Coal Phase-out Research Articles

Compensating affected parties necessary for rapid coal phase-out but expensive if extended to major emitters

Coal power phase-out is critical for climate mitigation, yet it harms workers, companies, and coal-dependent regions. We find that more than half of countries that pledge coal phase-out have “just transition” policies which compensate these actors. Compensation is larger in countries with more ambitious coal phase-out pledges and most commonly directed to national and regional governments or companies, with a small share going directly to workers. Globally, compensation amounts to over $200 billion (uncertainty 163-258), about half of which is funded through international schemes, mostly through Just Energy Transition Partnerships and the European Union Just Transition Fund. If similar transfers are extended to China and India to phase out coal in line with the Paris temperature targets, compensation flows could become larger than current international climate financing. Our findings highlight that the socio-political acceptance of coal phase-out has a tangible economic component which should be factored into assessing the feasibility of achieving climate targets.

Air Quality and Health Implications of Coal Power Retirements Attributed to Industrial Electricity Savings in China.

The coal-dominated electricity system, alongside increasing industrial electricity demand, places China into a dilemma between industrialization and environmental impacts. A practical solution is to exploit air quality and health cobenefits of industrial energy efficiency measures, which has not yet been integrated into China's energy transition strategy. This research examines the pivotal role of industrial electricity savings in accelerating coal plant retirements and assesses the nexus of energy-pollution-health by modeling nationwide coal-fired plants at individual unit level. It shows that minimizing electricity needs by implementing more efficient technologies leads to the phaseout of 1279 hyper-polluting units (subcritical, <300 MW) by 2040, advancing the retirement of these units by an average of 7 years (3-16 years). The retirements at different locations yield varying levels of air quality improvements (9-17%), across six power grids. Reduced exposure to PM2.5 could avoid 123,100 pollution-related cumulative deaths over the next 20 years from 2020, of which ∼75% occur in the Central, East, and North grids, particularly coal-intensive and populous provinces (e.g., Shandong and Jiangsu). These findings provide key indicators to support geographically specific policymaking and lay out a rationale for decision-makers to incorporate multiple benefits into early coal phaseout strategies to avoid lock-in risk.

Phasing out coal power in two major Southeast Asian thermal coal economies: Indonesia and Vietnam

The phase-out of unabated coal power is crucial for meeting climate agreements in coal-dependent economies such as Indonesia and Vietnam. Despite both countries committing to the 2021 Global Coal to Clean Power Transition Statement, translating phase-out pledges into action poses considerable challenges. Drawing insights from interviews with government, civil society, and industry experts, this study identifies the key barriers hindering coal phase-out in each country. Concerns about potentially escalating electricity prices and power shortages loom large, with the former being more prominent in Indonesia and the latter more prominent in Vietnam. The obstacles appear particularly significant in Indonesia for reasons including its higher coal dependence. We conclude that prioritizing renewable energy growth, as well as halting the construction of new coal plants, would be the most practical and viable way forward for both countries rather than an oversized early focus on coal plant closures. The analysis is of high relevance to informing plans under the two countries' Just Energy Transition Partnerships.

Power sector decarbonisation in developing and coal-producing countries: A case study of Indonesia

