To avert worsening climate disasters, all sectors of the economy must be transformed by midcentury. But one task is more urgent than all others: the rapid phase-down of planet-warming emissions from coal-fired power plants in emerging economies.
The world’s leaders are failing badly in meeting this goal. Burning coal for electricity is the single largest source of global greenhouse gas emissions. Every year it accounts for about 10 billion tons of carbon dioxide — more than 70 percent of global fossil fuel emissions from electricity generation.
And we’re continuing to move in the wrong direction. Since 1990, the world has doubled its emissions from coal-fired power. There are now more than 6,500 plants. At least an additional 941 are planned. According to our calculations at the Rockefeller Foundation, combined, they would emit 273 billion tons of carbon dioxide if allowed to operate for their normal operational lifetime of about 40 years — which is equivalent to nearly eight years of all carbon dioxide pollution globally. These emissions would presage humanitarian crises that can scarcely be imagined for the world’s most vulnerable communities.
We need to stop building coal plants immediately and cut coal emissions in roughly half by 2030 to keep global warming to below 2 degrees Celsius, or 3.6 degrees Fahrenheit, above preindustrial levels. That is the upper limit for warming set by the United Nations to avoid escalating climate risks. We must also accelerate the replacement of existing coal plants with clean power, which will unlock the potential to decarbonize transportation, buildings and industry. Innovative political and financial solutions are emerging. The question is: Will we harness them?
Cleaner and more cost-effective technologies are already available. Wind and solar are now the cheapest sources of new generation in most of the world. By 2030, it is likely that few coal plants will be able to compete with clean energy. The difference in costs is so great now that in many cases, it makes more economic sense to invest in renewable power with storage and use a portion of the income to buy out coal contracts, decommission plants and compensate affected workers and others.
The 38 countries in the Organization for Economic Cooperation and Development have seen emissions from coal plants decline by an average of 6 percent annually since 2014, according to our calculations. However, those emission reductions have been overwhelmed by emission growth in emerging nations, which now account for 79 percent of the global total, again according to our calculations. China, India, Vietnam, Indonesia and South Africa are among the countries that have relied heavily on coal for economic development.
Many factors are stacked in coal’s favor. Political and business elites are often highly invested in coal. Coal also supports tens of millions of lives directly and indirectly, and these are often concentrated in politically important regions like West Virginia in the United States, Mpumalanga in South Africa and Odisha in India. Moving away from coal, therefore, must be just if it is to prove politically and socially sustainable. By that I mean the transition must create paths to a brighter future for affected workers and others. It cannot exacerbate existing inequities or create other ones.
Another complicating factor is that an estimated 93 percent of coal power capacity worldwide is insulated from market competition by long-term contracts that guarantee the purchase of electricity at generous rates, according to the Rocky Mountain Institute. Building a grid around renewables also presents a daunting array of technical challenges. And emerging economies, with some justification, continue to place the onus on rich countries to lead the decarbonization charge and are highly resistant to outside pressure to phase down coal use.
In an analysis of coal’s future, the International Energy Agency last year said that “all evidence indicates a widening gap between political ambitions and targets on one side and the realities of the current energy system on the other.”
So what is to be done?
One political solution emerged at climate negotiations in Glasgow late last year. France, Germany, Britain, the United States and the European Union agreed to mobilize $8.5 billion over the next three to five years to help South Africa move away from coal and ease the transition for workers. As the world’s 15th-largest emitter of greenhouses gases, South Africa generates 87 percent of its electricity by burning coal.
The Group of 7 recently endorsed that approach, and similar partnerships may be struck with other countries such as Indonesia and Vietnam at the United Nations climate change conference in November in Sharm el-Sheikh, Egypt. India, the Philippines, Bangladesh, Pakistan and others are surely watching to see if the countries underwriting South Africa’s transition make good on their financial commitments. A key challenge will be to mobilize billions in new capital financed at below-market rates to underwrite these deals.
Another approach is focused on harnessing the power of carbon markets. If a single coal plant could be mothballed and replaced with clean power decades ahead of its planned retirement date, tens of millions of tons of carbon dioxide emissions would be avoided. Monetizing these savings by selling them as carbon credits to wealthy countries and corporations would be instrumental in getting the first replacement projects across the line. These credits would have to reflect real, verifiable emissions reductions; some of the revenues could be directed to affected workers and communities.
Philanthropies have also come together with their capital to galvanize energy transitions that create jobs and empower the most vulnerable. For example, the Rockefeller-supported Global Energy Alliance for People and Planet, a partnership of philanthropies and multigovernment institutions, is advancing the just transition in South Africa and elsewhere.
Together, the public and private worlds must shape solutions and make them work. They may represent our last chance to deliver a safe climate future.
Joseph Curtin (@jmcurtin) is the managing director for power and climate at the Rockefeller Foundation.