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As President Obama's signature Clean Power Plan heads to court, the Dutch parliament voted Thursday to shut down its entire coal industry. The move is needed in order for the country to meet its 2030 goal to reduce carbon emissions by 55 percent.
The action would put the Netherlands in position to achieve the goals of the Paris climate agreement. The 77 to 72 vote, while non-binding, comes on the heels of a recent confidential study, leaked to the Dutch newspaper Trouw, that one or more plants would have to be closed. The country has five coal plants currently in operation, including three that just came online last year. A recent five percent increase in emissions has been linked to its newest plants.
In June, 2015, a court in The Hague ordered the Dutch government to cut its emissions by 25 percent within five years. The unprecedented ruling came in a case brought by the Dutch Urgenda Foundation. In a transcript from the reading of the verdict, the court said: "The state must do more to avert the imminent danger caused by climate change, also in view of its duty of care to protect and improve the living environment." The government has appealed the ruling.
In the leaked document, the consulting firm CE Delft said that the Dutch government would need to quickly close one or two power plants to meet the court's order. They concluded that closing the plants would impose lower costs to society than other alternatives to achieve the court-imposed emissions target. The report estimated that the average household would save 80 Euros ($90 at current exchange rates) a year, against costs of 30 Euros ($34). The Dutch economic ministry estimated that the cost of closing all the country's coal plants by 2020 would total 7 billion Euros ($7.9 billion).
Last year, five older coal-fired plants were decommissioned. Some environmentalists think that a coalition agreement could keep some or all of the three newer plants open. The issue has been contentious and is likely to affect next year's Dutch elections. The right-wing, populist Freedom Party, which may block the parliament's plan, currently leads many opinion polls.
In the U.S., 94 coal plants were shut down last year, with another 41 expected to the shuttered in 2016. Aging plants and cheap natural gas are driving the transition from coal, even as 26 states are suing the federal government to overturn the Clean Power Plan. The U.S. Court of Appeals for the DC Circuit will hear oral arguments Sept. 27.
Even if the Clean Power Plan survives this challenge, a study published today in Nature Climate Change says that the U.S. will miss its 2025 carbon emissions target by a wide amount, as much as 1.5 billion metric tons per year. Nevertheless, "The study underscores the importance of EPA's Clean Power Plan for meeting the climate change promises," wrote Science this morning.
This week the Netherlands announced that would join the U.S., United Kingdom and others in ending support for public financing for new coal-fired power plants is a good sign for the growing fossil fuel divestment movement.
“This is another sign that the coal industry is on its last legs,” said Tim Ratcliffe, of 350.org, which is helping coordinate the global movement to divest from the fossil fuel industry. “There’s a growing consensus that coal has no place in a carbon constrained world. Coal isn’t just bad news for the climate, it’s increasingly bad news for any financial portfolio. Institutional investors should read the writing on the wall and divest.”
In their joint announcement, the U.S. and Netherlands stated, “We emphasize that our work to scale up climate-friendly investments in developing countries is most effective when combined with reducing public incentives for high-carbon infrastructure.”
“We need to redirect the flow of capital away from carbon-intensive investments and into climate solutions,” said Ratcliffe. “As value-driven institutions, universities, churches and pension funds should be leaders in helping speed up this transition.”
Dutch campaigners call on the Dutch pension fund ABP, one of the largest pension funds in the world, to divest from fossil fuels. ABP’s large exposure to high-carbon assets, puts the Netherlands at risk, according to a recent study by the Greens/ European Free Alliance. The largest part of ABP’s investments in commodities worth €10 billion is related to oil and gas that risk turning into stranded assets.
“ABP is entrusted with our money to secure our future, not to finance an industry whose business model is based on wrecking our future," said Liset Meddens, coordinator of Fossil Free NL with 350.org. "ABP needs to recognize the financial and environmental risks of fossil fuel assets and start phasing out their investments in this dirty industry.”
The Dutch pension fund would thereby follow Norway’s lead. Norway has set up an expert group to see if its $840 billion oil fund (the world’s largest sovereign wealth fund) should stop investing in fossil fuel companies.
Tuesday’s announcement will also place a new level of scrutiny on the U.S., Netherlands, World Bank and other large investors to make sure that they are living up to their commitment to stop supporting high-carbon infrastructure. Analysis by the group Oil Change International, for example, has shown that despite its climate commitments, the World Bank actually increased its funding for fossil fuel projects between 2012 and 2013. Meanwhile, the Obama Administration is currently deliberating on whether or not approve a permit for the carbon-intensive Keystone XL pipeline.
“It would be completely hypocritical for the Obama Administration to say that it wants to reduce public support for high-carbon infrastructure and then approve the Keystone XL pipeline, which is a fuse to the largest carbon bomb on the planet, the Canadian tar sands,” said Jamie Henn, 350.org strategy and communications director. “If the U.S. wants its climate commitments to be taken seriously by the international community, it needs to reject Keystone XL.”
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