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IEA Says World Coal Demand Will Rise, Despite Slashing Forecast Growth in India

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By Simon Evans

The International Energy Agency (IEA) has once again forecast that world coal demand will rise, despite halving its outlook for growth in India.

The IEA's Coal 2017 report, published Monday, sees a small increase in global coal demand from 2016 to 2022, with growth in India and southeast Asian countries outweighing declines in rich nations and China.


Since 2011, the IEA has consistently forecast rising coal demand, even as it has repeatedly adjusted its figures downwards in light of lower-than-expected growth. Some analysts believe the agency remains behind the curve in its outlook for coal (see below).

Carbon Brief runs through the IEA's changing coal forecasts for India and other key world regions.

Decade of Stagnation

Each year, the IEA publishes a series of six-year forecasts for key energy markets. For example, Coal 2017 looks at the market for the fuel out to 2022, broken down by country and sector.

The report's top line notes how global coal demand fell in 2015 and 2016, with the combined fall being the largest it has ever recorded in more than 40 years of data. It goes on to say that coal demand will increase by 177 million tonnes of coal equivalent (Mtce, 3 percent) in the years to 2022.

After two years of declines, this low growth will round off a "decade of stagnation" for coal, the IEA said. In a foreword to the report, IEA Executive Director Fatih Birol wrote:

"Looking ahead, this stagnation masks important regional variations. As coal use continues to decline in many parts of the world these declines are offset by continued growth in India [+135Mtce], Southeast Asia [+70Mtce] as well as several other countries where today coal's role is small but is on the rise, such as Pakistan and Bangladesh [+35Mtce]."

You can see this regional variation in the map, below.

IEA Coal 2017

Change in coal demand from 2016 to 2022, by country and region, in millions of tonnes of coal equivalent. The bubble sizes indicate the magnitude of change, with green for increases and red for decreases.

The IEA said global coal demand will reach 5,534Mtce in 2022, up from 5,357Mtce in 2016. Note that this would leave demand in 2022 at 1 percent below the level seen in 2013, a decade earlier. Note also that pathways to 1.5 or 2C require rapid and immediate reductions in global coal use.

Growth Forecasts

This picture of rising coal demand, even after adjustments for slower-than-expected growth, fits into a pattern of IEA forecasts over recent years (see chart, below). For example, its 2011 forecast overestimated global coal use in 2016 by 827Mtce (15 percent), which is equivalent to today's demand in the U.S. and EU combined.

Carbon Brief analysis of IEA coal market reports. Chart by Carbon Brief using Highcharts.

Forecasts for global coal demand, made by the IEA in 2011 through 2017 (blue lines), compared to data on actual use (red), in millions of tonnes of coal equivalent. Note the y-axis is truncated.

Last year, the most significant shift saw the IEA align with others in saying that Chinese coal demand had peaked in 2013. The IEA cuts its forecast for China again in this year's report, pushing the outlook for demand in 2022 even lower (see chart, below).

This shift for China reflects a drive to cut air pollution by replacing small coal boilers with gas, as well as expanding low-carbon supplies and building huge high-voltage power cables to replace coastal coal plants with a mixture of coal and renewable power from the country's interior.

The chart shows expected demand in 2022, for the thermal coal used in power plants, as forecast by the IEA in 2015 (dark blue columns), 2016 (yellow) and 2017 (light blue).

Carbon Brief analysis of IEA coal market reports. Chart by Carbon Brief using Highcharts.

Outlooks for thermal coal demand in 2022, by country and economic grouping, as forecast by the IEA in 2015, 2016 and 2017. OECD is the Organization for Economic Cooperation and Development, made up by the world's wealthiest nations. ASEAN is the Association of Southeast Asian Nations, comprising Thailand, Vietnam, Indonesia, Malaysia, the Philippines and others. *The 2015 and 2016 forecasts were extrapolated in a straight line to 2022, based on the last three data points.

This year, however, perhaps the more notable shift in outlook is for India. Last year, the IEA forecast saw Indian thermal coal demand rising by 215Mtce between 2014 and 2022. This year, the figure is 115Mtce, effectively halving the rate of growth for power sector coal demand.

