Glasgow pact: Significant leeway on coal, but climate funding unresolved

Experts point out that the removal of coal from energy mix would also warrant the government to find alternative sources of revenue.

Saturday’s Glasgow pact reneged on the promise of credible climate financing for the developing countries and was non-committal on the phasing out of oil and natural gas by the rich world, yet New Delhi could feel satisfaction at not letting the pact impose on itself an impractical obligation to ‘phase out’ the use of coal.

Coal is the mainstay of India’s energy mix and will remain so for a few more decades, even as its share in the mix will markedly plunge with the renewable energy and benign fuels like hydrogen set to made rapid strides. After a huddle between the envoys from India and China, the US and European Union was forced to make last-minute changes to the clause on coal, to ask countries to “phase down” their coal use, instead of phasing it out.

Analysts in India said that the Glasgow agreement fell short of realising the ambition of meaningfully addressing the issue of global warning, even as it claimed to have ‘kept alive’ the hope of capping global warming at 1.5 degrees Celsius. They also averred that coal phase-out timelines or urgency cannot be the same for all countries, and particularly when there is no mention of phase-out of oil and natural gas in the pact.

Based on the analysis of the Central Electricity Authority (CEA), the coal-based power generation capacity is expected to reduce from the current level to 54% of India’s total power generation capacity to 33% by FY30. Currently, the total installed power generation capacity in the country is 391 GW, of which coal-fired units make up for 209 GW. By FY30, CEA has projected that out of the total installed capacity of 795 GW, 266 GW will be coal-based.

The government had earlier estimated that the country will need 892 million tonne (MT) of coal in FY30 for power generation. India currently produces around 600 MT of coal annually, and even if the share of the fuel in power generation decreases, coal output will have to increase to cater to local demand.

India’s environment and climate minister, Bhupender Yadav, said after the Glasgow meet the last-minute revision reflected the “national circumstances of emerging economies”.

“We are becoming the voice of the developing countries,” he told Reuters. “We made our effort to make a consensus that is reasonable for developing countries and reasonable for climate justice,” he said, alluding to the fact that rich nations historically have emitted the largest share of greenhouse gases.

India has projected its climate finance requirements at $1 trillion by 2030. Apart from powering almost three-quarters of the country’s electricity generation, coal is also deeply intertwined into the country’s economy not only as a source of employment, but a significant source of revenue for the central government, state governments and the railways.

Experts point out that the removal of coal from energy mix would also warrant the government to find alternative sources of revenue. Though gradually increasing in terms of installed capacity, the intermittent and limited hours of power supply from renewable energy render it unattractive for state-owned discoms, which have to spend more on making backup arrangements. The nameplate tariffs of some solar/wind based projects are currently cheaper than coal, but only when the sun shines and the wind blows, they added.

“The failure to ramp up hard targets for climate finance and provide adequate support for loss and damage, in particular, has further eroded trust,” Arunabha Ghosh, CEO, Council for Energy Environment and Water, said, adding that “the refusal of developed countries to open up carbon space for poorer countries is unfortunate”.

Manjeev Puri, distinguished fellow, TERI, said that “there is no real commitment on part of developed countries to move ahead with serious and urgent domestic action let alone in terms of global collaboration and truly significant climate finance for tackling climate change”.

Commenting on the results of the Glasgow climate summit, Jai Asundi, executive director, Centre for Science Technology and Policy said that “in the spirit of equity and fairness, coal phase-out timelines or urgency cannot be the same for all countries, and particularly when there is no mention of phase-out of oil and natural gas on which developed countries are dependent.”

In the beginning of the COP26 summit, along with the 2070 ‘net-zero’ target Prime Minister Narendra Modi had already announced that the country will install 500 giga-watt (GW) of renewable energy capacity by 2030. India’s current renewable energy capacity is 103 GW; another 50 GW capacity is under implementation and projects entailing combined capacity of 32 GW are in various stages of bidding.