Global efforts to transition away from coal within a decade encounter significant challenges, particularly in developing and coal-producing countries, e.g. Indonesia. Most current studies do not discuss the impact of coal phase-out on the upstream sector, which is important for coal-producing countries. This study aims to analyse Indonesia's power sector decarbonisation impact on the power and fossil upstream sectors. This analysis used VEDA-TIMES energy system optimisation using three scenarios: least-cost system (BAU), decarbonisation without coal phase-out (PA 1.5), and decarbonisation with coal phase-out (PA 1.5 PO). In all cases, decarbonisation will reduce the amount of coal used in energy systems. However, in a technology-agnostic transition, coal still constitutes 16% of total capacity in 2060. By this time, the coal-fired power generating assets have also transitioned to high efficiency, low emissions (HELE) technologies. CCS plays an important role in Indonesia's decarbonisation. A key implication of the coal phase-out scenario is the stranding of $9 bn worth of existing assets and an increased role for renewable energy and imported natural gas in 2035–2050, posing a notable threat to gas security within the industrial sector. In addition, the potential loss due to untapped coal reserves is estimated at $63 bn, while the cumulative net loss in the coal upstream sector amounts to $799 bn (0.26% of Indonesia's GDP and 3.7% of the coal-producing GDRP). Nevertheless, the total investment and electricity production costs exhibit negligible differences in the rapid VRE expansion, but it will reduce total investment by 24% in the low VRE buildrate.

The effectiveness of environmental protection policies on greenhouse gas emissions

In Canada, greenhouse gas (GHG) emissions continue to remain high despite the federal government's commitment to reduce GHG emissions. Environmental policy across Canadian provinces has largely lacked consistency with some provinces implementing targeted policy such as carbon taxes while others have strongly resisted the federal government's attempts to encourage such policy. This study examines the impact of environmental policy on GHG gas emissions across Canadian provinces with policy uniquely measured by public and business sector spending on environmental protection as well as notable province-specific policies. An extended STIRPAT model is specified with the inclusion of proxies for environmental policy using panel data from Canada's ten provinces from 1995 to 2019. The cointegration and the error correction modelling approaches are employed to estimate the non-stationary panel data. A pooled mean group estimation is applied to provide short run and long run coefficients. The findings indicate that although per capita GDP is the main driver of GHG emissions in Canada, environmental policy has a significant mitigating effect, as shown by the negative association between emissions and private and public sector spending on environmental protection in the long run. Furthermore, provinces with targeted policies, such as Ontario's coal phase-out and British Columbia's carbon tax, experienced significant emissions reductions. The theoretical implication is the successful addition of policy variables to the STIRPAT model, providing the model a new application for future research.

Green transition and financial stability: The role of green monetary and macroprudential policies and vouchers

This paper analyzes a mix of alternative policies in supporting the green transition and the phase-out of fossil fuels, without compromising financial stability. An environmental dynamic stochastic general equilibrium (E-DSGE) model with two sectors (green and brown) and endogenous default is developed to assess potential climate-induced financial stability threats that can be mainly generated through physical and transition risks mechanism. Those risks are evaluated through a compound capital depreciation shock and a carbon tax shock. The paper offers several findings. First of all, a too stringent carbon tax would increase the medium-term default rate in both sectors, harming financial stability due to potentially detrimental effects on banks’ balance sheet. Second, there exists a trade-off in implementing green monetary or macroprudential policies: if a policy can encourage the green transition, financial stability is compromised due to a rise in default rates. In contrast, if a policy aims to reduce vulnerabilities and financial stability risks, then the phase-out of the polluting sector to foster the green sector would be hard to achieve. The model finds that under certain physical and transition risks, a dual interest rate policy, coupled with a fiscal policy in which carbon tax revenues are redistributed to households as vouchers to encourage the consumption of green goods, is able to support the green transition and safeguard financial stability. Therefore, top-down and bottom-up approaches are the keys for sustainability in the whole economy and financial system.

Reducing Fossil Fuel Dependence and Exploring Just Energy Transition Pathways in Indonesia Using OSeMOSYS (Open-Source Energy Modelling System)