The chart below shows the change in thermal coal demand between 2014 and 2022, as forecast by the IEA in (dark blue columns), 2016 (yellow) and 2017 (light blue).

Carbon Brief analysis of IEA coal market reports. Chart by Carbon Brief using Highcharts.

Outlooks for the change in thermal coal demand between 2014 and 2022, by country and economic grouping, as forecast by the IEA in 2015, 2016 and 2017. OECD is the Organization for Economic Cooperation and Development, made up by the world's wealthiest nations. ASEAN is the Association of Southeast Asian Nations, comprising Thailand, Vietnam, Indonesia, Malaysia, the Philippines and others. *The 2015 and 2016 forecasts were extrapolated in a straight line to 2022, based on the last three data points.

Coal India

This change in outlook for India is significant because India now drives the IEA's forecast of continued global coal demand growth. If the IEA is starting to change its view on Indian coal demand growth, then the global picture could change direction, too.

Plans to bring electricity to all citizens, plus rapid economic growth, mean an increasing role for coal power in India, the IEA said.

"There is a reality in electricity access and demand," said Keisuke Sadamori, director of energy markets and security for the IEA, in a call with journalists. Demand will grow, Sadamori said, even though countries such as India will probably follow a less energy-intensive path to development than those that came before them.

Growth in Indian coal power demand is also despite the IEA being "optimistic" about India's renewable energy targets, he said.

The IEA outlook for coal demand in India has clearly already shifted, reflecting the rapid expansion of renewables, slower-than-expected demand growth and financial troubles for coal and utility firms.

Priyavrat Bhati, energy group program director of the Delhi-based thinktank the Centre for Science and Environment told Carbon Brief:

"I would agree with the IEA assessment. While coal's demand growth is slowing, it is still hard to envisage a scenario under which coal will stall around 2022. Renewable energy has grown spectacularly in the past year…[but] power demand will continue to grow and renewable energy won't be sufficient."

Still, there are reasons to believe that the IEA remains behind the curve. Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis (IEEFA), told Carbon Brief:

"India is the key market revision by the IEA in this report and the changes [compared to last year] are material, but still nowhere near sufficient to address how quickly the Indian renewable energy story is unfolding."

India has set what have been seen as highly ambitious targets for renewables, aiming for 175 gigawatts (GW) in total by 2022, including 100GW solar and 60GW wind. Then, in November, the Ministry of New and Renewable Energy set out plans to meet these targets early, with power minister R K Singh saying the country could reach 200GW by 2022 instead of the "conservative" 175GW goal. Today's IEA coal forecast assumes that only 70GW solar will be installed by 2022.

In July, the IEA itself reported that Indian coal-power investments are drying up. Last month, it said solar would be cheaper than coal in India in the second half of the 2020s.

There is a large pipeline of roughly 43GW of new coal-fired power stations already under construction in India, with an even larger number at the planning stage. It is not clear how many of these plants will be completed, however.

Ted Nace, director of NGO CoalSwarm, told Carbon Brief: "In India, at least 31 coal-fired power plants under construction at 13 locations remain on hold, most often due to lack of financing as investment money shifts to cheaper renewables."

In contrast to the IEA, which sees Indian coal demand rising non-stop out to at least 2040, recent IEEFA analysis suggests the country's power stations could peak demand by 2027.

This view is partially supported by Varun Sivaram, fellow for science and technology at the Council on Foreign Relations. He told Carbon Brief:

"I personally think the IEA's forecast [for India] is reasonable. There are factors to suggest both that the Indian government is aggressive and conservative in its projection. A tonne of coal plants are in various stages of the permitting/construction pipeline, so very powerful interests are pushing to build at least some plants. On the other hand, coal utilisation is low and renewables are undercutting new coal plants on price, making the economic argument for new coal plants very difficult. So the middle ground projection is what the IEA projects, with the understanding that beyond 2022, India probably will not be powering an increase in global coal demand."

German Challenge

One intriguing aspect of the IEA report is its outlook for the EU. It said EU coal use will continue to fall, with remaining demand becoming ever-more concentrated in Germany and Poland.

