Coal and Poverty

I am as anti-coal as anyone else. It’s a terrible energy source if you care about the future of the planet. However, there’s no question that there’s a good reason why people burn coal, especially if you are poor–it is cheap and relatively abundant. The use of coal was central to the Industrial Revolution and continues to be for newly industrialized nations. That doesn’t mean it has to be that way–certainly we could be investing huge amounts into clean energy in newly industrializing companies to forestall this.

But that said, it’s really a cherry picked argument to say that coal actually doesn’t help the poor in the short term.

More coal doesn’t help people living close to the grid

The report notes that approximately 15% of people in energy poverty live close to existing electric grids, but there are a variety of barriers blocking their connection. For example, the poor consume relatively little electricity, so the costs of connecting them may exceed the resulting profits. The power lines used to connect them also result in high energy losses and power system instability. The poor also have little political influence in many developing countries. As the report concludes:

This means that for energy-poor families living close to the grid, building new power generation capacity – coalfired or otherwise – will not help them get connected. Instead, access will require financing the upfront costs of new connections, and rationalising tariffs to reflect the true costs of supplying power.

More coal also doesn’t help people in rural areas

Approximately 84% of energy-poor households live in rural areas further away from the grid. For this group, decentralized stand-alone and mini-grid solutions are much quicker than waiting to build a new centralized power plant and distribution lines. A single power plant can take a decade between planning and ultimate completion, while distributed wind turbines or solar panels can be deployed much more rapidly, as Elon Musk explained in ‘Before the Flood’:

So more coal only helps the capitalists? I mean, you might argue that coal is not the most efficient way to provide this electricity in terms of getting up the fastest. But that doesn’t mean that coal isn’t useful, especially on a smaller scale.

It then goes on to an unfortunate use of Bjorn Lomborg of all people to “show” that China’s poverty reduction in recent decades wasn’t really because of coal use. Um, OK. To be fair, China’s rise was due to a lot of factors. But very cheap energy built by a government that couldn’t care less about pollution was a big part of it.

At the end, the author notes that coal causes lots of pollution and the poor bear the burden of that. True enough but then that’s not really the argument here, right? In the short term, coal helps the poor. In the long term, it probably doesn’t. Finally, the real point:

Wind and solar are already becoming cheaper than coal

Not only are wind and solar better for the poor in terms of ease of deployment, clean air, and slowing climate change, they’ve also become cost-competitive.

South Africa, for example, is the cheapest place in Africa to generate coal-fired power, yet electricity from its new 4.7 gigawatt Medupi advanced coal plant will cost … 17% more than the electricity generated from South Africa’s 2 gigawatt of new onshore wind power. In India, the minister responsible for power development recently stated: ‘I think a new coal plant would give you costlier power than a solar plant’ (Climate Home, 2016). The statement is supported by the extremely low bid prices for recent solar procurements in India (Kenning, 2015). Renewable energy investment in the emerging world now outpaces that in developed countries (McGrath, 2016).

Renewable energy also has low operating cost and zero fuel cost, while fossil fuel costs are variable and susceptible to price spikes. And renewable energy creates more (and safer) jobs than coal.

Coal companies and their allies often argue that we need to burn their products to lift the poor out of poverty. For example, Matt Ridley has claimed:

those who advocate no support for coal are effectively saying that the adoption of renewable energy is more important than alleviating African poverty

In reality, there are better, faster, cleaner alternatives to help deliver electricity to the energy-poor. Those who argue to the contrary often do so to advance their own agendas.

That is starting to happen, but there’s no good reason to prevaricate about the role coal has played and continues to play in poverty reduction and rapid industrialization. Once again, these things would happen with far less damage to people and nature if wind and solar were built instead of coal. But the article as a whole is far from compelling in refuting the arguments for coal. The argument needs to be that “Yes, coal is an effective way to move people out of poverty but that the long-term damage makes it a terrible idea. Instead, let’s engage in the rapid buildup poor nations’ industrial capacity through renewable energy.” Fudging the facts about coal doesn’t help.