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The coal industry and the international community

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World Coal,

Aleksandra Tomczak, World Coal Association, looks forward to some of the decisions coming up in 2014 that will affection the coal industry.

2014 will see the first test case for the World Bank’s new energy strategy, which includes a decision to limit financing for coal-fired power plants to “rare circumstances”. In fact, at the end of 2014 the World Bank is expected to take a final decision on whether to finance a coal-fired power plant in Kosovo: it will be the Bank’s first decision relative to a coal project since the adoption of its new energy strategy.

The project would see the replacement of a 45-year-old plant, considered to be one the biggest emitters in Europe, with a more modern and reliable plant, and retrofitting a 25-year-old plant to bring it into compliance with the EU environmental standards. According to earlier World Bank analysis, the proposed new plant “is the least expensive thermal option, even when the relatively higher environmental costs are priced in”.

Milton Catelin, CEO of the World Coal Association (WCA), says it is critical that development banks support developing countries in accessing state-of-the-art coal technologies. “Coal has been vital to global development – almost half of this century’s incremental energy has come from coal alone and virtually all of the world’s poverty reduction between 1981 and 2008 took place in coal-fueled China.”

International community gears up for 2015 agreements

No firm decisions should be expected in the framework of international climate change negotiations this year, although the two major international meetings scheduled for 2014 should give a better understanding of possible future policy directions. In September, UN secretary-general Ban Ki-moon will hold a Climate Summit bringing together heads of states. The summit could be a useful indicator of the readiness and ambition of the international community for a global climate deal. It will be followed by international climate change negotiations in Peru in December (COP20) where countries will discuss issues such as the type and the level of mitigation commitments that should be made as part of the global climate deal.

2014 will also see the first substantive proposal for the post-2015 Sustainable Development Goals (SDGs). The proposal will be finalised in the first half of 2014 and will then be debated by the UN General Assembly. The SDGs will include a target on energy access, but how this is achieved remains to be seen. A formal negotiating process will commence in September to agree on the goals in mid-2015.

Contributing to the discussion on the post-2015 Sustainable Development Goals, the WCA has called for clear action to improve energy access and address the challenge of energy poverty affecting 1.3 billion people worldwide. “Including energy access targets post 2015 will be critical to mobilizing global action and supporting investment in modern energy technologies in the developing world. A robust energy access target is one essential component, but what derives from that target must also be recognition that different countries will achieve it in different ways. For some, renewable energy might be the best approach, but for many other countries, coal is going to play a huge role in delivering energy access,” said Catelin.

This is an edited extract of an article that first appeared as TOMCZAK, A., “What to watch in 2014: Policy developments that will shape the coal industry”, Cornerstone (Spring 2014), pp. 19 – 25. Cornerstone is the official journal of the World Coal Association.

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