In Germany, the IEA said coal demand will fall, even though the country plans to close all its remaining nuclear plants by 2022. This is because generation from renewable sources will increase strongly, overtaking coal to become the largest source of power around 2022.

Furthermore, the IEA said the balance is tight between running Germany's hard coal plants or switching to its large spare gas generation capacity. The report says: "Lower-than-anticipated gas prices or higher-than-expected coal or EU-ETS prices could trigger a decline in coal demand." It also points to the risk of new policy on coal, once a new government is formed.

This situation mirrors the picture across the EU, where coal plants are under pressure as a result of falling electricity demand, rising renewable generation and tightening air pollution rules, which will affect a significant portion of the EU coal fleet.

"One-third to one-half of the EU fleet needs to be retrofitted to comply with the new emission standards, or be shut down," the report notes. It adds:

"Investing in new abatement technologies would raise the cost of electricity generation…putting pressure on coal plants when wholesale electricity prices have reached record lows. In such an environment, recovery of any investment is uncertain: coal power plants have become high-risk assets in the EU due to the high political uncertainty and unfavourable market conditions that deter investment."

Under these conditions, a small increase in carbon prices on the EU ETS, or relatively small shifts in coal or gas prices could trigger significantly accelerated reductions in EU coal use.

It's worth noting, in this context, that the IEA forecasts an EU carbon price of €7 per tonne of CO2, whereas analysts expect recently agreed EU ETS reforms to raise prices to €10 in the short term and possibly much higher into the 2020s.

Conclusion

Over the past five years, the global conversation on coal—and its role in a world hoping to tackle climate change—has shifted dramatically. This change has followed the dawning reality that Chinese coal use has peaked, allowing global greenhouse gas emissions to level off, too.

This has turned the spotlight on India, seen by industry figures as the engine to drive coal growth forward. It's in this context that today's IEA forecast is significant, showing that in India, too, the outlook for coal is changing.

For Sivaram, that future engine of growth will come from southeast Asian countries, where there is "no end in sight" for coal plant construction. He told Carbon Brief:

"Renewables have been super-sluggish in ASEAN—pathetically slow growth because of a patchwork of regulations and a terrible investment climate. This will change slowly—it could take years for renewables to take off. So I am deeply worried about coal growth, as governments eagerly look to invest in plants now."

Not everyone shares this sense of gloom. Matthew Grey is senior analyst for utilities and power at the Carbon Tracker Initiative, an NGO. He told Carbon Brief:

"The incumbency is betting on India and southeast Asia as the main source of new demand and appear to be making the same mistake they made with China. Pollution policy and industrial strategy drive [renewable energy] deployment and [price] deflation. This virtuous cycle is now an unstoppable force. All the coal industry can do is try and entrench themselves in markets where the renewables sector is in its infancy. India and southeast Asian countries increasingly see an alternative to coal. This reality would have been unimaginable five years ago."

Reposted with permission from our media associate Carbon Brief.

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Brazilians living in The Netherlands organized a demonstration in solidarity with rainforest protectors and against the president of Brazil, Jair Bolsonaro on Sept. 1 in The Hague, Netherlands. Romy Arroyo Fernandez / NurPhoto / Getty Images

By Tara Smith

Fires in the Brazilian Amazon have jumped 84 percent during President Jair Bolsonaro's first year in office and in July 2019 alone, an area of rainforest the size of Manhattan was lost every day. The Amazon fires may seem beyond human control, but they're not beyond human culpability.

Bolsonaro ran for president promising to "integrate the Amazon into the Brazilian economy". Once elected, he slashed the Brazilian environmental protection agency budget by 95 percent and relaxed safeguards for mining projects on indigenous lands. Farmers cited their support for Bolsonaro's approach as they set fires to clear rainforest for cattle grazing.

Bolsonaro's vandalism will be most painful for the indigenous people who call the Amazon home. But destruction of the world's largest rainforest may accelerate climate change and so cause further suffering worldwide. For that reason, Brazil's former environment minister, Marina Silva, called the Amazon fires a crime against humanity.

