Hitching businesses to the green bandwagon

Michael Richardson, Straits Times 6 Dec 07;

AS GOVERNMENT negotiators from around the world try to agree on the outlines of a deal to reduce the impact of climate change, one of the biggest problems they must tackle is cutting the huge amounts of global warming emissions from the burning of coal to generate electricity and run heavy industries.

The officials, now meeting in Bali under United Nations auspices until Dec 14, face a daunting task. The world's three largest coal-burning countries - China, the United States and India - oppose mandatory emissions reductions, arguing that they would undermine economic growth.

In doing so, they foreclose the most radical but effective way to cut a heavily polluting energy source. However, an alternative path - developing low-emissions coal use - is a major opportunity and a major challenge for international cooperation. But it can be achieved only if Asian and Western governments and companies work more closely together for the common good.

Because coal is cheap and relatively abundant, it accounted for 25 per cent of the world's commercial energy supply last year, second only to oil. But due to its high carbon content, coal was also responsible for about 40 per cent of the carbon dioxide released from fossil fuels, despite supplying only 32 per cent of fossil fuel energy.

Carbon dioxide accounts for about 80 per cent of all greenhouse gas emissions and is considered the monster of global warming.

World coal consumption reached a record level last year, with China, the US, the European Union and India the top four users. But power generators in America and Europe are now finding it more difficult to get regulatory approval to build new coal-fired plants, partly because of growing public concern about pollution and climate change.

Meanwhile, China and India have embarked on major expansion of industrial coal use, saying it is essential for their economic growth, jobs and poverty alleviation, despite the costs to the environment and public health.

Last month, China's biggest coal-burning plant, a 4,000MW complex built at a cost of US$2.1 billion (S$3 billion), started supplying electricity to energy-hungry factories and cities along the country's eastern coast.

The official China Electricity Council said earlier this year that 90,000MW of coal- fired generating capacity - the equivalent output of 90 nuclear power stations - was added to the national grid last year alone. This staggering figure may well include some double-counting.

Moreover, as electricity supply catches up with demand in China and energy conservation measures take hold, the rate of power station construction will slow.

Even so, the International Energy Agency (IEA) warned in its recent annual report that if unfettered growth in global energy demand continues, demand for coal is set to grow most rapidly, driven largely by power sector demand in China and India.

As a result, energy-related emissions of carbon dioxide would increase from 27 billion tonnes in 2005 to 42 billion tonnes in 2030 - a rise of 57 per cent.

China is expected to overtake the US by the end of this year to become the world's biggest emitter of carbon dioxide, while India is projected to become the third-biggest source by around 2015.

The IEA suggests that any new deal to curb global warming should include incentives for China, India and other rapidly emerging economies to use energy more efficiently and invest in cleaner power.

The UN is not the best forum to work on the details of low-emissions coal technology. With almost 190 nations, it is too cumbersome. But any agreement related to climate change would need the UN's final seal of approval.

A better forum would be the Asia-Pacific Partnership on Clean Development and Climate (APP). Launched barely two years ago, it encompasses the governments and corporate sectors of seven partner nations, including Australia, Canada, China, India, Japan, South Korea and the US. The APP needs more resources and could be enlarged to include other major coal users and exporters such as Russia, Indonesia and South Africa. It could also draw on the coal expertise of the IEA and other bodies.

A key advantage of the APP is that it engages companies and governments. In the West, it is these coal and engineering businesses, rather than governments, that own the technology that enables modern coal plants to filter out nitrous oxide, a significant greenhouse gas, and other harmful emissions.

These same companies are the leaders in developing the next generation of coal-fired plants that will capture carbon dioxide for burial underground, although this may add substantially to the cost of electricity.

Last month, the Centre for Global Development in Washington, a non-partisan research institute, compiled an online database listing carbon dioxide emissions from 50,000 power plants around the world, with figures for the years 2000 and 2007, then forecasts for five to 10 years in the future, based on published plans.

The data base shows the US power sector is now the top emitter, spewing nearly 2.8 billion tonnes of carbon dioxide into the atmosphere each year. China is close behind at 2.7 billion tonnes, with Russia at 661 million tonnes, India at 583 million tonnes and Japan at 400 million tonnes. Germany, Australia, South Africa, Britain and South Korea round out the top 10 carbon polluters.

A significant finding of this study is that senior executives of the 100 largest power companies worldwide are responsible for plants that emit 57 per cent of all carbon dioxide emissions from this sector.

Bringing them into coal-related climate change negotiations could help to ensure the businesses they head move from being an important part of the problem to being an important part of the solution.

The writer is an energy and security specialist at the Institute of Southeast Asian Studies. This is a personal comment.