The black box beneath the coal debate

Bangladesh has all of a sudden rediscovered the importance of coal, which means Bangladesh has also rediscovered one of its favourite political pastimes of having an argument in which everyone already knows the ‘politically correct answer’ as well as the ‘economically correct answer.”

Prime Minister Tarique Rahman’s government has given the argument a useful shove. Last Thursday, PM Tarique directed the power and energy ministry to increase generation from coal-fired plants so that scarce domestic gas can be diverted to industry. 

He also wants a detailed energy plan through 2029, partly to give investors some idea of whether electricity and gas will actually be available when their factories open. This sounds suspiciously like ‘economics,’ and has therefore caused trouble.

Coal in Bangladesh is more than just a combustible sedimentary rock. It is a political identity. Mention Phulbari and a particular section of the Bangladeshi Left instinctively head for the barricades. Mention Barapukuria and environmentalists can produce a formidable catalogue of subsidence, contaminated water, disappearing farmland and unhappy villagers.

They are not inventing these things.

At Barapukuria, Bangladesh’s only operating coal mine, subsidence began shortly after mining started. Hundreds of hectares have been affected. Residents have described houses cracking from underground blasting, shallow wells becoming unusable and polluted water entering rivers and farmland. 

One local campaigner estimated that at least 10,000 people in 17 villages had been affected by the mine and adjoining power plant. Mohammad Tamim, a renowned energy expert, has pointed to the geology itself and said underground mining through unconsolidated rock makes subsidence “extraordinarily difficult to avoid.”

This is quite a strong case against pretending coal mining is harmless. It is not, however, necessarily a case against mining coal. That distinction ought to be elementary. In Bangladesh it is practically revolutionary.

The country possesses five identified coalfields: Barapukuria, Phulbari, Jamalganj, Dighipara and Khalashpir. Estimates differ according to what is counted as technically recoverable, but a government seminar last year put mineable reserves at about 834 million tonnes. Bangladesh meanwhile operates more than 8,000MW of coal-fired generation, overwhelmingly dependent on imported fuel.

Another energy-division estimate is more tantalising. It calculates that extracting only 20% of known reserves could produce 1.564 billion tonnes of coal, with an energy equivalent of roughly 40 trillion cubic feet of gas. Bangladesh is simultaneously spending enormous sums importing the stuff it lacks while declining seriously to investigate the stuff it possesses. 

LNG imports cost more than 50,000 crore taka in the last fiscal year, according to an internal energy division paper cited by Bonik Barta newspaper, with the cumulative bill since 2018 exceeding 2.5 lakh crore taka. Coal imports for power generation cost at least another 15,000 crore taka annually.

The sense of logic 

There is something ‘magnificently Bangladeshi’ about this ‘whole arrangement’. We have coal. We burn coal. We have built power stations specifically to burn coal. But because extracting our coal is ‘politically objectionable,’ we purchase somebody else’s coal and burn that instead.

The atmosphere, regrettably, has failed to appreciate the distinction. The same carbon dioxide emerges from the chimney whether the coal began its journey in Dinajpur on this side of the border or the other side. Or for that matter from Indonesia or Australia. Imported coal acquires no environmental halo while crossing the border or the Bay of Bengal. What it acquires is a freight bill.

The 2006 Phulbari protests turned this contradiction into political scripture. Police opened fire on demonstrators and killed protesters. The killings were indefensible. Opposition to the proposed open-pit mine subsequently became one of the defining causes of Bangladesh’s Left, combining legitimate concerns about displacement, farmland, groundwater and an objectionable foreign-company agreement with a much larger proposition…that leaving the coal underground was itself the virtuous policy.

Nearly 20 years later, that proposition deserves examination rather than reverence.

One argument in Asia Times put the case in deliberately provocative terms: Bangladesh did not actually reject coal after Phulbari; it rejected Bangladeshi coal. It subsequently built large coal-fired plants at Payra, Rampal and Matarbari using imported coal and bought electricity generated from coal across the Indian border. 

The country therefore retained the emissions while exporting much of the extraction and paying foreign suppliers for the privilege. There is a useful lesson here about the difference between activism and government. Activism is allowed absolutes. Governments generally are not.

A campaigner can demand no coal, no displacement, no ecological damage and no compromise. A government must keep factories running on any given Tuesday.

