Living With Coal: India's Energy Policy in the 21st Century.

• Author: Pachauri, R. K.

India's energy sector has been receiving a great deal of attention in recent years, particularly since the signing of the Framework Convention on Climate Change (FCCC) in 1992. In almost every forum dealing with the mitigation of emissions of greenhouse gases (GHGs), reference is inevitably made to the worrisome prospect of China and India burning huge quantities of coal in the future, adding to the concentration of GHGs in the earth's atmosphere. There are those who feel that these two countries should be persuaded to reduce their dependence on coal by adopting a set of appropriate policies and harnessing technological developments that would encourage a shift toward less carbon-intensive energies in the future.

Yet developing countries still have very low levels of energy production and consumption per capita (see Figure 1), and a large percentage of their population still does not have the benefit of the goods and services that developed countries have been using for decades. A sudden shift from coal to other energy sources, such as renewable energy, would require extremely costly capital investments and, in the short to medium term, higher outflow of foreign exchange to finance oil imports. In other words, a reduction in dependence on coal would not favor the economic interests of countries like China and India for at least the next 15 to 20 years.

[Figure 1 ILLUSTRATION OMITTED]

While the path that India adopts in the development of its energy sector is a subject of growing interest, there is a lack of understanding and awareness within the international community about the dilemmas India faces in making its future energy choices.

The country as a whole has very low levels of energy consumption per capita--a function of widespread poverty and uneven development. Many of India's approximately one billion people still lack access to electricity in their homes, and the country's infrastructure with respect to energy supply, transportation, telecommunications and health care is very weak. Looking ahead, the economic well-being of the population will require significant increases in energy consumption in the near future.

When India attained independence in 1947, almost all its supply of electricity was confined to a few towns and cities, with a total installed electricity capacity of around 1300 megawatts (MW). None of the rural areas had access to any modern fuel except kerosene. This low capacity would have been barely adequate for lighting 100 watt bulbs in 13 million homes, scarcely 20 percent of the country's population at the time, and would have no energy left for industry or other end uses. Over the past five decades the largely government-owned energy supply industry has attempted to spread the supply of commercial energy throughout the country But while 80 percent of the country should in theory have access to grid-based power, less than 20 percent of rural households actually consume electricity. Since power is available only in limited quantities, priority is given to uses such as irrigation pumping for agriculture and most rural households cannot afford to invest in wiring their homes for electricity In terms of per capita energy consumption, India has a long way to go.(1) Energy policy must be targeted toward expanding the supply of all domestic resources, including coal.

In terms of commercial energy resources, India currently has approximately 84,000 MW of conventional hydroelectric potential, 5,000 MW of small hydro potential, approximately 700 million tons of crude oil, 0.7 billion cubic meters of natural gas and 70 billion tons of coal. Hence coal is by far India's most important commercial energy resource, providing nearly 93 percent of its total energy.(2) The problem is that processing coal has negative environmental effects, such as large-scale air pollution resulting from the accumulation of ash through burning. Accordingly, there are those who argue that India should decrease its use of domestic coal resources. But this is neither a practical nor realistic energy policy. India's coal consumption is likely to continue in the near future, no matter what efforts are taken to control it. Moreover, any policy to reduce the use of coal must be examined against the background of the country's economic realities and its present low levels of total energy consumption.

In this paper, I will explore some of the ways in which the benefits of India's relatively large coal resources can be exploited while minimizing their negative effects. I will also highlight the fallacy of viewing future GHG emissions from India's increasing consumption of coal as a major threat to the earth's climate system, and instead argue that the goals of reducing GHG emissions and cleaning India's environment can be met through a combination of new, cleaner coal processing technologies and the measured use of renewable energy sources. In both these initiatives, India would be well-served by the assistance of the international community, which must strive to better understand India's energy dilemma: as a developing country grappling with the problems of widespread poverty, the need for environmental protection and conflicting choices between different energy sources, the solutions it adopts may be very different from those favored by the industrialized nations.

DISPELLING THE MYTHS ABOUT COAL

The truth is that it is not feasible for India to drastically reduce its use of coal. India already holds large domestic coal reserves that, given the country's desperate need for energy, should not be squandered. Also, cleaner coal production technologies are available, while renewable energy technologies are prohibitively expensive for a developing country. Western pressure in favor of reducing coal use cannot be justified on ethical grounds either, particularly given the fact that many industrialized countries produce and use much higher quantities of coal in per capita terms than their developing counterparts. The United States, in fact, is the world's largest producer and consumer of coal per capita.

Developing countries like China and India, however, do have an interest in moving towards cleaner sources of energy wherever technically feasible and economically viable, and to employ cleaner technologies in their use of coal. This is a challenge that the international community can help developing countries to effectively meet in the short run. Before examining India's future energy policy choices in greater depth, some facts need to be put forward and some common myths need to be dispelled.

First, the problem of climate change is not caused by current emissions of GHGs, but is the result of an increase in the concentration of such gases, which have accumulated through emissions since industrialization began 150 years ago. The burden of mitigating such emissions should and does rest with those who have caused the overwhelming share of increase in GHG concentration, rather than those who are still at a very low level of energy consumption and development. This is confirmed by the inclusion of the clause on "common but differentiated responsibility" in the FCCC. Developing countries need to pursue immediate goals of poverty alleviation--and to do so inevitably requires substantial increases in levels of per capita energy consumption.

Work by this author(3) estimates that approximately 65 percent of the...