“Global coal demand is slowing fast,” is the headline in a June Business Insider Australia story. “The global coal renaissance is the most important climate story today,” is the headline in a July Vox story.
Which is correct? Mostly the first one. There was a true global coal renaissance starting around the year 2000, a resurgence due primarily to China. But it is now stalling.
China was responsible for some 80 percent of the growth in global demand since 2000. You can see that in this June 15 chart from BP’s Group Chief Economist based on their newly-released “Statistical Review of World Energy 2015.”
China, however, has completely reversed its strategy of coal-intensive growth as Climate Progress has been reporting since the U.S.-China climate deal was announced in November. The driving force of this reversal is the terrible toll coal pollution has taken on the health of Chinese citizens in urban or industrialized areas — combined with the growing realization at the highest levels of China’s government that climate change will devastate China and that it must become a leader in avoiding the worst impacts.
You can see in the chart above the result of two of China’s strategies. First, they are working to aggressively take market share away from coal and accelerate the transition to low-carbon and zero-carbon sources — natural gas, nuclear, wind power, solar power, and hydropower.
Second, on the industrial side, they are transitioning away from the coal-intensive and energy-intensive industries that have been driving growth and speeding up the transition to a more balanced economy, with much more service sector growth. Many of the Chinese climate and energy experts I spoke to during my trip last month used the word “sustainable” to describe the economy that the leadership would like.
The result of this second strategy began to bear fruit last year, as this BP chart shows:
These two Chinese strategies combined are a key reason why China cut its coal consumption in 2014, the first drop this century. And since China has been the engine of the world coal market, it’s no surprise that global coal demand flatlined at 0.4 percent year over year growth in 2014.
Moreover, China’s coal-slashing strategies continue to have a huge impact into this year. Domestic demand continues to drop, and as Platts reported Wednesday, “China’s thermal coal imports in the first six months of 2015 were 42.35 million mt [metric tons], a 44% fall from the year-earlier period.”
China isn’t the only big user moving away from coal. In the United States, coal growth has been reversed by a combination of the economic slowdown, low natural gas prices, rapid expansion of renewables, and aggressive energy efficiency. As we reported earlier this month, for the first time ever “In April, 31 percent of electricity generation came from natural gas while 30 percent came from coal.”
“The Latest Sign That Coal Is Getting Killed,” was the headline of a July 13 BloombergBusiness piece, which noted “About 17 percent of U.S. coal-fired power generation will disappear over the next few years, according to an analysis by Bloomberg New Energy Finance (BNEF).”
The European Union has seen a sharp drop in coal consumption since 1990. And while that drop stalled in the last few years, it will continue as the EU moves to meet its aggressive new climate target announced for the Paris talks, a 40 percent drop in CO2 in emissions by 2030 compared to 1990 levels.
Yes, it is true that some other countries in Asia and Africa have been expanding coal infrastructure and coal use. That is a point made in a recent study about the post-2000 coal renaissance. It concluded, “If future economic growth of poor countries is fueled mainly by coal, ambitious mitigation targets very likely will become infeasible.”
But right now, only India’s usage is enough to affect global coal demand for the foreseeable future — and it is unlikely India will expand coal use fast enough to reverse the impact of what is happening in the U.S., the EU, and China. Indeed, India was quite surprised by China’s aggressive CO2 and coal commitments, which leaves them isolated among the big countries refusing to give hard and fast carbon targets pre-Paris. Also, India (along with many other countries) has noticed that China’s coal-centric growth pattern has had a devastating impact on human health — and that as a result, China is shutting down coal plants before the end of their lifetimes, just as the United States is.
It bears repeating that in the big U.S.-China climate deal last fall, China pledged to “increase the share of non-fossil fuels in primary energy consumption to around 20% by 2030.” That “will require China to deploy an additional 800-1,000 gigawatts of nuclear, wind, solar, and other zero emission generation capacity by 2030 — more than all the coal-fired power plants that exist in China today and close to total current electricity generation capacity in the United States.
Over the next 15 years, the Chinese will thus build enough clean electricity to power America. Why can’t India or other big developing countries do half as much in twice the time? Answer: They can, particularly since China’s commitment alone guarantees a continuation of the remarkable drop in the price of clean energy technologies, which in turn has led to the recent renewable power boom globally.
Coming out of the Paris climate talks in December, which have already spawned impressive CO2 commitments by a majority of the most polluting countries, there will be a renewed global push to accelerate the transition away from coal — and to provide capital and financing for developing countries that want to leapfrog coal entirely. And, of course, as each year passes, the dangerous impacts of carbon pollution become ever-more obvious, so the motivation and the global pressure will grow for developing countries to go straight to clean energy — and not waste precious capital building coal plants that will have to be shut down prematurely.
The Paris talks should also make obvious to all what the world’s top climate scientists and governments already know and have stated publicly: The world has to go to zero total carbon pollution long before 2100 and indeed as close to 2050 as possible — before actually going carbon negative.
So everybody is going to zero, and that means not only is the coal boom over for good, but an outright coal bust is not very far off. As a June Bloomberg piece explained, “The industrial age was built on coal. The next 25 years will be the end of its dominance.”
Note: I have an interview with NPR’s “Living on Earth” only after the global that while be posted in the next 24 hours. When it is up, I will link to it.