OECD countries must commit to helping Asian economies transition away from coal

The OECD must commit finance, technology, and research for this transition.


As global leaders gathered in Katowice, Poland for COP24 (the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change), they reaffirmed once more the principle that countries have common, but differentiated responsibilities (CBDR) to mitigate climate change. From a moral and political standpoint, CBDR is sound. Rich countries – loosely speaking, those in the Organisation for Economic Co-operation and Development (OECD) – benefited disproportionately from the run-away fossil fuel consumption that powered economic growth over the last two centuries. The burden of addressing the resultant issue of climate change should not fall on poorer countries that are yet to reap the same benefits. The challenge, however, is that CBDR is becoming increasingly difficult to square with atmospheric imperatives.

Our planet is limited to a ‘carbon budget’ of emissions to keep global warming to a safe level. A recently study in Nature Geoscience found that to give the planet a better than even chance of limiting warming to 1.5 or 2°C, the internationally agreed ‘safe’ targets, we must limit post-2015 emissions to 817 or 1524 gigatons of carbon dioxide (GtCO2), respectively. All human activities that produce greenhouse gas (GHG) emissions must fall within this carbon budget: conversion of forested land to agriculture, production of livestock, transportation, industrial production, and, the biggest emitter of all, electricity and heat production.

New analysis from Oxford University has developed scenarios in which the world adheres to its carbon budget, arguing that 224 GtCO2 should be earmarked for power production in a 1.5°C scenario and 324 GtCO2 in a 2°C one. It then compared these carbon budgets for power generation to the expected lifetime emissions from existing and planned power stations. The figure below is based on their findings.

Note on figure: These estimates assumed that electricity generation will consume ~14% of the total carbon budget, plus an additional 110 GtCO2 enabled through the sequestration of GHG emissions from power generated with bioenergy from carbon capture and storage.

Four conclusions are immediately apparent from Oxford’s analysis:

  1. To achieve our 1.5°C target, we can no longer use our existing stock of GHG-emitting power stations to the end of its productive lifecycle.
  2. To achieve our 2°C target, we have almost no room to build new GHG-emitting power stations without closing ones that are already operating.
  3. By far the biggest risk to blowing our carbon budget for power generation is existing and planned coal power stations.
  4. The front lines of the battle to reduce future GHG emissions from electricity generation are now firmly in Asia.

Given the dominance of coal plants in current and future emissions from electricity generation, it is worth examining their locations in further depth. The table below presents data from the Global Coal Plant Tracker. It lists the countries with the top 10 most polluting existing fleets of coal-fired power stations and the top 10 most polluting pipelines of coal power stations that are planned or under construction.

China is by far the largest emitter from coal power. Its fleet of coal-fired power stations represents over 60% of the global lifetime emissions from coal plants already under operation, and its planned new stations represent 40% of emissions from the entire global pipeline.

India is second. Its existing fleet of coal plants is projected to produce nearly three times the emissions of those still in operation in the United States. India’s planned new coal-fired generation capacity would increase these emissions 150%.

Aside from Japan and Turkey, the OECD will drop off the top 10 list entirely. Most of the coal-fired power stations in North America and Europe are coming to the end of their productive lifecycles. Many are being retired early, subject to tightening environmental regulations and stiff competition from natural gas and renewables. Very few new coal-fired power stations are planned.

Note on table: Figures for pipelines of new coal power development include new power stations that have been announced, pre-permitted, been permitted, announced + pre-permitted + permitted, begun construction or shelved (but not cancelled). The pipeline figures do not include those power stations that were previously planned, but have now been cancelled.

What does this mean for the principle of CBDR? Well, OECD countries must find ways to accelerate the complete retirement of their coal-fired generation. Gas power will eventually need to follow.

Even more importantly, however, they must support emerging Asian economies and others to build alternatives. The growing competitiveness of renewable energy at the expense of coal has not been limited to rich countries. Since 2010, China and India have cancelled plans for coal-fired power stations that would have produced 57.6 and 76.3 GtCO2, respectively, each more than the lifetime emissions of the rest of the world’s existing fleet (50.8 GtCO2). This shift has been driven by increasing concerns about local air pollution from coal power, and increasingly competitive alternatives to coal. China and India are now world leaders in renewable generation, ranking first and fifth in installed renewable energy capacity by country.

Under CDBR, OECD countries have an obligation to help accelerate emerging economies’ transition to renewable energy, enabling further cancellations of planned coal-fired power stations. They must help unlock Marshall Plan-level financing for new renewable energy generation. They must invest heavily in research and development to evolve the storage, grid management technologies, and institutions needed to incorporate variable renewable energy into electricity grids. And they must support a widespread effort to build the skills and technical capacity to build and manage renewable electricity systems.

The Energy and Economic Growth (EEG) Applied Research Programme, funded by UKAID, is funding a number of projects that aim to support this effort, and some of its focal countries are either in the top 10 emitters from coal (such as India), or are projected to be (Pakistan and Bangladesh). For example, one EEG core project, led by the University of Cape Town, is analysing global best practice in renewable energy financing and procurement.

Another core project will examine the implications of falling wind and solar costs for the economics of South Asia power trade. A recent EEG report on South Asia power trade, by Prof Shobhakar Dhakal of the Asian Institute for Technology, concluded that regional power trade can help unlock South Asia’s plentiful renewable energy resources, for two reasons:

  • Regional trade could enable Nepal and Bhutan to develop their hydro resources, opening up large electricity markets in north and eastern India and Bangladesh.
  • Regional trade could help to balance future electricity grids that have substantial variable wind and solar power by taking advantage of the flexibility of hydropower in Nepal and Bhutan and the variations in the timing of energy consumption across the region to match supply and demand.

At COP, OECD countries must not only commit to a rapid phase out of their own coal fleets. They must also provide strong commitments of research, finance, technology and technical support for a rapid renewable energy transition in poorer countries and the termination of the global coal pipeline. 

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