South32 chief executive Graham Kerr is candid about why the mining company he leads is turning its back on thermal coal: It's becoming less appealing to investors, it has an uncertain future and it is linked to climate change.
Months before, BHP flagged plans to leave the World Coal Association and put the Minerals Council of Australia on notice because it continues to prioritize coal over emissions reductions.
These mining companies reflect public opinion on the future of thermal coal. A 2017 poll found an overwhelming 81 per cent of Australians wanted policymakers to focus on renewables, such as wind and solar instead.
Impervious to the loud rumblings about coal's terminal decline and the need to leave it in the ground, the Minerals Council of Australiacontinues to be a passionate enthusiast.
This month, the MCA's boast of record revenues from thermal coal exports, takes no account of coal's health care costs and, as expected, does not mention costs due to coal's contribution to greenhouse gas emissions. It is too much to expect that costs from damage due to extreme weather events, and reduction in demand for coal would temper their bullish report although it may soon become a part of the duties of business to do so.
The mining and burning of coal emit toxic pollutants of particulate matter (PM) and oxides of sulphur and nitrogen, all of which contribute to heart, lung and vascular disease.
Research published in the medical journal, The Lancet, reveals that 24 people die for every terrawatt (TWh) of coal combusted. The International Energy Agency estimates that more than 7,500TWh of electricity was generated by burning coal in 2009. Therefore, according to this and other estimates, the toll from coal-fired power generation exceeds 200,000 deaths globally every year. Furthermore a report published by the World Health Organization in 2008, estimated that particulate pollution from coal could be causing over one million premature deaths annually. The more damaging fine PM from all sources contributes to over four million deaths annually world-wide and creates an enormous burden of disease that costs economies dearly in lost productivity and health costs.
In Australia, an estimated 1500 deaths occur annually from coal related diseases and coal mining has resulted in the reemergence of black lung disease in Queensland.
The monetary and social costs of these adverse health effects are not paid by mining companies and electricity generators, but by the public purse. Various analyses have revealed that the true cost of electricity from coal would be at least double if all externalities were taken into account. To provide some perspective, based on extrapolation from international studies, the health cost of air pollution associated with burning coal in Australia is estimated at A$2.6B annually which would make a severe dent in the revenue that the MCA is emphasizing in its report.
Undoubtedly aware of the huge problem created by coal's contribution to greenhouse gases, the MCA highlights its expansion into Southeast Asian markets where high efficiency, low emission (HELE) technology may be proliferating.
However as renewable energy advocate Simon Holmes-a-Court in his incisive recent article explains, HELE, when compared with sub-critical coal-fired generators is only slightly more efficient, is slightly less emissions intensive, and increases electricity costs by about 40%. HELE therefore has little chance of acceptance globally particularly when pitted against renewables.
If the MCA is looking at carbon-capture and storage (CCS) as a saviour of the coal industry, Holmes-a-Court also points out that CCS is expensive and has such large energy requirements that immediately negate its usefulness. Australia has invested over $1B in CCS over recent years without any financially viable result and there are no coal-power stations using this technology being built anywhere in the world.
Finally, the greenhouse gas effects of CO2 emissions is of crucial concern. The failure of the MCA's acknowledgement of the role of coal in global warming and consequent climate change is a gross abrogation of responsibility and is imposing a huge burden on future generations.It is about time the MCA and other fossil-fuel industries faced these realities and looked at health ramifications and the true cost of coal.
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