The chart above shows Aotearoa New Zealand’s exports and imports of coal. First, note that the emphasis is on timing, not absolute amounts; Imports have a different scale to Exports. Essentially, imports have been around 10% of exports.

It’s also important to note that most Aotearoan coal is exported, while coal used to generate electricity at the Huntly power station is mainly imported. These are two different grades of coal. So it is to be not unexpected that coal imports will have been high at the same times that coal exports also have been high.

And it’s important to note that these data are for values of coal, not volumes. Values will be affected by fluctuations in world coal prices and by fluctuations in the $NZ exchange rate. (Increases in coal exports from 2000 to 2002 will have reflected the historically low exchange rate then.)

Coal exports actually increased after the November 2010 Pike River explosion; that coalfield was still in development in 2010.

Generally, from 2005 to 2012 the export expansion reflected the world market; noting dips for the 2008 global financial crisis, with a subsequent export of stockpiled coal in 2009. During that coal boom period, more than half New Zealand’s coal exports were to India. There was a resurgence of coal exports to India at the end of the 2010s’ decade.

The lull in 2020/21 reflected to Covid19 crisis. Again, we see an exporting of stockpiles after the crisis eased. In 2023 coal exports plummeted, probably a mix of falling world demand as well as falling New Zealand supply. This is a good sign for global transitioning away from coal, though China’s domestic production and consumption of coal will be rising as it transitions from petrol and diesel cars to electric cars. China will be happy to be using fewer imported fossil fuels.

On the import side, New Zealand’s demand for coal from 2003 to 2020 seems to have reflected the global trend, and it will have reflected a lack of growth in renewable energy generation during the later years of the Clark-led Labour-led government. It was under National that the big fall in coal imports took place.

Coal consumption in New Zealand stabilised in the mid-2010s, but resurged again in 2018, again under a Labour-led government; although, to be fair, 2018 and 2019 mainly reflect economic growth rather than the new government’s priorities.

Coal consumption at Huntly in recent years also reflects drought, meaning less hydro-generation of electricity. There is likely to be a lull in coal imports over the next few months, given that the hydro lakes are full, and the El Niño weather forecast is for a strong contribution from wind generation.

My sense is that increased use of electric vehicles – and increased charging capacity – will lead to another temporary resurgence in coal imports. The 2023 quasi-recession, engineered by the Reserve Bank, may however lead to some offsetting reductions in energy demand. My guess, though, is that there will be a short-lived consumption boom in Aotearoa in 2024 and 2025, as high interest rates pull in hot-money from overseas, holding up the $NZ exchange rate, and leading to a further ‘blow-out’ in New Zealand’s current account deficit; a 30.6 billion dollar annual deficit (7.6% of GDP), slightly less than the record high of nearly 9% of GDP earlier this year.

I look forward to hearing about the new government’s plans for expanded renewable electricity generation, and hope that these plans will not mean the loss of wild rivers such as the Mokihinui. Time will tell; soon, in 2024. This government needs ‘runs on the board’ – outcomes, not just proposals – if it is to survive beyond 2026.

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

After a series of tense huddles, more than 24 hours into overtime, the gavel went down on a climate deal in Glasgow, Scotland, last night.

The Glasgow Climate Pact refers to coal for the first time in the UN process. It asks countries to come back with stronger climate plans in 2022.

And it finalises the most contentious elements of the Paris Agreement rulebook, six years after the landmark deal was done.

What it doesn’t do is meet calls for climate reparations, to the dismay of developing countries, especially in the Pacific.

A proposal for a finance facility to help victims of the climate crisis was quashed by the US and other rich nations, as was a call to earmark a share of carbon trading revenues to fund adaptation.

Addressing the plenary before the text was adopted, US Climate Envoy John Kerry said: “There is some discomfort. Well, if it’s a good negotiation, all the parties are uncomfortable. This has been a good negotiation.”

For China, India and big emerging economies, the compromise was accepting language around 1.5C, coal and fossil fuel subsidies despite concerns that such restrictions could inhibit their development — and a grievance against developed countries taking up most of the carbon budget.

India forces concession
India’s Environment Minister Bhupender Yadav forced a concession at the last minute, getting a reference to the “phase-out” of coal power changed to “phase-down”.

