The pandemic abruptly slowed the global march of coal. But demand for the world’s dirtiest fuel is forecast to soar this year, gravely undermining the chances of staving off the worst effects of global warming.
Burning coal is the largest source of carbon dioxide emissions, and, after a pandemic-year retreat, demand for coal is set to rise by 4.5 percent this year, mainly to meet soaring electricity demand, according to data published Tuesday by the International Energy Agency, just two days before a White House-hosted virtual summit aimed at rallying global climate action.
“This is a dire warning that the economic recovery from the Covid crisis is currently anything but sustainable for our climate,” Fatih Birol, the head of the agency, said in a statement.
dropped to its lowest level in a decade in 2019. And, over the last 20 years, more coal-fired power plants have been retired or shelved than commissioned. The big holdouts are China, India and parts of Southeast Asia, but, even there, coal’s once-swift growth is nowhere as swift as it was just a few years ago, according to a recent analysis.
In some countries where new coal-fired power plants were only recently being built by the gigawatts, plans for new ones have been shelved, as in South Africa, or reconsidered, as in Bangladesh, or facing funding troubles, as in Vietnam. In some countries, like India, existing coal plants are running way below capacity and losing money. In others, like the United States, they are being decommissioned faster than ever.
where coal use is growing, the pace of growth is slowing.
In South Africa, after years of lawsuits, plans to build a coal-fired power station in Limpopo Province were canceled last November.
In Kenya, a proposed coal plant has languished for years because of litigation. In Egypt, a planned coal plant is indefinitely postponed. In Bangladesh, Chinese-backed projects are among 15 planned coal plants that the government in Dhaka is reviewing, with an eye to canceling them altogether.
Pakistan, saddled by debts, announced a vague moratorium on new coal projects. Vietnam, which is still expanding its coal fleet, scaled back plans for new plants. The Philippines, under pressure from citizens’ groups, hit the pause button on new projects.
“Broadly speaking, there’s growing opposition against coal and a lot more scrutiny right now,” said Daine Loh, a Southeast Asia power sector energy specialist at Fitch Solutions, an industry analysis firm. “It’s a trend — moving away from coal. It’s very gradual.”
Money is part of the problem. Development banks are shying away from coal. Japan and Korea, two major financiers of coal, have tightened restrictions on new coal projects. Japan is still building coal plants at home, rare among industrialized countries, though Prime Minister Yoshihide Suga said in October that his country would aspire to draw down its emissions to net-zero by 2050.
Australia continue to mine their abundant coal deposits. Perhaps most oddly, Britain, which is hosting the next international climate talks, is opening a new coal mine.
And then there are the world’s biggest coal consumers, China and India.
China’s economy rebounded in 2020. Government stimulus measures encouraged the production of steel, cement and other industrial products that eat up energy. Coal demand rose. The capacity of China’s fleet of coal-fired power plants grew by a whopping 38 gigawatts in 2020, making up the vast majority of new coal projects worldwide and offsetting nearly the same amount of coal capacity that was retired worldwide. (One gigawatt is enough to power a medium-sized city.)
Coal’s future in China is at the center of a robust debate in the country, with prominent policy advisers pressing for a near-moratorium on new coal plants and state-owned companies insisting that China needs to burn more coal for years to come.
to remain open, and it is seeking private investors to mine coal. If India’s economy recovers this year, its coal demand is set to rise by 9 percent, according to the I.E.A.
But even India’s coal fleet isn’t growing as fast as it was just a few years ago. On paper, India plans to add some 60 gigawatts of coal power capacity by 2026, but given how many existing plants are operating at barely half capacity, it’s unclear how many new ones will ultimately be built. A handful of state politicians have publicly opposed new coal-fired power plants in their states.
How much more coal India needs to burn, said Ritu Mathur, an economist at The Energy & Resources Institute in New Delhi, depends on how fast its electricity demand grows — and it could grow very fast if India pushes electric vehicles. “To say we can do away with coal, or that renewables can meet all our demand,” Dr. Mathur said, “is not the story.”
nearly one-fourth of all energy worldwide.
Its proponents argue that gas, which is less polluting than coal, should be promoted in energy-hungry countries that cannot afford a rapid scale-up of renewable energy. Its critics say multibillion dollar investments in gas projects risk becoming stranded assets, like coal-fired power plants already are in some countries; they add that methane emissions from the combustion of gas are incompatible with the Paris Agreement goal of slowing down climate change.
in Vietnam. Gas demand is growing sharply in Bangladesh, as the government looks to shift away from coal to meet its galloping energy needs. Ghana this year became the first country in sub-Saharan Africa to import liquefied natural gas. And the U.S. Agency for International Development has been promoting gas as a way to electrify homes and businesses across Africa.
And there’s the rub for the Biden administration: While it has set out to be a global climate leader, it has not yet explained its policy on advancing gas exports — particularly on the use of public funds to build gas infrastructure abroad.
“There’s fairly strong consensus around coal. The big question is around gas,” said Manish Bapna, acting president of the World Resources Institute. “The broader climate community is starting to think about what a gas transition looks like.”
Julfikar Ali Manik and Hiroko Tabuchi contributed reporting.
How does a country deal with climate disasters when it’s drowning in debt? Not very well, it turns out. Especially not when a global pandemic clobbers its economy.
Take Belize, Fiji and Mozambique. Vastly different countries, they are among dozens of nations at the crossroads of two mounting global crises that are drawing the attention of international financial institutions: climate change and debt.
