Asia's reliance on coal spells trouble

Michael Richardson, Straits Times 26 Oct 09;

ASIA'S rebound from the global economic slump is cheering the world. But the revival is bad news for the environment because it is largely driven by a production system addicted to fossil fuels.

This helps explain why it is proving so difficult for international climate change negotiators to bridge the gulf that divides developed and developing countries.

It also helps explain why China and India, despite tensions over territorial and water disputes, agreed last week to work together to resist binding cuts or caps to their greenhouse gas emissions. The International Energy Agency (IEA) calculates that around 65 per cent of these emissions worldwide come from energy use or production.

The economic crisis has had a significant impact on the energy sector. The IEA reported earlier this month that investment in polluting technologies had been deferred and emissions of carbon dioxide could fall this year by as much as 3 per cent - steeper than at any time in the last 40 years.

'This gives us a chance to make real progress towards a clean-energy future,' said IEA executive director Nobuo Tanaka. But, he added, 'only if the right policies are put in place promptly'.

Here's a snapshot of global energy use. Fossil fuels account for 80 per cent of demand: oil (34 per cent); coal (25 per cent); natural gas (21 per cent). The rest comes from wood, other biomass and waste (11 per cent); nuclear power (6.5 per cent); hydro-power (2.2 per cent). Less than 1 per cent of global energy demand is met by clean sources such as geothermal, solar and wind.

Shifting this energy production pattern towards a system that produces little greenhouse gas emissions is politically difficult and very costly, particularly in Asia.

Oxford University economist Dieter Helm - who has co-edited a new book, The Economics And Politics Of Climate Change - says climate change is really 'about the massive increase of coal burning internationally, especially the growth of China and India fuelled by coal-based energy - and America too, where the Obama plans are also small relative to the problem'.

What does he mean? Coal fuels heavy industries, like steel and cement. But electricity is the key. It powers so much of modern life, from cooling and heating to lighting, computers and the Internet.

Electricity production accounts for nearly one-third of global fossil fuel use. It is the source of about 40 per cent of energy-related carbon dioxide emissions, and about one-fifth of greenhouse gas emissions from human activity.

Half of the electricity generated in the United States is from coal. In India, the figure is 70 per cent, and in China, 80 per cent. Why? Because coal is up to six times less expensive per unit of energy than oil or gas. It is also locally available in huge quantities.

Yet, despite some improvements, coal remains the most carbon-intensive of the fossil fuels. Modern US coal-fired plants still emit nitrogen oxides and sulphur dioxide at nine and 90 times the rate of new gas-fired plants respectively. And these plants emit carbon dioxide at more than twice the rate of new plants that generate electricity by burning natural gas.

In 2000, coal provided 28 per cent of the world's fossil fuel energy production, compared with 45 per cent for oil. By last year, coal's share had risen to 33 per cent. Coal use in China and India alone is not far short of consumption in the US and the rest of the world combined.

While coal use has started declining in many developed economies, China has in recent years been commissioning the equivalent of two 500MW coal-fired power plants per week, adding a capacity comparable to the entire power grid of Britain each year. A single such plant releases about 3 million tonnes of carbon dioxide annually into the air.

India uses only about a fifth as much coal as China. But with a population similar to that of China, a rapidly expanding economy and rising demand for electricity, India may one day come to rival China in its coal use.

Demand for electricity is growing in South-east Asia too. If countries in the region were committed to cutting emissions, they would follow Singapore, Malaysia and Thailand in switching from coal- and oil-burning plants to gas.

Instead, coal use is rising. Indonesia is in the midst of adding 10,000MW of coal-fired power to an existing capacity of 35,000MW, of which about 20 per cent burns coal. Indonesia became the world's largest exporter of thermal coal for power plants in 2007.

Vietnam plans to bring nearly 49,000MW of capacity online between 2006 and 2015. Over half the addition is to be fuelled by coal. Even Malaysia and Thailand are planning to increase coal use in their power plants to lower costs and diversify sources of fuel.

The World Bank's development report last month noted that 1.6 billion people - nearly a quarter of the world's population - have no electricity. These citizens of developing countries need massive expansions in energy, transport, urban systems and agricultural production.

Clean or not, coal is likely to be a big part of their future energy needs.

The writer is a visiting senior research fellow at the Institute of Southeast Asian Studies.