Tina Stege, of the Marshall Islands, told the plenary of her “profound disappointment” about the change.

“We accept this change with the greatest reluctance. We do so only because they are critical elements in this package that people in my country need as a lifeline for their future,” she said.

COP26 president Alok Sharma said: “I apologise for the way this has unfolded and I am deeply sorry.”

Pausing to fight back tears, he continued, to applause from the crowd, “I think it is vital that we protect this package” before, hearing no objections, he banged down the gavel.

Vulnerable countries also expressed dismay at the incremental progress on scaling up funding to respond to the impacts of climate change. They had to make do with a body to provide technical assistance and a “dialogue” on loss and damage.

Before the plenary started on Saturday afternoon Kerry and veteran US climate lawyer Sue Biniaz roamed the meeting hall. Their longest and most animated discussions were in a huddle with Ahmadou Sebory Toure, the lead negotiator for the G77+China group of developing countries.

‘Betrayal of people, planet’: World reacts to COP26 climate pact https://t.co/WRPMkN8gbp

— Al Jazeera English (@AJEnglish) November 14, 2021

Emerging empty handed
Yet Toure appeared to emerge empty handed. A source in the G77 said the African group had threatened to reject the package, but small islands talked them down.

Speaking in the meeting, while Biniaz pored over texts, Gabon’s Environment Minister Lee White said one of Africa’s red lines had “been rubbed out with no compromise”.

“The [African Group] is quite unhappy,” the source said. “Aosis [group of small island states] managed to convince the rest of the blocs to revisit the issue in Egypt. For now, they believe this is the best deal we can have out of COP.”

After the meeting, Kerry strode over to Toure and they exchanged a fistbump before walking off talking with Kerry’s arm around Toure’s shoulder.

The UK presidency’s stated aim for the conference was “to keep 1.5C alive”, referring to the most ambitious global warming limit in the Paris Agreement.

Announcements last week including India aiming for net zero by 2070 and a widespread agreement to reduce methane emissions led the traditionally cautious International Energy Agency to say that global warming could be held to 1.8C.

Climate Tracker caution
Others urged caution. Climate Action Tracker projected current policies put the world on a path to 2.7C warming and strengthened emissions targets for this decade could bend the curve to 2.4C.

More optimistic assessments rely on long term — and therefore uncertain — targets.

The carbon trading rules agreed in Glasgow, while stricter than some parties wanted, risk diluting ambition, critics warned.

“We have much to do to stop companies and countries gaming the system,” said Rachel Kyte, co-chair of an initiative to boost the integrity of voluntary carbon markets. “We have no room or time for markets like buckets of water, with 100 tiny holes.”

Article by AsiaPacificReport.nz

A suicide bombing near Kabul airport on Thursday added another dimension to the chaos in Afghanistan as Western forces rush to complete their evacuation.

Islamic State claimed responsibility for the blasts that killed at least 175 people, including 13 US soldiers, challenging the Taliban’s hold on the capital.

Either group is bad news for Afghan women and girls, and anyone with links to the former government or exiting armies.

Taliban officials are on a charm offensive in international media, with one suggesting to Newsweek the group could contribute to fighting climate change if formally recognised by other governments.

Don’t expect the Taliban to consign coal to history any time soon, though. The militant group gets a surprisingly large share of its revenue from mining — more than from the opium trade — and could scale up coal exports to pay salaries as it seeks to govern.

Afghan people could certainly use support to cope with the impacts of climate change. The UN estimates more than 10 million are at risk of hunger due to the interplay of conflict and drought.

Water scarcity
Water scarcity has compounded instability in the country for decades, arguably helping the Taliban to recruit desperate farmers.

There was not enough investment in irrigation and water management during periods of relative peace.

One adaptation tactic was to switch crops from thirsty wheat to drought-resistant opium poppies — but that brought its own problems.

The question for the international community is: who gets to represent Afghans’ climate interests?

If the Taliban is serious about climate engagement as a route to legitimacy, Cop26 will be an early test.

Megan Darby is editor of Climate Change News.

Article by AsiaPacificReport.nz

By RNZ Pacific

Tuvalu’s Prime Minister has condemned the Australian Prime Minister’s conduct at last week’s Pacific Islands Forum, calling Scott Morrison’s attitude “unfortunate” and “neo-colonial,” and questioning Australia’s future in the 18-member body.

