Developing World Will Grow On Coal, Climate Leaders Predict

The developing world will rapidly increase its use of electricity in the next 15 years, and coal remains the most likely fuel to power that growth, despite carbon emissions, according to a panel of world leaders in climate policy and economics.
"In the short term, which I define as the next 10 to 15 years, I see no alternative to coal," said Jairam Ramesh, an economist and member of the Indian Parliament who served as India's chief negotiator at the Copenhagen Climate Change conference in 2009. "This is a very depressing thing for me to say, but that's the reality."
Ramesh appeared at a panel last month at the World Economic Forum in Davos, Switzerland, alongside former EPA Director Carol Browner and Jin Yong-Cai, the executive vice president and CEO of the International Finance Corporation, an arm of the World Bank that focuses on private-sector development.
"There has to be some coal," said Cai, who hails from the world's largest coal-conusming nation, China. "There will be natural gas. That is the fuel mix we will depend upon for the next 15-20 years, hoping maybe the technology will develop. Maybe eventually carbon capture will be viable, I do not know, and that's the situation we're facing."
That situation means a continued increase, possibly an accelerated increase, in carbon emissions from countries like India, where the growth needed to alleviate poverty, according to Cai, is primarily constrained by access to electricity.
And that situation is complicated, according to Ramesh, by the unpopularity of nuclear power.
"We are unable in the current atmosphere to increase the contribution of nuclear power," Ramesh said. "Nuclear really is from a climate point of view the best option, but all environmentalists are opposed to nuclear power. There's a paradox here."
Browner, who served as EPA administrator under President Clinton and then as a climate advisor to President Obama, corrected Ramesh:
"I'm an environmentalist who's also pro-nuclear," she said. "And I'm pro-nuclear for a very simple reason. I think that climate change and greenhouse gas emissions, carbon pollution, carbon emissions, are the biggest issue the world faces, and it would be completely inconsistent to take off the table a source of energy that doesn't emit carbon."
University of Chicago economist Michael Greenstone, who moderated the panel, suggested that political opposition really has little to do with the plight of nuclear power.
"There's an environmental pushback on nuclear, but you can set that aside," Greenstone said. "Nuclear's not in the money. [With the low cost of] natural gas, there's no nuclear plant being built because no one can make any money doing it."
Nonetheless, while this panel was meeting in Davos, Switzerland, President Obama and Indian Prime Minister Narendra Modi were meeting in New Delhi and working on an agreement to reduce obstacles to U.S. investment in Indian nuclear plants.
Meanwhile, China is in the process of tripling its nuclear capacity with 50 new reactors.
Cai placed hope on new generation reactors being developed by Bill Gates's nuclear startup, TerraPower, and developed in conjunction with China.
"If that technology becomes available, if the Chinese build a few and really demonstrate this is a viable technology," Cai said, "that will be a solution."
But Browner cautioned that any coal infrastructure that develops in the next 15 years will likely be in service much longer than that.
"The infrastructure that is built—whether it's a coal infrastructure or a natural gas infrastructure—we have reason to assume it is with us for a very long time," Browner said, noting that the average age of a U.S. coal plant is about 45 years.
"When we talk about coal playing a role for the next 10, 15, 20 years, that's not the history. The history is, it'll be a much longer role."
Greenstone suggested a different strategy for blunting development of coal plants, one that emphasizes local concerns with public health over global concerns about climate change.
"My own view of the U.S.-China agreement is that it was driven largely by internal concerns about air pollution, not some far-flung focus on climate change," Greenstone said. "Raise that as an issue that people in developing countries are concerned about today, and you get some climate co-benefits along the way."
And in fact, India is home to 13 of the world's most polluted cities.
The panel in Davos (video) was hosted by the Energy Policy Institute of Chicago, which Greenstone directs. He opened the discussion by framing the problem for the developing world.
"You cannot have growth, you cannot have high levels of income, without lots of energy consumption," he said, displaying a graph that shows energy consumption in kilowatt hours per capita per year:
• 13,236 kilowatt hour per person per year in the United States
• About 3,300 in China
• About 700 in India
Ramesh agreed that the U.S. figure represents the vast potential for energy consumption of billions of people who may aspire to a commensurate lifestyle.
"These countries are anxious for growth," Greenstone said, "they're growing, and in the coming decades we're just going to see lots of lots of increased energy consumption."
If that growth comes from coal, it can be relatively cheap—about 3 cents per kilowatt hour. Alternative sources will cost much more.
"In order to get rid of the air pollution that's a result of using coal, or to reduce the rate of climate change, one is going to have to use forms of electricity that are maybe three or four times as expensive," Greenstone said. "That's just a conscious choice that will have to be made one way or another."
But it's a difficult choice, as well as a critical one, in the world's poorest countries, where the choice will be made most often in coming years.
"The most interesting energy problems are outside of the United States," Greenstone said. "It will be decided in places like India and China: what level of air pollution do we want to have, how much energy access do we want to have, and what degree of climate change?"
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