However, the consumption of natural gas grew considerably last year, rising by 4. Despite seeing a decline in demand during and , saw a 0. Renowned as the most polluting fossil fuel, efforts to reduce the usage of coal have been the most noticeable. Renewable energy sources, such as solar and wind power, provide a viable alternative to fossil fuels.
Jackson Howarth. In order to provide you with the latest digital energy web services you need to use the latest and greatest web browsers. Update your browser for a better web experience, here and all over the internet. Rather, it will be crucial that the coal phase out is seen as fair and that the process corresponds to political realities.
Policymakers need to understand in more detail who will be affected by a transition away from coal, how these societal groups can be effectively compensated and how powerful vested interests can be counterbalanced. It is understood that a coal phase-out can only succeed if it takes into account social objectives and priorities. Such dialogue typically emphasizes employment creation but often fails to include considerations related to i regional economic development, ii effects of higher energy prices for consumers and energy-intensive industries and iii how just transition dynamics may cascade beyond individual countries 9.
Hence, what is needed is a just and feasible transition providing decent work and quality jobs as well as regional economic futures while at the same time limiting adverse impacts on consumers and energy-intensive industries. It was coined by trade unions to support social assistance programs for workers who lost their jobs as a result of environmental policies We agree with calls to expand the notion of just transitions, and to also reflect the potential negative effects of energy transitions on households and consumers, industry and regional development 23 , While the environmental and health effects of coal are well understood, policymakers in newly industrializing countries often highlight the importance of coal for industrial development in specific regions Planning for alternative regional economic futures to substitute for coal requires a clearer understanding of the upstream and downstream links of coal mining and coal-fired power generation to the broader economy.
Such plans could include the provision of transport and communication infrastructure, investment in higher education to attract human capital and new business opportunities, as well as the relocation of government services. Renewing energy supply systems can increase electricity system costs: for example, depreciated coal plants may produce electricity at lower costs than new alternative power generation assets.
It is then a question of social equity to shield the poor from electricity price increases. This can be achieved by adjusting electricity tariffs, raising social spending or subsidizing energy efficiency, depending on the given institutional and political context. Foregoing coal could also affect the competitiveness of industries such as steel, aluminium, chemicals and other important components of industrial strategy.
More fine-grained projections of leakage risks in different sectors under a wide range of scenarios are required to explore which policy instruments can effectively reduce leakage. Options include coordinated implementation of emission reductions among different countries, the free allocation of permits within emissions trading schemes, border carbon adjustments, carbon contracts for difference and mechanisms of technology transfer The coal industry typically is a powerful stakeholder with vested interests in delaying coal phase-out.
Strategies to overcome the influence of vested interests might include government payments for coal power plants that are being closed. More cost-efficient alternatives that could be assessed include accelerated carbon pricing or industry-internal schemes whereby remaining power stations pay out plants that are retiring ahead of their end of economic life In addition, the interests of alternative energy producers can be leveraged to help build coalitions that create support for coal phase-out that partially offsets the opposition of those losing out 13 , A viable coal phase-out strategy will need to prevent new coal-fired power plants from being built.
This prevents locking in long-lived assets and is usually politically easier to achieve than closing existing plants early. In many cases, expanding power supply through sources other than coal that is, renewables or natural gas is cost effective, even before considering the environmental and health costs of coal use.
This will increasingly be the case as the cost of renewable energy technologies continues to fall. Nevertheless, there are factors that tend to favour continued investment in coal assets, including the security of supply in regions with abundant coal resources, the desire to protect jobs in the coal sector and in regional areas of coal production, dependence of public budgets on royalties from coal mining as well as political influence of owners of coal mines and power producers.
Coal phase-outs therefore require roadmaps based on a clear understanding of which plants are to be phased out when, which policies can be applied and how affected stakeholders can be included in the process. The age profile of coal power plants differs greatly between countries.
Industrialized countries typically built up a large part of their power infrastructure before , whereas India, China and many other industrializing countries ramped up coal use in the last 15 to 30 years 1 economic logic suggests that relatively old, and typically less efficient, plants often found in developed countries should be decommissioned first.
Other factors to consider are the public health impacts of associated air pollution and water use in densely populated areas. A realistic sequence of power plant closure will also need to take into account political and institutional constraints.
Second, China is a USD 15 trillion economy of 1. Although all IEA scenarios show Chinese coal demand plateauing or declining in the s, the possibility of an increase in coal consumption, even temporary, cannot be completely ruled out.
The large amount of relatively young coal-fired energy assets in Asia, such as power plants and steel mills, could continue to operate for decades to come, based on the typical lifetimes of such assets.
Tackling the emissions from existing assets like these remains a critical element of efforts to address climate change. An important technology that can contribute to this is carbon capture, utilisation and storage CCUS. Despite progress in some areas, CCUS has largely failed to meet expectations over the past decade.
But the technology has now been demonstrated across a range of key sectors, including coal-fired power generation, steel production and hydrogen. New investment incentives and strengthened climate goals have underpinned renewed momentum in recent years, with more than USD 4.
Continued progress for CCUS will be important to address emissions across a range of sectors and fuels — but for coal, it is likely to play a pivotal role in shaping its future.
Thank you for subscribing. You can unsubscribe at any time by clicking the link at the bottom of any IEA newsletter. Learn more. Close Search Submit. Carbon dioxide emissions remain trapped in the atmosphere for long periods of time, building up an atmospheric stock that leads temperatures to rise.
To keep average global temperature increase below two degrees celsius as has been agreed in the UN Paris Agreement , we can thus calculate the cumulative amount of carbon dioxide we can emit while maintaining a probability of remaining below this target temperature. In the latest Intergovernmental Panel on Climate Change IPCC report, the budget for having a 50 percent chance of keeping average warming below two degrees celsius was estimated to be approximately billion tonnes of carbon as shown in the chart.
This means that we have to leave around two-thirds of known reserves in the ground if we want to meet our global climate targets. For example, if we wanted to increase the probability of keeping warming below two degrees celsius to 80 percent, we would need stricter carbon limits, and would have to leave percent of fossil fuels untouched.
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