From a legal perspective, this might be a helpful way of prosecuting environmental destruction. Crimes against humanity are international crimes, like genocide and war crimes, which are considered to harm both the immediate victims and humanity as a whole. As such, all of humankind has an interest in their punishment and deterrence.

Historical Precedent

Crimes against humanity were first classified as an international crime during the Nuremberg trials that followed World War II. Two German Generals, Alfred Jodl and Lothar Rendulic, were charged with war crimes for implementing scorched earth policies in Finland and Norway. No one was charged with crimes against humanity for causing the unprecedented environmental damage that scarred the post-war landscapes though.

Our understanding of the Earth's ecology has matured since then, yet so has our capacity to pollute and destroy. It's now clear that the consequences of environmental destruction don't stop at national borders. All humanity is placed in jeopardy when burning rainforests flood the atmosphere with CO₂ and exacerbate climate change.

Holding someone like Bolsonaro to account for this by charging him with crimes against humanity would be a world first. If successful, it could set a precedent which might stimulate more aggressive legal action against environmental crimes. But do the Amazon fires fit the criteria?

Prosecuting crimes against humanity requires proof of widespread and systematic attacks against a civilian population. If a specific part of the global population is persecuted, this is an affront to the global conscience. In the same way, domestic crimes are an affront to the population of the state in which they occur.

When prosecuting prominent Nazis in Nuremberg, the US chief prosecutor, Robert Jackson, argued that crimes against humanity are committed by individuals, not abstract entities. Only by holding individuals accountable for their actions can widespread atrocities be deterred in future.

The International Criminal Court's Chief Prosecutor, Fatou Bensouda, has promised to apply the approach first developed in Nuremberg to prosecute individuals for international crimes that result in significant environmental damage. Her recommendations don't create new environmental crimes, such as "ecocide", which would punish severe environmental damage as a crime in itself. They do signal, however, a growing appreciation of the role that environmental damage plays in causing harm and suffering to people.

The International Criminal Court was asked in 2014 to open an investigation into allegations of land-grabbing by the Cambodian government. In Cambodia, large corporations and investment firms were being given prime agricultural land by the government, displacing up to 770,000 Cambodians from 4m hectares of land. Prosecuting these actions as crimes against humanity would be a positive first step towards holding individuals like Bolsonaro accountable.

But given the global consequences of the Amazon fires, could environmental destruction of this nature be legally considered a crime against all humanity? Defining it as such would be unprecedented. The same charge could apply to many politicians and business people. It's been argued that oil and gas executives who've funded disinformation about climate change for decades should be chief among them.

Charging individuals for environmental crimes against humanity could be an effective deterrent. But whether the law will develop in time to prosecute people like Bolsonaro is, as yet, uncertain. Until the International Criminal Court prosecutes individuals for crimes against humanity based on their environmental damage, holding individuals criminally accountable for climate change remains unlikely.

This story originally appeared in The Conversation. It is republished here as part of EcoWatch's partnership with Covering Climate Now, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story.

Author, social activist and filmmaker Naomi Klein speaking on the one year anniversary of Hurricane Maria on Sept. 20, 2018. Erik McGregor / Pacific Press / LightRocket / Getty Images

By Natalie Hanman

Why are you publishing this book now?

I still feel that the way that we talk about climate change is too compartmentalised, too siloed from the other crises we face. A really strong theme running through the book is the links between it and the crisis of rising white supremacy, the various forms of nationalism and the fact that so many people are being forced from their homelands, and the war that is waged on our attention spans. These are intersecting and interconnecting crises and so the solutions have to be as well.

The book collects essays from the last decade, have you changed your mind about anything?

When I look back, I don't think I placed enough emphasis on the challenge climate change poses to the left. It's more obvious the way the climate crisis challenges a rightwing dominant worldview, and the cult of serious centrism that never wants to do anything big, that's always looking to split the difference. But this is also a challenge to a left worldview that is essentially only interested in redistributing the spoils of extractivism [the process of extracting natural resources from the earth] and not reckoning with the limits of endless consumption.

What's stopping the left doing this?

