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Coal’s health and environmental costs outweigh economic benefits

The cost of continuing to use coal in electricity production is higher than not using it when accounting for the negative monetary impacts from higher healthcare costs and biodiversity loss, a study has found.

Coal combustion is currently one of the biggest sources of CO2, accounting for more than a third of global emissions. Coal is also a major contributor to the detrimental effects on public health and biodiversity

However, while countries such as the UK are reducing their usage of the fossil fuel, India and - to a greater extent - China are still widely generating electricity from coal, with the latter already planning to expand its capacity in the coming years.

Computer simulations by an international team of researchers have demonstrated that countries would be economically better off stopping the use of coal as soon as possible.

The simulations also show the world cannot stay below the 2°C warming limit if we continue to burn the fossil fuel.

“We’re well into the 21st century now and still heavily rely on burning coal, making it one of the biggest threats to our climate, our health and the environment,” said Sebastian Rauner, lead author and researcher at the Potsdam Institute for Climate Impact Research (PIK).

“That’s why we decided to comprehensively test the case for a global coal exit. Does it add up, economically speaking? The short answer is yes, by far.”

For their computer simulations, the researchers looked not only at electricity generation, but at all energy sectors, including transport, buildings, industry and agriculture.

“We find that, based on all countries’ current climate pledges under the Paris Agreement, humanity is so far not on track to keep global warming below 2°C.

“Yet, if all countries would introduce coal exit policies, this would reduce the gap to fulfilling the goal by 50 per cent worldwide. For coal-heavy economies like China and India, quitting coal would even close the gap by 80-90 per cent until 2030.”

The researchers developed a simulation framework which considers the full lifecycle effects of phasing out coal, accounting not only for all impacts associated with coal combustion but also how a coal exit would affect the remaining energy sources and the energy sector as a whole.

“In particular, we looked at two externalities: human health costs, especially caused by respiratory diseases, and biodiversity loss, as measured on the basis of how much it would cost to rewild areas currently cultivated,” Rauner said. “The mitigation costs, in turn, are mostly economic growth reductions and costs for investments in the energy system.”

The study found that benefits from reduced health and ecosystem impacts clearly overcompensate the direct economic costs of a coal exit. They amount to a net saving effect of about 1.5 per cent of global economic output in 2050, or around £318 for every human on Earth in 2050.

India and China could reap the largest benefits from stopping coal use as they both have high populations that are densely packed together.

“This has very significant policy implications: It makes a huge difference for the citizens of an Indian or Chinese megacity what air they breathe and, for farmers, how intact ecosystems are. These benefits are immediate and local,” Rauner explained. “So the incentives towards policy makers are twofold. One, it is not unlikely that phasing out coal can win popular support and eventually elections. Two, it is worthwhile phasing out coal even if your neighbours do not.”

Earlier this month a think tank warned that coal developers could be wasting $638bn (£502bn) globally developing new plants instead of generating electricity from cheaper renewable sources.

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