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'After all, we are betting the planet!' Angel Gurría, Secretary-General of the OECD. Photo: OECD via Flickr (CC BY-NC-ND).
'After all, we are betting the planet!' Angel GurrĂ­a, Secretary-General of the OECD. Photo: OECD via Flickr (CC BY-NC-ND).
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OECD chief: World must ditch coal, go renewable

Alex Kirby

5th July 2015

The secretary general of the OECD group of the world's 34 richest nations has issued a dramatic plea to its members to act now to end 'unabated coal' burning, writes Alex Kirby, and invest in renewables around the world to prevent climate disaster.

If we want a lower level of risk, we should be even more ambitious. After all, we're betting the planet ... We continue to be on a collision course with nature. As we continue to emit, the risks are becoming increasingly unpredictable and uninsurable.

The future of coal has come under scrutiny from a perhaps unlikely source - the head of the organisation representing wealthy nations that relied on coal for 32% of electricity generation last year.

Angel Gurría, secretary-general of the Organisation for Economic Co-operation and Development (OECD), said the scale of new investments in "unabated" coal-fired electricity generation - where greenhouse gases are emitted directly to the atmosphere - posed the most urgent threat to the Earth's climate.

Speaking in London on Friday, he said governments should be sceptical about the benefits of coal for their citizens. They should rethink the role of coal in energy supply, and conduct a more rigorous evaluation of its true costs:

"Governments need to be seriously sceptical about whether new coal provides a good deal for their citizens. If we muster the political will to set ourselves on a 2°C trajectory today, not all coal assets will be able to run for their full economic lifetime. Unsurprisingly, if we delay action, we will have to strand much more capacity overall, as steeper reductions will be required."

Environmental costs

With prices failing to fully account for the environmental, health and financial costs of coal, many of the coal plants being built today might have to be shut down before the end of their economic lifetimes - representing a huge write-down of invested capital that poor countries can ill-afford.

The OECD, founded to stimulate economic progress and world trade, has 34 members drawn from the richest and most powerful industrialised countries.

But Gurría, in a passage that will hearten many developing countries in the approach to the UN climate change negotiations in Paris in November / December this year, said that if poorer nations could not afford low-carbon alternatives, then richer countries should find the money to close the cost gap:

"Coal is the most carbon-intensive fuel available for electricity generation. The most urgent threat to climate policy is the scale of new investments in unabated coal-fired electricity generation still being planned. Between now and 2050, if no further mitigation measures are undertaken, coal generation is projected to emit more than 500 GtCO2.

"That is around half the remaining carbon budget consistent with staying under 2°C. Even the most advanced (and costly) coal-fired power plants are not going to be consistent with a 2 degree goal unless they can capture and store the CO2 they produce. Yet the IEA expects global demand for coal to continue to grow in the near term, which would result in a disastrous 4°C plus trajectory."

In any case, Dr Gurría said, countries' contributions to emissions reductions after 2020 are not consistent with a 2°C pathway. He said the carbon clock was ticking and the Paris COP21 climate conference must give a clear and credible signal that governments are determined to go for a higher level of ambition.

"Calling something a process doesn't guarantee an outcome", he said. "We have been in a process for over 20 years and, so far, the commitments simply don't add up." Continued investment in coal is one of many "misalignments" between climate goals and countries' policies in other domains, Dr Gurría said.

'Policy misalignments' undermine climate action

A report by the OECD, its specialised Nuclear Energy Agency, the International Energy Agency and the International Transport Forum says policy misalignments undermine climate action in areas from tax to trade, electricity market regulation and land use.

The report says two-thirds of global energy investments still go into fossil fuels, 50% of agricultural subsidies in OECD countries harm the climate, and various tax provisions encourage fossil fuel production and use. This "policy incoherence", as the report describes it, limits the effectiveness of countries' climate change efforts, and increases the cost of the transition to a low-carbon economy.

Dr Gurría urged governments to consider what needed to be done to resolve such misalignments, starting with a demand that each ministry should regularly report on which of its policies run counter to desirable climate results.

And he urged all countries to take the problem seriously: "The size of the carbon budget that we can emit consistent with 2 degrees depends on how big a risk you are prepared to take to meet that goal or to wind up on a higher temperature pathway.

"But one fact is clear - we are currently emitting some 38 billion tonnes of CO2 p.a. and this will exhaust that budget at an alarming rate. Furthermore, the 2 degrees goal relies on a carbon budget which only provides for a 66% chance of meeting the target.

"If we want a lower level of risk, we should be even more ambitious. After all, we're betting the planet. This is the 'cheerful recklessness' towards our common home lamented by the Pope in his recent climate change encyclical.

"Two degrees already implies costly change. But we're currently on course for around 3-5 degrees.  We continue to be on a collision course with nature. As we continue to emit, the risks are becoming increasingly unpredictable and uninsurable."

Green energy must take its place

And one clear solution is renewable energy, Dr Gurría continued: "we already have commercial alternatives to coal-fired power generation, in contrast to heavy industries like cement and steel which don't and which pose a major technical challenge.

"The fact that 60% of total power plant investments since 2000 have been in low-carbon technologies illustrates the point. Depending on the region, cost-competitive renewables include onshore wind, biomass and hydro-based generation, solar and geothermal power.

"Some challenges remain, but the bottom line is that low-carbon options can and should play a much greater role in energy supply. Their costs are still decreasing, some much faster than others, and the challenges of integrating new renewable energy are being overcome."



The speech: 'Climate: What's changed, what hasn't and what we can do about it - Six Months to COP21' by Angel Gurría, Secretary-General, OECD, was delivered on 3rd July 2015 in London, United Kingdom.

The report: 'Aligning Policies for a Low-carbon Economy' was produced by OECD in co-operation with the International Energy Agency (IEA), the International Transport Forum (ITF) and the Nuclear Energy Agency (NEA).

Alex Kirby writes for Climate News Network.

Additional reporting by The Ecologist.


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