Cleaning up its act
COAL is a dirty fuel, so it should be no surprise in a world that is starting to feel the adverse effects of climate change that it has become a dirty word too.
Coal prices have fallen by half over the past four years as weak global economic growth has depressed demand, and hardpressed coal-mining companies now face the prospect of further declines as the world’s biggest consumers seek to slash carbon emissions and reduce air pollution.
US President Barack Obama’s Clean Energy Plan, released on Monday, takes a particularly hard line on coal as part of a bid to meet an ambitious commitment to reduce US carbon dioxide emissions by 32% from 2005 levels by 2030. This follows a move by China to reduce its reliance on coal, in part due to a similar drive to curb greenhouse gas emissions but also because air pollution has become a serious health issue in the rapidly urbanising and populous country.
Even Japan is considering restarting some of the 43 nuclear reactors it shut down after the 2011 Fukushima disaster, as a way to use less coal.
This trend is undoubtedly going to have a knock-on effect around the world, both from the perspective of countries seeking to reduce emissions with an eye on the Paris climate conference scheduled for December — when a protocol is expected to be adopted committing each country to a specific emissions target — and for coal producers such as SA. Many mines are already struggling to cover soaring costs as revenues dwindle, but now it appears that the Paris protocol could sound the death knell for the least efficient operations.
Obama’s Clean Power Plan is interesting because it represents a subtle shift in his approach. After starting his first term with a policy for tackling climate change based primarily on concern for the environment, the Obama administration changed course after running into a brick wall in Congress, with subsequent initiatives emphasising the effect rising temperatures and weather-related natural disasters might have on the economy and jobs. Now the US focus is on the personal wellbeing of individual Americans, including their lifestyle and health. Whether that will sway Congress remains to be seen.