In a North American context, it's the greatest taboo of all to actually admit that there are going to be limits. You see that in the way Fox News has gone after the Green New Deal – they are coming after your hamburgers! It cuts to the heart of the American dream – every generation gets more than the last, there is always a new frontier to expand to, the whole idea of settler colonial nations like ours. When somebody comes along and says, actually, there are limits, we've got some tough decisions, we need to figure out how to manage what's left, we've got to share equitably – it is a psychic attack. And so the response [on the left] has been to avoid, and say no, no, we're not coming to take away your stuff, there are going to be all kinds of benefits. And there aregoing to be benefits: we'll have more livable cities, we'll have less polluted air, we'll spend less time stuck in traffic, we can design happier, richer lives in so many ways. But we are going to have to contract on the endless, disposable consumption side.

Do you feel encouraged by talk of the Green New Deal?

I feel a tremendous excitement and a sense of relief, that we are finally talking about solutions on the scale of the crisis we face. That we're not talking about a little carbon tax or a cap and trade scheme as a silver bullet. We're talking about transforming our economy. This system is failing the majority of people anyway, which is why we're in this period of such profound political destabilisation – that is giving us the Trumps and the Brexits, and all of these strongman leaders – so why don't we figure out how to change everything from bottom to top, and do it in a way that addresses all of these other crises at the same time? There is every chance we will miss the mark, but every fraction of a degree warming that we are able to hold off is a victory and every policy that we are able to win that makes our societies more humane, the more we will weather the inevitable shocks and storms to come without slipping into barbarism. Because what really terrifies me is what we are seeing at our borders in Europe and North America and Australia – I don't think it's coincidental that the settler colonial states and the countries that are the engines of that colonialism are at the forefront of this. We are seeing the beginnings of the era of climate barbarism. We saw it in Christchurch, we saw it in El Paso, where you have this marrying of white supremacist violence with vicious anti-immigrant racism.

That is one of the most chilling sections of your book: I think that's a link a lot of people haven't made.

This pattern has been clear for a while. White supremacy emerged not just because people felt like thinking up ideas that were going to get a lot of people killed but because it was useful to protect barbaric but highly profitable actions. The age of scientific racism begins alongside the transatlantic slave trade, it is a rationale for that brutality. If we are going to respond to climate change by fortressing our borders, then of course the theories that would justify that, that create these hierarchies of humanity, will come surging back. There have been signs of that for years, but it is getting harder to deny because you have killers who are screaming it from the rooftops.

One criticism you hear about the environment movement is that it is dominated by white people. How do you address that?

When you have a movement that is overwhelmingly representative of the most privileged sector of society then the approach is going to be much more fearful of change, because people who have a lot to lose tend to be more fearful of change, whereas people who have a lot to gain will tend to fight harder for it. That's the big benefit of having an approach to climate change that links it to those so called bread and butter issues: how are we going to get better paid jobs, affordable housing, a way for people to take care of their families?

I have had many conversations with environmentalists over the years where they seem really to believe that by linking fighting climate change with fighting poverty, or fighting for racial justice, it's going to make the fight harder. We have to get out of this "my crisis is bigger than your crisis: first we save the planet and then we fight poverty and racism, and violence against women". That doesn't work. That alienates the people who would fight hardest for change.

This debate has shifted a huge amount in the U.S. because of the leadership of the climate justice movement and because it is congresswomen of colour who are championing the Green New Deal. Alexandria Ocasio-Cortez, Ilhan Omar, Ayanna Pressley and Rashida Tlaibcome from communities that have gotten such a raw deal under the years of neoliberalism and longer, and are determined to represent, truly represent, the interests of those communities. They're not afraid of deep change because their communities desperately need it.

In the book, you write: "The hard truth is that the answer to the question 'What can I, as an individual, do to stop climate change?' is: nothing." Do you still believe that?

In terms of the carbon, the individual decisions that we make are not going to add up to anything like the kind of scale of change that we need. And I do believe that the fact that for so many people it's so much more comfortable to talk about our own personal consumption, than to talk about systemic change, is a product of neoliberalism, that we have been trained to see ourselves as consumers first. To me that's the benefit of bringing up these historical analogies, like the New Deal or the Marshall Plan – it brings our minds back to a time when we were able to think of change on that scale. Because we've been trained to think very small. It is incredibly significant that Greta Thunberg has turned her life into a living emergency.