Indonesia’s commitment to the Paris Agreement and its Nationally Determined Contribution (NDC) is not adequately reflected in the significant CO2 emissions from fossil-fuel-intensive energy sectors, despite the enormous potential of renewable energy sources in the country. The ongoing coal regime has led to electricity oversupply and air pollution problems. Despite the huge challenges for Indonesia, a just energy transition away from fossil fuel is crucial. This study aims to explore the ideal energy mix and key emission reduction pathway in Indonesia in achieving a just energy transition using the least-cost optimisation energy modelling tool OSeMOSYS. Six scenarios are modelled over the period 2015–2050 including coal phase-out, NDC, the Just Energy Transition Partnership (JETP), and carbon tax implementation. The results highlight that solar power, geothermal power, and hydropower are the alternatives for coal decommissioning. Despite the large-scale investment in renewable energy under the NDC and JETP scenarios, emissions could be reduced by 55% and 52%, respectively, by 2050. Moreover, Indonesia’s current carbon tax rate will not lead to a significant emission reduction. Three recommended policies include (1) accelerating CFPP retirement; (2) imposing an aggressive carbon tax rate; (3) prioritising investment in solar technologies.

Europe’s independence from Russian natural gas — Effects of import restrictions on energy system development

With the Russian invasion on Ukraine in 2022 and the following disruption of Russian natural gas imports, Europe’s energy reliance on Russia has become more apparent than ever. To tackle the resulting challenges of a limited supply of fossil fuels from Russia and especially its effects on energy system development, short and long-term effects need to be investigated thoroughly. This paper aims to quantitatively analyze the impact of reduced natural gas availability from Russia on the European energy system, both in the coming years, as well as in the future. Using the Global Energy System Model (GENeSYS-MOD), three scenarios with varying amounts of Russian natural gas and further impacts of reduced fossil fuel imports from Russia are calculated. Results show that strong effects are mostly observed in the short to medium-term, but an overall earlier phase-out of fossil fuels can be achieved in the long-term. The reduction of natural gas imports is tackled by an increase in LNG imports and domestic natural gas production to overcome the supply gap. Strong reactions are seen in the levelized costs of electricity generation between 2022 and 2025, with higher costs in scenarios with restrictions on Russian natural gas imports, but with a negligible difference in the long-term. Most importantly, lower emissions in scenarios with reduced natural gas supply from Russia highlight the positive effect of an early reduction in fossil fuels and investment in renewable technologies, resulting in a near 100% emission-free energy system by 2045, 5 years before the Base scenario with unrestricted Russian gas imports. The results find that a limitation of Russian fossil imports does not pose a long-term threat to the European energy system or its required transition away from fossil fuels, but can rather accelerate its decarbonization and energy demand reductions.

How Realistic Are Coal Phase-Out Timeline Targets for Turkey?

Coal phase-out is considered to be critical to the success of energy transition for all countries. Yet, recent assessments indicate that energy security aspects may affect phase-out plans and/or commitments and jeopardize energy transition ambitions. This study aims to question to what extent coal phase-out targets for Türkiye are realistic. Although previous research has mainly focused on direct emission reduction targets and just transition aspects, we include a down-to-earth discussion of the potential challenges before coal phase-out. The interaction between phasing-out coal power generation and energy security aspects is also analyzed. To understand the coal phase-out timeline targets, its limitations, and constraints within the framework of future power projections, a supply–demand model with different scenarios was developed. In addition, energy storage was also discussed as an option. Analysis revealed that energy storage, in the short- and medium-term, may not be the panacea, as it may not be deployed in the scale to substitute the energy security that coal provided. Moreover, our findings indicate that phasing-out is not as simple as assumed. A target timeline is certainly not realistic considering the energy security aspect and challenges. On the other hand, economically nonviable and technically nonavailable coal-fired power plants in the power system may retire gradually (as a natural phase-out process). This may occur even without waiting for the target timeline, if there would ever officially be one.

