Some 1.2 billion people around the world lack access to electricity. 2.8 billion burn charcoal, wood, or other biomass to cook and heat their homes. Lack of access to clean, reliable energy services, or "energy poverty," is a terrible problem for those who face it, leading to hours of drudgery gathering fuels and high mortality from indoor pollution (which kills around 4 million people a year).
Energy poverty stands in the way of better health, better education, and better jobs. Development experts increasingly agree that there is no way to end extreme poverty without making energy access universal. That’s what the UN and the World Bank have set out to do by 2030 with the Sustainable Energy for All initiative.
Meanwhile, the coal industry finds its fortunes on the decline in the developed world, losing out to natural gas and renewables. All its hopes for survival, much less growth, rest with the developing world.
So it has glommed on to the surge of interest in energy poverty and is now selling itself as a solution.
For instance, here’s Peabody Energy, calling "advanced coal" a solution to energy poverty:
Here’s the World Coal Association doing the same. Here’s Arch Coal providing energy-poverty talking points to Jeb Bush when he attacked the pope over climate change. Here’s Murray Energy CEO Robert Murray delivering the same talking points on Fox News. Here’s the Daily Caller pushing them, direct from right-wing think tank the Energy & Environment Legal Institute. Here’s Fred Smith of the Competitive Enterprise Institute. And so on.
Are they right? Is coal the key to providing universal energy access?
A recent paper from 12 international poverty and development organizations (led by the Overseas Development Institute) argues the negative. In fact, the opposite is true: Not only will more coal plants do nothing for energy access, they will impose unnecessary suffering on the poor.
Coal causes climate change, which is bad for the poor
There are some interesting, and not so obvious, reasons why this is true, but the most important reason is also the most self-evident: Coal causes climate change.
Coal is the single biggest contributor to global carbon pollution. It provides about 30 percent of global energy and produces about 44 percent of global carbon emissions.
Climate change is going to be very, very bad for the global poor, for a wide variety of reasons. It threatens to set back decades of development work. As Jim Yong Kim, president of the World Bank, puts it, "if we don’t confront climate change, we won’t end poverty."
This separate report from the Catholic Agency For Overseas Development (CAFOD) puts the threat into perspective. "Of the 30 countries most vulnerable to changes in weather patterns and hazards including climate change," it says, "26 are among the world’s poorest — that is, ‘least developed’ countries." Of the populations most vulnerable, four in ten — over 400 million people — already survive at the edge of subsistence, on $1.25 a day. (See also this grim report from the Center for Global Development.)
Pushing global average temperatures past 2 degrees above preindustrial levels threatens the welfare of hundreds of millions of people who are already close to the edge. And all it will take to push temperatures that high (and higher) is one-third of the coal plants already planned in the world.
To limit temperatures beneath 2 degrees, the world will need to leave at least 80 percent of known coal reserves unexploited and two-thirds of planned coal plants unbuilt. That is simply incommensurate with using coal to drive development in poor countries.
Lack of sufficient energy is not the main cause of energy poverty
How can access to energy services be extended to those who lack it?
The coal industry claims the answer is more energy — and that renewables are incapable of providing the quantity needed. They point to China’s decade-long coal binge and its success in lifting people out of poverty.
"No other poverty alleviation strategy in modern history has been more effective than the one implemented by China and driven by an economy fuelled at over 70% by coal," Milton Catelin, chief executive of the WCA, has said.
The point about China is misleading (more on that in a second), but more importantly, it fundamentally misdiagnoses the problem with the world’s remaining "energy poor."
The energy poor fall in two basic categories. Around 15 percent of them live in urban areas, in close physical proximity to power grids, but they aren’t reliably hooked up to those grids.
Both technical and political barriers prevent connection. Those households tend to be dispersed and consume very little energy, which means connecting them is a money loser for utilities. And in many poor countries, utilities are not under social pressure to provide universal access; indeed, they are often centers of patronage and corruption.
Building more coal plants and hooking them to those grids won’t help these households at all. Indeed, in countries like India where this is a serious problem, there is already excess coal capacity on the grid, so new plants are likely to sit idle.
Hooking these households to the grid requires better governance, better financing for the upfront costs of connection, and reform of electricity subsidies and tariffs.
The other 85 percent of energy-poor households are rural, distant from any centralized grid, mostly in Africa, India, and the rest of developing Asia. Putting more coal power on those centralized grids is obviously not going to help them.
EAS Sharma, former Indian minster of power, notes that some 6 million urban and 75 million rural Indian households lack electricity access. "These figures have not changed appreciably since 2001," he writes, "though around 95,000 MW of new largely coal-based electricity generation capacity was added during the intervening decade."
New coal plants are not targeted to areas with poor electricity access. Why would they be? Those households are poor! There’s no money there. Instead, coal gets built where there’s large-scale commercial or industrial demand. There’s no correlation between coal and energy-access needs, either within a country or, as this chart shows, across countries:
The best, fastest solution to bringing energy access to areas where it is now lacking is distributed energy — solar, biodigesters, batteries, microgrids, and the like. These micro-energy solutions will not offer a level of energy access equal to what’s available on a strong centralized grid, but they are more than enough for energy-poor communities to take the first few steps up the energy-access ladder, which are huge in terms of welfare and health.
Eventually, those microgrids can be linked up and connected to larger (low-carbon) power plants, so these rural areas can have real, industrialized economies. But in the meantime, distributed energy can reach them a hell of a lot faster than larger power plants and central grids.
Coal was not China’s primary anti-poverty tool
What about China’s alleged success using coal to reduce poverty? Shouldn’t other countries have the same opportunity?
However, as the authors of the ODI report point out, that story about China is mostly a myth. It gets the timing wrong:
In China between 1981 and 2004, the number of people living on less than $1 per day declined by 500 million. Two thirds of this progress occurred between 1981 and 1987, prior to China’s industrialisation and large-scale expansion in coal power.
The most impactful anti-poverty tool in China was agricultural reform, which broke up collective farms and gave smallholders an economic stake in their farms. The second was a huge push toward export-led manufacturing. The wave of coal-driven industrialization came along when two-thirds of the work was already done.
This is not to say that coal-powered industrialization had no role, but that a) there are other, more powerful measures available, and b) industrialization need not be driven by coal.
Ending energy poverty is complicated; coal’s role is not
The question of how to get energy access to those who now lack it is complicated, to be sure. As I covered in a two-part series here and here, there are ongoing disputes over the right mix of central grid versus microgrid development, baseload versus distributed power, political versus economic reform, and much else.
But coal’s role in all this is not complicated. Locally, coal kills people through air and water pollution. Globally, coal kills people by exacerbating climate change. It’s unconscionable for any country to permit further coal expansion if there are reasonable alternatives.
And there are reasonable alternatives, ready to expand. Maybe renewable energy, joined with efficiency, grid build-out, and energy storage, can cover it. Maybe it’s renewable energy and some nuclear power. Maybe it’s renewable energy, some nuclear power, some biomass, and some natural gas.
In any case, there’s no need for coal. Coal’s gotta go.
Many people and reports have made this same point before.
- Institute for Energy Economics and Financial Analysis: "Energy Poverty, Then and Now: How Coal Proponents Have It Wrong"
- Carbon Tracker: "Energy Access: why coal is not the way out of energy poverty"
- The Australia Institute: "All talk, no action: the coal industry and energy poverty"