Despite numerous pledges made at globally revered climate conferences and leading the race to green energy transition, India after all cannot choose to compromise its energy security.
The Power Minister of India clarified: “Energy security is my first priority. I will not compromise on the availability of power for this country’s development.”
This conviction is self-explanatory as India moves towards being the most populous nation. And it knows as a responsible nation that its own choices will impact not only its own population but also the planet’s entire balance of global warming.
This is well explained by an energy expert: “India is pivotal to the future of global energy and climate policy.”
India continues to grab the top spot in Climate Vulnerability every year with spouts of extreme and altered weather events like floods, droughts, heatwaves etc. Indian cities are some of the world’s most polluted cities, its groundwater is depleting fast, its productivity is harboring competition, that too with two hostile neighbors at each end.
Understanding the chances at stake, India therefore has pledged to achieve the carbon neutrality by 2070 and has made record progress in expanding Renewable energy.
Still the country maintains huge dependency on coal which is by far a consistent source of air pollution. Much to the resentment of its ‘pristine’ nature and awe of its authorities, the coal-fired power systems in India are relatively new and have capacity to function more.
Winter is the time for air pollution in its capital region bringing many lives at the doorstep of death or suffering.
Paddy burning, vehicular emissions, power plants etc., all make their own meaningful contribution to this menace that remains unaddressed with seemingly inadequate solutions.
With an addition of one more coal-backed power plant in the vicinity of its already burdened capital, experts have exclaimed: “The way coal is priced, subsidies are leading to higher air pollution from power plant emissions”.
This happens alongside the government throwing open nearly a million square miles of its territory that includes untouched coastal lands and offshore waters, for petrochemical uses. This is akin to selling whatever guard is left!
Globally in 2022, the total fossil fuel subsidies were valued at around $7 trillion or 7.1 percent of the total GDP. This indicates a huge $2 trillion increase in subsidies flowing in because of the government’s support.
The International Monetary Fund (IMF) has begun to consider ‘not taxing pollution’ in its own accounting as something similar to ‘subsidizing pollution’ and a few economics tend to differ.
The IMF’s working paper found India to rank fourth amongst the world nations for subsidizing fossil fuels with around 28 lakh crores or $350 billion.
Data finding around such subsidies including fossil fuels and cleaner forms of energy has never been easy. Different challenges come in dealing with data collection from different nature of institutions.
Most public finance institutions (PFIs) exhibit a lack of data availability while the three biggest PFIs alone parked INR190,116 crores or USD 23.765 billion for power in FY 2021.
Financial institutions (FIs) and public sector banks (PSBs) chalked out just 4.3 percent of their total energy credit for clean energy.
Additionally, in 2021, the seven leading Indian public sector undertakings (PSUs) invested in fossil-based energy projects nearly 11 times more than in renewable energy projects.
It will therefore not come as a newsflash that there exists an annual investment gap of US$450 billion in investments that shall be made in clean energy.
Any possible increase in investments and subsidies being driven to exploit the planet’s dirtier sources for our incessant want of energy continue to belittle whatever meagre yet significant strides humanity has made so far.
The only better option is to lessen and shift support away from fossil fuels to cleaner energy forms that will cast a strong market signal for the adoption of low-carbon technologies and their emerging capital-hungry markets.
If we are to note, distribution of such subsidies to the end users also has its own set of inclusion and exclusion errors.
This can shield our public institutions from being termed as ‘lenders of the last resort’ for fossil fuel-based assets and can evade the risk of asset stranding.
Moreover, such a step can avoid 1.6 million annual pre-term deaths from locally-centered air pollution by 2030. Even when we exclude the climate benefits derived from these reforms, eliminating fossil fuel subsidies without compromising the need for ground-level transition will be a thing of interest.
Not to forget, such acts alongside imposing corrective taxes such as carbon tax could reduce global greenhouse emissions, particularly carbon emissions by 43 percent which is the basic minimum.
India’s experiences have been able to display this kind of steps are difficult yet possible and can be more realizable with targeted ambition and tracking.