The Challenge of Cutting Coal Dependence

Source: By Eduardo Porter, New York Times • Posted: Thursday, September 1, 2016

It won’t be easy to get rid of coal.

Worried the nation might miss its 2020 target to drastically cut emissions of carbon dioxide, the German government proposed a steep levy last year on the most heavily polluting generators. The tax was intended to deliver a decisive blow against lignite or brown coal, the dirtiest fuel around and Germany’s main source of electricity.

Germany views itself as a leader in the push against climate change. It is probably the world’s most enthusiastic investor in renewable energy, mainly wind and sun. But even the powerful Chancellor Angela Merkel couldn’t quite pull it off.

Facing blowback from labor unions and governments in coal country, Berlin backed off, replacing the levy with a subsidy of 1.6 billion euros to gradually mothball eight coal-fired plants and shut them down permanently by 2023.

Environmentalists hated it. “Instead of being fined for polluting by the proposed new climate levy, utilities will instead get paid for keeping their oldest and most inefficient lignite plants on standby,” noted a report for Oxfam on Germany’s energy policies by the environmental nonprofit E3G. It “amounts to a golden handshake for utilities at the expense of taxpayers and consumers.”

And that wasn’t all. The chancellery also rejected a push by Barbara Hendricks, the environment minister, to establish a road map to the total phaseout of coal, hoping to postpone timing decisions until after national elections next year.

Berlin’s hesitance may seem like little more than a snag in Germany’s vaunted “Energiewende.” At least the coal generators are scheduled to shut down eventually.

But the resistance in the greenest of green countries underscores a more substantial challenge to the international effort to drastically reduce fossil fuels in the world’s energy supply: workers and retirees, local economies and communities still depend on the fuels the rest of us hope to let go of to preserve the planet for our children and our children’s children.

I’m old enough to remember President Jimmy Carter going on TV on April 18, 1977, declaring a “moral equivalent of war” against dependence on foreign oil, and telling Americans that “we need to shift to plentiful coal.” It seems unfair to simply tell the communities that worked on this shift: “We’re sorry, but it didn’t work out.”

But making those who will suffer from this transformation whole is not just a matter of fairness. A successful transition to a low-carbon future requires their support. And yet they remain pretty much an afterthought in the public debate over climate change.

“The scale and the scope of the transition is enormous,” said Matt Baker, a former commissioner with the Colorado Public Utilities Commission who is now a program officer for energy and climate at the William and Flora Hewlett Foundation. “You can’t do it in the time frame we are thinking about without the consent of the so-called losers in the transition.”

Germany may have few coal workers left: Only about 63,000 jobs are directly or indirectly related to coal out of a total work force of 43 million. But they are well organized into powerful unions. Even in the United States, where 50,000 remaining coal miners have next to no political power, the fate of coal country has grabbed the headlines during the presidential campaign.

An open cast mine in Germany. The government last year backed away from a plan that would have taxed big polluters, offering temporary subsidies instead. CreditGordon Welters for The New York Times 

Employment in American coal mines has been falling for decades, pushed more by market forces than environmental policy. The steep downturn of late is mainly because of a glut in the global steel market and extra-cheap natural gas. President Obama’s Clean Power Plan has not yet kicked in, placed on ice by the Supreme Court. Still, Hillary Clinton singled out coal country for government assistance, offering $30 billion over 10 years.

The stakes are even larger in China. It is the world’s largest consumer of coal — burning as much as every other country combined. After years adding coal-fired generators at breakneck speed, the government in Beijing finally acknowledged the public health costs and ordered limits on new construction.

Yet even as environmentalists welcome the decision as a watershed in the transition out of the world’s most polluting fuel, striking coal miners have taken to the streets, protesting unpaid wages and government plans to cut 1.3 million coal jobs out of a total of nearly six million to reduce overcapacity as the country’s growth slows.

There are several reasons to be skeptical about the world’s transition out of coal. Sure, official data suggest that the world’s production peaked in 2013. China’s coal consumption appears to have declined 3.3 percent last year. But experts note that despite the new limits, there are still lots of new coal-fired generators being built.

To protect jobs and tax revenue from small coal mines, Chinese local governments have been known to fib when Beijing has demanded they stop producing coal. They stop reporting production numbers but don’t shut them down.

Finally, even the most renewable-friendly nations have not figured out howto draw more than a modest share of their power from wind and sun — which can’t be counted on to deliver energy continuously. At the same time, coal remains the easiest and often cheapest source of base power. So from Germany to India, strategies to increase the share of renewable energy in the power mix have relied on a coal base.

“The way many jurisdictions are going is to follow the German model,” said Mark C. Thurber, associate director for research at Stanford University’s Program on Energy and Sustainable Development. “It seems totally nuts, but it follows from the fact that renewables have a lot of support, and other than that, people do what they know, which is coal.”

India draws 62 percent of its power from coal and is already the second-largest consumer after China and ahead of the United States. Coal consumption is growing about 7 percent a year to power the country’s economic catch-up.

“There is not much research into backing out coal with something else,” Mr. Thurber said. “They are just throwing renewables at a coal base.” While environmentalists welcomed India’s announcement last year that it would increase investment in solar energy, they were less pleased by its plans to triple coal production from 2013 to 2020.

This means the world’s climate change strategy cannot rely on the quick replacement of the dirtiest fuel around. Increasing investment in technologies like carbon capture and storage may prove indispensable to meet the limits on carbon dioxide emissions needed to prevent a catastrophic warming over coming decades.

Even after all this is dealt with and the obstacles are overcome, the human dimension will remain.

It will require a lot of attention, and more than a few billion dollars. Simply assuming that displaced coal miners will make a smooth transition into jobs in newfangled energy industries, which have a different geographical footprint and require a different skill set, is a cop-out.

The world’s energy transition cannot be portrayed simply as “Big Coal vs. virtuous wind and solar.” Horrible as this might sound to economists — who believe in taxing polluters, not rewarding them — the energy transition may require paying the dirtiest generators, as Germany has done, to stick around.

“Climate campaigners have to address the real‐world concerns of people who may not come out on top during the transition,” Craig Morris, an environmental blogger, wrote in German Energy Transition. “Several degrees of warming by 2100 may sound scary, but not nearly as much as long‐term joblessness just a few years from now.”