Navigating urban tensions and injustices in domestic heating transitions: a case study of coal phase-out in social housing

Navigating urban tensions and injustices in domestic heating transitions: a case study of coal phase-out in social housing

Just transition away from coal: Vulnerability analysis of coal districts in India

India as an important stakeholder in climate action, indicates a rapid transition in its energy system and phasing out of coal. However, coal being a critical component in its energy basket for energy security and energy poverty, phasing out will have multiple socio-economic implications at local level. Inclusion of justice in transition away from coal needs to account for the vulnerability of coal-dependent regions and identify trade-offs and synergies between developmental policies and climate change mitigation. The study attempts to understand how the burden of coal phase out is distributed across districts through vulnerability index. The analysis of socio-economic indicators gives a comprehensive picture of the vulnerability and the capacity of the district to adapt to the transition. The results shows that the vulnerability to coal phase out is highly regional and concentrated to the top 10 districts on the vulnerability index. The micro analysis of the indicators shows that, while coal revenue contributes positively to the national economy and state economy, at the local (district) level fiscal dependency of coal is limited to high coal dependent districts. The study contributes to developmental policies and framing of India's just coal transition policy. The study suggests that coal phased out also presents an opportunity to rebuild the vulnerable districts.

Understanding institutional and policy challenges in China’s coal transition: Insights from the case of Chongqing

&lt;p&gt;China’s efforts and decisions to phase out coal will shape global endeavors in addressing climate change in the upcoming decades. This study investigates the action logic and interactions among different stakeholders, including the central government, local government, coal enterprises, and mine workers, in the case of Chongqing to gain valuable insights into existing institutional and policy challenges. Our results demonstrate that: First, the provincial government is the key to managing and implementing the local coal transitions, its motivation for coal transition, however, may not always align with the nation’s overall priorities. This highlights the need for a top-down coal transition policy to address the mismatched incentives among various participants. Second, Chongqing’s successful experience in maintaining economic development and whole employment demonstrates the possibility of adopting a rapid coal closure in places with similar resource endowments and industrial structures. Chongqing’s collaborative approach to transferring social responsibilities to local governments also serves as a valuable model that may apply to others’ contexts. Lastly, it is crucial to make context-based policy adjustments and establish an integrated and independent governance system when pursuing a rapid, efficient, and safe coal phase-out.&lt;/p&gt;

Closing the supply-side gap: using a novel vulnerability index to identify the right policy mix for coal producing countries

Rapid coal phaseout is a key measure to reach the 1.5 °C warming target. With projected global coal demand declining faster than global supply, a poorly anticipated and planned transition in coal producing countries would have huge local and national economic and social impacts. Identifying the vulnerabilities of specific coal producing countries and regions to this transition is important for designing appropriate policies to manage its potential local and national impacts. For this purpose, the novel Coal Transitions Vulnerability Index (COTRAVI) is developed, composed by 12 key “transition risk” and “ability to cope” indicators, for the 10 largest coal producing countries. In addition to indicators included in previous transition risks analyses such as energy and economic dependency, coal reserves, and age of coal assets, the COTRAVI includes indicators to account for the likely speed of the transition (based on simulations from the COALMOD World model), the exposure and resilience of coal producing regions, the national economic resilience, and the transition policies in place. This provides a more holistic approach to identifying and comparing the challenges of producing countries. The results show the high importance of Just Transition plans in increasing the ability to cope with the transition, as well as the need for more structural changes and targeted policy efforts in highly vulnerable countries and heavily coal-dependent regions. The COTRAVI analysis also identifies two relevant roadblocks for a globally just coal transition: high cost of capital and stranded assets risk in the coal producing countries.

The potential of demand response as a tool for decarbonization in the energy transition

Planning and managing energy production, transmission, and distribution face new challenges as renewable energy sources become more widely used. These sources enhance existing issues of grid operation due to their unpredictability and intermittency. As a result, sophisticated energy system control techniques and technologies that offer novel flexibility solutions to the inelastic demand side are necessary to ensure the power system’s stability. This paper reviews the feasibility of demand response as a tool for effective grid management and a measure for properly sized renewable energy systems (RES) capacities, both of which could accelerate the phase-out of fossil fuels. Research also focuses on tapping into the building stock's demand response capacity in an effort to decrease operational CO2 emissions. In this line of approach, current status and goals of the respective European policies are analyzed. The role of market based decarbonization is studied and presented along with the status of demand response market implementation in several countries.

