The Biden administration arrived this month at international climate talks in Scotland with the intent to prove the United States was again ready to lead the fight against global warming.
But when more than 40 countries signed a pledge to phase out coal in the coming decades, the United States was conspicuously absent.
The White House’s reluctance to sign the pledge says a lot about coal's continued political influence in the face of declining fortunes.
Few countries have hammered coal as hard as the United States in the last decade. Stagnant electricity demand, low natural gas prices and the ever-falling cost of renewables have fueled the shutdown of U.S. coal plants — overpowering efforts from former President Trump to revive the industry’s fortunes.
Yet coal retains political power. The Biden administration's decision not to sign the coal phaseout pledge comes as Democrats haggle over a budget bill in Congress that would direct billions of dollars in subsidies to clean energy. Finalizing that deal requires securing the vote of Sen. Joe Manchin, the Democrat from coal-dependent West Virginia who holds the swing vote in the Senate.
“What you’re seeing in the U.S. as part of that announcement is a quiet belief that markets will do the dirty work, and politicians don’t need to get their hands dirty by saying the quiet part out loud,” said Justin Guay, who tracks climate policy at the Sunrise Project, an international advocacy organization.
U.S. coal generation is up in 2021, thanks to a rise in natural gas prices. Few analysts think the rebound in the United States will last. The bigger question is how long American coal plants will be able to hang on.
The United States remains the world’s third largest coal consumer — even after a decade that saw the country close a quarter of its coal capacity. Another quarter is scheduled to close by 2030, according to U.S. Energy Information Administration figures.
When the International Energy Agency mapped out a path to net-zero emissions earlier this year, it concluded coal use in rich countries such as the United States would need to cease in the 2030s followed by developing economies in the 2040s. That projection was echoed in the coal phaseout signed in Scotland last week.
Some analysts think coal’s end in the United States could come relatively quickly, even without government intervention. The economic case for continued investment in mining and supporting infrastructure, such as railways, becomes harder as the industry contracts, said James Stevenson, an analyst who tracks the industry at IHS Markit, a consultancy.
Meanwhile, no new coal plants are planned. IHS predicts U.S. coal consumption at power plants will register 160 million tons in 2030, down from around 500 million tons last year.
“This structural transformation away from coal is happening irrespective of the political will,” said Leo Roberts, an analyst at E3G, a climate think tank. “There’s no coal pipeline in the U.S. either, so the U.S. not being here doesn’t mean that the U.S. isn’t on its way out of coal as well.”
The United States’ reluctance to publicly commit to a coal phaseout stands in stark contrast to three southeast Asian countries that backed the pledge.
Indonesia, South Korea and Vietnam all signed on. In 2020, those three countries ranked seventh, eighth and ninth in global coal consumption, according to the BP Statistical Review of World Energy.
And Indonesia and Vietnam have the potential for more growth. The 19 gigawatts planned in Indonesia ranked third most in the world according to a recent report by E3G. Vietnam had 18 GW planned, fourth most.
South Korea's signature came weeks after Seoul had committed to phasing out coal by 2050, in what would amount to a rapid acceleration of the country's pledge. Indonesia and Vietnam committed to halt construction of new plants and phase out existing ones in the 2040s, the target for developing economies. Both countries said their pledges are contingent on receiving international funding to help wind down their reliance on coal.
Some of that money has begun to flow. The Climate Investment Funds announced $2.5 billion to pay down debts on existing plants in South Africa, Indonesia, India and the Philippines and accelerate their retirement.
The Asian Development Bank announced a similar plan for two funds targeted at Indonesia and the Philippines. One would pay to accelerate the retirement of existing plants, while the other would finance clean energy. The bank estimates a full scale-up of the program could slash emissions by 200 million tons annually. Indonesia’s total emissions, for reference, were 589 million tons last year.
In Asia, where gas is less available and renewables account for much of the replacement power, governments are a bigger driver behind the coal transition, Stevenson said.
“There is a little bit of a habit of thinking of southeast Asia as rapid growth and pushing coal hard. What we’ve seen really over the last three to four years is cancellation of projects,” Stevenson said. “Asians are keen as a population to do their bit on climate, and at a government level there is a sense in a lot of countries, obviously not at all, to do what the biggest economies are doing and make these announcements.”
But if governments are driving the transformation in Asia, it is the market in the United States.
The dynamic was underlined by an announcement last week by Southern Co. The Georgia-based utility said it would close more than half its coal fleet this decade. The announcement was unrelated to the international coal pledge. Southern’s move is a result of a decision not to upgrade a series of units with federal wastewater standards (Energywire, Nov. 5).
Yet the episode highlights the path ahead for the United States. Southern was America’s third largest utility emitter in 2019, according to M.J. Bradley, a consulting firm. The retirements will affect two units at Plant Bowen and a unit at Plant Scherer. Both Georgia power plants rank among the largest coal facilities in America, but each has posted declining electricity output in recent years.
Not included on the list was Southern’s Plant Miller in neighboring Alabama. Miller emitted more than 18 million tons of carbon dioxide in 2020, or more than the combined emissions output of Scherer and Bowen, according to EPA data.
Southern Co. has no plans to close Miller.
Climate hawks say that puts the United States in danger of missing its climate goals, and speaks to the need for government intervention.
“The reality is the coal industry in the U.S. is in structural decline,” Guay said. “The only question is the timeline. That is why we need political intervention. It is the only reason. It is inevitable this industry will go away.”
Reporter Sara Schonhardt contributed.
Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2021. E&E News provides essential news for energy and environment professionals.