by Hannah Green

In India, there is a thriving market for trash. People make lives for themselves collecting it, sorting it, buying it, selling it: making it useful once again.

While the community of trash workers occasionally gets attention from the American media, the focus often revolves around the initial realization that people can earn a living from garbage piles, and what this says about poverty levels.

Katherine Boo’s recent book related to the subject, Behind the Beautiful Forevers, went deeper, exploring the mechanisms of entrepreneurship and exploitation in India. However, there is also a more positive side to this story that often goes uncommented on. An efficient recycling system has a long-term positive effect on society as a whole, and is also something that North America and Europe generally lack. That is a significant part of what the trash economy in India is- an informal recycling system.

Estimates suggest that between 56 and 70 percent of Indian recyclable material actually gets recycled, compared to 30 percent in Europe and the United States. This is because in India, the informal trash economy is highly efficient, and generates a surplus, whereas in rich countries dealings with trash can be seen as a market failure. While Indian government dealings with trash are highly inefficient, a significant portion of the informal workforce-about 90,000 people in Delhi alone — are eager to get their hands on the growing supply of trash so that they can sell it to recycling firms for profit.

The informal trash economy subsidizes the less efficient formal sector, thus benefiting taxpayers as well as the environment. While many of these workers live in very poor conditions, most of them still earn more than the minimum wage, some significantly so.

Many Indian companies buy recycled materials without self-consciously labeling themselves as eco-friendly institutions. Recycling is not necessarily associated with an environmentalist mindset in India, but instead is just another way to reduce the cost of living or doing business. In the west, on the other hand, if recycling gets done it is usually with some concept of environmentalism in mind. It is not thought of as a way to make money but something that people do if they are concerned about the environment — a chore. Environmentalism isn’t nearly as effective a motivating factor as money. Most people in rich countries can barely manage to separate paper from plastic, and then machines have to do the rest of the work. Just separating different kinds of plastic bottles from one another is an enormous process — one that requires investment in the development and production of expensive machines that need energy to run and that are still less precise than human labor.

Companies that use expensive recycled materials in their products will inevitably make sure that customers know about it, in order to get them to accept a higher price. Thus, consumers can find the same feeling of satisfaction from these consciously ecofriendly products they might have gotten from taking the time to separate recyclables. The feeling of having done something good for the environment is also commoditized, even if it’s not that big a seller.

In rich countries, the market hasn’t found a way to deal with excess trash in a way that is profitable in the short term. If India’s economic boom recovers, it may one day join these countries, and the population of people willing to deal with trash cheaply may decline. Right now, rich countries can afford to have an inefficient system for dealing with trash, although it is very expensive. But the longer we wait to find a system that works, the more each piece of trash ends up costing in the long term, both in terms of dollars and in damage to the environment.

A growing global economy and population only means more trash. Finding a way to deal with it profitably soon would be a very smart investment.

Hannah Green covers economic and foreign policy issues, especially in South Asia and the Middle East.  She recently received her B.A. in history from Northwestern University, and is living Lucknow, India, where she studies Urdu and Hindi.

by Justin Guay, via the Sierra Club

The biggest untold story in the world is now out in the open.

Despite warnings from the World Bank about the dangers of unchecked climate change, the coal industry has a global pipeline of nearly 1,200 plants planned, two thirds of which are in India and China. India alone has plans to build a coal fleet nearly twice the size of the entire U.S. coal fleet.

But if this pipeline has you thinking that a coal-fired future is inevitable, think again. The truth: The majority of plants in this global pipeline are nothing an illusion.

To understand the reality of the industry’s plans, take a look at India. India’s huge pipeline will require ~2.4 billion tons of coal by 2030. That’s two and a half times what the U.S. currently consumes. More importantly, it’s nearly five times the amount of coal that India produces. To feed this beast India is going to need a herculean effort to increase production.

Let’s take an optimistic scenario where Coal India (CIL) – the state owned mining company responsible for 90 percent of domestic supplies — maintains a robust 7 percent annual growth rate. In this scenario, India would increase production to ~ 1.5 billion tons. Despite this mammoth increase in production, the country would still face a supply shortfall equal to 920 million tons by 2030 – an amount equivalent to annual U.S. coal demand. That’s a jaw-dropping amount of coal and it’s the “optimistic scenario” because it’s based on the fantastical belief that CIL will maintain an annual growth rate it has only achieved twice in the past 10 years.

