Western Households Sacrificed While Asians Benefit From Coal Splurge

By Vijay Jayaraj

In a move opposite the direction of the global climate change agenda, India’s newly elected government has announced contracts for an additional 12,800 megawatts (MW) of thermal power capacity (coal and natural gas).

The announcement stands in stark contrast to India’s previous commitments to transition away from fossil fuels and towards wind and solar. This decision, coming on top of 28,400 MW already under construction, has reignited the debate on the unfair burden levied on Western taxpayers.

India’s energy demand is growing at an unprecedented rate. As the world’s fastest-growing major economy, with a population of over 1.4 billion people, the country’s hunger for power seems insatiable. The International Energy Agency projects that India’s energy demand will double by 2040, growing at 3% per year — three times the global average.

Given these factors, India’s decision to expand its coal-fired power capacity is not surprising. Coal remains the most readily available and economically viable option to meet this massive energy demand in the short to medium term.

India has the world’s fifth-largest coal reserves, estimated at 319 billion metric tons. This domestic availability ensures energy security and reduces dependence on imports. Coal plants provide baseload power, ensuring a stable electricity supply that is critical for reliable power, something that renewable energy sources cannot provide even when supported by batteries.

At the heart of India’s coal expansion lies a fundamental challenge: the urgent need to lift millions out of poverty. Despite significant progress in recent decades, India still grapples with widespread poverty. As of 2021, the World Bank estimated that 10% of India’s population lived below the international poverty line of $2.15 per day.

The Indian government argues that rapid economic growth, fueled by affordable energy, is the most effective way to improve living standards for its vast population. From this perspective, the expansion of coal use is a critical component of the country’s strategy to reduce poverty.

Enough With Excessive Energy Pricing

This situation raises questions about the effectiveness of carbon taxing and other pricing mechanisms in many developed countries, including the United States, the United Kingdom and Canada.

Energy-intensive industries such as manufacturing, mining and agriculture are critical to economies. Measures like carbon taxes that increase energy prices stifle growth and competitiveness, reversing decades of economic progress.

This abuse of Western consumers by a climate industrial complex obsessed with reducing emissions of carbon dioxide from the combustion of fossil fuels is unnecessary, being utterly unsupported by honest science. Moreover, even when emission reductions are achieved –often they’re not – they are offset by the increasing use of coal, oil and natural gas in developing nations like India.

In the U.K. and Canada, where carbon taxes are driving up energy costs, low-income households are disproportionately harmed because a larger share of their income goes toward essentials like heating and electricity.

According to a 2023 report by “Statistics Canada,” 18% of the poorest households had trouble keeping their home heated or cooled. Further, 2% of all “Canadian households reported that someone in their home needed medical attention because their home was either too hot or too cold.”

Likewise, the U.K. government’s own research notes that “around 13% of households in England were classed as fuel poor, 20% in Scotland, 14% in Wales, and 24% in Northern Ireland.”

“British Steel”says, “The average price faced by U.K. steelmakers for 2024/25 is 66 pounds per MWh (megawatt-hour) compared to the French price of 43 pounds/MWh and the German 50 pounds/MWh. (That means) we pay 37-50 million pounds more for our electricity this year than our European competitors.” This is likely to become worse as the U.K. government pushes for electrification of steelmaking.

This could soon be a reality in the U.S. too if Washington continues to damage the energy sector with a forced move to unreliable and expensive energy sources like wind, solar and hydrogen.

It’s time to stop making Western taxpayers sacrificial lambs at the altar of climate politics while countries like India and China burn huge amounts of fossil fuels to the benefit of their people.

This commentary was first published at Real Clear Markets on October 3, 2024.

Vijay Jayaraj is a Science and Research Associate at the CO₂ Coalition, Arlington, Virginia. He holds an M.S. in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the U.K., and a bachelor’s in engineering from Anna University, India.