| Introduction: Contextual Introduction Body: Highlight Environmental and Socio-Economic Challenges & measures to ensure energy transition Conclusion: Way forward |
India’s thermal power-producing states bear a disproportionate environmental and socio-economic burden while supplying electricity to power-consuming states. Despite generating electricity for national needs, they face high pollution, ecological degradation, and public health crises, with little to no compensation.
Environmental and Socio-Economic Challenges
- Air and Water Pollution: Thermal power plants contribute to high carbon emissions (20,794.36 kg per year), causing severe air pollution in producing states. Fly ash disposal contaminates soil and groundwater, while power plants consume large amounts of water, leading to water scarcity.
- Health Impacts and Livelihood Losses: States like Jharkhand, Chhattisgarh, and Odisha suffer from higher rates of respiratory illnesses and chronic diseases due to pollution. Traditional livelihoods such as agriculture and fisheries are adversely affected by environmental degradation.
- Economic Disparities and Resource Curse: Coal-rich states generate maximum thermal power but have lower per capita electricity consumption and economic growth. These states do not receive tax revenue from power generation while consuming states benefit from cheaper electricity.
Measures for Equitable Compensation and Sustainable Energy Transition
- Introduction of a Generation Tax: States hosting central sector power plants should be allowed to levy a tax on electricity generation, ensuring revenue for local development. Alternatively, the Union government can collect and transfer a generation tax to these states.
- Compensation Through the Finance Commission: The 16th Finance Commission should introduce fiscal transfers to power-producing states based on environmental degradation and climate impact. A formula similar to previous devolution criteria for forest cover and climate concerns can be applied.
- National Clean Energy and Environment Fund Expansion: The fund should be restructured to provide direct compensation to states affected by coal-based power generation. Funds can be allocated for pollution control technologies and renewable energy projects in these states.
- Stronger Environmental Regulations and Green Energy Investments: Enforce retrofitting of old thermal plants with Flue Gas Desulfurization (FGD) and stricter emission norms. Invest in solar, wind, and hydro projects to reduce dependence on coal-based power. Encourage state-level green energy transition policies through fiscal incentives.
Conclusion
Thermal power-producing states face an unjust economic and environmental burden. Introducing a generation tax, fiscal transfers, and a structured compensation mechanism can ensure fairness. Simultaneously, accelerating renewable energy adoption is crucial for a sustainable and equitable energy future in India.
