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Monthly Archives: March 2012

China leads global poverty reduction – thanks to coal

Milton Catelin, Chief Executive, WCA

Milton Catelin, Chief Executive, WCA

The World Bank and the UN celebrate the fact that global poverty was halved – a goal which was set by the international community as one of the Millennium Development Goals. This is a milestone achievement. But there is another story behind the headline that both the World Bank and UN glossed over – virtually all of the world’s poverty reduction between 1981 and 2008 took place in China.

World Bank estimates show that the percentage of those living below $1.25 a day in China decreased from 84% to 13% between 1981 and 2008. During this time China lifted 662 million people out of poverty. Unfortunately not all countries shared the same destiny. Outside of China there are now more people living on $1.25 a day than there were in 1981.

What the World Bank’s analysis doesn’t say is that coal played a key role in reducing poverty in China. During the period 1980-2008 Chinese annual coal consumption increased by more than 400% from 626 million tonnes to 2.7 billion tonnes.

Electrification is a vital component of China’s poverty alleviation campaign which has built up basic infrastructure and created local enterprises throughout China. As a result, from 1985 to 2003, electricity production in China rose by over 1500 TWh, of which around 80% is coal-fired.

No other poverty alleviation strategy in the modern history has been more effective than the one implemented by China and yet the current draft of the Rio +20 declaration says nothing about coal-based electrification and the necessary expansion of business and industry in the world’s poorest countries.

Significant on-grid electrification is essential for reducing poverty. The IEA says that in order to address the problem of energy poverty coal will have to provide half of the on-grid electricity connections in areas currently suffering from energy poverty globally. This electricity will help power the economic and social infrastructure that is essential to lifting people out of poverty.

The world’s leaders should finally come to grips with the challenge of poverty and support the deployment of advanced coal technologies in the developing countries that want to use coal to fuel their economic development – something that many governments will want to do looking at the Chinese example.

UK climate policy puts ends before means

Milton Catelin, Chief Executive, WCA

Milton Catelin, Chief Executive, WCA

British media revealed earlier this week that the UK Government will be trying to convince its EU partners that the 27 members need a clean energy target for 2030, rather than a renewable energy target.  Such a target would include all low-carbon technologies, including CCS and nuclear power. The UK proposal is commendable, especially at times when many bureaucrats are tempted to put means before ends, promoting only renewables instead of low-carbon technologies.  This approach should be supported by all countries interested in a common sense policy and in an effective response to climate change.

All scientific evidence says addressing climate change will require all low carbon technologies.  In fact the International Energy Agency says that 20% of the solution will come from renewables and 20% from CCS. Why should renewables be given favourable treatment?  The IEA says stabilisation of CO2 without coal power with CCS will be 70% more expensive and likely fail to meet our climate objectives. The IEA also says that almost 10% of emission savings in the power sector through to 2050 will come from deploying high efficiency coal power plants.

The UK Government should go a step further and reflect on how to include GHG emissions savings achieved through high efficiency coal plants in the clean energy target. Including advanced coal technologies in the 2030 targets would mean all EU countries can get on board with the European Commission climate action agenda. Building bridges between coal rich countries and the EU climate targets is a prerequisite for encouraging China and India to act on climate change.

If the EU finally acknowledged the potential of high efficiency plants to contribute to our low-carbon future it would get the necessary support of all its Member States for ambitious climate action over the decades to come. It could also provide a meaningful example to other countries which are key for addressing the climate change challenge.

Coal’s Role in Chinese Social and Economic Development

Dr Zhang Xiwu, Chairman, Shenhua Group discusses the role coal has to play in raising standards of living across China.

Coal and the economic chain

In the third film from WCA’s series on coal and sustainable development, Fernando Zancan, President of the Brazilian Coal Association discusses the economic chain around the coal industry and what this means for people living in developing countries.

Short-sighted approaches to climate and energy won’t fix anything


Benjamin Sporton, WCA Policy Director

Benjamin Sporton, WCA Policy Director

When you run an ideological campaign, sometimes the means risk becoming more important than the ends – and you miss the bigger picture.

Earlier this week it was revealed that Greenpeace Australia is planning to lead a massive campaign against the coal industry in that country. The plan aims to disrupt the Australian coal industry through a range of public relations, litigation and other actions aimed at making the industry unviable.

This plan has been widely condemned in Australia. The Federal Treasurer (finance minister) said “I find it pretty disturbing because the coal industry is a very important industry in Australia,” while Prime Minister Julia Gillard reaffirmed support for the industry saying “The coal industry has got a great future in this country …. we’ve made that clear all along. You’re seeing that future being built now as we see expansion in our coal exports particularly.” Their statements echoed those of many other Australian business, union and political leaders.

And it’s no wonder. According to the Australian Coal Association 77% of Australia’s electricity comes from coal and coal exports pump more than AUD$43 billion into the economy every year. Even more importantly billions of dollars of royalties help state governments fund vital community services such as schools and hospitals and fund social infrastructure projects. Without the coal industry those funds would dry up.