But this optimistic scenario looks even more doubtful when you take into account the woeful state of the Indian coal sector. Despite industry spin that “environmental hurdles” are constraining production, the truth is that India has simply not invested in the infrastructure necessary to mine and transport coal to power plants. Worse, the permitted mining expansions it does have are under heavy scrutiny as the coal gate scandal has already resulted in the revocation of dozens of coal leases.

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by Hannah Green

This August, power shortages in India that left 300 million in the dark made it very clear that one of the world’s fastest growing economies was facing an energy crisis. Less clear is how realistically to solve it. Many firms are looking for new sources of oil to fulfill India’s growing energy demands, but this could prove to be painfully expensive.  On the brighter side, solar energy and other renewable resources are already being rapidly harnessed in the non-Western world, and they are becoming cheaper and cheaper.

As of June 2012, 31 percent of India’s energy came from renewable resources, including hydroelectric power, while only 9 percent of the United States’ did as of the end of 2011. In a 2009 McKinsey & Company survey, India was rated the top producer of solar energy in the world, just above the United States, with an annual yield of 1,700 to 1,900 kilowatt hours per kilowatt peak (kWh/KWp). However, demand for energy in India will only continue to grow, and the question is whether energy will continue to come mainly from fossil fuels or from renewable energy sources

Many hope so. Current local and imported supplies of gas and coal in India are insufficient to fulfill energy demands, and both investing in sufficient imported fossil fuels to keep India electrified or extracting new natural gas sources will hurt the Indian economy, according to a report by Boston Consulting Group. Hunting for shale gas is a risky and expensive venture, and creating Liquid Natural Gas facilities to ease the transport of imported oil would also require an investment of $12 – $25 billion. However, hydroelectric, wind, and solar power sectors are all growing. Hydroelectric power already accounts for 19 percent of India’s electricity, but at the moment less than half of available hydroelectric resources are being exploited.  Several solar power initiatives by state governments and the department of renewable resources are currently at work in India, the largest of which is the Jawarhal Nehru National Solar Mission, launched in 2010. The goal of the $19 billion plan is to harness 20,000 MW of grid power solar energy and 2000 MW of off-the-grid solar energy by 2020.

Part of the reason that solar power is becoming so affordable for India is that the demand for it is decreasing in the West. China’s solar power industry has recently faced an excess manufacturing capacity because of EU cutbacks on solar subsidies. That’s bad news for China, but good news for the Indian solar industry.

A report by the environmental research firm Clean Edge and non-profit Co-op America shows that 10 percent of United States energy could potentially come from solar power by 2025, but only a small fraction of that potential is actually in development.  Due to its larger land mass and smaller population, the United States has the potential to create much more solar energy than India does, and its energy demand continues to be much higher than India’s, despite having a quarter of India’s population. However, if current American and Indian government initiatives proceed as planned, the United States will likely continue to remain behind India as a producer of solar energy by 2030.

There are several reasons why renewable energy sources are growing faster in India in the short term than they are in the United States and Europe. India can’t afford to rely on expensive and unreliable fossil fuel imports the way that richer countries with solid infrastructure in place for traditional energy resources can. For rich countries to switch to renewable energy requires a choice: keep the infrastructure that’s in place and continue to use non-renewable energy (cheaper in the short term) or make the comparatively expensive switch to renewable energy.  In India, on the other hand, villages that are still off the grid have only to choose the option that is cheaper from the ground up.  It is often cheaper to install new solar energy plants than it is to connect to the existing grid in India. Thousands of Indian villages have already been newly electrified with solar power. In some villages that don’t yet have full electricity, small solar cells are a significantly cheaper and safer replacement for kerosene cells. Finally, other concerns, such as aesthetics, continue to impede the construction of renewable energy plants in the United States and Europe.  In India such things are given little consideration.

Countries that are making room for renewable energy now may well benefit in the long term. Recently there has been speculation as to whether India can keep up the rapid economic growth that has taken the world by storm in the past few years. It’s true that in the short term growth is slowing down. But long-term factors like energy blackouts, energy access, and global warming might eventually see India moving ahead once again. In coming years, leaders in renewable energy might not be those countries most capable of producing it, but those who can least afford not to.

