Global Coal Risk Assessment

Confronted with a cooling economy and global headlines declaring an "Airpocalypse", China faces challenges on multiple fronts. While many people are quick to point out the hurdles, the reality is that its leaders are moving ahead with significant policy measures and reforms. If successful, these actions will not only help drive China's economic development, they will address another mounting threat: climate change.

The latest report from the Intergovernmental Panel on Climate Change confirms the risks of climate change and humans' central role in it. China is no less vulnerable. One-third of its coastline is highly vulnerable to rising seas that will probably lead to the relocation of coastal communities. China's agricultural production - including rice, wheat and corn - could fall dramatically within a few decades due to shifts in precipitation and soil quality. Health impacts, including malaria and other infectious diseases, are also expected to mount as global temperatures rise.

As China moves to tackle issues related to the economy, pollution and urbanisation, each carries opportunities to shift the country's emissions trajectory and make progress on climate change.

Coal is emerging as a major topic of conversation at the United Nations climate-change negotiations currently taking place in Warsaw – and rightly so. Indeed, it is a discussion that the world needs to have.

The latest findings of the Intergovernmental Panel on Climate Change conclude that we are quickly using up our carbon “budget” – the amount of carbon that we can afford to emit while still having a good chance of limiting global warming to 2º Celsius. According to the IPCC, keeping the global temperature increase from pre-industrial levels below this threshold – the recognized tipping point beyond which climate change is likely to get seriously out of control – requires that the world emit only about 1,000 gigatonnes of carbon (GtC). More than half of this amount was already emitted by 2011. Unless we shift away from carbon-intensive behavior, the remaining budget will run out in roughly three decades.

U.S. public financing for overseas coal-fired power is likely coming to an end.

That’s the clear signal from the U.S. Department of Treasury’s announcement earlier this week. At institutions like the World Bank, where the United States is the largest shareholder, this decision holds real significance.

Last month, China’s State Council announced a new action plan to combat air pollution, which included a prohibition of new coal-fired power plants in the three most important metropolitan areas around Beijing, Shanghai, and Guangzhou (known as the “key-three city clusters”). But while the plan sounds like progress, will it actually slow down China’s new coal construction? A bit of analysis suggests that it may take more action to really curb China’s appetite for coal.

When President Barack Obama announced the country’s first national climate strategy, many people wondered what it would mean across the nation. Yet, the strategy may carry even more significant implications overseas.

The plan restricts U.S. government funding for most international coal projects. This policy could significantly affect energy producers and public and private investors around the globe.