Yahoo News 27 Oct 08;
BEIJING (AFP) – China's dependency on coal as its major energy source is creating hidden environmental and other costs worth more than seven percent of its annual gross domestic product, green groups said Monday.
A report entitled: "The True Cost of Coal", jointly commissioned by Greenpeace, the Energy Foundation and conservation group WWF, said taking into account the real expense was vital to the nation's future energy security.
The unaccounted costs equate to an estimated 1.7 trillion yuan (249 billion dollars), and would be even higher if the impacts of climate change were included, according to the report.
"Environmental and social damages are underestimated while using coal in China as a result of market failures and weakness in government regulations", said Mao Yushi, an economist and lead author of the report.
By accounting for the hidden annual costs, China could wean itself off its coal dependency and better address ecological degradation and global warming concerns, the report said.
"The government of China has the opportunity to make a real improvement to the environment by reforming the current coal pricing system," the report said.
"If all the external costs of coal are genuinely reflected in the coal price, this will provide a non-distorted price signal for the whole energy market."
The report said the external and unaccounted costs to China of using coal included air and water pollution, ecosystem degradation, damage to infrastructure, human injuries and loss of life.
It also takes into account the distortion of government regulations which keep the cost of coal down such as distorted land ownership policies, and inadequate worker safety and worker compensation systems.
China depends on coal for about 70 percent of its booming energy needs, which is one factor in its huge increase in greenhouse gas output in recent years.
China now ranks alongside the United States as one of the world's two biggest emitters of the gases that are blamed for climate change.
Hidden Cost Of China's Coal Is $250 Bln – Survey
Emma Graham-Harrison, PlanetArk 28 Oct 08;
BEIJING - China's dirty and dangerous coal mining industry cost the country a hidden $250 billion last year in lost and damaged lives, wasted energy and environmental devastation, according to a survey launched on Monday.
Pollution affected water, land and air around mines, thousands died and many more were hurt in mining accidents, and acid rain-causing sulphur dioxide and mercury were among dangerous emissions when coal is burnt in factories and power plants.
None of this is reflected in low coal and power prices, according to "The True Cost of Coal", researched over three years by Chinese economists and environmentalists.
"Behind China's large production and consumption of coal ... lie expensive and worrying environmental and social costs," their report warns.
Tariffs would need to rise by around a quarter to reflect the real burden for Chinese society, which in 2007 was 1.7 trillion yuan (US$254.9 billion), they say.
"Currently these costs are paid by the people in China suffering from the damage," Mao Yushi, one of the report's authors and chairman of the Unirule Institute of Economics, told a news conference at the launch of the report.
Experts from the coal heartland of Shanxi province, Peking University, the government's top energy think-tank and the Chinese Centre for Disease control also contributed research.
Last year nearly 3,800 miners died in explosions, flooding and other underground accidents. Although that marked a 20 percent decrease from 2006, it is still the most dangerous mining industry in the world.
For a country short of water and struggling to keep its food and air safe, it is also an environmental liability, said Yang Ailun from Greenpeace, who helped coordinate the report.
Each tonne of coal produced means 2.5 tonnes of water are polluted, while coal mining waste makes up some 40 percent of the country's solid industrial waste, she said.
NO END TO COAL
The key problems identified by the report are government regulations that distort prices and weak oversight that allows miners to get land cheaply, dodge safety and environment laws and ship their coal in dirty, dangerously overloaded trucks.
Extra taxes, stricter enforcement, and an end to the price caps that have kept electricity temptingly cheap would make coal prices more realistic and curb waste, deaths and the worst pollution, the report said.
The good news for a country that relies on the dirty fuel for more than two thirds of its energy is that the big price increase it calls for in the long term would mean only a tiny hit to the economy as efficiency soars and green energy firms prosper.
But for those who dream of a future powered only by windmills and dams, they warn that coal will not lose its dominance in China for decades. The report says the 23 percent price rise it recommends would cause only a 7 percent fall in consumption.
China is already the world's biggest producer and consumer of coal, which provides a cheap, domestic energy source at a time when volatile global oil markets have exacerbated worries about tight supplies.
Demand is growing so fast that its miners have to produce an extra 200 million tonnes a year to keep up, or the equivalent of the entire coal mining industry of major producer Indonesia.
A slight decline in consumption, in place of this frantic expansion, might give the industry room to improve their standards without starving the country of energy.
(US$1=6.845 Yuan)
China pays high environmental and social price for reliance on coal
Pollution, emissions and mining accidents cost £160bn each year, say Greenpeace, WWF and energy campaigners
Tania Branigan, guardian.co.uk 27 Oct 08;
China's main source of power is so destructive that its social and environmental impact costs £160bn annually, warns a new report from green campaigners.
The country is the world's largest producer and consumer of coal, relying on it for more than 70% of energy production, compared with a global average of around 40%.
The True Cost of Coal, published by Greenpeace, the World Wildlife Fund and The Energy Foundation, says by-products ranging from water pollution to mining deaths cost China an additional 1.7 trillion yuan, or more than 7% of annual GDP.
"From extraction to combustion, every step in the process of using coal damages the environment," warns the report.
"To ensure its energy security, environmental protection and healthy economic and societal development, China must reduce its reliance on coal."
The report catalogues the effects of the industry across a wide range of areas. According to official figures, coal is responsible for 70% of soot, 85% of sulphur dioxide, 67% of nitrogen oxides and 80% of carbon dioxide emitted in the country — leading to respiratory diseases and contributes to global warming.
Thousands die annually in the country's mines, despite a safety drive in recent years. Wastewater and solid residue damage water systems and agricultural land.
Land subsidence caused by mining damages road, railway lines and power lines and results in the relocation of 2,000 people for every 10m tonnes of coal produced.
Each tonne of coal consumed in 2007 cost China an extra 150yuan in environmental damage, the study shows.
The authors — from well-regarded research institutes in China — show how the government could ensure those costs are internalised, suggesting the price of coal would rise by 23%.
They accept that would reduce GDP by 0.07%, but argue it would increase China's long-term international competitiveness and increase social wealth by 940bn yuan.
"Environmental and social damages are underestimated while using coal in China, as a result of market failures and weakness in government regulations," said economist Mao Yushi, lead author of the report.
The report suggests that imposing environmental taxes, improving compensation schemes and other restructuring the coal industry could all slash coal use.
"Recognising the true cost of coal would create incentives to developing cleaner, sustainable energy sources. The government should introduce an effective price signal for coal, which would ensure a massive improvement in energy efficiency and large-scale implementation of renewable energy.
"This would reduce China's environmental pollution and show its leadership in fighting climate change," urged Yang Ailun, climate and energy campaign manager of Greenpeace China.
