India Gives $10 Billion Dollar Green Energy Fund To Coal
India’s biggest government green energy fund will be used to compensate states for lost coal revenues and is scheduled to be eliminated by next year, according to a Monday announcement.
The country’s finance ministry responded to government records requests by saying that all remaining funds in the National Clean Energy and Environmental Fund will go towards compensating for lost coal import and production revenues.
“Basically, the fund is now dead wood,” an anonymous senior finance ministry official said Monday. “[T]here are so many demands on our limited resources and a reassessment of priorities is done each year. The money collected so far in the clean energy fund and remaining unspent will go towards compensating states.”
India planned to tax coal to pay for green energy, but the resulting increase in coal costs hurt goods and services tax revenues. Now, environmental funds will be used to compensate for this loss.
“The decision shows the government’s inability to manage this fund,” said Rita Pandey, an environmental economist and professor in New Delhi. “We have argued in the past that apart from funding the renewable energy sector, the coal cess should be used to support innovation in the clean coal technologies as well.”
India is the world’s fastest growing, and third largest, emitter of carbon dioxide (CO2), largely due to its dependence on coal for electricity. The country got 59 percent of its electricity from coal in 2014, and Indian leaders are ramping up the country’s coal production by opening a new mine every month, despite signing the Paris climate agreement.
The growth of coal power in India means that, mathematically, CO2 reduction schemes are futile without its participation, yet the country hasn’t made a serious commitment to spending $90 trillion — the green energy price tag the International Energy Agency says is required to curb warming.
India has stated it will only reduce emissions if it receives substantial assistance from Western countries, equivalent to $2.5 trillion over the next 15 years in direct aid, grants and cheap financing.
“[O]ur dependence on coal will continue. There are no other alternatives available,” a top coal ministry bureaucrat told Reuters. India says coal provides the cheapest energy for the kind of rapid industrialization that will lift millions out of poverty.
More than 2,400 coal-fired power plants are under construction or being planned around the world, 1,171 of which will be built in China. India is building 297 and planning another 149 coal plants..
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