Hannah Green covers economic and foreign policy issues, especially in South Asia and the Middle East.  She recently received her B.A. in history from Northwestern University, and is living Lucknow, India, where she studies Urdu and Hindi.

Nicole Ghio, via the Sierra Club

When Dr. Jim Yong Kim took over as President of the World Bank, there was hope amongst health advocates and environmentalists that, given his background, the Bank would reevaluate its support for deadly fossil fuel projects. Dr. Kim’s assertion that a new World Bank report on global warming should “shock us into action” is a step in the right direction.

Now, however, he has an opportunity to back this rhetoric with concrete action as the International Finance Corporation (IFC) reviews the social and environmental impacts of its $450 million loan for the enormous four-gigawatt Tata Mundra coal plant in Gujarat, India.

by Justin Guay, via Sierra Club

A while back I wrote a post on the need to get India’s solar boom right. I wrote the piece because it was obvious that solar energy is primed to take off in India and it was clear there are two paths the country could take: distribute that boom to benefit the 300 million people still waiting for the grid, or forcibly centralize a resource that is most effective when distributed.

A year later, installations have grown at a blistering pace — from 80 MW a year ago to over 1 GW — but they are almost entirely centralized. And now, the question is more important than ever: To centralize or not to centralize?

Let’s start with hard reality: The grid is never coming to rural India. No matter what policy makers want to believe, decades of attempts and huge gains in supply have yielded little increase in electrification. More importantly, off grid solar installations have been dramatically cheaper than grid extension because they compete with the huge costs of extending the grid and the huge costs of diesel and heavily-polluting kerosene. That’s why the future of rural electrification is decentralized clean energy — something even the very serious IEA recognizes.

But it’s not just the IEA that gets this. Politicians are catching on as well. Take Nitish Kumar, the chief minister of Bihar, whose sole political platform is delivering energy access to the 100 million people of Bihar. To achieve this lofty goal (only 18% of the population currently has access) Bihar is going to need a distributed clean energy revolution because coal-gate has deepened the already immense problems of the coal sector, making the possibility of a coal fired future impossible. If Kumar wants to remain in office, he has to rely on distributed solar.

And, of course, distributed grid-tied installations reduce peak load which can help avoid blackouts like the historic one India just suffered. In short, distributed is the way to go.

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by Justin Guay, via the Sierra Club

The U.S. Ex-Im Bank and its president Fred Hochberg have never met a coal project they didn’t like.

At times it’s so bad we don’t know what century the institution thinks it is operating in. Now, despite a worldwide uproar over the Bank’s interest in one of the world’s largest coal ‘mega-mines’ in Australia, it has been linked to another Australian mega mine that would bring coal across the Great Barrier Reef. Underwriting this potential destruction of the Great Barrier Reef is an unacceptable use of U.S. tax payer dollars — and it’s time Ex-Im Bank came clean on its involvement.

It’s not surprising to hear over-eager developers link the Ex-Im Bank to these projects because the institution has a long history of supporting fossil fuel projects. And that track record is getting worse. It got so bad that the Sierra Club wrote an open letter to President Fred Hochberg after we witnessed first hand the destruction these projects are wreaking on communities and livelihoods (check out our blog on the Sasan coal project in India).

But our pleas were callously ignored as President Hochberg okay-ed a massive expansion of coal finance in every corner of the globe. From Kusile in South Africa, to Sasan in India, to Xcoal in the U.S., to the recently proposed mines in Australia, it appears that Ex-Im Bank cares little for the environmental damage the institution is causing around the world — not to mention the reputation of this administration.

The problem, however, is that the public does. And that public stretches from Australia where the mining would take place, to India where the coal would be burned, to the U.S. where the financing would come from. This global outcry was captured in part by Avaaz’s petition to #savethereef (consider taking a minute to contact Fred Hochberg personally via twitter: @fredhochberg), but also by media scrutiny in India, the U.S., the UK and Australia. It appears that while President Hochberg may consider designations like “World Heritage Site” pesky obstacles, the global public considers them treasures.

Which is why Greenpeace Australia’s recent report on massive coal export expansion plans that would trample the Great Barrier Reef — and the global climate — was so damning. They found that if underwritten by institutions like Ex-Im Bank, the world would add emissions equivalent to a country the size of Canada while increasing traffic through one of the world’s greatest natural wonders. For an excellent visual representation of this lunacy check out Greenpeace’s short video:

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