In an interview with RNZ on Sunday, Enele Sopoaga also threatened to pull Tuvaluan labour from Australia’s seasonal worker programme in light of comments by Deputy Prime Minister Michael McCormack, who was recorded saying people from Pacific countries threatened by climate change – like Tuvalu – would survive because “many of their workers come here and pick our fruit”.

Australia’s High Commissioner to Tuvalu would be summoned to explain the comments on Monday, Sopoaga said, and he would cancel the programme if he wasn’t satisfied. He would also encourage the leaders of the other Pacific countries – including Kiribati, Samoa and Tonga – to do the same.

READ MORE: ‘Bullying’ Australia disregards Pacific over climate crisis, says 350 Pacific

“I thought the Australian labour scheme was determined on mutual respect, that Australia was also benefiting,” said Sopoaga. “We are not crawling below that. If that’s the view of the government, then I would have no hesitation in pulling back the Tuvaluan people as from tomorrow.”

“I don’t think the Tuvaluan people are paupers to come crawling under that type of very abusive and offensive language,” he said. “If New Zealand is thinking the same way, we’ll have no other option but to do that [there too].”

McCormack’s comments came after the region’s leaders – including Sopoaga, Morrison and New Zealand Prime Minister Jacinda Ardern – met for a marathon 12 hours on Tuvalu’s main island, Funafuti, on Thursday with Australia, the region’s largest economy and emitter, pitted against the Pacific.

The Pacific countries wanted strict commitments to cutting down greenhouse gas emissions, a phase out of coal power stations, support in replenishing the UN’s Green Climate Fund and a strong and united communique that they could take to international climate talks at the UN next month.

But Australia refused to budge on certain red lines, which included insisting on the removal of mentions of coal, a commitment to limit global warming to under 1.5C and drafting a plan for achieving net-zero emissions by 2050.

It succeeded. Late on Thursday night, a watered-down communique was released, although some are now questioning at what cost.

Australia is meant to be in the midst of a so-called “step-up” in the Pacific, and Morrison came to the meeting stressing the vuvale (family links) between Australia and the region as Canberra gets increasingly jittery about China’s presence.

Pacific trip-up
But if the reaction from the region’s leaders in the past few days has been anything to go by, the step-up has tripped and tumbled some way down the stairs.

Vanuatu’s foreign minister, Ralph Regenvanu, described the meeting as “tense” and “very frank,” revealing that the talks almost broke down twice.

Marshall Islands Foreign Minister David Paul tweeted “Stepping-up means showing up. It means showing you are willing to play your own part in fighting the greatest threat to the Pacific and to the world.” That was later followed by: “The Pacific’s survival – and the Australian fruit industry – requires leadership on the greatest threat to our region and to the world.”

But the most cutting criticism was from Fiji’s Prime Minister, Voreqe Bainimarama, who said on Saturday that Australia had taken a “big step backwards” in its relationship with the Pacific. That came after he told The Guardian on Friday that Morrison’s approach during Thursday’s meeting was “very insulting and condescending.”

Article by AsiaPacificReport.nz

Pacific Media Centre Newsdesk

Wording has played a crucial role in a reportedly “fierce” Pacific Islands Forum in Tuvalu with Australia allegedly managing to alter documental terms to downplay its commitment to climate change mitigation.

According to RNZ Pacific, a communiqué and separate statement on climate change was released after a 12-hour meeting between the leaders yesterday.

The document, released after midnight, included what’s titled the ‘Funafuti Declaration for Urgent Climate Change Action Now”.

READ MORE: Tongan PM blasts Pacific regionalism ‘myth’ and silence over West Papua

The main communiqué endorsed a declaration from the small island states calling for a commitment to limit global warming to 1.5 degrees celsius, an immediate phase out of coal, and contributions to the UN Green Climate Fund.

While Australia was a qualification and did not endorse the main communiqué it did endorse the separate statement which committed countries to work in solidarity to combat climate change, reports RNZ.

However, Australia which is the largest coal exporter in the world managed to have all references to coal removed from the documentation.

