U.N. Climate Change Summit Does Not Produce Results

This week the U.N. Summit on climate change was held in New York and there is clear pressure for countries to shutter coal-fired power plants and to provide additional country commitments for reducing greenhouse gas emissions, despite there being 15 months before countries are supposed to revise their commitments to the 2015 Paris Agreement. Australia and Japan were denied speaking time because of their role in funding coal. Protesters even flew a blimp of Japanese President Shinzo Abe in a bucket of coal outside U.N. headquarters. China and India did not make new commitments to further their reduction of greenhouse gas emissions, but instead participated in other venues. India took part in joint announcements on low-carbon manufacturing, and China led a work stream for protecting and expanding natural carbon sinks. Currently, China's plan regarding the 2015 Paris Agreement is to allow its emissions to increase and peak in 2030, after which it will begin to reduce them. Despite all the hyperbole and mutual expressions of admiration, nothing was accomplished.

China

China's Ministry of Ecology and Environment unveiled a new position paper recently that shows little progress towards its Paris Agreement, and even possibly shows a step backward. The paper indicates a return to China's historic position that developed countries are primarily responsible for addressing climate change and provided no mention that a revised commitment might be imminent. The paper states, "China is willing to strengthen its communication with all other parties in the implementation of nationally determined contributions and the formulation of mid-to- long term climate strategy." Similar to Japan, China is funding coal-fired power around the world. According to their paper, they are willing to talk, but as we all know, talk is cheap, regardless of the currency. Further, China's approvals for new coalmine construction have surged in 2019. China is expecting consumption of coal to increase in the coming years despite its actions to fight smog and decrease greenhouse gas emissions. China's energy regulator approved the construction of 141 million metric tons of new annual coal production capacity from January to June, compared to 25 million metric tons approved in 2018--over a fivefold increase. The projects included new mines in the regions of Inner Mongolia, Xinjiang, Shanxi, and Shaanxi that are part of a national strategy to consolidate output at dedicated coal production bases, as well as expansions of existing collieries. With these actions, combined with the Chinese presently constructing additions to their coal fleet that equal the total coal fleet of the United States, anyone who suggests that China is moving away from coal is simply mistaken. While some smog-prone regions like Hebei and Beijing have cut coal use and shut hundreds of small mines and power plants, China is still allowing for significant increases in coal production and coal-fired power generation. China's coal output increased 2.6 percent in the first-half of 2019 to 1.76 billion metric tons. The China State Grid Corporation projects that total coal-fired capacity would peak at 1,230 to 1,350 gigawatts--an increase of about 200 to 300 gigawatts. China mandates "ultra-low emissions" technology in all new coal power plants and is improving mine zoning regulations. By the end of last year, 80 percent of China's total coal-fired power capacity had installed "ultra-low emissions" equipment--about 810 gigawatts.

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India

According to the BP Statistical Review of World Energy, India increased its coal consumption in 2018 by 8.7 percent to 452 million metric tons of oil equivalent--up from 416 million metric tons in 2017. Between 2007 and 2017, India's average annual growth rate of coal consumption was 5.7 percent. Coal has been providing about 55 percent of India's total energy requirements, and the future does not look very different for coal in India's energy mix. Coal India Limited (CIL), which is the world's largest coal mining company, provides about 85 percent of India's coal production. The central government owns around three-quarters of the company, which provides revenue to the treasury through dividend payments and taxes on coal production. The company provides tax revenue and employment to the coal-producing states, which are among the poorest in India. Indian Railways transports the bulk of domestic coal and the company over-charges for coal transport to subsidize passenger transport. For power plants located far from mines, coal transport is often the largest component of their coal costs. An additional 50 gigawatts of coal-fired generation are under construction in India, despite the country's focus on increasing renewable energy and natural gas consumption. India's energy policy focuses on bringing affordable electricity to all homes. Its per-capita electricity consumption is only one-third of the world average, with millions of homes lacking an electricity connection, despite Prime Minister Modi's accomplishment of bringing electricity to many of India's villages.

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Russia

Over the last 10 years, Russia increased its annual coal production by over 30 percent to 440 million tons, making the country the world's third-largest producer. In the same period, investments in its coal industry increased 150 percent. According to a draft development program, annual coal production might reach as much as 670 million tons in the next 15 years. Almost half of Russia's current 58 coal mines in operation opened in the last 20 years. Several more are under construction, including in the Arctic. In the Taymyr Peninsula, the large territory stretching into the far northern Kara Sea, there are plans for the production of over 25 million tons annually over the next five years. The federal government has even allowed a piece of land to be removed from the great Arctic Natural Park in order to facilitate the construction of the Chaika coal terminal. The Vostok Coal company is in the process of developing the first of a large number of mines on the northeastern tip of the peninsula. The mine areas of the Severnaya Zvezda (Northern Star) company are located nearby and the two companies plan to build two major port terminals to export coal. Coal is expected to play a major role in the development of the Northern Sea Route. President Putin requested that shipping on the Arctic route reach 80 million tons per year by 2024 in his six-year plan. Russia plans to sell its coal to the Asian market as its coal sales to Europe have been declining. Russia still plans on ratifying the Paris Agreement and says it will be curbing emissions, but coal is not mentioned in its plans. Also, the 2009 Russian Climate Doctrine does not specifically mention coal. According to Putin's representative on climate issues, Ruslan Edelgeriev, a new climate strategy through 2050 is being developed and will be completed in December. Russia's Energy Doctrine that was adopted in May 2019 indicates that Russia's position as an energy superpower is being challenged by international efforts to combat climate change.

Conclusion

Despite the United Nations efforts to curb coal use, a number of countries have plans for further development of their coal resources. China, India, and Russia all plan on expanding coal production.