COVID-19 added to coal’s woes, as world lockdowns minimize demand for electrical energy. Outpaced by the expansion of low-cost renewable power, more and more shunned by banks and insurers and dealing with tighter authorities laws, the dirtiest of fossil fuels appears to be like to be on its final legs.
However whereas many specialists consider coal is now in an unstoppable demise spiral, the tempo of change is sluggish when in comparison with the size of the local weather disaster we face. Regardless of international locations’ pledges to slash carbon emissions to deal with local weather change, coal continues to be enjoying an essential function for a handful of nations, notably China, and new coal tasks are lined up across the globe. It’s nonetheless unclear when the world’s final coal plant will shut its doorways.
The necessity for a swift exit from coal is apparent. Coal might have powered industrial revolutions and propelled international locations onto the world stage, however it’s a planetary catastrophe. It releases extra carbon emissions per unit of power than every other electrical energy supply and is the largest single supply of temperature will increase, chargeable for nearly one-third of worldwide warming.
Coal can be a well being disaster, releasing air air pollution, which will increase the danger of most cancers, coronary heart illness, bronchial asthma and different respiratory illnesses. It has scarred the lungs of coal miners and made them much more weak to COVID-19.
The world can not proceed to extract and burn coal and have any hope of assembly the local weather commitments wanted to stave off catastrophic local weather change. In line with the Intergovernmental Panel on Local weather Change, coal have to be gone by 2050.
“We have to be making radical changes and reductions through 2050 to meet the Paris Agreement [on climate change],” mentioned Christine Shearer, program director for coal on the non-profit World Vitality Monitor. “So it’s not enough to say, ‘Oh yeah, yeah, we’ll do it by 2050,’ and just make some modest movements. We need very, very rapid changes.”
The Good Information
Globally, coal demand has been falling for the previous few years. It dropped by 1.8% in 2019 and the Worldwide Vitality Company predicts 2020 can have seen a 5% drop in coal demand, the biggest fall since World Struggle II.
Coal-fired crops the world over are shutting their doorways. In India, new coal building has slowed dramatically: Over the primary half of 2020, the nation retired extra coal capability than it opened. In Europe, 19 EU international locations and the U.Ok. have pledged to section out coal by 2030. Spain might effectively turn out to be the primary nation on this planet to utterly shut down its coal trade — it shut seven of its 15 remaining coal crops in the summertime of 2020, with the remaining anticipated to shut over the following few years.
Coal’s demise has been significantly stark within the U.S. Regardless of Donald Trump promising to revive the flagging sector, the final 4 years noticed extra coal crops shut than throughout Barack Obama’s second presidential time period. In 2019, the identical 12 months that consumption of power from renewables overtook coal for the primary time, America’s coal use fell by 18%, to its lowest degree since 1975. In Texas, the guts of America’s fossil gasoline trade, wind energy overtook coal within the state’s power combine for the primary time in 2020.
The important thing issue behind coal’s decline has been market forces. “Coal simply can’t compete with cheaper, less polluting alternatives of the modern energy economy,” mentioned Neha Mathew-Shah, worldwide local weather and coverage marketing campaign consultant on the Sierra Membership and one of many authors of “Boom and Bust 2020,” a report on the coal trade.
Tumbling pure gasoline costs have hit coal exhausting, however so too have the technological leaps in renewable power ― rising effectivity and bringing down costs. Photo voltaic prices have fallen greater than 80% since 2010 and photo voltaic is now constantly cheaper than most new coal and gas-fired crops, in keeping with a 2020 report from the Worldwide Vitality Company, which dubbed photo voltaic the brand new “king of electricity.”
Increased consciousness of the local weather impacts of coal has had an impact, too. Japan’s atmosphere minister advised the Monetary Instances that the energy of criticism of the nation ― one of many world’s most essential monetary backers for coal energy ― on the 2019 UN local weather convention in Madrid helped spur its new coverage to dramatically reduce coal funding in overseas international locations.
In Kenya, after a drawn-out battle, campaigners managed in 2019 to halt the development of what would have been the nation’s first ever coal-powered plant. A Kenyan court docket cited environmental issues and a failure to adequately seek the advice of the native inhabitants.
Coal can be changing into more and more unpalatable to monetary establishments, governments and pension funds ― particularly as environmental teams pile on the strain. Final 12 months, Norway’s $1 trillion sovereign wealth fund introduced it might be ditching shares in fossil fuels, together with round $6 billion of investments in coal corporations.
Greater than 230 monetary establishments have carried out restrictions on financing coal tasks and firms, in keeping with the non-profit Reclaim Finance. This features a slew of insurers led by European corporations but in addition some U.S. corporations reminiscent of Chubb, which introduced in 2019 it might cease insuring coal-fired crops by 2022, in addition to any corporations that make greater than 30% of their revenues from coal mining. “Chubb’s announcement is a clear sign that coal is becoming uninsurable worldwide,” mentioned Mary Anne Hitt, director of the Sierra Membership’s Past Coal marketing campaign, in an announcement.
Insurance coverage is a key lever for change, as not having the ability to get coated would make it just about inconceivable to finance and construct new fossil gasoline infrastructure. One of the controversial new coal tasks, the Adani-owned Carmichael coal mine below building in Australia, has seen a number of insurers pull out. It’s an additional blow to a venture that Adani is already self-financing after struggling to safe monetary backing from banks.
In September, a bunch of corporations together with Ben & Jerry’s and Patagonia wrote to American insurers asking them to cease insuring fossil gasoline corporations altogether. “The insurance industry is underwriting and investing in fossil fuels which we now know are the key drivers of climate change,” their letter mentioned.
