Coal in the spotlight at COP 26

The recently concluded international climate change conference held in Glasgow – COP 26[1] – saw an unprecedented focus on weaning the world off coal as an essential step in keeping the average global temperature from rising by more than 1.5-2.0 degrees Celsius from pre-industrial levels. Phasing out coal in the electricity sector will be key to any credible strategy to address climate change.

Success won’t come easily, however. China, the world’s biggest carbon emitter, is still building coal-fired power plants, opening a new one virtually every week in 2020. Thermal coal consumption in India has doubled in the last decade. Most advanced economies continue to rely on coal-fired electricity to varying degrees. Coal looms particularly large in Asia, home to more than half of the world’s population.

The encouraging news is that a significant group of countries participating in COP 26, including Canada, pledged to stop burning coal by 2030 or 2040. This indicates that momentum is growing to reduce the place of coal in the world’s energy system. But the challenge of delivering on this commitment will be immense.

Today, coal provides about 26% of the world’s energy and 44% of its electricity. The accompanying chart shows total primary energy consumption for the G20 countries, broken down by broad energy source: coal, oil, natural gas, and “everything else” (nuclear, hydroelectric, and other renewables). Coal’s importance stands out. In China, South Africa, and India, it accounts for well over half of all energy consumed. And it continues to be a significant source of energy in advanced economies like Australia, Japan, Germany and the U.S., notwithstanding considerable progress in scaling back the use of coal in developed economies in the last 10-15 years.

The G20's Energy Sources Vary Greatly

The latest data confirm that China now consumes more coal than the rest of the world combined![2] Without a herculean and sustained Chinese effort to curtail widespread reliance on coal, particularly for electricity, there will be zero chance of meeting the international climate change goals confirmed at COP 26.

Where does Canada fit in this picture? Coal meets only a small slice of Canada’s overall energy demand. This is mainly because Canada has developed one of the least carbon-intensive electricity systems in the world: about four-fifths of the power produced in the country comes from carbon-free sources, notably hydro, nuclear and non-hydro renewables. Very few other affluent or middle-income countries can match that. Within Canada, only in Alberta, Saskatchewan and Nova Scotia does coal still make a meaningful contribution to generating electricity.

It follows that looking ahead, Canada has limited room to reduce greenhouse gas emissions in the next decade by switching from coal to less carbon-intensive electricity sources, compared to both other advanced economies and the vast majority of emerging economies. For the most part, Canada will have to look outside of the electricity sector if it hopes to make substantial progress in de-carbonizing in the next decade. Unfortunately, that means the costs associated with reducing emissions are likely to be higher for Canada than for many other countries where coal has a bigger place in the energy system and there are cost-effective options to replace it with less carbon-intensive forms of electricity.

[1] COP refers to Conference of the Parties – the countries attending the first global climate change get-together back in 1992.

[2] Council on Foreign Relations, “Can the world slash coal use by 2030?” (November 10, 2021).