If the world is to avoid climate catastrophe, it will have to forgo burning almost 90 percent of proven coal reserves, plus one-third of oil and half of natural-gas reserves.
However, instead of implementing policies aimed at realizing that objective, governments continue not only to subsidize the fossil-fuel industry, but also to use scarce public resources to find new reserves. That has to change — and fast.
In an effort to help spur that change, the Heinrich Boll Foundation and Friends of the Earth International have aggregated key data about the coal industry in the just-released Coal Atlas. The figures are striking.
According to the IMF, post-tax subsidies for coal — including environmental damage — reached 3.9 percent of global GDP this year. G20 governments are estimated to spend US$88 billion per year on exploration subsidies for new fossil fuels.
A recent report by the Natural Resources Defense Council, Oil Change International and the WWF revealed that from 2007 to last year, governments channeled more than US$73 billion — or more than US$9 billion per year — of public money toward coal projects. Leading the way were Japan (US$20 billion), China (about US$15 billion), South Korea (US$7 billion) and Germany (US$6.8 billion).
This public investment augments already substantial commercial funding for the coal sector. In 2013, 92 leading banks provided at least 66 billion euros (US$70.3 billion) — more than four times more than in 2005. All of this has gone to buttress an industry that produces a massive share of global emissions — and seems dead set on continuing to do so.
Since 1988, just 35 coal producers, both private and state-owned, have contributed one-third of total carbon dioxide emissions. The damage their products are causing is no secret, yet coal and other fossil-fuel companies have refused to adjust their business models. Instead, they have actively worked to block efforts to mitigate climate change at the national and international levels, including by funding climate-change deniers and lobbying against “renewable energy” targets and successful instruments like feed-in tariffs.
Meanwhile, the coal industry argues that it plays an indispensable role in tackling “energy poverty” — that is, the lack of access to modern non-polluting forms of power, primarily electricity. It is true that energy poverty is a huge problem, affecting about 1.2 billion people worldwide. For farmers who must rely on pumped water to irrigate their crops, this means lower efficiency and productivity. For households that must burn firewood, cow dung, and kerosene to cook, it means indoor air pollution that can cause respiratory diseases. For schoolchildren, poor lighting after dark means lost learning opportunities.
However, coal is not the solution. Just the health consequences of coal production and combustion are staggering. In 2013, Coal workers pneumoconiosis, or black lung disease, resulted in more than 25,000 deaths globally. In the EU, coal combustion is responsible for 18,200 premature deaths and 8,500 new cases of chronic bronchitis per year. In China, an estimated 250,000 people die prematurely because of coal combustion.
The physical toll carries large economic costs as well, from lost working days to pressure on healthcare systems. Climate change, too, will impose enormous costs, even if strong mitigation and adaptation measures are taken. For the 48 least-developed countries, the costs of coal will soon amount to an estimated US$50 billion per year.
Far from receiving subsidies, the fossil-fuel industry should be paying for climate change. After all, just last year, the top two fossil-fuel companies — Chevron and ExxonMobil — together pulled in more than US$50 billion in profits.
If the world is to have any chance of capping the increase in global surface temperature at 2°C above pre-industrial levels, without being forced to employ dangerous and risky technologies like carbon dioxide capture and storage or geo-engineering, its energy system must be transformed.
First and foremost, world leaders must commit to phasing out fossil fuels, with the explicit goal of leaving 90 percent of proven coal reserves, one-third of oil reserves and half of gas reserves in the ground. They must also end public subsidies for coal as soon as possible, within the next few years, while ensuring that poor and vulnerable communities do not suffer from an increase in energy prices.
Moreover, governments worldwide must hold coal and other fossil-fuel producers accountable for the damage their products have caused, including through a levy on fossil-fuel extraction to fund the Warsaw Mechanism on Loss and Damage under the UN Framework Convention on Climate Change. Existing international law — in particular, the “polluter pays” principle, the “no-harm” rule and the right to compensation — supports such a system.
Finally, to address energy poverty, world leaders must scale up funding for decentralized “renewable energy” projects, including through a globally funded feed-in tariff for “renewable energy” mini-grids in developing countries.
The fossil-fuel industry’s success in safeguarding its own interests has come at the expense of the health of the planet and its people. It is time to reform our perverse global energy system — beginning by resolving to leave coal and other fossil fuels where they are.
Lili Fuhr heads the ecology and sustainable development department at the Heinrich Boll Foundation.
Copyright: Project Syndicate
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