Coal phase-out can provide “cheap” way to reduce emissions, researchers say

New research has shown that a global phase out of coal use would deliver net economic benefits in the long term, and would be an affordable way for countries to bridge the gap to limiting average global warming to no more than two degrees.

The analysis has been published in the journal Nature Climate Change, and reaffirms that pushing for a phase out of coal use will lead to net economic benefits in the long term, particularly in countries that are heavy coal users.

“We’re well into the 21st century now and still heavily rely on burning coal, making it one of the biggest threats to our climate, our health and the environment. That’s why we decided to comprehensively test the case for a global coal exit: Does it add up, economically speaking? The short answer is: Yes, by far,” lead author of the report and researcher at the Potsdam Institute for Climate Impact Research Sebastian Rauner said.

The researchers undertook a ‘full life cycle’ analysis of coal production, considering the direct economic impacts that a phase out of coal would create, as well as flow on effects for the wider energy sector, on human health and environmental impacts beyond those of climate change.

“In particular, we looked at two externalities: Human health costs, especially caused by respiratory diseases, and biodiversity loss, as measured on the basis of how much it would cost to rewild areas currently cultivated. The mitigation costs, in turn, are mostly economic growth reductions and costs for investments in the energy system,” the paper says.

The benefits would not necessarily be evenly distributed, with countries like Australia likely to lose out, as a country that is both a global supplier of coal and a country that enjoys relatively good air-quality.

But the researchers found that any costs carried by countries as a result of a coal phase-out would be significantly outweighed by the benefits in countries like China, India and most of Europe.

The researchers suggest that such a finding must be considered in global climate change negotiations, to prevent countries like Australia effectively becoming a “free-rider” in a global energy market; receiving the benefits of coal exports but carrying few of the costs.

“Phasing out coal could hence be one way out of what we know as the tragedy of the commons,” report co-author Nico Bauer said. “Coal phase-out has a positive synergy between the global climate challenge and local environmental pollution.”

The researchers say that a phase-out would be “a cheap way” to achieve significant reductions in greenhouse gas emissions, and that countries should consider integrating such a strategy into updated national plans set to be presented to the next round of international climate change talk scheduled for the end of the year.

“In international climate negotiations, governments need to factor-in that exiting coal is a cheap way to substantially reduce global greenhouse gas emissions and has huge co-benefits at home. Our study shows that national and global interests are not necessarily trading-off, but can go hand in hand.”

The analysis found that the benefits from switching away from coal would substantially outweigh the potential economic costs, amounting to a net positive impact of as much as 1.5 per cent of global economic output by 2050.

The researchers quantify this benefit at US$370 (A$600) per person by the year 2050 and said that China and India would are the best place to benefit from the phase out of coal, given both their reliance on the fossil fuel and the impact it has on each country’s air quality.

Coal is the world’s single largest source of human caused greenhouse gas emissions, and has additional negative social impacts on human health through air pollution and impacts on biodiversity.

The researchers pointed to the fact that the climate change pledges made by countries are current insufficient to keep global warming below 2 degrees, but said that if countries adopted coal phase-polices, that this gap could be bridged.

“We find that, based on all countries’ current climate pledges under the Paris Agreement, humanity is so far not on track to keep global warming below 2 degrees. Yet, if all countries would introduce coal exit policies, this would reduce the gap to fulfilling the goal by 50 percent worldwide. For coal-heavy economies like China and India, quitting coal would even close the gap by 80-90 percent until 2030,” Rauner added.

The research mirrors the finding of another analysis completed by researchers from the University of Oxford, which found that the immediate revocation of coal mining permits could deliver net benefits to the global economy.

Analysis published by Carbon Tracker estimated that as much as $1 trillion in investments could be at risk, as the falling costs of wind, solar and storage technologies begins to threaten the business case for much of the world’s fleet of coal fired power stations.

RenewEconomy and its sister sites One Step Off The Grid and The Driven will continue to publish throughout the Covid-19 crisis, posting good news about technology and project development, and holding government, regulators and business to account. But as the conference market evaporates, and some advertisers pull in their budgets, readers can help by making a voluntary donation here to help ensure we can continue to offer the service free of charge and to as wide an audience as possible. Thankyou for your support.