Category Archives: Business

The price of ethical consumption

This post originally appeared as a twitter thread by Vidushi here.

Morality in markets is expensive. Why does the average consumer have to bear the burden of “ethical consumption”?

As a middle-class, keen-on-a-sustainable-lifestyle consumer, my consumption choices come at significant cost to me. It requires time, effort & money to choose products that are eco-friendly, have controlled emissions, fairly traded blah blah. Not the best user experience. Fashion industry is an emissions and labour exploitation juggernaut; hence it is my personal responsibility as a consumer to buy “ethically made” clothes that are worth three times my capacity, but hey, at least I don’t support industries exploiting workers in Global South. Supermarkets provide vegetables in unnecessary plastic packaging, and because it is my personal stance to minimize plastic waste, it’s on me to invest time in finding rare, low waste alternatives. And of course, these alternatives don’t operate at the usual market price.

Standard products that markets provide for a regular consumer optimizing for price: plastic packaged, emission generating, processed foods – all are inherently damaging. And deviating to sustainability isn’t as feasible for the common person. Got to pay a price for your morals. I have to constantly justify the higher prices of “ethical” products to myself by convincing myself of having a “moral high ground”. I’m supposed to pay more to stick to my belief for a better planet for everyone, while the companies make better profit out of me paying more. People trying to live sustainably are often questioned if this expensive individual action has any impact on the grand scale. We question ourselves too and continue living with this burden because well, it’s your personal choice & it’s fair to pay for what you chose. Is it? Being a vegan is an automatic hit on your wallet. Why should I waste time deciphering ambiguous labels? Ecolabels should make me happy, which can very well be mere greenwashing. The very concept of one’s personal carbon footprint was in fact first publicized by BP. Come on.

All I see is consumers constantly struggling for fair options while companies continue standardizing their hazardous offerings. Is it fair for consumers to pay for their choices when the choices available are in fact not what they would want? Shouldn’t the onus of this morality be on these companies who force this dilemma upon us in the first place? Why should consumers have to pay for the externalities that the producers create? Do only the privileged deserve a guilt-free consumption? We need better options.

Further reading:

Indian Government’s Plan to auction off 41 coal blocks to private sector

India standing in the forefront of developing countries has a continuous increase in energy demands. In the race of energy generation technologies, we have come a long way to rely on coal as the more dominant resource. India is the second largest producer of coal with 716 million tonnes after China with 3523.2 million tonnes [1]. Analysing India’s coal usage, with the reserves of 319 billion of tonnes of coal [2], India uses 966 million tonnes of coal every year [3]. Although, 246 million tonnes of coal are imported mainly from Indonesia, Australia, South Africa and Russia. [4]

On 18th June, 2020 PM Modi addressed the event in which 41 coal mines (later changed to 40) were auctioned for commercial mining. Currently India has 83 operational coal mines with producing around 450 Mt of coal with Coal India Ltd. (CIL) being the largest coal producer of India [5]. Here, the roadmap started in 2015, where changes were made to make the laws in the coal mining sector so that private companies carry out mining as a captive requirement not for sale or other purpose. But this news has come with a further change with the removal clause of captive use being removed.

Considering Coal as a sector, this story can be linked to the target of increasing the GDP by 10%. (Federation of Indian Chambers of Commerce & Industry) FICCI in 2019, bolstered the increase of revenue from the mining sector to achieve this target. The mining sector now contributes approximately less than 3% to the GDP, NITI Aayog wants it to be 25% [6]. Moreover, this sector also provides around 355-500 thousand jobs, which are bound to increase with this auction adding more 280 thousand. All in all, this is a big thumbs up for the economy. [7]

Regarding the future of energy, renewable energy is the clear winner because of the cost and increasing efficiencies. Also, foreign investment and acceptability is more in renewable energy so we should not expect FDI in the mining sector. Moreover, various countries in the world are moving away from thermal power plants in the next 15 years. Having all this in the background, digging more 41 coal mines could turn out to be a risk. It is true that coal is our base load, but we can surely get rid of old and not efficient power plants. Also, the quality of coal from India has higher ash content making it non-compatible with highly efficient boilers in thermal power plants (example: Mundra, India). This deal can be helpful for making India independent and reducing imports, investing the funds in your own country. But rather, there are hidden costs to make these 41 coal power plants operational, which is 33 thousand crore rupees [7]. This money could also be invested in the renewable energy sector and try to shut down some thermal plants.

Talking about coal and mining, the environment is always a major parameter. Even though India should already start it’s plan of shifting its dependency on coal and ideally no more coal mines need to be explored, this system is complex and India even actively striving to be a pioneer in renewable energy has no concrete plans of phasing out coal. Geographically, coal and iron are found in dense forest regions. Out of the 41 blocks, some of the blocks have a forest cover of 50-80% [8]. These can turn in a setback for India with the targets of reducing carbon emission. There also exist tribal communities in the marked areas which would need to be displaced. So, these 41 blocks have reserves of approx. 17 billion and if India needs the coal to compensate with the imports of .2 billion/year, then these reserves would last for around 85 years [9]. This shows that there are no plans of phasing out coal from the government, instead to rely on coal for a long time of 85 years. Also, on a longer run, we would still face similar issues after 85 years. We need permanent solutions for reducing our dependency on coal.

Practical solution for the current situation is balance and delineating a plan for an optimum solution. As of today, 67% of the allotted coal mines are not even operational[10]. Firstly, we need to align with the renewable energy capacity targets of 175GW till 2020 and 450GW till 2030[11] and secondly, expanding and optimizing the use of existing blocks to its maximum efficiency. We then would be in a better position to decide upon only some of these blocks for mining, which are not so densely forest covered and meet the demand of imports. This would suffice the energy demand along with preserving the biodiversity and the tribal communities living there.

References:

[1] https://en.wikipedia.org/wiki/List_of_countries_by_coal_production

[2] https://coal.nic.in/content/coal-reserves

[3] https://www.worldometers.info/coal/india-coal/#coal-consumption

[4] https://www.theglobaleconomy.com/India/coal_imports/

[5] https://timesofindia.indiatimes.com/business/india-business/pm-modi-launches-auction-process-for-coal-mines-for-commercial-mining-key-points/articleshow/76438373.cms

[6] https://energy.economictimes.indiatimes.com/news/coal/mining-sector-key-to-indias-double-digit-growth-rate-ficci/69094627

[7] https://energy.economictimes.indiatimes.com/news/coal/auction-of-41-coal-mines-will-make-india-self-reliant-in-energy-sector-create-more-than-2-8-lakh-jobs-amit-shah/76455612

[8] https://www.hindustantimes.com/india-news/coal-mine-auction-opens-up-vast-stretches-of-forests-in-central-india-for-mining-show-documents/story-1SdToixA4Dcomld0op8lzH.html

[9] https://www.financialexpress.com/economy/new-model-privatisation-kicks-in-with-auction-of-41-coal-assets/1996250/

[10] https://youtu.be/dRi5u22FIYQ

[11] https://www.cnbc.com/2020/03/03/india-has-some-huge-renewable-energy-goals-but-can-they-be-achieved.html