World failing on coal reduction with net zero now in danger

The world has reached a make or break moment in its efforts to phase out coal by 2050, with failure to do so ending any hopes of meeting the target of net zero by the same year.

The Potsdam-Institute for Climate Impact Research (PIK) and Potsdam University have issued the results of a computer simulation which delivered dire forecasts for the planet and the world’s efforts towards net zero.

“It’s really a make-or-break moment,” said Stephen Bi from the Potsdam-Institute for Climate Impact Research (PIK) and Potsdam University, lead author of the study “Our computer simulation of climate economics and policy making indicates that current policies lead the world to less than a five percent likelihood of phasing out coal by mid-century. This would leave minimal chances of reaching net-zero emissions by 2050 and limiting disastrous climate risks.”

“The most shocking result was that even though most countries decide to stop burning coal for electricity during the simulation, this has almost zero impact on total future coal use,” said  Bi. “We then dug deeper into this perplexing result to identify what policymakers can do to actually achieve the coal exit.”

Investigating the Powering Past Coal Alliance, launched at the world climate summit COP23 in 2017, the scientists sought to understand whether these countries’ efforts to cut coal would make it easier or harder for other countries to follow suit. That is, the coalition may grow as member states work to modernize their electricity sectors, but it may also lead to a rebound in coal use globally. The latter effect, often referred to as ‘leakage’, can arise due to market effects: if demand decreases in some places, so do prices, which in turn can increase demand elsewhere.

Interestingly, the scientists’ revealed the computer simulation shows that the most concerning leakage effect in this case may actually arise within the Alliance itself rather than through international coal markets.  Although the Powering Past Coal Alliance is expected to grow, its pledge is limited to the electricity sector. This means that countries who join can actually increase their coal use in steel, cement and chemicals production, greatly hindering the potential of this initiative.

“The greatest risk to the coal exit movement may actually come from free-riding sectors in coalition members. Unregulated industries can take advantage of falling coal prices at home and use more coal than they otherwise would have,” explained co-author Nico Bauer, from PIK.

The scientists concluded that additional strong policies are needed. “The coal exit debate has to look beyond the power sector and also include the heavy industry. Carbon pricing would be the most efficient instrument to close loopholes in domestic regulations, while restrictions on coal mining and exports would go the furthest to deter free riding abroad,” added Bauer.

“China plays a special role since it produces and consumes more than half of all coal globally. The Chinese government must act swiftly to curtail the coal-driven Covid recovery,” Bi explained. “The current coal plans jeopardise China’s recent promise to peak domestic emissions before 2030, and to achieve net-zero emissions by 2060. The computer simulation gives China roughly fifty-fifty odds of joining the Alliance, and it only falls on the right side of that line if it stops building coal plants by 2025.”

Further, the simulation showed that the Alliance only manages to boost solar and wind energy expansion if China decides to phase-out coal. China would thus have “a golden opportunity to solidify its leading role in renewable energy market and unleash sustainable development opportunities worldwide, but this requires commitment to phasing out coal,” explained Bi. “If not, then it becomes less clear how we’ll achieve sufficient diffusion of renewables worldwide. China’s actions today can position it to either lead or impede the global energy transition.”