The floatation of Coal India was a smasher. Bigger than anyone could have dreamed. The Government of India launched the initial public offering (IPO) of Coal India Ltd, the state-owned coal mining company that is the largest in the world, on the 18th of October. With the 10% stake they put on offer, they hoped to generate 150 billion Rupees’ worth of demand – enough to go some way towards keeping the fiscal deficit within its target for the year.

The IPO closed on the 21st October 15 times oversubscribed, having generated over seven times that. It had generated more cash than the Government could have possibly hoped for.

A child picks coal from mines in Jharia. Before coal was unearthed in this area, Jharia was a belt of dense forests inhabited by tribes.A child picks coal from mines in Jharia. Before coal was unearthed in this area, Jharia was a belt of dense forests inhabited by tribes.

But behind the cheers of the Coal Ministry is another, quieter sound. It’s roar of hacksaws and the crashing of trees, the thrum of diverse forest life settling into silence. It’s the sound of the cost of this success and of the quiet death of a valiant attempt to balance economic development with ecological sustenance.

Rewind to March 2010. Coal India Ltd, mindful of how attractive it might look to potential investors, was searching to reduce the amount of time it took to get environmental clearance for its mining applications. Together with the coal ministry, the company approached the Ministry of Environment and Forests and proffered nine forest zones in India under which they had coal reserves. Assess them, the coal bodies offered, and tell us which areas we can mine in and which we can’t. The idea was that the assessment could basically give the go-ahead for mining in certain areas, so slicing out the time and money spent applying for unlikely mining approvals.

The environment ministry accepted. Of the nine forest zones, they identified 37% as having particularly dense forest cover, and as supporting particularly rich biodiversity. From now on, said Environment Minister Jairam Ramesh, applications to mine the 222 coal blocks that lay underneath these richly biodiverse areas would not be entertained by his ministry. The areas were ‘no-go’ zones. In the remaining 63% of these forest areas (which covered 383 coal blocks), applications for environmental clearance would be entertained as in the usual manner. 

The coal industry went mad. The move put 619 million tonnes of coal a year out of reach, and the IPO of Coal India Ltd was already in the pipeline for later in the year. They had been aiming for looser protocols on mining applications, and instead they had ended up with the same processes, but in a smaller area. “It blew up in their faces, basically,” says Preethi Herman, a campaigner with Greenpeace India following the developments.

The coal ministry began to contact ministries of power and infrastructure, painting the move as one that would inhibit economic growth and development, and rallying them to push for the restrictions to be removed.

It’s worth pointing out here that Ramesh is by no means a Luddite. Three hundred mining applications have been approved in the last 30 years versus only 24 rejected (though Ramesh has only been environment minister since May 2009). In trying to strike a balance between development and environment – that is, striving that development be sustainable - Ramesh has explicitly stated that mining must continue.

“They [mine owners] should try to maximise the potential of mining areas instead of trying to access ‘no go’ zones,” he said in March 2010.

Yet the protected zones began to crumble away, as pressure on the Prime Minister to do something about Ramesh’s stand came both directly from the coal ministry, and indirectly from the immense coal mining lobby that spans the country - identified by many as being hand-in-hand with the state forest departments for the purpose of mining approvals.

In May, the Prime Minister’s Office ordered a review of the ‘no-go’ zones, first stating a concern that the areas could turn into breeding grounds for Naxalism, before talking mainly about how many millions of rupees worth of coal could be extracted from the no-go areas.

India gets over half its electricity from burning coal, and the link between a developing economy and an unlimited access to the country’s coal seams must have been stridently made in the corridors of power.

The awkward environmental restrictions fell just in time. Less than three weeks before the IPO was due to launch, the Law Ministry wrote that the no go zones were, ironically, in conflict with the forest conservation acts and appeared to have “no sound legal basis”.

On the same day as the shares floated and foreign investors, reassured of the economic stability of coal in India, rushed in to buy, a conference on biodiversity began in Nagoya, Japan. The tenth Conference of Parties (COP10) on 18th and 19th October was the stage for the presentation of a report on The Economics of Ecosystem and Biodiversity (TEEB), a three-year study into the economic value of ecological health. It called for the loss of biodiversity to be addressed as an issue of equal importance to climate change and to be tackled in parallel with it. It was welcomed most heartily by Jairam Ramesh.

“India is planning a TEEB for India study to assess its natural capital. We are committed to developing a framework for green national accounts that we can implement by 2015,” stated Ramesh in a note prepared in advance of the Nagoya summit.

Placing a market value on natural assets is a fascinating idea and one that shall certainly be subjected to vociferous debate. Those arguing for it might brandish this story of the no go zones as proof that it is economic values that shall most often triumph, in the political battles of a developing country. And it seems we are short-sighted: importance is always be placed on the economic gains that are most immediate rather than long-term considerations.

“TEEB aims to provide strong incentives for countries to ensure decisions are not solely based on short-term gains, but build foundations for sustainable and inclusive development,” Ramesh continued, in the explanation of his decision to conduct a TEEB study in India.

So what of the biodiversity that the environment ministry is trying to protect? Broadly, India has 7-8% of the world’s recorded plant and animal species in only 2.4% of the world’s area. This makes it one of 17 “mega-diverse” countries in the world. Ten different biogeographic zones can be found across the country, from deserts to wetlands, Malabar coast to Himalayan peaks. As far as forests go, this includes 16 major and 251 subtypes of forest, though it’s not yet clear which types the proposed no-go areas correlate or correlated with.

Placing a value on biodiversity could also go some way towards describing the value of mature forests as opposed to new cover. “We will assure that we will plant 2.5 times more trees where we cut trees,” said coal minister Shriprakash Jaiswal in October, as the whittling away of the protected zones continued. A draft mission for government action on climate change, released during this ministerial battle, allocated 440 billion rupees to double the amount of land taken up for afforestation. Of course, replanted trees do not compare to ancient forest in terms of the amount of biodiversity they support.

Millions of livelihoods in India are maintained by its biodiversity and it also carries great cultural importance. Not least in the tiger, the endangered national animal of India, and in the elephant, the national heritage animal. In addition to thick forest cover, the no go zones also incorporated some known ‘corridors’ of animal movement between forest areas.

For now the environment ministry is again being painted as anti-development. In late October the coal ministry wrote in a Cabinet note that “any new criteria at this stage that causes us to reassess our resource base will not only push the power generation growth plans of the country but will also have its effects in the future when the climate change issue becomes more stringent.”

Whether the coal ministry will be successful in its battle to leave no coal seam unturned, using climate change as an argument for cutting down forests certainly breaks new ground.

The above is an article published online by The Independent on 10th November 2010.