Externalities of Economic development – The Jharia Coal Mine

Posted: November 10, 2013 in Uncategorized

Jharia is one of the most important coal mines in India. It is one of the largest in Asia. It is present in the state of Jharkhand which is in the eastern part of India. Once a great resource with high quality coking coal, uncontrollable fires have turned it into an inferno. The people of Bokhapadi village in Jharia face severe economic and environmental consequences because of the mining activities. Jharia was once an area filled with dense forests and local tribes used the land for farming and their livelihood. But to fuel the economic growth, the mining industry is extracting more coal every day at the cost of the people and the environment. The coal mining industries have forced the people to let go of their farms and now the people are forced to become coal scavengers.

Jharia Coal Reserve

Jharia Coal Reserve

Coal Fire

Coal Fire

There is a continuous fire burning in the mine due to the temperature and oxidation. Most of the fires in Jharia ignite when coal, exposed to air during mining operations, spontaneously combusts. This fire gives out smoke which contains poisonous gases such as carbon monoxide, carbon dioxide, nitrogen oxide and sulphur dioxide. Thousands of poor, mostly unskilled, migrants from neighbouring states have settled in Jharia over the years. Most of them collect coal illegally and earn money for just two meals a day. This has led to ill health of the people living around the mine, causing lung diseases. It also has resulted in child labour, and the most common diseases in this area are tuberculosis, asthma, pneumoconiosis and other chronic lung disorders. All the other environmental impacts of burning coal, such as, green house gas emissions, global warming and climate change are also important issues.

One of the miners in the video mentions – “We are working against nature”. So these are few of the consequences of going against the natural environment.



Coal Scavenging

Coal Scavenging

Can we put a money value on the problems these people are facing? The pricing of the market does not include these externalities. The effects on the people around coal mines should be taken into consideration when the price of a good is being set. It is very difficult to take into consideration all these externalities, but as mentioned by Pearce and Barbier in the article- “The Economic System and Natural Environments”, environmental economists have developed complicated techniques to measure the total economic value of an environmental asset.

Child Labour

Child Labour

Thus I personally believe that the costs of these externalities should be added to the price of fossil fuels and other polluting goods in the energy market. There should be a global implementation of carbon tax. This would create awareness among the people and the markets, and great care would be taken to prevent such environmental and social impacts. It is difficult but a very strong and viable option to work towards environmental sustainability.


Caton, P. (2010, October 13). Jharia coal belt documentation . Retrieved from Jharia Coal Belt Documentation

Munnik, V., & Hochmann, G. (2010). The social and environmental consequences of coal mining in south africa a case study . Retrieved from http://www.bothends.org/uploaded_files/uploadlibraryitem/1case_study_South_Africa_updated.pdf

Ugly Faces of Economic Development in India [Web Video]. Retrieved from http://www.youtube.com/watch?v=dbd1gF3Z5Fo

Peace, G. (2011, October 4). The true cost of coal – jharia coal mine, india. Retrieved from http://quitcoal.org/blog/true-cost-coal-jharia-coal-mine-india

Prakesh, A. (Photographer). The rising global interest in coal fires [Web Photo]. Retrieved from http://www.earthmagazine.org/article/rising-global-interest-coal-fires

  1. Valerie says:

    Wow. This is the antithesis of what Roseland describes as the components of sustainable communities. It is frustrating that environmental and other (e.g. human health) externalities that do not have an easily quantifiable monetary value often remain unaccounted for. This also relates to the environmental justice readings as well and demonstrates the reality of many impoverished communities, where workers and residents suffer from terrible conditions because they have little to no alternatives to provide food and shelter for their families.

  2. Lindsay says:

    Your call to action really hits at the heart of what sustainable development should be, taking into account all externalities and not just the environmental or economic impact of our choices. It is heartbreaking to see people’s lives decimated by other’s resource use and I believe what you suggested in class and in your blog is the appropriate measure to take: include the social costs of extracting coal in this fashion in the price of fossil fuels and encourage reduced consumption of fossil fuels via a carbon tax. Also, sharing videos like this via social media and blogs to make this issue more visible can hopefully get a dialogue going about what we do here in America affecting communities a whole planet away.

  3. sustmeek says:

    Wow, I had not heard about these open-fire coal mines. Thats pretty bad. I agree that all of the externalities you mentioned need to be incorporated into the price of carbon. I watched both parts of the video, and its hard to see how the problem can be fixed even in our lifetime. These mines will burn for some time, and that means even more people to be relocated.
    Thank you for perspective. Easy to get lost in an argument for more bike lanes, but important to remember what we are really fighting for.

  4. janamcgee says:

    Saurahb- Thank you for this post. The human costs of mining are so often left out of the CO2 discussion. We talk about global warming in serious but more general terms. I agree that this should be added to the carbon tax. It is one thing we can do to improve conditions. I also agreed with the class discussion about education for women, and access to better contraception to help control fertility. I also wondered about microloans as help in getting away and starting a sustainable business.

  5. I had never heard of this before, crazy! I agree with Valerie that it is unfortunate that these externalities are difficult to quantify in monitary terms. Perhaps an investigation of health-related costs as a result of the pollution damage would be beneficial? Regardless, the internalization of these externalities into the economic system, whether that is through coal taxes, subsidies to homeowners, etc. is absolutely necessary.

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