processes of change, including the foot soldiers of conventional energy systems and the communities that depend directly or indirectly on the emission-intensive footings of current global economics.
Any form of transition is never easy. With energy transitions, there are social, political, geographical and cultural contexts at play. Therefore, taking the various stakeholders, which may include workers, businesses, governments and communities, into account at an early stage dilutes any negative impact that a transition may have, and creates more opportunities in the long term. It requires vision and an avenue for effective dialogue.
India’s unique predicament
In the years since the Paris Agreement was signed, India has slowly, but surely, earned the distinction of being among the best performing large economies when it comes to climate action. While the energy sector has been the primary front of assault in India’s low carbon push, its developmental agenda, which includes ensuring improved energy access to millions of energy-scarce regions, puts an added spin to the implications of its shift to low carbon energy. The prerogative of ensuring the delivery of modern services and improving energy access makes India’s clean energy transition a balancing act unlike that seen in the developed world.
“The western conceptualisation of just transition does not fit for the Indian contexts. In India, the challenge is not only to shift a highly informal workforce but to also formalise it, which is much different from the discourse in developed countries. Every parameter is different in the Indian context, and the framing of just transition in India has to be very different from the western norm,” says Chandra Bhushan, president and CEO of the International Forum for Environment, Sustainability & Technology (iForest), an independent environmental research organisation in New Delhi.
While advocates of clean energy have long argued for the exit of coal, a fuel that, by most measures, is quickly approaching obsolescence, disruptions during the COVID-19 pandemic provided a worrying glimpse at the real-world implications of such a move.
India’s estimated coal reserves amounted to 319 billion tonnes in 2018, which is the fifth-largest in the world. At present, the coal-mining sector provides 300,000 formal jobs through Coal India Ltd (CIL), according to government data. An iForest report, however, estimated there were around 15 million people who were directly or indirectly connected to the coal sector. The sector is, therefore, an employment multiplier. Its demise would have multifold impacts. Already, the number of jobs in the sector have fallen. According to a Cobenefits study, increased mechanisation has led to the loss of around 105,000 jobs between 2000 and 2015.
“All the debate surrounding a just transition is very theoretical, especially in India. Nobody has really cared to go to the ground to try and build some empirical basis for the theory. This rings especially true for India where many variables surrounding dependence of individuals and communities on coal mines is not being captured at the national levels. When you zoom in a little, the situation at the sub-national and local levels is world’s apart from national assessments of employment and dependence on mining,” adds Bhushan, who is also the lead author of the iForest study.
The COVID-19 lockdown has only worked to accelerate this transition. Unorganised and informal jobs were the worst hit in the lockdown period, which includes small traders and labourers. According to the Initiative for Sustainable Energy Policy (ISEP), simply transitioning coal plants to renewable energy generation plants is not enough. This is because of the size of the coal mines, which may not have the required renewable power generation capacity. Besides, an RE job requires an assessment of skill transferability and worker mobility.
The commercial complication
India has long maintained that coal would form an important part of the country’s energy mix going into the next few decades. India’s justifications have often rested on the country’s low per capita energy demand and emissions, and historically low contributions to global warming. While India’s recent opening of coal mining to commercial interests can be seen as a last ditch effort to capitalise India’s vast coal reserves while also bolstering its energy security, the move could also carry implications for labour in the country’s energy sector and possibly for chances of a just transition moving forward.
“We still do not know for certain how India’s foray into commercial coal mining will pan out. It will, however, likely have some complicated implications on employment in coal mining and the transition process. While this is not to argue that nationally owned sources of energy are fundamentally better, there are very legitimate concerns when commercial interests take precedence over public interests, especially when it comes to job generation. Without effective regulation that addresses dependencies in the entire coal supply chain, along with allied economic activity upstream and downstream from the mines, there is a risk that India hangs on to coal but undermines the questions of public interest,” says Sabina Dewan, executive director of the Just Jobs Network, a private, non-partisan organisation working on the issue of just transition and decent work in the new economy.
A bigger concern though, than the direct implications of commercial mining, is the simultaneous mechanisation and closure of existing mines, says Bhushan. “New commercial mines are likely to be highly mechanised, so the numbers in terms of direct employment generation may not be very significant when talking about a transition. The larger problem is the mechanisation of large publicly owned mines, and the closure of smaller ones. It is clear that in the current economics of coal, large mechanised mines offer a greater competitiveness compared to smaller unmechanised ones. With most of Coal India Limited’s coal coming from a few large mines, there is little profit incentive to keep smaller mines operational. The closures, that we’ve been seeing for a few years now, are likely to cause massive economic disruptions in India’s coal producing districts, and complicate any just transition process,” he elaborates.
