## A Greener Future Begins with a Shift to Coal Alternatives _IMF Blog, December 8, 2020_ ## Source details **Canonical URL:** [A Greener Future Begins with a Shift to Coal Alternatives](https://www.imf.org/en/blogs/articles/2020/12/08/blog-a-greener-future-begins-with-a-shift-to-coal-alternatives) ## Other formats - [Markdown version](/en/blogs/articles/2020/12/08/blog-a-greener-future-begins-with-a-shift-to-coal-alternatives/index.md) - [Structured JSON version](/en/blogs/articles/2020/12/08/blog-a-greener-future-begins-with-a-shift-to-coal-alternatives/index.json) - [Bundle manifest](/en/blogs/articles/2020/12/08/blog-a-greener-future-begins-with-a-shift-to-coal-alternatives/bundle-manifest.json) ## Bibliographic details - Authors: Christian Bogmans, Claire Mengyi Li - Published: December 8, 2020 --- ### Context and overview - As the world economy emerges from the COVID-19 crisis, the consumption of coal is expected to recover from its sharp decline during the pandemic. - Demand for coal remains strong and helps to fuel economic development in emerging markets, while many countries are taking steps to reduce dependence on fossil fuels, especially coal. - Green investment and technological progress can check the rebound in coal use and accelerate a transition to cleaner energy sources as economic activity normalizes. - Well-designed policies can help ease the transition for coal miners and others whose livelihoods depend on coal. ### Historical role, emissions, and health impacts - Coal accounts for 44 percent of global CO2 emissions. - When burned to generate heat or electricity, coal is 2.2 times as carbon intense as natural gas. - Coal-fired thermal power plants release sulfur dioxide, nitrogen oxide, particulate matter, and mercury into the air and rivers, streams, and lakes. - Historical health impact example: British government medical reports estimated that 4,000 people died as a direct result of the Great Smog of London in 1952 that was caused by coal combustion and diesel exhaust. - Development pattern: middle-income countries are typically most dependent on coal; advanced economies increased coal use during the second industrial revolution and later transitioned to oil, nuclear, natural gas, and renewables as incomes rose. ### Current consumption patterns and key statistics - Emerging markets account for 76.8 percent of global coal consumption, with China contributing about half. - Power generation accounts for 72.8 percent of coal usage. - Industrial uses (such as coking coal for steel production) represent 21.6 percent of coal usage. ### Obstacles to coal phaseout - Pace of historical decline: coal use declined just 2.3 percent annually during the period 1971–2017; at that rate, it would take 43 years to fully phase out coal, starting from the peak consumption year. - Long-lived assets: coal power plants have a minimum design lifespan of 30 to 40 years, making existing plants persistent unless costs of renewables change dramatically or policies intervene. - Industrial dependence: industrial uses concentrated in emerging markets are hard to replace; hydrogen-based technologies offer a pathway to green steel production but incentives are currently weak because of insufficient carbon pricing. - Social and financial costs: moving away from coal typically means losses for domestic mining industries and workers. Examples cited include the United States, where the transition from coal to natural gas led to a decline in coal mine employment, a record number of bankruptcies among coal mining firms, and a sharp decline in coal mining stocks. - Stranded-asset risk: banks and investors may take losses on investments in obsolete mines and power plants ("stranded assets"). - Political economy: strong domestic mining interests in major coal-consumer countries such as China and India may complicate and delay phaseouts; mining communities have long traditions tied to coal livelihoods. ### Feasibility factors and policy levers - Effective measures include stricter environmental policies, carbon taxes, and affordable energy substitutes. - Empirical examples: - A carbon pricing scheme helped the United Kingdom reduce its dependence on coal by 12.4 percentage points from 2013 to 2018. - In Spain, government subsidies favoring renewable electricity generation helped reduce coal dependence between 2005 and 2010 (partly driven by temporary factors). - In the United States, the shale gas revolution pushed down natural gas prices and contributed to a more modest decline in coal use. - International support for emerging markets and low-income countries can include financial and technical assistance (e.g., know-how to build grids that work with intermittent power sources such as wind and solar) and limiting financing of new coal plants where alternatives exist. - Cleaner alternatives and technologies: - Natural gas can help bridge the energy transition toward a greener future. - Carbon capture and storage technology may be a viable solution to ease the transition away from coal, but it is currently less cost-competitive than other low-carbon energy sources such as solar and wind. - Policy design considerations: - Coal miners and others dependent on the coal industry need realistic solutions to potential disruption. - Supportive policies are needed to ease job transitions and encourage development of alternative industries to avoid hollowing out communities and upending families. ### Key takeaways - Coal is a major contributor to CO2 emissions and local pollution, with significant health consequences. - Emerging markets, especially China, dominate current coal consumption. - Historical rates of decline imply long transition timelines unless policy and market forces accelerate change. - Carbon pricing, subsidies for renewables, affordable alternatives, international assistance, and social support for affected workers and communities are central to feasible coal phaseout strategies. - Technological options (hydrogen for steel, carbon capture and storage) exist but face cost and incentive barriers today. *Source: Christian Bogmans, Claire Mengyi Li, December 8, 2020 — A Greener Future Begins with a Shift to Coal Alternatives (IMF).* --- ## References - [日本語](https://www.imf.org/ja/News/Articles/2020/12/08/blog-a-greener-future-begins-with-a-shift-to-coal-alternatives) - [Português](https://www.imf.org/pt/News/Articles/2020/12/08/blog-a-greener-future-begins-with-a-shift-to-coal-alternatives) - [World Economic Outlook](https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020) _Source: https://www.imf.org/en/blogs/articles/2020/12/08/blog-a-greener-future-begins-with-a-shift-to-coal-alternatives_