Economic Times, February 12, 2022
By Pradeep S Mehta and Sucharita Bhattacharjee
Almost 70 per cent of India’s energy portfolio comes from fossil fuel-based generation. Apart from being the backbone of our energy sector, coal has multiple socio-economic implications in a developing nation like India. The coal mines and allied sectors employ millions of permanent and contractual labourers with or without social securities. Also, the ecosystem built around the mines and thermal power plants provide livelihoods to several others.
Moreover, the taxes and royalties that come from coal, constitute a substantial portion of government revenue.
India’s coal belt can be seen as a microcosm of paradox of plenty. Districts in this region, in spite of being rich with natural resources, are yet to achieve comparable socio-economic growth and development of its peers. In the absence of adequate green investments channelised to those coal pockets to address the consequences of the coal mine closure, it will only exacerbate the existing misery of the local people.
It is common knowledge that the behemoths of coal and thermal power sectors have been serving the local economy and people significantly through their Corporate Social Responsibility and other community development initiatives by providing for infrastructure, health and education facilities. All these should be kept in mind while preparing the transition strategy by phasing down India’s coal dependency and building reliance on Renewable Energy (RE) generation.
There is a spatial disparity between the major coal producer states and the states with high renewable energy potential. The Eastern region of India, housing most of the coal mines, will witness huge job loss and subsequent impact on their local economies due to this proposed transition. On the other hand, Western India will witness new employment opportunities in the flourishing RE sector.
This implies a further migration of workforce from east to west in order to fill in the employment gaps. Whether or not this displaced workforce with their existing skills sets will be employable in the solar or wind projects is another concern. Additionally, the RE sector is less labour intensive, except for the construction phase. Therefore, this structural shift from coal-based thermal to renewable energy generation may not be able to absorb millions of workers who are expected to lose their jobs in the coal and allied sectors.
Evidently, a similar geographical mismatch exists in terms of new investments coming into the energy sector. Anticipating that the per unit cost of electricity generated using fossil fuels will eventually become much higher than that of solar power, this will gradually create a huge impact on the coal-based power sector employment. Also, owing to the environmental concerns supplemented with the coal shortage as experienced by India in the immediate past, a transition away from the primacy of coal to alternative source-based energy basket is becoming an imperative.
With this inter-connected sequence of developments, future of coal mines and other highly coal dependent sectors, especially the conventional power generation sector, appears much more challenging. However, the disproportionate shares of the number of studies focussing on the potentially favourable sides of green energy adoption and the existing body of literature on the adverse impact of coal mine closure on employment opportunities, are yet to receive the required attention among all relevant stakeholders so as to secure a central place in the policy discourse.
Therefore, mitigating the challenges put forth by the gradual closure of coal mines and the subsequent scaling down of thermal power plants – as an inevitable part of this transition – will not be an easy feat. Creating a coalition of stakeholders including policy makers, research organisations, direct and indirectly affected persons and investors will be crucial to have the necessary local buy-in, both economic and political.
In short, in order to address the employment challenges caused by the imminent energy transition, the Government must focus on: a) building and enhancing new skills sets of the workforce, and b) creating employment opportunities in other labour-intensive sectors of the economy by increasing the scope and coverage of relevant programmes and schemes.
Moreover, a potentially disastrous consequence can be avoided with an evidence-based development of a framework for coal mine closure, having a medium to long-term vision of diversifying economic activities of those regions, particularly for creating alternative livelihood opportunities. Interventions should be made to re-purpose and re-use the land abandoned by the coal mines and the thermal power plants.
Along with ecological restoration of such sites, exploring possibilities for new economic activities like fisheries, eco-tourism, agroforestry and renewable energy projects suitable to local contexts that can employ local communities, especially the erstwhile coalmine workforce, should be done holistically.
Thus, to conclude, the recently adopted Glasgow Pact on Climate Change, which put unprecedented emphasis on the envisaged shift from conventional to renewable energy generation, recognised the need to strengthen the scope for mobilising support in terms of finance and technology from the developed North to enable the developing countries embrace this transition in a just and time-bound manner.
This called for creating inter-governmental alliances to identify and pursue targeted interventions towards phasing down the coal power and increasing the reliance on alternative source-based power generation while addressing issues like socio-economic and energy poverty, creation of safe and decent alternative employment opportunities, gender inclusion, local community development, etc. It is needless to say that, at the national level, a comprehensive policy framework ensuring a Just Energy Transition from coal to renewables with a focus on job creation should entail comprehensive planning, investment and good governance.
Mehta is Secretary General and Bhattacharjee is Policy Analyst of CUTS International, a global public policy think- and action-tank on trade, regulation and governance.