Assessing the efforts of coal phaseout for carbon neutrality in China

As the world's largest producer and consumer of coal, coal phaseout is critical for China to achieve carbon neutrality and contribute to global decarbonization. Here, utilizing the Global Change Assessment Model, this paper simulates China's coal phaseout pathways at the sectoral level between 2015 and 2060, considering the deployment of carbon capture and storage (CCS). The results show that China's coal consumption peaks at 96.4 Exajoules (EJ) in approximately 2020 and needs to decrease to 10.9 EJ by 2060 to achieve carbon neutrality. Specifically, the power sector bears the most significant proportion of responsibility, as its coal consumption must fall to 1.4 EJ by 2060, which is approximately 97.2% lower than the peak in 2020. The industrial sector is next and needs to decrease consumption to 9.2 EJ of coal in 2060, which is a reduction of 32.3 EJ below the 2020 level. Electricity will replace coal as the dominant energy source in the industrial sector after 2040. However, a portion of feed coal will remain in the industry for a long time. Among the industrial subsectors, the steel sector needs to put significant pressure on efforts to phase out coal, followed by the cement and nitrogen fertilizer sectors. In 2060, these three sectors will consume 5.7 EJ of coal, accounting for 64.1% of the total coal consumption in the industrial sector. The deployment of coal-CCS is one of the alternatives to achieve carbon neutrality and ensure smooth coal phaseout. Under the carbon neutrality scenario, the annual deployment of coal-CCS needs to exceed 0.13 EJ from 2025 to 2045, with a peak at 3.3 EJ in 2045.

Does energy transition help narrow the urban-rural income gap? Evidence from China

With climate change and inequality concerns being the twofold challenge for societies, vigorously facilitating the pace of energy transition in parallel to promoting social justice is addressed by global societies. Using an empirical analysis of 30 provinces in China, we examine how the pace of multi-dimension energy transition influences urban-rural income gap. It starts from an assessment of China's energy transition performance by constructing a comprehensive index framework. Then we investigate the impacts of the energy transition on the urban-rural income gap by employing panel data of China's 30 provinces from 2008 to 2019. Our results demonstrate a significant upward trend in China's overall energy transition performance. Meanwhile, this paper highlights the positive but heterogenous contributions of the energy transition to narrowing the urban-rural income gap. We also gauge the positive moderating effects of energy transition and various targeted transition policies and environmental factors on the urban-rural income gap in China, such as the clean heating and PV-based poverty alleviation project; but the negative effect of coal phaseout policy cannot be ignored. Our findings in the context of urban-rural income inequality in China provide practical insights and pertinent policy implications to deepen understanding of the global just energy transition.

Green Transition and Electricity Sector Decarbonization: The Case of West Macedonia

During the last 50 years, the vast majority of European countries have relied on coal and imported carbon-containing fuels to meet their growing electricity demand. Coal is the only fossil fuel in significant reserves across Europe. However, the pressing threat of radical climate change and the looming depletion of fossil fuels necessitate a structural transformation from a conventional centralized fossil fuel-based electricity generation system to an innovative decentralized system based on zero carbon (green) energy resources. In this context, one important issue for communities operating coal-based Thermal Power Stations (TPS) nearing retirement is whether the European Union (EU) policy can ensure a socially just development of the coal mining areas during the coal phase-out. The objective is to avoid a decline in living standards and mass immigration. In response to the EU’s decarbonization policy, the Greek state has recently decided to retire the lignite-based West Macedonia TPS, which has been in operation since the 1970s. Since its establishment in August 1950, the (initially State-controlled) Greek Public Power Corporation (PPC) has undertaken the responsibility to operate the quarries and the six local TPS, offering approximately 25,000 direct and indirect jobs. Over the last 50 years, the extraction of lignite and the operation of the 4500 MWe TPS of West Macedonia has been the primary economic activity, accounting for nearly 45% of the entire Region’s GDP. While both the Greek state and the EU have prepared and presented plans to financially support local communities and encourage new private and public investments, local citizens remain anxious about their future. The present study investigates the attitude of young scientists towards the forthcoming radical changes linked to the green transition in seriously affected EU Regions, with a focus on West Macedonia. The proposed analysis in West Macedonia reveals the skepticism of young people regarding the speed of the green transition and concerns about significant migration and potential brain drain. On the other hand, the implementation of EU initiatives, including the involvement of young scientists in the planned new green energy-related activities, offers a promising alternative solution. This engagement can lead to the successful integration of local communities into the sustainable and green future envisioned by the EU.