And Bangladesh is hardly operating from the luxurious end of the development spectrum. Two decades ago, around 90% of the fuel used for electricity generation came from domestic sources. By 2023 the proportion was roughly half. Energy experts warned then that it could fall towards 10% by 2030 without a change of course. 

Bangladesh expanded generation capacity while neglecting domestic gas exploration and increasingly exposing itself to international LNG prices.

Then Russia invaded Ukraine and the international gas market helpfully demonstrated what energy sovereignty means to countries that do not possess it. This is where Bangladesh’s environmental conversation becomes rather selective.

Green concern or what?

Consider garments.

The ready-made garment industry is perhaps the greatest economic transformation Bangladesh has accomplished since independence. In FY2024-25, RMG exports earned about $39.35 billion out of total merchandise exports of $48.28 billion — roughly 81.5%. 

The industry directly employs millions and has been central to the movement of women into paid industrial work, urbanisation, foreign-exchange earnings and the creation of an economy substantially more sophisticated than the famine-haunted country inherited in the 1970s.

It has also been an environmental horror show.

Textile dyeing and processing consume vast quantities of water and produce chemical effluent. Research on textile discharges in Bangladesh has found numerous water-quality parameters exceeding permissible limits, including contaminants that make untreated effluent unsuitable for direct release into surface water. Rivers around industrial belts have for years absorbed what is, in effect, part of the hidden cost of cheap clothing.

Nobody sensible concludes from this that Bangladesh should have refused to develop a garment industry. Had environmental perfection been imposed as a precondition for industrialisation in 1985, Bangladesh would have remained pure and poor.

The useful question was never whether garments damage the environment. They plainly do. The useful questions are how much damage is tolerable, which damage can be prevented, who pays for mitigation, what regulations should apply, how factories are monitored and whether the economic and social gains justify the residual cost.

Coal deserves the same intellectual seriousness.

That does not mean Tarique Rahman should order excavators into Phulbari next Sunday. Nor should an energy bureaucrat prepare a powerpoint presentation demonstrating that coal is excellent, the cabinet approves it on Wednesday and affected villagers discover on Thursday that their ancestral homes have become an energy-security consideration.

That was approximately how ‘too much development’ occurred during Sheikh Hasina’s rule…decide first, manufacture expertise afterwards. The more important inheritance from the Hasina era is not a particular energy policy but the destruction of trust in the process by which large projects were approved.

When institutions are weak, environmental assessment easily becomes a futile practice. Consultants know what answer is expected. Bureaucrats know which minister wants the project. Businessmen know which politician matters. Public hearings are held after the important decisions have effectively been made. The government produces a report. The report produces approval. Everybody congratulates everybody on following due process.

The villagers then meet the bulldozer or any other giant machine.

This is why the most sensible contribution to the current coal debate may also sound the least exciting. Energy expert Dr Tamim has proposed for an impartial assessment by a third party with no vested interest. If an honest examination concludes that the environmental and social risks can be managed, proceed; if it finds them excessive, abandon the proposal.

Engineering difficulties, he argues, should be investigated rather than treated either as imaginary or insurmountable.

Precisely.

The argument we need

The argument Bangladesh needs is therefore not “coal versus no coal”. It is about building a state capable of making a credible decision about coal.

Start with the environmental questions. What happens to groundwater? What happens to agricultural land? What happens to air quality, rivers, biodiversity and carbon emissions? What are the differences between underground and open-pit extraction? How much land will subside? Can it be restored? At what cost?

Then the human questions. How many people would actually be displaced? Not the conveniently small number preferred by the developer or the conveniently enormous number preferred by campaigners: the number established independently. Who owns the land? Are Indigenous communities affected? What happens to farmers, sharecroppers and agricultural labourers whose livelihoods depend upon land they do not own?

Compensation cannot mean giving a farmer a cheque for his house and declaring the problem solved. A household loses networks, employment, access to schools, markets, water and community. If displacement is unavoidable, rehabilitation has to price those losses too.

Then there is the economics.

What is the actual cost per tonne of domestic coal after mining, environmental mitigation, compensation, rehabilitation, water management and eventual land restoration? How does that compare with imported coal? With LNG? With renewable generation plus storage and grid investment? How vulnerable is each option to exchange-rate movements and geopolitical shocks?