Trying to remove coal from the mix is a short sighted solution to addressing the world’s climate and energy challenges.  Globally coal provides more than 40% of the world’s electricity and it has been the fastest growing fuel for more than two decades. As the Chief Economist of the International Energy Agency said in a speech recently, coal must be part of the solution to climate change. Deploying clean coal technologies such as high efficiency low emission power generation and carbon capture and storage can significantly reduce the cost of climate action. What’s more, coal plays a major role in providing the steel needed for other sources of renewable energy (see our recent graphic on coal and wind power).

Campaigns like this also ignore the critical role coal will play in delivering energy to the 1.3 billion people across the globe who lack access to electricity. Last year’s World Energy Outlook highlighted that of all the on-grid electricity needed to meet the IEA’s “energy for all” case, more than half would need to come from coal. These figures demonstrate coal’s central role in supporting increasing electricity demand in the future, particularly in a world where more than a billion people live in energy poverty. If the world is to be ambitious in improving energy access, then coal will be needed to meet a very significant proportion of the energy needed.

These campaigns also come amidst studies such as this one, which recently appeared in Environmental Research Letters, which show the limited impact eliminating all coal-fired power generation would have, according to the study eliminating coal from the mix would only reduce global temperatures by 0.2 degrees over the next 100 years. Such a change would come at a massive economic and no doubt social cost, with no real change in climate outcomes.

We need to focus on delivering energy to those who currently lack access to it and supporting developing countries’ economies to grow (which a big chunk of Australia’s coal exports do). Coal can and will play a major role in these efforts, and it can do so with new technologies that address climate and environmental concerns.

If Greenpeace’s campaign were successful, it would come at a massive economic and social cost, with no noticeable environmental benefit. What is the use in that?

Meeting the World’s Growing Energy Needs

In the latest in a series of WCA films focusing on energy for sustainable development, Norman Mbazima, CEO of Thermal Coal, Anglo American, discusses why different types of energy are required if we are to meet the world’s growing energy needs.

He also highlights how mining can have a positive effect on local communities in the developing world.

World Coal Association: invest in CCS before it is too late

Global voice of coal industry urges EU and Member State Governments to drive down costs of low-carbon technologies and incentivise improvement of power generation efficiency

BRUSSELS, 6 March 2012 – The World Coal Association (WCA) has called for EU decision makers to drive down the costs of low-carbon technologies and incentivise the improvement of power generation efficiency, especially at coal-fired power plants.

At last week’s industry roundtable at the European Parliament, jointly held by WCA and MEP Boguslaw Sonik, it was also recommended that the EU should not change its mitigation ambition for 2020.

Debating the outcomes of the Durban climate change negotiations, MEP Boguslaw Sonik argued that the climate change negotiations in Durban were an important step towards a global climate deal and stressed that the EU should not be the only region to take on the burden of reducing GHG emissions. MEP Sonik also said that coal was an important energy resource for Europe because of its role in strengthening the region’s security of energy supply and criticised the EU’s climate policy for aiming to phase out coal instead of focusing on reducing GHG emissions from coal.

The discussion brought together the following panellists:

Boguslaw Sonik, Member of the European Parliament
Tomasz Chruszczow, Special Envoy for Climate Change, Poland
Milton Catelin, Chief Executive, World Coal Association
Nick Campbell, Chairman, BusinessEurope Working Group on Climate Change
Jean-Yves Caneill, Head of Environment, EDF

There was general agreement that Durban produced a number of important decisions, in particular the decision to include CCS in CDM.

Milton Catelin, Chief Executive, WCA said, “CCS is a crucial element of the low-carbon portfolio. If governments are truly serious about climate change, they should invest just as much in CCS as they do in renewable technologies.

“The world needs CCS because coal use will continue to grow in the foreseeable future”, he added.

Panellists agreed that there is no certainty a climate deal will be reached in 2015, as foreseen under the Durban Platform agreement. It was also acknowledged that an important debate will need to take place on how to differentiate between the emerging economies such as China and the least developed countries in the debate on how to finance access to low-carbon technologies.

In the more immediate future, panellists expect the Parties to start the difficult debate on various ways for increasing mitigation ambition. The debate on both issues is expected to commence in May during the Climate Change Conference in Bonn

Other attendees at the industry roundtable included Members of the European Parliament and their staff, the European Commission, NGO representatives from the European Climate Foundation and WWF, as well as other industry association representatives including Central Europe Energy Partners, the International Emissions Trading Association and the Italian Association of Electricity Enterprises. The event was also attended by representatives of companies working in the energy business, including Total and RWE.

For further information, please contact:
Vanessa Sobun-Springham – Manager, Communications
vsobun-springham@worldcoal.org
t: +44 (0) 20 7851 0052