Sunday 26 June 2022

EU forgets own sermons, returns to coal (The Sunday Guardian)

 Past governments ensured that India lost the advantage that would have accrued to the country were it to utilise its immense coal reserves to their full potential. Nationalisation of coal and mismanagement resulted in the country having to expend scarce foreign exchange to buy coal from countries such as Australia. Interestingly, those from abroad who were most active in the NGOs advocating that India cut back its domestic coal production came from major coal-extracting countries, including the US, Australia and the UK. The consequence of succumbing to such anti-Atmanirbhar advocacy was, of course, not that India sharply reduced the share of coal in its energy sector, but that the country had to import coal from outside, a practice that continues to this day. Whether it be coal, copper or other such resources abundant in India, by one means or the other, India became dependent on foreign countries for much of its supply. Pharmaceuticals is an example of such excessive dependence, as the Indian pharmaceutical industry has grown steadily more dependent for pharmaceutical intermediates on China. After the disruption in supply chains caused by Covid-19 and geopolitical challenges in 2020, efforts by the Government of India to reduce such a high degree of dependency in a premier sector increased. Nuclear energy is far “greener” than energy that is generated through the use of coal as a feedstock. Given that there is a need to reduce if not eliminate India’s dependence on foreign suppliers for the uranium that its nuclear industry needs, this is another essential feedstock, the domestic supply of which has been sharply reduced by use of the executive as well as the other branches of government to discourage uranium mining within the country. As for coal, until such time as its necessity gets reduced to insignificance, efforts need to be made to increase production within the country rather than remain reliant on foreign coal. In such a context, getting a chipmaking company from the US, South Korea or Taiwan to begin production locally needs to be a priority for Ministers Ashwini Vaishnav and Rajeev Chandrashekhar.

The war between Russia and Ukraine has had an outsize effect on global supply chains, in large part caused by the range of financial and other sanctions that have been slapped on the Russian Federation by NATO together with Japan, Taiwan and South Korea. The three are facing a threat from China, especially Taiwan, while in the case of South Korea, the hawkish (on Pyongyang) newly-installed Yoon administration has generated a sharp rise in North-South tensions. It is apparent that the roster of sanctions was not properly thought through, or else that key members of NATO believed that Russia would soon dissolve into chaos as a consequence of the measures taken against the largest country by far in the world in terms of size. Instead, President Putin has recovered his popularity as a consequence of the war, while the Russian people have a long history of stoically bearing up to adversity in a way that the populations of most of the countries in the European Union would not. The President of the European Commission, Ursula von der Leyen, seems to have a somewhat simplistic view of situations, as witness her advice to India to go solar on a fast track, no matter what the cost of following such guidance would be, if it were even practical, which it is not. Von der Leyen has suggested that the population of the EU should each adjust the thermostats in their gas-fired heaters to two degrees less than normal. What “normal” is has not been specified by her. In contrast to her advice to India to go solar, the EU Commission President is backing a comeback of coal. Causing further damage to the planet would in this view be a lesser evil than cutting off purchases of oil and gas from Russia. Meanwhile, Asia these days is gulping up all the oil and gas it can absorb from the Russian Federation, while NATO through its sanctions on Russia is ensuring that the cost to the European consumer of oil and gas goes up, owing to greater dependence on higher-priced US supplies. Once Russia completes its logistics chains to major Asian customers of its natural resources, Middle Eastern countries may find that demand from that continent to their gas and oil may come down. Most probably in 2022 itself, there will be a whiplash effect from the public towards the leaders of the Atlantic Alliance who have collectively inflicted so much misery on not just their own people but the rest of the world as well in their effort to prevent a country brimming with natural resources from exporting any of it. The Ukrainian side needs to read the portents correctly and sue for peace with Russia, giving Biden, Johnson and others an excuse to remove the sanctions designed to punish Russia but which are instead causing stagflation in their own countries. Helping kill the planet through going back to the use of coal instead of oil and gas is just one of the many ways in which the Russia-Ukraine war is on track to cause even more economic and societal devastation than Covid-19 and the attendant measures did.

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