The RE vs Coal employment computation
One of the major advantages of employment in the renewable energy sector over the coal sector is the socio-economic benefits that it provides – this includes higher income, fixed salaries, healthcare benefits and skill-building opportunities. A direct result of this would be the elevation of India’s poverty-stricken rural economy. The Cobenefits study estimated at least 3.2 million people can be employed in this sector by 2050 – that is five times more people than what the fossil-fuel sector employs currently.
These numbers and projects though are highly speculative and offer little in terms of solid insights warn experts. “I am always wary of long term employment projections and comparisons which are subject to significant assumptions and selective mapping, and often fail to paint real world scenarios,” explains Dewan, who is also a senior visiting fellow at the Centre for Policy Research in New Delhi.
But as of today, renewable energy is concentrated mainly to the southern and western parts of India. This is primarily because of the lack of land and the pro-coal stand of the governments in power in other states. Coal power, however, is generated mainly in the central and eastern states in India and it shows no signs of slowing down. This dichotomy makes just transition a mountainous challenge.
According to a study published in Environmental Research Letters, India would need a solar power capacity of 1,000 GW in order to replace coal mining jobs. This is a huge task with the main challenge acquiring sufficient land.
While wind energy is also a fast-growing segment of the renewables energy sector, the study highlighted a complete mismatch in areas that are viable for wind power and areas where coal mining is currently being undertaken. Therefore, the government would have to rely on the solar market to make up for the gap.
The study found that in order to absorb all coal mining workers, at least 2GW of solar power would need to be installed around each of the 500 operational coal mines in states such as Jharkhand, Chhattisgarh, Orissa, West Bengal and Telangana.
But even if this were to be achieved, a study published in Springer Link found there was insufficient personnel to train, demonstrate, maintain and run these renewable energy structures.
One way of ensuring this, according to the study, would be to establish a connection between training institutes and renewable power companies. Investigations, by way of field surveys, would give the government more insight into the ground realities that need be accounted for.
But while several comparative studies have rationalised a shift to clean energy through employment generation potentials, there is scepticism around the ‘apples to apples’ comparative approach that most employ. “Most of these studies do not capture the fundamental difference in the nature of jobs generated by RE and coal, or the multiple variables and spill off effects on the many allied local economies that have established around coal centres. RE jobs are mostly service sector jobs, and these may be able to replace the formal employment in coal. But this simplification neglects the large informal economies dependent on coal. RE cannot support this informal economy,” says Bhushan.
The importance of unions
Unions carry a lot of weight in the coal sector. There are five currently, which are included in all major decision-making processes at the district, state and central government levels. They oversee issues related to wages, pensions, health, education and infrastructure development. They were also out in full force when the government recently announced the coal block auctions this year. The lack of unions in the clean power sector, therefore, is a glaring gap in the level of bargaining power that might become crucial for a just transition.
Recognising the fact that coal workers will have to contend with productivity losses as temperatures rise along with a loss of jobs, advocates of workers’ unions have called for a greater role of worker organisations in the transitioning process. “The strategic transition towards renewables also calls for a simultaneous approach to training workers to manufacture, install, operate, and dispose of renewable energy and low-carbon technology. This will require a well-coordinated worker training programme, aimed strategically towards building a lower carbon economy. The existence of a renewable energy PSU would make this process much more manageable, in terms of skills identification, methodology, and absorption after retraining. As a result of the existing density and organization of unions in the coal industry (estimated at close to 90 per cent in state-run coal mines), trade unions are uniquely placed to help foster this transition and retraining for renewables,” it says in a chapter on the implications of the low-carbon shift and the role of Indian labour in the 2019 Oxford publication India in a warming world. The authors quickly admit this to be a “distant vision in the current market oriented (RE) sector.”
According to the authors of the chapter, central to the transitioning process is the democratisation of energy, which would also reduce the vulnerability of communities that are most affected by the transitioning process.
But while the significance of workers’ unions in India’s energy landscape is undeniable, there is also a danger in over-representing unions in policy according to Chandra Bhushan. “Unions dominate energy policy considerations in India currently, however the role of unions in the new energy sector is much lesser compared to traditional sectors. Unions are effective in collective bargaining against single large employers. Unlike in coal, this is not the scenario in the new energy sectors. In my opinion there is a clear danger that unions dominating discussions around a just transition could impede the process rather than reinforce it,” says Bhushan.
The path to a clean energy future for India is rocky and narrow. India’s challenge is first and foremost one of managing the political economy of energy in a way that weighs public interest holistically. This balancing act over the next decade or so will likely become a crucial aspect of how India manages its low carbon shift, and will also decide the fates of millions of people currently suspended in animation.