Yes, she set sail for the UN climate summit in New York on a zero carbon yacht ...

Exactly. But this isn't about what Greta is doing as an individual. It's about what Greta is broadcasting in the choices that she makes as an activist, and I absolutely respect that. I think it's magnificent. She is using the power that she has to broadcast that this is an emergency, and trying to inspire politicians to treat it as an emergency. I don't think anybody is exempt from scrutinising their own decisions and behaviours but I think it is possible to overemphasise the individual choices. I have made a choice – and this has been true since I wrote No Logo, and I started getting these "what should I buy, where should I shop, what are the ethical clothes?" questions. My answer continues to be that I am not a lifestyle adviser, I am not anyone's shopping guru, and I make these decisions in my own life but I'm under no illusion that these decisions are going to make the difference.

Some people are choosing to go on birth strikes. What do you think about that?

I'm happy these discussions are coming into the public domain as opposed to being furtive issues we're afraid to talk about. It's been very isolating for people. It certainly was for me. One of the reasons I waited as long as I did to try and get pregnant, and I would say this to my partner all the time – what, you want to have a Mad Max water warrior fighting with their friends for food and water? It wasn't until I was part of the climate justice movement and I could see a path forward that I could even imagine having a kid. But I would never tell anybody how to answer this most intimate of questions. As a feminist who knows the brutal history of forced sterilisation and the ways in which women's bodies become battle zones when policymakers decide that they are going to try and control population, I think that the idea that there are regulatory solutions when it comes to whether or not to have kids is catastrophically ahistorical. We need to be struggling with our climate grief together and our climate fears together, through whatever decision we decide to make, but the discussion we need to have is how do we build a world so that those kids can have thriving, zero-carbon lives?

Over the summer, you encouraged people to read Richard Powers's novel, The Overstory. Why?

It's been incredibly important to me and I'm happy that so many people have written to me since. What Powers is writing about trees: that trees live in communities and are in communication, and plan and react together, and we've been completely wrong in the way we conceptualise them. It's the same conversation we're having about whether we are going to solve this as individuals or whether we are going to save the collective organism. It's also rare, in good fiction, to valorise activism, to treat it with real respect, failures and all, to acknowledge the heroism of the people who put their bodies on the line. I thought Powers did that in a really extraordinary way.

What are you views on what Extinction Rebellion has achieved?

One thing they have done so well is break us out of this classic campaign model we have been in for a long time, where you tell someone something scary, you ask them to click on something to do something about it, you skip out the whole phase where we need to grieve together and feel together and process what it is that we just saw. Because what I hear a lot from people is, ok, maybe those people back in the 1930s or 40s could organise neighbourhood by neighbourhood or workplace by workplace but we can't. We believe we've been so downgraded as a species that we are incapable of that. The only thing that is going to change that belief is getting face to face, in community, having experiences, off our screens, with one another on the streets and in nature, and winning some things and feeling that power.

You talk about stamina in the book. How do you keep going? Do you feel hopeful?

I have complicated feelings about the hope question. Not a day goes by that I don't have a moment of sheer panic, raw terror, complete conviction that we are doomed, and then I do pull myself out of it. I'm renewed by this new generation that is so determined, so forceful. I'm inspired by the willingness to engage in electoral politics, because my generation, when we were in our 20s and 30s, there was so much suspicion around getting our hands dirty with electoral politics that we lost a lot of opportunities. What gives me the most hope right now is that we've finally got the vision for what we want instead, or at least the first rough draft of it. This is the first time this has happened in my lifetime. And also, I did decide to have kids. I have a seven year old who is so completely obsessed and in love with the natural world. When I think about him, after we've spent an entire summer talking about the role of salmon in feeding the forests where he was born in British Columbia, and how they are linked to the health of the trees and the soil and the bears and the orcas and this entire magnificent ecosystem, and I think about what it would be like to have to tell him that there are no more salmon, it kills me. So that motivates me. And slays me.

This story was originally published by The Guardian, and is republished here as part of the Covering Climate Now partnership to strengthen the media's focus on the climate crisis.

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