The War on Coal?

Is banning coal an objective in and of itself or just one of many measures to address climate change and local and regional pollution problems? Is a war on coal a proxy for a war on climate change and, if so, how effective is that war?

At the just-completed climate negotiations in Warsaw, coal became a major focal point, not least because the Polish Prime Minister has declared “The future of Polish energy is in brown and black coal” and Poland added a special two-day conference on coal as a side event to the climate talks.  Also in Warsaw, Ed Davey, the UK Secretary of State for Energy and Climate Change announced that the UK would stop funding coal projects in developing countries via lending through multilateral development banks.  This follows on earlier commitments from President Obama and several Scandinavian countries to no longer support international lending for coal projects.

Most of the action is on the domestic rather than the international level and efforts to ‘ban coal’ have emerged around the world.  In China, direct combustion of coal will be banned in Beijing, Shanghai, and Guangzhou by 2017. In September, the US Environmental Protection Agency proposed regulations on new power plants that would not impact natural-gas fired power plants, but which would require a substantial reduction in emissions from coal-fired generation and which opponents have labeled a war on coal.  In Canada, the last coal plant in Ontario will be shut down next month and the provincial government has pledged to ban all future coal-fired generation.  The UK has an emissions performance standard that effectively prevents unabated coal-fired generation in new power plants, but which allows older coal-fired power stations to continue operating.  As a result, the House of Lords has recently moved to force existing coal-fired stations to shut down earlier than required.

What impact do these measures and policy announcements over the future of coal in specific jurisdictions have on the fight against climate change more widely? Unfortunately, paying attention to these individual actions and announcements can be misleading about the direction of travel whether globally or even within Europe.  Last year, China produced 3.7 billion tons of coal, three times what it produced in 2000  (it is worth stopping for a  second and trying to imagine that number). China now accounts for almost half of world coal production.  Even in Europe, not just ‘problem’ countries like Poland, but member states that claim to favour aggressive action on climate change such as Germany and the Netherlands have built or are planning to build new coal-fired power stations (10 in Germany and 3 in the Netherlands).  In Germany, 2.7 GW of new lignite (brown coal) capacity came on line in 2012 and an additional 8 GW of coal is expected by 2015 even as Germany spends billions on solar and wind generation.

Do the recent moves against coal reflect something substantive (or at least a change in momentum) or are these efforts primarily symbolic?  Should governments just ignore coal (or any other specific fuel) and simply apply an ever-increasing carbon price across the economy that does not distinguish between specific fuels or technologies? What are the advantages of focusing on specific fuels or technologies? What policy instruments are most likely to be effective?

 

 

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