Coal's Problems Are Governance, Not Climate Regulation

Context: Issues with coal sector related to the misgovernence rather than climate change.

Issues in coal sector

• Trigger factors: Climate change-associated weather events such as peculiar rainfall patterns and associated floods delaying shipments from the coalfields in India’s east-central states.
• Rise in prices and uncertainty: Recently, high-quality thermal coal has crossed $200 a tonne a new record, surpassing one set just before the 2008 financial crash.
  • This has limited options for coal imports, just as domestic coal mining has stumbled.
• Issues with Stockpiles: Stockpiles of coal in India have crashed from around 50 million metric tonnes when the pandemic hit in 2020 to under 10 million tonnes in 2021.
• Policy Negligence: Hope was that success of renewable energy in recent years would allow for countries to speed up their transition away from high-emissions fossil fuels particularly coal.
  • But the coal shortage is hampering economic recovery post pandemic, thus, negatively impacting the climate targets.
• Market structure and governance issues: Lack of planning remains key factor.
  • State dominance: In India, the coal supply problem lies in between the extraction and consumption of coal, which are heavily under state control.
  • Railways’ negligent treatment of coal trains also added to the misery.

Conclusion: Problems in coal sector are unreformed pricing, poor management of infrastructure, and patchy governance. It’s got nothing to do with climate action.