The Challenge of Phasing Out Coal

GS-3 Mains : Economy 

Short Notes or Revision Notes

 

Question : Analyze the trends in coal power generation, focusing on the rise of coal plants in countries like China and India. How do these trends align with global climate goals, and what factors contribute to the continued growth of coal-fired power capacity?

Coal and Climate Change

• Coal power plants are the single largest source of greenhouse gas emissions (20%).
• Reducing coal use is crucial for combating climate change.

The Rise of Coal Power

• Global Energy Monitoring report shows a rise in coal plants, especially in China and India.
• China:
  • Built 2/3 of the world’s new coal plants in 2023.
  • Increased capacity at the highest rate in 9 years.
  • Decommissioned only 4 GW in 2023 (target: 30 GW by 2025).
• US:
  • Slowdown in coal plant decommissioning (9.7 GW in 2023 vs 14.7 GW in 2022).
• Global coal-fired power capacity grew 2% in 2023 (highest annual increase since 2016).

Meeting Climate Goals

• To meet Paris Agreement targets, we need to retire 126 GW of coal plants annually for the next 17 years.
• We retired only a sixth of that capacity in 2023.

Challenges of the Green Transition

• Developing economies need affordable energy for poverty reduction.
• Green energy growth hasn’t kept pace with rising electricity demand in these countries.
• Coal sector employs many people (transition needs to consider social impact).

Potential Solutions

• Carbon capture and storage technology (expensive and debated).
• Developmental finance institutions can help mitigate social and environmental impacts of coal dependence.
• Increased focus on green transition in developing economies.

Conclusion

• The rise of coal plants threatens climate goals.
• A green transition is necessary, but emerging markets need support.

 

 

India’s Job Crisis: Challenges and Potential Solutions

GS-3 Mains : Economy

Short Notes or Revision Notes 

 

Question : Evaluate the factors contributing to India’s job crisis despite being the world’s fastest-growing economy. How does the focus on services, what are the implications for the labor market?

India’s Growth Paradox

• India, the world’s fastest growing economy, struggles with job creation.
• Working-age population participation (46.6%) is low compared to other economies (70%).

Did India Make a Development Mistake?

• India focused on services (IT, back-office) instead of replicating the Asian model (land reform, manufacturing).
• Service sector jobs require skills, and a large skills gap exists (only 50% of young Indians are employable).

The Shrinking IT Sector

• IT, the jewel of the service sector, shrank for the first time in 25 years due to automation and AI.
• Slowdown is evident in cutbacks and slow hiring.
• Many low-skilled service workers who returned to villages during lockdowns prefer to stay.
• Agriculture sector has seen a 60 million person increase in the workforce in the last four years.

The Need for Multiple Job Creation Strategies

• Job creation should be the top priority for the upcoming government.
• Move beyond the singular focus on services (currently 13% of GDP).
• Multiple job creation vectors are needed with policy support, skill development, and incentives for employers.

Promising Job Creation Vectors

1. Global Capability Centers (GCCs)

• High-end service exports with MNC offshore units providing services like finance, legal, HR, and tech innovation.
• Over 1,500 GCCs employ 1.6 million people, projected to grow to 4.5 million by 2030.
• Services from GCCs could become a major export, generating income and demand for lower-skilled services.

2. Scaling Up Tech Startups

• Unrealized potential exists in Indian tech startups that can create direct and indirect jobs.
• Recent investment bubble burst due to overvaluation, regulatory uncertainties, and talent shortages.
• This is a second chance for startups to focus on solid industries like AI, SaaS, defense, and greentech.
• Founders need to prioritize sustainable growth and building a skilled talent pool.

3. Green Economy Jobs

• India, the 3rd largest energy consumer, is 4th in renewable energy installed capacity.
• Plans include installing 500 GW of renewable energy, producing 5 million tonnes of green hydrogen annually.
• The World Economic Forum projects 50 million new “green economy” jobs in India.

4. Reviving the Manufacturing Sector

• Manufacturing cannot be ignored due to the large jobs deficit.
• Focus on small and medium manufacturers (less automation-intensive, more labor-absorbent).
• Leverage India’s digital public infrastructure to provide manufacturers with credit, resources, logistics, and customer access.
• This can help replicate the benefits of larger players for small and medium manufacturers.

Conclusion

India faces a serious employment crisis that policy changes can address. Job creation must be a top priority for the new government