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Giving Up on Coal: Why and How

Thursday 22 October 2015, by Pierre-René Bauquis

Coal has been the fastest-growing of the fossil fuels since the 1990s, far outpacing natural gas and oil on a global basis. Yet coal is also the most harmful of the fossil fuels in terms of climate impact because it is the principal source of carbon dioxide emissions. It is time to face these stark facts and give up on coal. We now have much better alternatives to coal in the form of natural gas, nuclear power and renewable fuels. A simple and effective policy mechanism could be devised under the auspices of the UN to put us on the path to giving up on coal. While the political will to make such a change seems to be lacking and the Paris climate talks in December cannot be expected to produce something so ambitious, giving up coal is a simple and realistic policy that ought to be the focus of the next UN climate conference.

For the last 30 years fossil or carbon-based fuels have represented a rather stable proportion of worldwide primary commercial energy supplies: approximately 83%. In 2014, coal represented some 26%, oil 33% and natural gas 24%. Among these fossil fuels, it is coal which has seen its share grow most rapidly since the 1990s, at a rate of approximately 3.5% per year from 2000 to 2014, as compared to 2.5% yearly for natural gas and 1.5% for oil.

Worldwide, 70% of coal production (7.8 billion tons in 2014) is used to generate electricity. The other uses are: approximately 20% for the domestic and industrial sectors (including rail transport, cement and coal-to-liquids) and 10% for metallurgy (steel production). Coal generates 40% of worldwide electricity, natural gas 20%, nuclear 15%, hydropower 15% and other renewables 10%. Currently, on a worldwide basis, coal-fired power plants emit an average of 900 grams of CO2 per kilowatt hour, while gas-fired plants emit 450 grams — half as much. Looking ahead to 2020, the new coal-fired power plants, known as ultra-supercritical plants, that will enter into service will emit an average of 800 grams of CO2, while new combined-cycle gas plants will emit 400 grams of CO2. This means that the ratio of 2:1 of CO2 emissions per kilowatt hour will be maintained. On a worldwide basis, CO2 emissions resulting from the use of fossil fuels are as follows: coal 51.3%, oil 30.3% and natural gas 18.4%.

Why Should We Give Up Coal ?

First of all, because, as seen above, it is the principal worldwide source of CO2 emissions. In 2014, coal was the leading emitter of CO2 among fossil fuels: coal, 26,000 million tons of CO2; oil, 15,400 million tons of CO2; and natural gas, 9,300 million tons of CO2.

Second, because coal mining is also an important source of methane emissions, another greenhouse gas that causes climate warming. Deep underground, coal mines generate methane which is then vented to the atmosphere and is largely unrecorded.

Third, because the health effects of coal production are disastrous. Coal mining is responsible for many deaths: "immediate deaths" in the case of mine accidents, or "deferred deaths" due to silicosis and other pulmonary diseases affecting miners. For a given quantity of electricity produced, intermittent renewables and nuclear power cause one death, gas and hydroelectric power cause 10 deaths, and coal production causes 100 deaths — an order of magnitude more deadly.

Fourth, because the health effects of coal utilization are also disastrous. Burning coal remains a major source of sulfur emissions, nitrogen oxides (NOx) and fine particles. Although the health consequences of these emissions are difficult to establish precisely, it is likely that coal consumption causes 100 times more "invisible deaths" than natural gas for a given quantity of thermal energy produced.

For all these reasons, giving up coal should be a priority as soon as it is technically and economically possible.

How Can We Give Up Coal ?

First, a decision should ideally be taken at the Paris climate talks in December, COP 21 (21st Conference of the Parties to the UN Climate Convention), to freeze electricity generation from coal at its 2015 (or 2020) level. Construction permits for new coal-fired power plants would be subject to two conditions: (i) they should replace obsolete coal-fired power plants (those with efficiency below 37%), and (ii) they should be state-of-the-art, high-efficiency (above 45%) plants, and hence supercritical or ultra-supercritical plants with low NOx emissions and very low particulate emissions.

Second, we should immediately begin to reduce coal-generated electricity on a worldwide basis by imposing a heavy progressive tax on coal at the production stage. For example, the tax could be $50 per ton as early as 2018 and $100 as from 2025. To be realistic, this approach would require two basic elements: a system of world governance and control and a system of financial compensation. The governance and compensation systems must both be lodged within an agency of the UN, as was the case for the UN climate conference system itself, which was set up to study climate change caused by greenhouse gases. The total taxes collected by this new UN agency should be redistributed under a system to be negotiated between the member states in the UN. One could imagine, for example, that 50% of the taxes collected would be redistributed among coal producers in proportion to their 2015 or 2020 production to compensate them for the decline of their production. The other 50% could be distributed among coal users to compensate them for the cost increases resulting from substitution of other electricity sources for coal or replacement of inefficient coal-fired plants by costly state-of-the-art ones.

While this plan represents a sensible path toward initiating the progressive end of coal production and utilization, we all know that in the real world, such a drastic change can take place only if a very large opinion shift occurs to support it, especially among major coal producers such as China, the US, India, Russia, Germany, Poland, Australia and South Africa. It is essential to achieve the support of these countries in giving up coal production in order for the world to rely on less carbon-intensive fossil fuels — essentially natural gas — or even better, on non-carbon power sources such as nuclear and renewables, primarily solar and wind.

As recently as 2000, the massive shift from coal to natural gas would not have been a credible option, because long-term, low-cost reserves of natural gas were not sufficient to make it realistic. It is the shale gas revolution that now makes this a credible option. For those, especially outside the US, who find it difficult to believe this statement, do not forget that as recently as 2000 the US had planned to become a major gas importer, building some 15 LNG import terminals. It is now clear that as from next year, 2016, the US will become an LNG exporter and will remain so for decades to come, reconverting many of its LNG import terminals into export terminals. Similarly, as recently as 2000, renewables from wind and solar were far too expensive to constitute a large potential source of replacement of coal in electricity generation. This is no longer the case, as renewables would now in most cases be competitive if a cost of carbon emission at a reasonable level were introduced at, say, $50/ton of CO2.

Such an approach, involving imposing a predictable cost on carbon emissions, has recently been accepted in principle by major oil companies, even if they advocate different mechanisms for implementing the approach. In London at the Oil & Money conference of October 2015, the chief executives of Royal Dutch Shell and Total, backed by all other large European oil companies (BP, Eni, Repsol and Statoil) argued in favor of a carbon emissions market trading system, while the CEO of Exxon Mobil favored a tax-neutral carbon tax system. The principle of the need for carbon pricing, however, was shared. Putting a price on carbon in one of these ways is another alternative that would also help us give up on coal.

However, everyone must realize that carbon-pricing mechanisms are also beyond the objectives of the Paris COP 21 climate talks. The main objective of this major conference is to transform into binding undertakings the individual commitments for carbon-emission reductions proposed by the participating countries. As of mid-October, 150 countries had submitted their proposals, and only a small group, including some Opec members, had not yet submitted theirs. Despite its logic and simplicity, the policy approach proposed above for giving up on coal is clearly not on the agenda of COP 21 in Paris. Could it become the backbone of the agenda for COP 22?

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