Asia’s rebound from the global economic slump is cheering the world with its promise of more growth, jobs and trade. But the revival is bad news for the environment because it is largely driven by a production and transport system addicted to fossil fuels, especially coal and oil. This helps explain why it is proving so difficult to bridge the gulf between developed and developing countries in negotiations leading to the United Nations climate change summit in Copenhagen in December.
It also helps explain why China and India, despite tensions over territorial and water disputes, agreed recently to work together to resist binding cuts or caps to their global warming emissions. The International Energy Agency (IEA) calculates that around 65 percent of these greenhouse-gas (GHG) emissions worldwide come from energy use or production.
The financial and economic crisis has had a significant impact on investment and demand in the energy sector. The IEA reports that emissions of carbon dioxide, the main GHG, could fall this year by as much as 3 percent — steeper than at any time in the last 40 years.
“This gives us a chance to make real progress toward a clean-energy future,” says agency’s executive director, Nobuo Tanaka. But, he adds, “only if the right policies are put in place promptly.”
Here’s a snapshot of global energy use. Fossil fuels account for 80 percent of demand: oil (34 percent); coal (25 percent); natural gas (21 percent); wood, other biomass and waste (11 percent); nuclear power (6.5 percent); hydro-power (2.2 percent). Less than 1 percent of global energy demand is met by clean, renewable sources such as geothermal, solar and wind.
Narrowing the focus to the global power sector, coal accounts for just over 40 percent of the energy sources used to generate electricity, natural gas nearly 20 percent, hydropower 16 percent, Nuclear power around 15 percent, oil 7 percent and other sources, including renewables, slightly over 2 percent.
Shifting this energy production pattern away from fossil fuels toward the end of the spectrum that produces no or low air pollution and global warming emissions is politically difficult and very costly, particularly in Asia.
Japan, the world’s second-largest economy after the U.S., is heavily reliant on energy imports. It has spent years trying to reduce this dependence and use its energy more efficiently. Yet in a normal year, Japan still gets about 25 percent of its electricity from coal, 24 percent from gas, 11 percent from oil — and only 29 percent from nuclear, 9 percent from hydro and 2 percent from other renewables that have near zero GHG emissions.
Oxford University economist Dieter Helm has co-edited a new book, “The Economics and Politics of Climate Change.” He says that climate change is really “about the massive increase of coal burning internationally, especially the growth of China and India fueled by coal-based energy — and America, too, where the Obama plans are also small relative to the problem.”
What does he mean? Coal fuels heavy industries, like steel and cement. But electricity is the key. It powers so much of modern life, from cooling and heating to lighting, computers and the Internet.
Electricity production accounts for nearly one-third of global fossil fuel use. It is the source of some 40 percent of energy-related carbon-dioxide emissions, and about one-fifth of total GHG emissions from human activity.
Half of the electricity generated in the U.S. is from coal; in India, the figure is 70 percent and in China 80 percent. Why? Because coal is as much as six times less expensive per unit of energy than oil or gas. It is also locally available in huge quantities, offering energy security for many decades to come.
Yet despite some improvements, coal remains the most polluting and carbon-intensive of the fossil fuels. Modern U.S. coal-fired plants still emit nitrogen oxides and sulfur dioxide at nine and 90 times the rate of new gas-fired plants, respectively. And these plants emit carbon dioxide at more than twice the rate of new plants that generate electricity by burning natural gas.
Coal has led the growth in fossil fuels this decade. In 2000, it provided 28 percent of the world’s fossil fuel energy production, compared with 45 percent for oil. By last year, coal’s share had risen to 33 percent. Most of the coal consumption growth was in China and India. Coal use in those two countries alone is not far short of consumption in the U.S. and the rest of the world combined.
While coal use has started declining in the U.S. and leveled off in many other developed economies, China has in recent years been commissioning the equivalent of two 500-megawatt coal-fired power plants per week, adding a capacity comparable to the entire power grid of Britain each year. A single such plant releases about 3 million tons of carbon dioxide annually into the air.
India uses only about a fifth as much coal as China. But with a population similar to that of China, a rapidly expanding economy and rising demand for electricity, India may one day come to rival China as a source of carbon emissions from coal.
Demand for electricity is also growing in Southeast Asia. If countries in the region were committed to cutting emissions, they would follow Singapore, Malaysia and Thailand in switching from coal- and oil-burning plants to gas.
Instead, coal use is rising to provide reliable and affordable electricity. Indonesia, by far the region’s biggest economy, is in the midst of adding 10,000 megawatts of coal-fired power to an existing capacity of 35,000 megawatts, of which about 20 percent burns coal. Indonesia became the world’s largest exporter of thermal coal for power plants in 2007, overtaking Australia.
Vietnam, the fastest-growing economy in Southeast Asia, plans to bring nearly 49,000 megawatts of capacity online between 2006 and 2015, quadrupling the size of its electricity grid. Over half the addition is to be fueled by coal, most of it mined in Vietnam. Even Malaysia and Thailand are planning to increase coal use in their power plants to lower costs and diversify sources of fuel.
The World Bank’s annual global development report, released in September, put the spotlight on energy and climate change. It noted that 1.6 billion people, nearly a quarter of the world’s population, have no electricity.
These citizens of developing countries — whose average per capita GHG emissions are a fraction of those of high-income nations — need massive expansions in energy, transport, urban systems and agricultural production.
Clean or not, coal is likely to be a big part of their future energy needs.
Michael Richardson is a visiting senior research fellow at the Institute of South East Asian Studies in Singapore.