More coal energy will increase poverty, report says

Coal will not end energy poverty and increasing its share in the energy pool will actually increase poverty in poor countries, a new report says.

According to a recent position paper by the Overseas Development Institute (ODI), a UK think tank on international development, the coal industry is vouching for increased coal use to fight extreme poverty and improving energy access.

In the paper ODI argues that more coal will not end and instead entrench poverty due to its contribution to environmental degradation and health hazards.

The report states that China is often used a model when addressing energy poverty, as the Asian giant reduced its own extreme poverty and boosted its industrialisation through the use of coal.

“Yet two thirds of China’s reduction of extreme poverty were due to agricultural and macroeconomic policy changes before its coal-fired expansion in the 1990s,” the report reads.

Detailed time series analyses by World Bank economist Martin Ravallion have revealed that China’s success in reducing extreme poverty was primarily driven by growth in agricultural productivity, enabled by regulatory changes.

ODI recognises the “unquestionable” importance of industrialisation in China’s development, but argues that coal is given “too much credit” for the reduction of extreme poverty in general.

“The immediate human health impacts of coal in the developing world are staggering, particularly for poor people who are the least equipped to deal with the economic burdens of illness, a premature death in the household, or degraded water and land resources,” ODI says in the study.

The report cites estimates that coal has contributed hundreds of thousands of premature deaths in Southeast Asia, between 260,000 and 670,000 in China alone.

‘Catastrophic results’

Additionally, roughly 44% of existing and planned coal plants are located in high water stress areas, with a quarter situated in “red-listed” areas where surface and groundwater are being drained faster than their reserves are replenished.

“This is most severe in China and India. Roughly half of all coal plants in China and a quarter of those in India are located in red-listed areas,” ODI says.

Coal is also the highest CO2 emissions producer in the world, and ODI argues that increasing coal consumption may have “catastrophic” results as it may increase global average temperatures by more than the 2°C, which was deemed the absolute acceptable limit for global warming at the Paris Climate Conference.

Yet even at 2°C, global warming could plunge an additional 100 million people into extreme poverty and unless the trend is reversed this number could rise to 750 million by 2050, according to research cited in the ODI study.

‘Renewable energy cost-competitive’

In order to curb coal use, ODI suggests increasing the share of renewable energy in the global power supply due to them being “more abundant and lower-cost” than coal.

“The potential supply of renewable energy is many times greater than current energy consumption. Renewable energy is now cost-competitive with higher-carbon alternatives, even without taking into account the latter’s pollution costs,” ODI states.

In addition to its cost, ODI lists flexible deployment, increasing reliability, and job creation as other drivers that should be considered.

Solar energy dominates the global renewable power potential, followed by geothermal and wind power, but particularly in Southeast Asia bioenergy could pose a viable alternative.

ODI calls for G20 governments to end all forms of subsidy to fossil fuels and phase out all government support to new coal capacity, instead prioritising clean and renewable energy sources on both governmental and institutional level according to the Paris Agreement.

This article was written by Ilari Kauppila, deputy editor at Biofuels International

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