The calculation should include externalities rather than hiding them. Coal that appears cheap because taxpayers later repair environmental damage is not cheap. Imported LNG that appears convenient until a war sends prices through the roof is not necessarily secure.

And then comes the neglected question…who gets the money?

Bangladesh has accumulated enough experience of resource extraction to know that “national interest” can occasionally mean the interests of several gentlemen who possess right set of mobile numbers.

During the Hasina era, infrastructure and energy policy became particularly vulnerable to politically connected rent-seeking. The danger in reopening domestic mining is therefore not merely environmental. It is institutional. A badly designed mining regime can socialise environmental costs while privatising profits — leaving villagers with damaged land, taxpayers with rehabilitation costs and politically connected contractors with surprisingly attractive houses in Gulshan.

No geological survey can solve that. Ironically, only governance can.

So, it means public hearings that are actually public. Environmental and social-impact assessments published in full. Raw data accessible to researchers. Independent universities and research institutions are given enough time to challenge assumptions. Project contracts disclosed except where narrowly justified commercial confidentiality applies. Conflict-of-interest declarations. Clear compensation formulas. Judicial review. Independent monitoring once extraction begins. Regular publication of groundwater, pollution, subsidence and health data.

And, most importantly, the people who bear the immediate costs must be treated as participants rather than scenery.

Interpreting solutions

We have to understand consent is not a local chairman appearing at a government function and announcing that everybody is delighted. Nor is consultation a microphone handed to villagers after the decision has been made.

If communities are asked to surrender land for a national project, the state owes them informed consent procedures, meaningful negotiation and compensation generous enough that development does not require one group of Bangladeshis to become poorer so that everyone else may become richer.

This may sound cumbersome. It is. Democracy is annoyingly inefficient compared with issuing an order under a dictatorship. But there is a practical reason for building these guardrails beyond liberal piety. Bangladesh cannot settle every difficult development question by street or Facebook battle.

How many movements are citizens expected to organise? Against a coal mine this year, a dam next year, a special economic zone the year after, then a port, power station, railway and gas field? Activism is an emergency brake, not a steering wheel.

A functioning state should make the emergency brake necessary only occasionally. This is where both sides of Bangladesh’s coal argument ought to become uncomfortable.

The ‘environmental Left’ should acknowledge that development involves trade-offs and that refusing domestic extraction while consuming imported fossil fuels can amount to outsourcing the unpleasant part of one’s own energy system.

The pro-coal establishment should acknowledge that Barapukuria has already demonstrated that environmental fears are not bourgeois fantasies invented in seminar rooms. Land has subsided. Water problems are real. Communities have borne costs.

Tarique Rahman therefore has an opportunity larger than deciding whether Bangladesh should mine more coal. His government can demonstrate a different way of deciding.

Bangladesh may eventually conclude that extracting part of its coal is economically indispensable and environmentally manageable. We suspect there is a strong case for doing so. A country trying to become a manufacturing hub cannot simultaneously become ever more dependent on imported energy whose price is determined by wars, shipping routes, foreign governments and the mood of global commodity markets.

But that conclusion should emerge from evidence… not from prime-ministerial preference.

The Hasina years should have taught Bangladesh something simple. When the people who make major economic decisions also control the information, the experts, the contracts and the mechanisms of accountability, they tend to capture a share of the benefits. The costs are more democratically distributed: villagers lose land, taxpayers inherit liabilities and future generations receive the environmental invoice.

So yes, dig up the coal if the evidence says Bangladesh should. Leave it underground if the evidence says the costs are intolerable. But first build a process capable of telling the difference.

Because the real scandal is not that Bangladesh has coal beneath its soil. Nor is it that coal is dirty. Industrialisation is dirty. Garments were dirty. Urbanisation is dirty. Even the supposedly clean energy transition requires mines, transmission lines, batteries, land and unpleasant compromises somewhere.

The scandal would be to repeat the old habit of allowing a small collection of politicians and bureaucrats to decide what constitutes the national interest and informing the nation afterwards. Bangladesh does not need another sacred position on coal.

It needs a government that can open the black box.

—

Faisal Mahmud is the Managing Editor of Daily Waadaa

Nayel Rahman is a political analyst