Short-term benefits of coal phase-out outweigh costs

By: Christer Ågren

A recent study, published in Nature Climate Change, concludes that phasing out coal-fired power stations is a no-regret strategy for most world regions, and that this applies even without considering the impacts of global warming.

Coal combustion is not only the single largest human source of the major greenhouse gas carbon dioxide (CO₂), but also a major emitter of air pollutants that cause damage to public health and biodiversity. The new study by an international team of researchers led by the Potsdam Institute for Climate Impact Research (PIK) provides robust further economic arguments for why shutting down coal plants is worth the effort.

According to the authors of the study, their work shows that: 1) The world cannot stay below the 2 degrees limit if we continue to burn coal; 2) The benefits of phasing out coal clearly outweigh the costs; and 3) Those benefits occur mostly locally and short-term, which make them useful for policy makers.

“We find that, based on all countries’ current climate pledges under the Paris Agreement, humanity is so far not on track to keep global warming below 2 degrees. Yet, if all countries would introduce coal exit policies, this would reduce the gap to fulfilling the goal by 50 per cent worldwide. For coal-heavy economies like China and India, quitting coal would even close the gap by 80–90 per cent by 2030,” said Sebastian Rauner, lead author and researcher at the Potsdam Institute for Climate Impact Research.

The team of researchers developed a simulation framework which considers the full life cycle effects of phasing out coal, accounting not only for all impacts of coal combustion from mining to smokestack, but also how a coal exit would affect other energy sources and the energy sector as a whole. They also analysed monetised environmental and human health costs, thus enabling a comparison with mitigation costs. 

“Benefits from reduced health and ecosystem impacts clearly overcompensate the direct economic costs of a coal exit. They amount to a net saving effect of about 1.5 per cent of global economic output in 2050, that is USD 370 for every human on Earth in 2050”, said Gunnar Luderer, leader of the energy research group at PIK and professor at the Technical University of Berlin. “We see this effect already in the medium term. In particular, India and China could reap most of those benefits already by 2030.”

In international climate negotiations, governments need to factor in that exiting coal is a cheap and necessary way to substantially reduce global greenhouse gas emissions and a measure that also has huge co-benefits at home. The study shows that national and global interests can go hand in hand.

Given the Paris Agreement’s current requirement for updates to the Nationally Determined Contributions (NDCs), this paper is quite timely, commented Gunnar Luderer: “It underscores the benefits of a global coal exit – to the better of our planet and our health. Yet, importantly, ending coal is just the beginning. It must be flanked by further ambitious climate policies to avoid a lock-in to other fossil fuels, namely oil or natural gas.”

Christer Ågren

Sources: Potsdam Institute for Climate Research (PIK) press release and Ends Europe Daily, 23 March 2020

The study “Coal-exit health and environmental damage reductions outweigh economic impacts” (DOI: 10.1038/s41558-020-0728-x), by S. Rauner, N. Bauer, A. Dirnaichner, R. Van Dingenen, C. Mutel, and G. Luderer is available at: https://www.nature.com/articles/s41558-020-0728-x

See also the article “Air quality co-benefits of ratcheting up the NDCs” (doi.org/10.1007/s10584-020-02699-1), by S. Rauner et al., and published in Climatic Change on 18 April 2020. Available at: https://link.springer.com/content/pdf/10.1007/s10584-020-02699-1.pdf

In this issue