The Obama administration recently dealt another blow to the coal industry, reaching an agreement with world leaders to end global financing of new coal plants in a deal that will restrict cheap energy options for developing nations.
The agreement between members of the Organization for Economic Cooperation and Development (OECD) will end export credits for coal plant technology, a cheap energy resource on which many poor nations rely. The deal kills 850 planned coal plant projects around the world, despite the rise of coal use in developing countries, particularly India and south-east Asia.
“We are witnessing a global renaissance of coal majorly driven by poor, fast-growing countries that increasingly rely on coal to satisfy their growing energy demand,” said a report published by the Proceedings of the National Academies of Science (PNAS). “The low price of coal relative to gas and oil has played an important role in accelerating coal consumption since the end of the 1990s.”
The move represents a victory for the Obama administration — which has been pushing for global cuts of coal funding since 2013 — ahead of December’s climate summit in Paris. Japan was a major road block to an agreement as many of their corporations rely heavily on coal investments, reports Bloomberg, but a compromise in the deal still allows for funding of advanced technology plants that employ emission reduction techniques like carbon capture.
“Climate change is one of the greatest challenges of our time,” said OECD nations in a statement. “We reaffirm our commitment to rationalize and phase out fossil fuel subsidies that encourage wasteful consumption.”
The deal struck between the 34 member nations of the OECD deals a substantial blow to an industry already suffering from enhanced environmental regulations. Britain’s government announced Wednesday it would close its coal fired plants by 2025 in a shift towards even cheaper natural gas production. Ending export credits will cut funding for 85 percent of new coal plant projects going forward, according to Bloomberg.
Cuts to global coal subsidies won’t begin until 2017 and the door is still left open for advanced technology projects. The National Mining Association points to this as a silver lining, but remained critical of the overall agreement, which has the potential to be strengthened when member countries meet for a review in 2019, reports EurActive.com.
“The president is on the wrong side of history,” said National Mining Association spokesman Luke Popovich in an email statement. “He may think coal’s day is done, but the 19 other rich nations of the OECD evidently don’t, let alone the emerging nations that will continue to rely on coal long after he’s out of office.”
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