Overcoming political stalemates: The German stakeholder commission on phasing out coal

The future of coal remains contested in many countries, hindering necessary energy transitions. Collaborative governance approaches, such as stakeholder commissions, have been proposed as potential solution to resolve such societal conflicts. In Germany, a stakeholder commission process managed to overcome the existing stalemate situation, leading to the adoption of a coal phase-out by 2038. Celebrated for enabling the German coal phase-out, the commission's outcomes are ambiguous, recommending a coal phase-out incompatible with the 1.5 °C climate target and granting high financial compensations to coal regions. Based on 18 semi-structured interviews with members of this “Commission on Growth, Structural Change and Employment”, we analyze how the stalemate situation in the German conflict over the future of coal was overcome and how the commission's outcome was formed. We find that the absence of alternative ways to enforce their interests, and external political, economic, and societal pressure were crucial factors that motivated interest groups to engage in the commission. The commission facilitated trust-building among members, and compromise offers behind closed doors among key actors, ultimately overcoming the stalemate in the contentious environment. Yet, existing and remaining power imbalances within the commission resulted in the decision-making process being dominated by incumbent actors. Having shifted discussions in Germany from if to how to phase out coal, enabled the next government to move the agreed-on phase-out date from 2038 to 2030. Our research contributes to the debate on politics of fossil fuel phase-outs and can inform future collaborative governance approaches in the context of contested sustainability transitions.

The political economy of saving the planet

This paper advances a broad program to move the global economy onto a viable climate stabilization path—a trajectory that is consistent with the CO2 emissions reduction targets established by the Intergovernmental Panel on Climate Change (IPCC). The overarching project is straightforward: to achieve the IPCC emissions reduction targets, and to accomplish this in a way that also expands decent job opportunities and raises mass living standards for working people and the poor throughout the world. This overarching aim is captured within the idea of a Global Green New Deal. As I use the term, the Global Green New Deal, includes four major features: phasing out global fossil fuel consumption by 2050; clean energy investments, averaging about 2.5 percent of global GDP per year, including both public and private investments; just transition support for workers and communities that are currently dependent on the fossil fuel industry; and phasing out deforestation and industrial agriculture, to be replaced with afforestation and sustainable agricultural practices. This paper focuses on the first three issues, related to the operations of the global energy system. The main topics covered are: Fossil Fuel Phase-out; Clean Energy Investment Program; Job Creation, Job Losses and Just Transition; Providing Cheap and Accessible Financing; and Ensuring Global Fairness.

Preparing for the Just Transition from Local Economies’ Perspective: Belchatow Brown Coal Basin Case Study (Central Poland)

This article addresses the matter of investment decisions undertaken by the local authorities of coal-dependent economies in the context of oncoming transition resulting from the industrial facilities closure. The article offers an analysis of investment expenditures in three areas: technical infrastructure, social infrastructure, and environmental protection. The theoretical part of the article is focused on the issues of the just transition process and the role of institutions in effective planning for the post-coal future. Examples of concrete investments mitigating the negative effects of the coal phase-out are presented. The research is also completed by the recommendations and suggestions for policy makers.