Coal Is Not in Decline; It Is Thriving in the South
Krizna Gomez December 9, 2015
It may seem that the world is finally appreciating the threat of climate change, as many countries which have traditionally been reliant on coal, the highest greenhouse gas emitter, are now imposing strict policies to limit their coal use.
But that is only for a fraction of the world.
Yes, the Obama administration has released its Clean Power Plan that will likely cause the retirement of many coal plants and the prevention of new construction in the US. Yes, the European Union has pledged to reduce its emissions by 40% from 1990 levels. And yes, Germany has been at the forefront of transitioning to renewables, transforming the North Sea into a massive farm of giant wind turbines that resemble white elephants.
But when I painted this picture to an indigenous leader in the region of La Guajira in Colombia, where the trucks of Latin America’s largest open pit coal mine zip past indigenous reserves like clockwork, this idea of a world moving away from coal was strange if not laughable.
Prakash Javadekar, the Environment Minister of India, has said in July this year that cuts in greenhouse gas emissions are “more for developed countries”. India, China and Indonesia alone are jointly using 71% of newly mined coal globally. India, the second biggest consumer of coal after China, is planning to double its coal output by 2020; the state-run Coal India, which claims to be the largest public coal company in the world, grew its output by 32 million tons for 2014/2015—its biggest volume rise in its four-decade existence. In Southern Africa, six countries are looking to build coal-fired plants. Africa’s largest economy, Nigeria, is reviving its coal industry and Kenya, the biggest economy in East Africa, is now opening a coal-fired power plant for the first time in its history. Pakistan, the Philippines and Vietnam are also increasing their coal use.
The coal industry may be in a slump, with prices falling from $120 a ton in 2010 to $60 today, but the Global South is banding together to keep it alive. South Africa will be providing coal to Kenya and technical assistance to Nigeria. Chinaremains one of the biggest financiers of coal projects around the world. The New Development Bank by BRICS (Brazil, Russia, India, China and South Africa) is expected to serve as a “brick wall” to the domino effect against coal financing, coming to the rescue of stranded coal projects. The China-led Asian Infrastructure Investment Bank, meant to rival Western-dominated multilateral banks like the World Bank, may do the same.
However, the Global North is just as culpable in what has been happening in the South.
Between 2003-2013, 34 OECD countries, including 21 from the EU, gave $12.8 billion worth of export credits to coal plants. France, which is currently hosting the global climate change negotiations, and Germany lead these EU countries. In 2012, France and the United States also provided a $1.1 billion guarantee for South Africa’s Kusile power plant, which will be the fourth largest coal-fired plant in the world. The United States may also be closing coal plants, but it is planning to export the coal it can no longer use. This is not merely inconsistent policy—it is rank hypocrisy.