The Coal Dilemma

updated December 2016

Coal is plentiful in Africa and South Asia and most low income countries assert their right to a traditional fossil-fuel development path, when cajoled to “leapfrog” the old technologies in favour of renewables. Observing that per capita emissions of their populations are tiny fractions of those in Europe and North America, these countries perceive an element of hypocrisy in the maintenance of significant coal-fired generation in developed economies such as Germany and Australia.

Many environmental campaigners oppose this strategy, arguing that climate change will aggravate global poverty, ultimately reversing the benefits of coal-fired energy access. They also observe that off-grid technologies will be essential, if no households are to be left behind.

Projections by global energy policy and research groups generally assume that coal will continue to play a role in extending national grids in developing countries. Individual governments themselves have all published plans, as a commitment under the Paris Climate Agreement approved in 2015. These “Intended Nationally Determined Contributions” often lack detail but strive to achieve an outcome which improves on “business as usual” without jeopardising economic development, for which energy capacity is crucial.

The global coal industry itself lays claim to a moral responsibility to pursue global poverty reduction by achieving energy goals more quickly and at lower cost than fanciful renewable alternatives. Households desire connection to a traditional grid, runs this argument.

Sensitive to accusations of overlooking the needs of the poor in urban and peri-urban areas, climate campaigners focus their opposition on the availability of soft loans from the multilateral development banks for fossil fuel projects. The World Bank asserts that it has not supported coal-fired power projects since its controversial $3.75 billion loan to Eskom of South Africa in 2010.

A second area of controversy centres on the interest of many developing countries in large hydropower projects, influenced by studies which declare the untapped potential to be as much as 92% and 80% in Africa and Asia respectively. As a renewable source, hydropower is a highly attractive option.

However, these projects have a poor track record of environmental destruction and human displacement, often without proper prior assessment or consultation. New developments such as the Gibe III dam in Ethiopia attract opposition from international environmental and human rights watchdogs.

Big hydropower is also vulnerable to climate change. A fall in the level of dam water below the point necessary to drive turbines has already caused chronic power shortages during periods of drought in Uganda, Zambia and Ghana.

The energy roadmap for the world’s poorest countries is therefore hemmed in by conflicting forces – the desperate need for human and economic development in parallel with the protection of vital environmental assets – both perspectives co-existing in the Sustainable Development Goals. These countries face dilemmas that did not exist at the comparable period of development in Europe and North America, more than a hundred years ago.

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