More coal mines will lead to more poverty, new report warns | RenewEconomy

More coal mines will lead to more poverty, new report warns

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Supporters of Adani mine says coal crucial to solving poverty, but new report suggests new coal mines will only worsen climate change and drive poor nations deeper into poverty.

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Think Progress


There’s an argument within the fossil fuel industry that access to fossil fuels like coal and oil are necessary for developing nations to help pull themselves out of poverty. A new report released by Oxfam, however, warns that extracting more coal won’t help energy-poor countries build their economies, but instead will worsen global warming and entrench vulnerable communities in poverty.

The report, titled “More Coal Equals More Poverty,” argues that the vast majority of energy-poor households in developing countries lack access to a traditional electricity grid, meaning traditional energy sources like coal would do little to help bring electricity to those currently living without it.

Moreover, the report warns, extracting and burning fossil fuels like coal would release more greenhouse gas emissions into the air, worsening the impacts of climate change. And those impacts — increased heat waves, rising sea levels, and more variable growing seasons — will have an outsized impact on the world’s poor, many of which depend on subsistence farming for food and economic support.

To maintain a 50 percent chance of staying within 2°C of warming — the limit agreed upon in the Paris climate agreement — the report notes that 80 percent of the world’s coal reserves would need to remain untapped. That, in turn, means the world would have to quickly move away from coal power to low-carbon forms of energy, like wind and solar.

“Renewables are the clear answer to bringing electricity to those who currently live without it,” the report says. “The real cost of burning more coal will be measured in further entrenched poverty — through the escalating impacts of climate change and humanitarian disasters, increasing hunger and deaths and disease caused by pollution.”

The report was specifically aimed at the Australian government, which has been supportive of a proposed coal mine in Queensland, Australia; if built, it would be the largest coal mine in the country’s history. The federal resource minister has called the mine “great news,” and argued that it would help boost both regional and Australian economies.

The mine has run into some problems with funding, however, as at least 19 banks throughout the world have committed — either specifically or due to a company policy — to not finance the coal mine.

On Monday, Adani — the Indian company behind the proposed mine — postponed a final decision on the $16.5 billion project “indefinitely,” citing uncertainty over the royalties offered by the Australian government.

The government had previously been debating whether to offer an agreement that would have allowed the mine’s backers to pay just $2 million a year in royalties, which some economists argued could cost Queensland $1.2 billion in revenue.

The Oxfam report argues that Australia’s stance towards the coal mine is “fundamentally at odds with the global shift to renewable energy,” and ignores the opportunities for job and economic growth created by low-carbon technologies like wind and solar.

The report points to countries like India and China, which have pledged to greatly expand their renewable capacity in the coming years. China has promised to invest $360 billion by 2020 in renewable generation, and has seen its coal consumption steadily decline in recent years. In 2016, China also set a record for number of solar panels installed; it now expects to reach its goal for solar installations, originally set for 2020, two years early.

In India, where some 240 million people have no access to electricity, investors have been funneling money into renewable projects. Last year, India received a $20 billion dollar investment from Japan’s Softbank, and another $2 billion from the French energy company EDF, both aimed at expanding the country’s solar market.

And in December, the U.S. government’s development finance institution, the Overseas Private Investment Corporation (OPIC) announced a partnership with the Indian government to help finance renewable energy throughout India — though its unclear how that partnership will fare under the Trump administration, which has shown itself to be unfriendly to renewable investment.

The Oxfam report concludes by asking the Australian government to commit to no new coalmines, or coalmine expansions.

“A failure to break free from coal will harm our nation — leaving Australians with an expensive and unreliable energy system, stranded high-carbon assets, lost opportunities for new jobs and prosperity, and little to offer the rest of the world as it continues to transition away from fossil fuels,” the report says.

“Embracing renewable energy and smart climate solutions, both here and abroad, offers the promise of a brighter future for all.”

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  1. Malcolm M 3 years ago

    I wish Renew Economy would stop repeating the global warming arguments against the Adani mine. This argument only plays to those who already believe in global warming, and are already be opposed to the mine.

    The point that would resonate more strongly with conservatives is why a new mine should get the benefit of a government-backed soft loan, when the current mines have had to fully fund their infrastructure. It gives the new mine an unfair advantage, particularly when the seaborne coal market is in decline. Are government funds being used to shift export coal jobs from the Hunter Valley to the Galilee Basin ?

    • trackdaze 3 years ago

      A fair point. Many of the jobs adani suggest would indeed be at the expense of existing coal jobs.

      Its time Adani writes the mine “asset?” off its books.

      If it was to build a gigawatt scale solar plant as it has done in India recently it would be a different story.

      • Peter F 3 years ago

        The problem for Adani is that if it formally withdraws from the project it will have to write off the investment so far. If it did that particularly in view of its ongoing legal problems in India it may well go broke altogether

        • trackdaze 3 years ago

          Deferred is the term they are currently using.

    • Darren 3 years ago

      Ive moved on to arguing its economic merits, of which they are none, and its already a stranded asset.

    • Joe 3 years ago

      Malcolm, I can’t think of any stronger argument then Global Warming. We only have one home and that is mother Earth, although Mars is looking more and more attractive as we keep trashing what is left of mother Earth. The environment may be an “externality” for some but it is what we all rely on for survival. That is the argument that should always be front and centre.

  2. john 3 years ago

    The decision to defer the decision on the Carmichael Mine was, as expected, portrayed as being totally the Queensland Governments fault in local media.
    The fact they could not get finance is overlooked.
    If a 21 billion project fails because it needs a few million a year to be viable it has a problem.
    The economic case must not give this venture a tick from most bank’s viewpoint.
    No doubt this will be in the media from now until the next election.

  3. Marathon-Youth 3 years ago

    Poverty is the result of corruption more than anything else. Nothing will change with Poverty unless corruption is stopped

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