There is yet more bad…
Commodities outperformed other asset classes…
A new report by the World Resource Institute (WRI), titled “Global Coal Risk Assessment: Data Analysis and Market Research”, claims to be the most comprehensive of its kind that is available to the public, and takes an in depth look at the coal market. It managed to identify 1,200 new coal plants that are being planned for construction across 59 countries of the world; three quarters are to be built in India (455) and China (363).
Coal is the most polluting form of fossil power generation, and Ailun Yang, the author of the report, said that “this is definitely not in line with a safe climate scenario – it would put us on a really dangerous trajectory,” despite the warnings from politicians and climate scientists that the planets carbon emissions must be cut within a few years in order to avoid irreversible changes to the climate.
The WRI noted that the global coal market is actually growing; it suffered a small dip in 2008, during the financial crisis, but then grew by an incredible 13% in 2010. This has been partly led by an increase in demand from China, but also by the rapidly increasing import volumes procured by Japan, South Korea, and Taiwan, all of whom have lots of coal plants, but very few coal mines.
Related Article: Trading Places: The Intertwined Fortunes of Coal and Natural Gas
Coal plants are the first source of power generation that many developing countries, such as Guatemala, Cambodia, Morocco, Namibia, Senegal, Sri Lanka, and Uzbekistan turn to, despite the fact that they don’t really have any coal mining industry themselves. As Yang said, “there is a long way to go to raise awareness that you can meet energy needs from sources other than coal.”
Finance for the new coal plants has been mostly supplied by commercial and development banks, the largest contributor being JP Morgan Chase which has provided more than $16.5bn over the past six years, and then Citibank with $13.8bn.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com