For A Just Energy Transition, Budget Should Lay Down A Roadmap

This is especially true regarding the need to safeguard the interests of countless millions, including unskilled informal workers, in the world’s most populous nation, whose jobs and livelihoods are dependent on fossil fuels, mainly coal.

What will be relevant to look out for in this context would be whether this year’s Budget speech by the FM contains special announcements to demonstrate how India would ensure that no one gets left behind during the energy transition process.

Particularly, whether the FM outlines the contours of the policy framework India would adopt for realising a socially equitable energy transition, in keeping with its stated commitment to the ‘development for all’ principle. Currently, India meets more than 50 per cent of its energy needs from fossil fuels (predominantly coal).

It would also be pertinent to watch if the FM mentions any mechanisms about how the Centre and the states could work together on the just transition exercise. Sight must not be lost of the fact that state governments, by dragging their feet on shifting from fossil fuels due to fears of its impact on jobs in their regions, could potentially come in the way of the realisation of India’s ambitious growth plans in the renewable energy arena.

While presenting the Budget for the financial year 2024-25 on July 23 last year, the FM had said: “We will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability.”

In December 2023, a report titled “Just Transition: Labour Migration in Indian Coalfields” by IIT-Kanpur asserted that there are “around 2 crore informal workers work in Indian coalfields”.

In March 2024, a statement issued by the government’s information wing, the Press Information Bureau (PIB), said: “The coal-producing Public Sector Undertakings (PSUs) of the Government of India, notably Coal India Limited (including subsidiaries) and NLC India Limited, collectively employ a workforce of 3,69,053 individuals, including 1,28,236 contractual workers. Additionally, the sector supports approximately 3.1 lakh pensioners, underlining its significant impact on livelihoods and social welfare.”

For many years now, India — as an acknowledged leader of the Global South — has been one of the staunchest advocates of undertaking an energy transition processes in a fair and equitable fashion, keeping local realities in mind. It has also announced several measures to demonstrate its commitment to the clean energy cause, which includes setting an ambitious target of generating 500 GW from non-fossil fuel sources by 2030 and establishing a Green Hydrogen Mission.

However, India has still not outlined how it would take care of its unskilled labour and those living on the margins, whose sources of income may be put at risk due to the move away from fossil fuels. There has also been no talk till date of launching a dedicated skill development initiative for those whose jobs may be on the line due to a shift from coal to clean energy sources, so that these people could secure their livelihoods.

In its report titled “Accelerating Just Transitions for the Coal Sector” released in March 2024, the International Energy Agency (IEA) had said: “Accelerating coal transitions will impact workers and communities that depend on coal. For that reason, comprehensive stakeholder engagement and a set of policies to manage negative impacts, including on energy affordability, energy access and socioeconomic development, are essential. These need to cover the creation of decent work opportunities, support for workers affected by energy transitions and respect for fundamental labour principles and rights.”

Weighing in on the issue of India vis-à-vis just energy transition, climate-focused think tank Climate Group had, in an article in August 2024, said: “A transition away from fossil fuels will have both positive and negative impacts. On the one hand, such transitions can lead to new livelihood opportunities, diversified economic activities and more sustainable pathways of energy generation. While on the other hand, if not adopted mindfully, the transition can also exacerbate economic vulnerabilities of the communities who are reliant on fossil fuel or mineral extraction supply chains.”

With authors of the said Climate Group article going on to recommend the need for a “comprehensive policy framework that can ensure the socio-economic rights of the affected people and communities are well protected”, and such policies being designed keeping in mind geography, demography and social factors, including gender parity, worker rights and social protection.

Incidentally, in November 2024, the G20 meeting in Brazil saw members endorse the “Principles for Just and Inclusive Energy Transitions” adopted by the G20 Energy Transitions Working Group.

It includes fostering social dialogue and encouraging “meaningful and effective participation by all relevant stakeholders, including from affected communities, employers’ organisations and trade unions in the decision-making processes related to energy transitions” and strengthening “access to appropriate social protection systems for all”.

Ultimately, the long-term success of any major transformation agenda is also largely dependent on the transparency and openness of the communication with stakeholders whose support holds the key to the change being brought about.

By providing an action plan of how the government proposes to go forward on a just transition exercise, the latest Budget could go a long way in mitigating the apprehensions that various stakeholders have, about the shift to clean energy, and, by extension, help fast-track the transition.

(The writer is a current affairs commentator. Views expressed are personal)