Why India Did Not Commit To Coal Phase Out

Why did India seek this change, and why are some criticising it for this?

We speak with Ulka Kelkar, director for climate at World Resources Institute, India. She is an economist with more than two decades' experience in climate change impacts and policy. She models the economic impacts of low-carbon development pathways for India and supports climate action in Indian cities and states.

Kelkar also discussed the key takeaways for India, and the gains on key issues such as climate finance.

Edited excerpts:

What lay behind India's insistence on a 'phase down' of coal use, rather than a phase out?

I think they were trying to make a point on differences between developed and developing countries. It is not just India but also China, South Africa, Nigeria who made the same comments in their final remarks. Coal phase out is not easy for a developing country like India though the western media will report it differently.

Is India facing the heat because it requested the change in the last hours?

In this conference, there were expectations from mitigation, adaptation, finance, [and] acknowledging the importance of loss and damage (L&D). Current adaptation finance has now been doubled but the original amount was small in the first place. Developed countries have not delivered on their climate finance which they were supposed to. On L&D also the text was watered down, from a specific facility to a series of dialogues. Vulnerable countries find that to be a severe compromise but they recognise that for the first time, L&D has taken its rightful place in the main agreement. On mitigation, had this last-minute intervention not come [to change the wording], the other compromises would have still been there. It is not that everything else was perfect.

India already has a net-zero deadline for 2070 and targets for 2030. Its renewable energy (RE) targets of 2030 will mean that the country will meet around 55% of its electricity generation through RE. Since India is already moving in the direction of a fossil fuel phase out, why did it not agree to the language?

We have to remember the difference between developed and developing countries. Developed countries have already set up the supply [infrastructure] of electricity that is needed to meet the energy needs of their populations. The portion of the electricity supply coming from fossil fuels will have to be shifted to renewable energy but the energy needs of their population are already being met.

For developing countries, our energy needs are not yet met, they are growing. So even though we build clean energy infrastructure like 500 GW of RE [capacity], the existing fossil fuel energy capacity cannot simply be phased out or substituted. RE capacity is to be grown on top of existing fossil fuel capacity. As RE grows more and more, it will meet the new energy needs of the population and also start substituting the fossil fuel electricity capacity. Over time, after 20 years or so, coal-fired power plants that currently exist will become old and inefficient and will have to be retired. So this is the kind of transition that will take 20-30 years or more. Also, the power sector is only one component of our net-zero aim. Others are the transport and industrial sectors. So, 500 GW of clean electricity will have far-reaching effects on other sectors also. International funding for coal-based power plants is drying up, RE is becoming competitive compared to coal. So, market forces will also take care of a lot of things.

Was the term 'phase-down' used then to buy India time?

It appears that they are making a point. Although the Paris Agreement calls on all countries to take action, there is a difference between developed countries, in their abilities to take action quickly, and developing countries--in their needs. You cannot uniformly apply the same options to all countries. You need to take into account the needs of their people. Even on the question of [fossil fuel] subsidies, the [Indian] environment minister pointed out that a lot of subsidies go for supporting clean cooking through LPG because otherwise our population was using firewood. It is a very different kind of use of subsidies as compared to when large companies are bailed out. When India insisted on phase-down instead of phase-out, it was to point out we are at an early stage in our development trajectory.

What does this mean for the new coal plants India has already announced?

All those 2030 targets announced by the PM have to be met--such as reducing projected emissions--and they all act as constraints for new coal-based expansion.

The PM had asked for $1 trillion in climate finance from developed countries. How important are these funds for India? And the L&D compensation?

All three types of funding--to support mitigation action (scaling up RE), for adaptation (dealing with impacts of climate change in future) and L&D (current effects of climate change)--apply to India. We do need all three. The first one could be supported through private finance, through technology partnerships, a large part of it can be private investments. On adaptation, issues like health, water security, agricultural improvements don't lend themselves well to private finance because they don't give quick returns. They are distributed over a large number of disaggregated stakeholders. That's why you need public finance--whether bilateral or multilateral aid.

On L&D, for India, so far whenever we have faced any extreme weather events, we have paid for it from our own budgetary resources. Even when L&D funding becomes available, the priority will be the most vulnerable, least developed countries, who have been fighting for this. For us, it is more symbolic to support the call for L&D.

There were two pledges in the backdrop of this COP26. One on reducing methane emissions and another on halting and reversing deforestation. India did not sign either. Your views?

Within the Glasgow pact also there is a reference to phasing out non-CO2 GHGs [such as methane]. Different kinds of interventions can be used to reduce CO2 and methane emissions. The IPCC report talks about CO2 net-zero emissions by mid-century. For non-CO2 gases, it doesn't talk about a target net-zero year. The reason why methane gets attention is that it has higher global warming potential than CO2. A large amount of methane just leaks from pipelines when oil and natural gas are being transported. The leaks can be prevented, it is something that pays for itself. That's what the pledge was aimed at-- taking advantage of cheap opportunities to reduce methane emissions in oil producing countries. For India, the emissions come from agriculture and a little bit from the waste sector. Our scientific establishment has been looking for opportunities in the agriculture sector for a while now. Those are there in our biennial report. Definitely there are things that can be done but for the global methane pledge, the focus is on cheap opportunities in the oil and gas sector.

The Paris Rulebook that deals with rules related to trading of carbon credits in the market has been finalised. How will this benefit India?

There was a long wait for the rules of carbon trading to be finalised. For India this is a good sign that rules have been finalised. India has 1 million tonnes of carbon credits through CDM projects, perhaps it will be able to trade these in the international markets. Even if that doesn't work out fully, India can create its own domestic carbon market and we can link it to markets in other countries. It is like a common currency has been created. All the details have now been ironed out and the Paris Agreement can now be fully implemented.

What are the next steps?

The PM's national statement will be used to update the earlier NDC. In the Glasgow agreement, countries have been asked to come back with a long-term strategy in 2022. This is where our 2070 net-zero commitment needs to be reflected. Other than that, India's Apex Committee for Implementation of Paris Agreement will take care of certain needs such as making rules for domestic carbon markets, possibly. Certain mechanisms and processes will have to be created and states, cities, companies will also be able to make their own plans.

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