In the Developing World, Coal Is Still the King

The Western view of the world is centered around themselves. [Believing] the rose-tinted views [expressed by Western elites] that ‘the West would like India to succeed’ is plain naiveté.”

Krishnamurthy Subramanian, Chief Economic Advisor, Government of India

For decades, Western bankers, beholden to United Nations “sustainable development” goals, have held virtual veto power over African development and have impeded infrastructure construction in other cash-poor developing nations. No longer.

To the consternation of central planners (and highly paid environmentalists) the UN’s veto power has recently been significantly compromised. China, India, and even African and other Asian nations are building coal-fired power plants and developing coal resources much faster than the U.S. can shut its own plants down. The great master plan to save the planet via a worldwide ban on fossil fuels is being systematically undermined by the hungry. Michael Kors Slim Runw... Best Price: $84.41 Buy New $200.00 (as of 08:43 UTC - Details)

According to Indian journalist and engineer Sudhanva Shetty, “coal is likely to remain king” in India till 2030 – and beyond. The reason: coal caters to more than half of India’s domestic energy needs. State-owned Coal India on March 10 announced plans for expansion of 24 existing coal mining operations and up to eight new “greenfield” coal mines.

Coal continues to account for about 56 percent of India’s total primary energy consumption. Despite 2020 demand being slowed by the COVID pandemic, coal use in India is expected to increase by 3.8 percent in 2021.

China, too, is planning significant increases in investment in coal energy over the next five years, according to a government released in early March that Agence France-Presse says includes “only modestly increased renewable ambitions.”

Last year, China built enough coal-fired power plants to provide 38.4 gigawatts of electricity, far surpassing the 8.6 GW lost from retiring older coal plants. Nikkei Asia notes that this increase is the equivalent of 30 new nuclear facilities, “suggesting that coal will remain king in China for the foreseeable future.”

China promises no more that up to (just) 20 percent of its energy will be from renewable sources by 2025 –the goal was 15 percent in 2020. China’s plan, while paying homage to “carbon neutrality” by 2060 (30 years behind Western goals), signaled “little urgency” in cutting greenhouse gas emissions, let alone total energy consumption.

President Xi Jinping says that China will hit peak emissions by 2030, but there are no guarantees. Even during the COVID lockdown in 2020, China’s CO2 emissions were 1.5 percent higher than in 2019, and with a predicted 6 percent economic growth in 2021, China again will have a net increase in CO2 emissions.

China’s strong post-pandemic recovery has been boosted by heavy investment in infrastructure that could “stem the shift” toward “greener” policies. The 5-year energy plan from the world’s biggest polluter includes no specific targets for increasing wind, solar, or hydro capacity. And neither the United Nations nor Western billionaires can do a thing about it. Nor can they stop China’s financing of coal-fired power plants and coal mining operations in smaller nations.

Two of the last three U.S. Presidents have pledged to destroy the U.S. coal industry, yet at the same time they also have sought to end the recovery of natural gas through hydrofracturing (fracking). American cities and states, claiming there is a “climate emergency,” are even passing laws forbidding the shipment of American coal to Asian ports. The funny thing is that these Americans (and their UN aficianados) are fighting a losing battle with the developing world.

The Zero Carbon Crowd is red hot angry that the developing world is not following its lead in eliminating coal, let alone other fossil fuels, from their economies. But are jet-setting U.S. Climate Envoy John Kerry and his colleagues crying because they really do fear an “extraordinary climate crisis”? Surely, if there were a genuine consensus on climate policy (as there was for the COVID pandemic), the whole world would be unified in its response.

But what if Western elites, long accustomed to bullying poor nations into following their often whimsical commands, are just nonplussed that they no longer can stop them from using coal to build an energy infrastructure? That appears to be the thesis of a recent Bloomberg story that claims China’s involvement in financing coal projects both at home and in even poorer nations “is isolating it further from the rest of the world.”

The Bloomberg headline screams, “China is virtually alone” in financing new coal mines and power plants. They then seek to bully China by noting first that (“virtuous”) financial institutions in the U.S., Europe, and Japan are shunning coal investment, then stating that the often-state-backed Chinese investment companies do so “even at the risk of undermining the spirit of China’s international commitments to fight climate change.

Caleb Dengu, chairman of Zimbabwe’s RioZim Energy, thanked Chinese investors for financed a multi-billion-dollar power plant, “stepping in to help after over two decades of stonewalling from Western financiers” and “especially as major banks in the world are forced to stop financing coal-fired power stations.”

And Lefoko Moagi, Botswana’s minister of mineral resources, green technology, and energy security, let the West know his country intended to develop its 200-billion-ton coal resource. “we all subscribe to a greener world,” he acknowledged, “but we believe that we just can’t leave an abundance of a god-given natural resource just like that.” [Wouldn’t be pru-dent!]

Moagi explained last February that, “We very much would like to work with everyone who wants cleaner, green technologies. But we are saying, ‘If you are not giving us an alternative to how we will generate our power, are you saying we must collapse as an economy because power runs everything? If there’s no power, the country shuts down.” Steve Madden Men&rsquo... Check Amazon for Pricing.

Like Dengu, Moagi knows that Western banks are basing financing of development projects “based on the greening of the exploitation,” But, he added, “Apart from banks, there are people awash with case who want to participate and it is their space and their time.” Under the previous President, the U.S. was one of those “people.”

Chinese Academy of International Trade and Economic Cooperation executive Yu Zirong, speaking at a Belt and Road Initiative, said there should not be a “one-size-fits-all approach” for green development in poorer nations. Instead, base decisions on the host country’s natural resources. “For countries with rich coal resources,” said Yu, “it is impossible to completely forbid them using coal. The key is how to use them more reasonably.”

OilPrice journalist Irina Slav says Western elites who demand an all-renewables energy portfolio even for developing nations often ignore the reality that many African countries (in particular) simply lack transmission infrastructure extensive enough to accommodate utility-scale solar and wind installations economically. Even in countries (like Kenya) with a well-developed grid, wind and solar (minus the outrageous subsidies offerred by rich Western nations) are still economically unviable.

Slav cites comments by Cecily Davis, head of Africa Group, who while touting mini-grids for wind and solar projects in African nations says “it is unfortunate” that some African nations continue to exploit oil and gas (and coal) resources. “If they scale back fossil fuels,” she laments, “they lose the tax revenue to pay for other infrastructure; if they maintain oil and gas production, that makes it harder for renewable energy to compete.”

As if making Western elites happy is the highest priority for the poor nations of the developing world.

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