India Coal Surge Nullifies California Renewables

Workers carry coal at a coal yard near a mine in Sonbhadra, Uttar Pradesh India on Nov. 23, 2021. Ritesh Shukla/Getty Images

Commentary

One of the themes in my Epoch Times articles is how the whole world is not following California down the primrose path to green insolvency. Californians are suffering high costs, with many leaving, for nothing.

The wording of Assembly Bill 32, the Global Warming Solutions Act of 2006, promised it would continue the “tradition of environmental leadership by placing California at the forefront of national and international efforts to reduce emissions of greenhouse gases. ... [A]ction taken by California to reduce emissions of greenhouse gases will have far-reaching effects by encouraging other states, the federal government, and other countries to act.”

At the signing ceremony on Sept. 27, 2006, also attended by then-San Francisco Mayor Gavin Newsom, Gov. Arnold Schwarzenegger enthused about his most important legislation, saying, “It will begin a bold new era of environmental protection in California that will change the course of history.”

The main result has been to severely damage California by making housing, especially, much more expensive—which reduced housing affordability and contributed mightily to the ongoing homelessness pandemic. I detailed all that in “The Media Is Helping Schwarzenegger Rewrite His Governorship.”

Odisha, India Coal Surge

Now look at this story in the Financial Times (FT). Despite its liberal bias, as a business paper it has to keep its money-oriented readership reasonably informed on economics stories. So, this story is significant: “India’s dream of green energy runs into the reality of coal.” In sum, India, despite improving its green energy, needs so much coal to power its development from a poor to a middle-class country that it’s not at all inspired by Mr. Schwarzenegger, AB 32, and California.

The story begins in Odisha, also called Orissa, an eastern Indian state on the Bay of Bengal. The FT doesn’t provide the demographics, so I’ll put them here. The population in 2021 was 48 million, up 7 million in a decade. That’s a bit larger than California’s, but growing instead of shrinking. Odisha’s per capita income is growing about 10 percent a year, but still was just 127,383 rupees in 2021-22, or $1,530.

By contrast, California’s population in 2022, according to the U.S. Census Bureau, was 39,029,342. Per capita income was $41,276.

Former California Gov. Arnold Schwarzenegger poses next to his gubernatorial portrait at the unveiling in the Rotunda of the State Capitol in Sacramento, Calif., on Sept. 8, 2014. Justin Sullivan/Getty Images

So Odisha’s income is 1/27th that of California’s. You can see why they’re likely not spending a lot of time online at the site of the USC Schwarzenegger Institute reading about his celebrations of AB 32. The poor people there want development just like everybody else in the world.

“Coal accounts for about three-quarters of the nation’s power generation,” reports the FT of India as a whole. “While per capita energy consumption in the country, the world’s largest by population, is well below the global average, demand is expected to grow more over the coming decade than anywhere else.”

It notes Prime Minister Narenda Modi wants to build 500 gigawatts of non-fossil fuel energy production by 2030. Odisha also has announced ambitious green energy programs.

“Yet India’s energy transition is complicated by intractable problems, from the difficulty of acquiring land for solar and wind farms to deep financial distress in its power system.” Basically, in my analysis, the country doesn’t have the deep pockets of California’s long-suffering citizens to pay for the greening of India. “The authorities see the expansion of polluting industries such as steel and cement as essential to creating jobs and economic growth.

“This means that, even as they invest in renewables, coal-belt states such as Odisha are opening more mines and power stations that will leave India dependent on coal for decades to come.”

Indian Democracy

Despite some problems, India remains a democracy. That means it has to be more attentive to the desires of its people, especially economic development, than dictatorships such as its giant neighbor, Communist China. Of course, the Chinese Communist Party also has laid a path to rapid growth for more than 40 years, moving away from famine-inducing Maoism toward a mix of state and private capitalism. But current President Xi Jinping during his decade in power has greatly increased CCP meddling in the economy.

An excavator sift through dunes of low-grade coal near a coal mine in Pingdingshan, Henan Province, China, on Nov. 5, 2021. Aly Song/Reuters

“Xi’s Policies Have Shortened the Fuse on China’s Economic Time Bomb: Policy mistakes have mired the country in ‘Xi-flation,’” headlined Foreign Policy columnist Zongyuan Zoe Liu on Sept. 6. “In recent months, critical economic indicators—from industrial profits and exports to home sales—have all recorded double-digit percentage declines. In July, while consumer prices rose globally, they fell in China, raising concerns that deflation could worsen the difficulties faced by heavily indebted Chinese companies.”

Adam Smith wrote, “There is a great deal of ruin in a nation.” And of course, even a largely free economy such as America’s involves a lot of government interference, something also increasing in recent years under President Biden. Sometimes it seems as though governments are in a race to see which can implode its own economy faster.

Certainly, right after AB 32 passed, California’s economy crashed much faster than the rest of America during the Great Recession, 2007-10. And after that, home prices soared so high that today only 16 percent of Californians can afford a home, according to the California Association of Realtors.

It seems California’s one-party rule, anti-natalism, and heavy-handed regulation of the economy more resemble Communist China than Democratic India.

In any case, India will have an election next year, where voters will have their say on Mr. Modi’s policies. By contrast, Mr. Xi will never have to face an election.

Australian Coal Production Also Going Gangbusters

In June, the FT reported Australian giant “BHP expects the rampant expansion of India’s steel industry to boost its coal business significantly, with the world’s largest miner refocusing after being hit by a Chinese ban on Australian products.

A general view of The Yallourn Power Station in Yallourn, Australia, on Aug. 16, 2022. Asanka Ratnayake/Getty Images

“Around 40 percent of BHP’s metallurgical coal—used by steel mills and also known as coking coal—is now heading to India, chief commercial officer Vandita Pant told the Financial Times in an interview. The figure is up from 30 per cent in its 2019 financial year. India had become a ‘very big, big market’ for the Melbourne-based company, said Pant.

“The government in India expects to grow its steel production to 300 million tons a year by the end of the decade, from 125mn tons last year, according to officials. Steel demand has been driven by India’s rapid urbanization, which is boosting infrastructure spending and the growth of the country’s industrial sector.”

Looks like Australia also isn’t paying attention to AB 32, Schwarzenegger, and California, either.

No Climate Emergency

Meanwhile, back in the real world outside California’s climate alarmism, so far more than 1,600 scientists, including two Nobel laureates, have signed the World Climate Declaration, “There Is No Climate Emergency.”

It states: “Climate science should be less political, while climate policies should be more scientific. In particular, scientists should emphasize that their modeling output is not the result of magic: computer models are human-made. What comes out is fully dependent on what theoreticians and programmers have put in: hypotheses, assumptions, relationships, parameterizations, stability constraints, etc. Unfortunately, in mainstream climate science most of this input is undeclared.”

India’s realism on economic growth and the climate shows where most of the world is heading. Its rush to coal-based growth far overshadows what puny reductions in greenhouse gases California has gained at great expense.

Instead of being in the “forefront” of such policies, as AB 32 promised, California is lagging far behind, with its impoverished residents being the foremost victims.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.