Monthly Archives: September 2014

Growth and Climate Action Can Go Hand in Hand

A new report by the Global Commission on the Economy and Climate sets out compelling evidence that growth and climate-saving action can be achieved together. The report can be downloaded at:

It finds that there are major opportunities in three key sectors of the global economy — cities, land-use and energy. By improving energy, investing in infrastructure and stimulating innovation across these sectors, governments and businesses can deliver strong growth with lower emissions. Although this report is one of several technology-can-fix-everything reports that sidesteps the question of our economy’s inherently unsustainable consumption and aspirations, the findings have much by way of tactical value.

Here’s an extract about coal from the chapter on “Energy” (Thanks to Trusha Reddy, Earthlife Africa for the extract)

Coal is also the most carbon-intensive of fossil fuels, accounting for 73% of power sector emissions but only 41% of generated electricity.70 Reducing coal use is an essential feature of pathways to reduce CO2. For example, the IEA 450 scenario sees coal-fired power generation falling to 60% of 2011 levels by 2030, and total reductions in coal emissions of 11 Gt CO2.71 Analysis carried out for the Commission suggests that as much as half of this reduction could be achieved at zero or very low net cost, once the changing cost of alternatives, and reduced health damages and other co-benefits are taken into account.72

Given the known risks associated with coal, it is time to reverse the “burden of proof”, so coal is no longer assumed to be an economically sound choice by default. Instead, governments should require that new coal construction be preceded by a full assessment showing that other options are infeasible, and the benefits of coal outweigh the full costs.

But conditions are changing, driven by fast-rising demand and a sharp increase in coal trade. Prices are twice the levels that prevailed historically,65 with projections for continued high levels in the range of US$85–140 per tonne, even as other options, notably shale gas in the US and renewable energy sources globally, have fallen in cost. The future security advantage of coal is also less clear than before. India has imported more than 50% of new coal requirements in recent years, and may face still higher import dependence without a change of course.66
The damage from air pollution has proven substantial and hard to address once coal-based infrastructure is built out; in China, mortality from air pollution is now valued at 10% of GDP.68 In many countries, properly accounting for the cost of pollution erodes the cost advantage of coal. For example, coal-fired power has a financial advantage in much of Southeast Asia, at costs of US$60–70 per MWh. But properly accounting for air pollution can add a cost of US$40/MWh or more, enough to bridge or exceed the cost gap to alternatives.69

The next 15 years offer an opportunity to create better energy systems that also reduce future climate risk. Achieving this will require a multi-faceted approach. The starting point must be to get energy pricing right, implementing energy prices that enable cost recovery for investment and less wasteful use of energy, and removing subsidies for fossil fuel consumption, production and investment.