The British perspective is naturally distorted.
Never mind the country’s inability to fight wars, to generate economic growth, to look after its old people, or to win at football – if there’s one thing the country has been effective at, it’s cutting down its use of coal in the generation of electricity.
Great Britain now uses 90% less coal than it did just two decades ago, as renewable energy, and in particular windfarms, have come to dominate the power generating landscape. Where the Guardian once reported with satisfaction any significant stretch of time during which Britain’s energy needs had been met exclusively by sources other than coal, now such events barely warrant a paragraph.
As a serious force in the UK’s power mix, coal is spent.
There’s a broad awareness of this environmentally encouraging development across the wider British public, including the investment community, especially since in recent years the anti-coal lobby has become increasingly vocal. For the British, it’s encouraging that here’s one area at least where they don’t come down on the wrong side of political correctness.
But because the British are largely coal free themselves, and because ESG campaigns are increasingly shutting down new coal initiatives in Britain, including new stock market listings, there’s also a perception that coal as a global contributor to global warming is on the way out.
This is not the case at all.
The number of new coal-fired power stations being planned and being built the world over continues to rise. Indeed, the pace has somewhat accelerated this year as China, the number one consumer of coal for electricity generation, sought to keep its economy afloat by the provision of more power.
Recent analysis by UBS, which on the whole paints an upbeat picture from the environmentalists’ perspective, nevertheless highlights that the world’s coal-fired power stations are likely to increase in number before they decrease. UBS puts what it calls ‘peak coal’ at 2023, which isn’t that far away at least.
UBS bases this call on the idea that although the number of new stations continues to rise, overall the decommissioning of old power stations ought to outpace the construction of new ones.
It’s a reasonable assumption, but as with many forecasts relating to China, more a matter of conjecture than statistical analysis.
In the past 20 years, China’s coal-fired power capacity and usage has gone up by around five times, according to analysis presented by the website Carbonbrief [www.carbonbrief.org]. India’s has more than tripled, and the rest of Asia is up as well. By contrast, coal-fired power capacity and consumption in Europe and North America – yes, including the US – has fallen, in the case of the US by around one sixth, in the case of the 28 European nations by a little less than a quarter.
No significant new theses or hypotheses on global warming have been presented during that time, and the general scientific consensus has remained that global warming is an extremely serious issue.
So can it be that the arm-chair social media campaigns carried out by Western liberals against coal are effective only in countries where such demographics actually have significant power and influence? It’s an obvious assumption, although difficult to prove.
The real question is: what makes UBS think that the hitherto accelerating growth of global coal-fired power capacity is suddenly going to turn round in 2023?
For one thing, although India and other Asian countries are increasing capacity, it’s striking that in the first half of 2020 China was responsible for more than 89% of new plant proposals and for initiating the construction of more than 85% of the world’s new coal-fired power plants.
What China does is really what matters. And although the Chinese continue to build, they are at least making encouraging noises. Recently the Chinese Communist Party announced that it plans to cut net carbon emissions to zero by 2060, which, even if it is a long horizon, at least shows that the direction of travel is positive from an environmental point of view.
It didn’t say that it would stop using coal, altogether though, and indeed it didn’t give any details on how it plans to achieve the 2060 target at all. As things stand, the idea that China will be able to cut its coal consumption to similar levels in percentage terms that the UK has remains laughable. Yes, China continues to accommodate Elon Musk’s inroads into the country with Tesla. But guess where all the electricity to power those Tesla cars will come from? – that’s right, the coal-fired power stations.
Still, there is at least a dialogue going on now internally in China. A research group at Tsinghua University recently presented a plan whereby China might be able to cut the use of coal for electricity generation by 2050, providing it was prepared to spend US$15tn and boost nuclear and renewables accordingly.
How seriously the Chinese will take the 2060 pledge over the coming decades remains to be seen. Will there be a loss of face if they look like missing the target. Or will the whole project be quietly forgotten, as the Europeans and North Americans provide a huge amount of slack with ongoing decommissioning? It’s tough to predict, but one way or another, what happens with coal will be crucial for future generations.