However Maintain On …
Whereas coal’s destiny appears to be like all however sealed, we’re not there but.
Again in Might 2019, the United Nations chief António Guterres mentioned: “We must stop building new coal plants by 2020.” And but, there are nonetheless coal crops being accredited and constructed around the globe. These new coal tasks, if realized, would lock in carbon-heavy coal manufacturing for many years.
China is the large participant, residence to half of the world’s working coal energy capability and just below half of the coal tasks below building. Regardless of a newly introduced dedication to succeed in internet zero emissions by 2060, the nation continues to be hoping coal will assist fireplace up post-pandemic development. There are 127 coal crops at pre-construction stage, in keeping with July 2020 figures from World Vitality Monitor.
“In China, you’re really seeing that provinces are using coal power to meet economic targets and to continue to grow,” mentioned Shearer. The nation’s dedication to carbon neutrality, which implies coal must be phased out by round 2050, might also be behind this push, she added. “I think they’re really trying to get in any project that they can right now because they see that the door is closing.”
China can be a key coal financer in different international locations, reminiscent of Vietnam, South Africa and Indonesia. “Where you see new coal projects, it’s usually Chinese companies, Chinese finance behind it,” mentioned Shearer. Now that Japanese and South Korean banks, beforehand prime coal traders, have began to drag again — thanks partly to elevated authorities restrictions on coal lending in each international locations — it stays to be seen whether or not China will comply with their lead or whether or not its financing function may very well develop.
Indonesia, the place coal is the largest export, can be throwing its help behind the trade within the hope it could possibly reboot the economic system. The nation has 52 coal crops presently on the pre-construction stage, in keeping with World Vitality Monitor.
Even the U.Ok., a rustic held up for example of the way to section out coal, confronted a barrage of criticism when it gave the inexperienced mild for a brand new deep coal mine in January. If it goes forward, it is going to be the primary to be inbuilt three a long time. And regardless of the swiftness with which America’s coal trade has declined, a report revealed on Monday by the Sierra Membership discovered that the nation’s most fossil-fuel-dependent utilities are nonetheless planning to maintain coal crops working for at the least one other decade.
Whereas many international locations are failing to offer management on coal, monetary establishments have the ability to exert strain on the trade. And but, lots of their anti-fossil gasoline insurance policies are riddled with loopholes.
“It’s not just about having a policy,” mentioned Yann Louvel, monetary establishments’ coverage analyst on the NGO Reclaim Finance, “but to really have an impact you need to have a good policy, a robust policy.”
Of the 237 monetary establishments globally with coal insurance policies, Reclaim Finance discovered that solely 18 had sturdy insurance policies that considerably restricted funding to coal.
Blackrock, the world’s largest asset supervisor, which manages greater than $7 trillion, pledged to ditch some coal investments final 12 months. However, in keeping with analysis revealed in January by Reclaim Finance and German NGO Urgewald, it nonetheless holds $85 billion in coal corporations.
That is because of loopholes in its coverage, mentioned Louvel, such because the caveat that shares can nonetheless be held in corporations that make lower than 1 / 4 of their revenues from coal.
“They omit a lot of companies that are diversified enough to be below the threshold, even if in absolute terms, they mine a lot of coal,” mentioned Youvel.
A portion of Blackrock’s $85 billion in coal funding went to coal builders, he added, “which are really the worst of the worst of the worst companies that should be the first ones to be excluded because very clearly we are in 2021, companies that are still planning to expand coal have not understood anything about climate.”
A spokesman for Blackrock mentioned, “Our conviction is that climate risk is investment risk.”
He added: “We ask all companies to disclose how their business model will be compatible with the transition to a low-carbon economy. Where we do not see sufficient progress, we take voting action.”
We must always not even be speaking anymore about coal. Coal ought to already be one thing of the previous.
Yan Louvel, Reclaim Finance
There are a lot of causes that the top of coal is so drawn out, mentioned Katrin Ganswindt, a local weather and power campaigner on the NGO Urgewald: “The investments have already been made, the companies are fighting for survival and the governments are afraid to implement too drastic measures.”
And there are loads within the coal trade that consider it could possibly nonetheless be revived, she added. In November, Ganswindt attended the digital Coaltrans Asia convention ― billed because the world’s largest coal convention ― and mentioned the coal corporations attending admitted that they’re in unhealthy form. However, she added, they’ve “neglected reality” and are nonetheless telling themselves: “it’s going to get better, even if it’s not going to go back to what it was. It’s not the end. It’s a non-permanent decline.”
A Time For Reckoning
The tempo of the worldwide coal exit might ramp up in 2021. President Joe Biden utilized to rejoin the Paris settlement his first day in workplace, which means the U.S. will be part of practically each different nation on this planet in committing to maintain warming beneath ranges which may set off catastrophic local weather change.
The landmark U.N. local weather convention on the finish of this 12 months, at which international locations are anticipated to make new and bold pledges to slash emissions, can be more likely to focus concentrate on what place the dirtiest of fossil fuels nonetheless has within the world power combine.
Financial components are unlikely to swing again to coal’s favor. Renewables maintain getting cheaper, and the impacts of the pandemic are more likely to ripple outwards for years, making a coal comeback appear more and more unfeasible.
The momentum is there, however the tempo of coal’s demise doesn’t match the size of the local weather disaster it has helped create. “To put it bluntly, very clearly we should not even be talking anymore about coal, coal should already be something of the past,” mentioned Youvel.
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