They owe staggering amounts of money to various foreign lenders. They face staggering climate risks, too. And now, with the coronavirus pandemic pummeling their economies, there is a growing recognition that their debt obligations stand in the way of meeting the immediate needs of their people — not to mention the investments required to protect them from climate disasters.
The combination of debt, climate change and environmental degradation “represents a systemic risk to the global economy that may trigger a cycle that depresses revenues, increases spending and exacerbates climate and nature vulnerabilities,” according to a new assessment by the World Bank, International Monetary Fund and others, which was seen by The Times. It comes after months of pressure from academics and advocates for lenders to address this problem.
downgraded its creditworthiness, making it tougher to get loans on the private market. The International Monetary Fund calls its debt levels “unsustainable.”
nearly $600 billion in debt service payments over the next five years. Both the World Bank and the International Monetary Fund are important lenders, but so are rich countries, as well as private banks and bondholders. The global financial system would face a huge problem if countries faced with shrinking economies defaulted on their debts.s
“We cannot walk head on, eyes wide open, into a debt crisis that is foreseeable and preventable,” the United Nations Secretary General, António Guterres, said last week as he called for debt relief for a broad range of countries. “Many developing countries face financing constraints that mean they cannot invest in recovery and resilience.”
The Biden administration, in an executive order on climate change, said it would use its voice in international financial institutions, like the World Bank, to align debt relief with the goals of the Paris climate agreement, though it hasn’t yet detailed what that means.
flurry of proposals from economists, advocates and others to address the problem. The details vary. But they all call, in one way or another, for rich countries and private creditors to offer debt relief, so countries can use those funds to transition away from fossil fuels, adapt to the effects of climate change, or obtain financial reward for the natural assets they already protect, like forests and wetlands. One widely circulated proposal calls on the Group of 20 (the world’s 20 biggest economies) to require lenders to offer relief “in exchange for a commitment to use some of the newfound fiscal space for a green and inclusive recovery.”
debts soared, including to China, and the country, whose very existence is threatened by sea level rise, pared back planned climate projects, according to research by the World Resources Institute.
The authors proposed what they called a climate-health-debt swap, where bilateral creditors, namely China, would forgive some of the debt in exchange for climate and health care investments. (China has said nothing publicly about the idea of debt swaps.)
sinking under huge debts, including secret loans that the government had not disclosed, when, in 2019, came back-to-back cyclones. They killed 1,000 people and left physical damages costing more than $870 million. Mozambique took on more loans to cope. Then came the pandemic. The I.M.F. says the country is in debt distress.
Six countries on the continent are in debt distress, and many more have seen their credit ratings downgraded by private ratings agencies. In March, finance ministers from across Africa said that many of their countries had spent a sizable chunk of their budgets already to deal with extreme weather events like droughts and floods, and some countries were spending a tenth of their budgets on climate adaptation efforts. “Our fiscal buffers are now truly depleted,” they wrote.
In developing countries, the share of government revenues that go into paying foreign debts nearly tripled to 17.4 percent between 2011 and 2020, an analysis by Eurodad, a debt relief advocacy group found.
Research suggests that climate risks have already made it more expensive for developing countries to borrow money. The problem is projected to get worse. A recent paper found climate change will raise the cost of borrowing for many more countries as early as 2030 unless efforts are made to sharply reduce greenhouse gas emissions.
Tropical forests around the world were destroyed at an increasing rate in 2020 compared with the year before, despite the global economic downturn caused by the pandemic, which reduced demand for some commodities that have spurred deforestation in the past.
Worldwide, loss of primary old-growth tropical forest, which plays a critical role in keeping carbon out of the atmosphere and in maintaining biodiversity, increased by 12 percent in 2020 from 2019, according to the World Resources Institute, a research group based in Washington that reports annually on the subject.
Overall, more than 10 million acres of primary tropical forest was lost in 2020, an area roughly the size of Switzerland. The institute’s analysis said loss of that much forest added more than two and a half billion metric tons of carbon dioxide to the atmosphere, or about twice as much as is spewed into the air by cars in the United States every year.
pro-development policies of the country’s president, Jair Bolsonaro, led to continued widespread clear-cutting. Surging forest losses were also reported in Cameroon in West Africa. And in Colombia, losses soared again last year after a promising drop in 2019.
a severe fire season, with 16 times more forest loss in 2020 than the year before.
anecdotal reports from Brazil and other countries suggested that deforestation was rising because of the pandemic, as the health crisis hampered governments’ efforts to enforce bans on clear-cutting, and as workers who lost their jobs because of the downturn migrated out of cities to rural areas to farm. But Mr. Taylor said the analysis showed “no obvious systemic shift” in forest loss as a result of the pandemic.
If anything, the crisis and the resulting global economic downturn should have led to less overall forest loss, as demand, and prices, for palm oil and other commodities fell. While falling demand may have helped improve the situation in Indonesia and a few other countries, Ms. Seymour said that globally it was “astonishing that in a year that the global economy contracted somewhere between 3 and 4 percent, primary forest loss increased by 12 percent.”
Global Land Analysis and Discovery laboratory at the University of Maryland, who have devised methods for analyzing satellite imagery to determine forest cover. The World Resources Institute refers to their findings as “forest cover loss” rather than “deforestation” because the analysis includes trees lost from plantations and does not distinguish between trees lost to human activities and those lost to natural causes.