IEA chief backs India on coal, says no exit without financial aid

Lending his weight to India's stand on coal as an energy source, International Energy Agency (IEA) chief Fatih Birol on Wednesday said it won't be fair to ask developing nations to stop using coal without giving international financial assistance to make up for the economic challenge from such a move.

Developing nations like India depend on coal for 60 per cent of their energy, and coal and associated sectors are major employment generators, he said at the Energy Horizons Leadership Dialogue organised by Council on Energy, Environment and Water (CEEW).

Endorsing the Indian stand of it not being responsible for global pollution, Birol said, "climate change issue we have today, (that is) concentration of carbon in the atmosphere is not an issue of today. It is an issue of almost last 100 years."

"And many countries, so-called advanced economies, came to this industrialised levels and income levels by using a lot of coal. These are the US, Europe, Japan," he said.

 

India has maintained that it is not a polluter and cause of climate change and has voluntarily committed to reducing greenhouse gas emission intensity of its GDP by 33-35 per cent below 2005 levels by 2030. Though it has taken up an aggressive plan to build renewable energy capacity, India sees a role for coal in its energy basket for the next few decades.

Birol, whose energy agency is a policy adviser for members of the Organisation for Economic Co-operation and Development, said China, India and Indonesia - which house almost half of the world population - produce more than 60 per cent of electricity from coal and the average age of their coal-fired plants is 11 years as compared to 40 years in Europe.

A coal-fired plant has a maximum age of 45-50 years.

"There is a lot of investment put in and there is a lot of investment to be paid back," he said adding plants in Asia have a 40 year more lifecycle if they follow the cycle as prevalent in other countries.

Besides, coal in many developing countries is a key source of employment.

"For example in India, Coal India Ltd or even the Indian railways carrying coal is a big source of employment. Many people get their daily bread from coal," he said. "Therefore it is extremely important on how we on one hand get out of the coal and at the same time do not have a negative impact on emerging markets."

He was responding to a question on UN chief Antnio Guterres on Tuesday giving a call to the G7 group of rich nations to commit to exit coal by 2030.

Japan and the US have no formal coal phase-out plans, while Germany plans to continue burning coal until 2038.

Birol said Germany with very small coal usage as compared to China or India, after a lot of negotiations with trade unions, has decided to exit coal by 2038.

And Germany's per capita income levels compared to India or Indonesia is much higher, he said.

"So in my view, we have to exit coal worldwide. Not only to reach our climate goals but also for air pollution in cities," he said. "But how we make this transition needs on one hand domestic governments to move and make the right decisions, and at the same time we need some change support from the international financial architecture."

This support is especially needed for developing countries.

"It wouldn't be fair to go to a developing country and to say 'your coal is creating aproblem for the climate change, so shut it down'. It wouldn't be fair and I am not a supporter of that," he said.

"Yes we need to get out of coal but it is a shared responsibility of all countries around the world. We need to support, as an international community, those countries and communities who would face serious economic challenges as a result of leaving coal behind."

UN Secretary-General Antnio Guterres had last year called on the Indian government to move away from coal and other fossil fuel-based economic growth and fully embrace renewable energy.

Speaking about India, Birol said he had some years back said India is moving to the centre stage of the world energy. "Today I can say, it is at the centre of the world energy system."

Last month, IEA said India will make up the biggest share of energy demand growth at 25 per cent over the next two decades, as it overtakes the European Union as the world's third-biggest energy consumer by 2030.

To know what will happen in the global energy market, "a close eye" will have to be kept "on decision coming out of New Delhi," he said.

India, he said, has achieved remarkable results in bringing electricity to millions and replacing polluting primitive cooking fuel with clean LPG in rural and poor household kitchens.

"India did a lot on renewable energy front but can do more," he said adding the nation has a huge potential for battery storages.

Also, it can improve energy efficiency, particularly in air conditioners, trucks and industries.