While the Guardian had reported that Scott Morrison’s government was pushing for the words climate change “crisis” to be changed to “reality” in the draft communiqué, it remained in the final document.

Nevertheless, Australia’s Shadow Minister for Foreign Affairs, Penny Wong, said Scott Morrison was undermining vital relationships in the Pacific.

“The reality is that Pacific Island nations, Pacific leaders have made it clear they don’t trust the Morrison government when it comes to climate change. They don’t trust them because the Morrison government has failed to act on climate change.”

Fiji’s Prime Minister Voreqe Bainimarama was not happy with the result of the forum, saying the leaders had settled for the status quo.

“Watered-down climate language has real consequences — like water-logged homes, schools, communities, and ancestral burial grounds,” he said.

Opposition leader of the Solomon Islands, Matthew Wale, said the forum was a missed opportunity to really “step up”.

“‘Family’, has been exploited for domestic Australian politics,” he said, referencing the term Scott Morrison had used in his speech at the forum.

Tuvalu Prime Minister Enele Sopoaga was more diplomatic, saying: “I think the outcome is a very good outcome, it’s probably the best outcome given the context and circumstances.”

New Zealand Prime Minister Jacinda Ardern has been praised for her commitment to climate change at the forum.

This week she announced $150 million Pacific climate funding and reiterating New Zealand’s commitment to reducing emissions, citing the goal of reaching net zero carbon emissions by 2035.

While she has said Scott Morrison’s government “has to answer on the Pacific”, she stopped short of calling for Australia to transition out of coal, reports The Guardian.

“Issues around Australia’s domestic policy are issues for Australia,” she said, when asked about Australia’s coal use.

Article by AsiaPacificReport.nz

By RNZ Pacific

Pacific leaders have declared a climate crisis in the region and are demanding an end to coal mining.

The declaration was signed by several regional leaders at the Pacific Islands Development Forum in Fiji on Tuesday.

The declaration expressed grave concerns about the impacts the climate crisis will have on the Pacific.

READ MORE: Australia has a ‘moral responsibility’ to planet, says Marape

In it, the Pacific Islands Development Forum called on governments of countries with high carbon emissions to stop hindering climate change efforts.

It also demanded all coal producers immediately stop any new coal mining and phase out all existing production over the next 10 years.

The declaration asked the development forum’s 14-member states to immediately end subsidies on fossil fuel production.

Echoing 2018’s Boe Declaration from the Pacific Islands Forum, Tuesday’s declaration affirmed “that climate change poses the single greatest threat to the human rights and security of present and future generations of Pacific Island peoples”.

The move was welcomed by environmental non-profit 350.org, with founder Bill McKibben calling it a “very powerful manifesto”.

“The election, in the Pacific, of the government of Australia that continues to want to expand coal mines is a slap in the face to everyone else in that region and in the world,” he said in a videoed statement.

Meanwhile, Fiji’s Prime Minister said Pacific leaders should accept nothing less than concrete commitments to cut emissions at next month’s Pacific Islands Forum Summit.

Frank Bainimarama will be attending his first summit since 2008.

Fiji was suspended in 2009 and Bainimarama said he would stay away until New Zealand and Australia were no longer full Forum members.

In a speech at the Pacific Islands Development Forum – which was set up by Fiji after its suspension – Bainimarama said the region cannot accept any watered-down commitments.

At last year’s forum, Australia was exposed as having attempted to water-down a resolution that declared climate change the region’s greatest security threat.

Bainimarama said the region needs greater commitments from the region’s bigger neighbours, hinting at Australia and New Zealand.

“Fiji and the Marshall Islands have already announced our intention to revise our own nationally determined contributions, and I urge this … membership to do the same and demand the same from the more developed economies, including and especially our large neighbours in the Pacific.

“We should accept anything less than concrete commitments to curb greenhouse gas emissions in line with the most ambitious aspirations of the Paris Agreement. We cannot allow climate commitments to be watered down at a meeting hosted in a nation whose very existence is threatened by the rising waters lapping at its shores.”

• This article is published under the Pacific Media Centre’s content partnership with Radio New Zealand.

Article by AsiaPacificReport.nz

By Megan Darby, deputy editor of Climate Home News

China launched an “international green development coalition” last week, in the face of growing concern about its coal investments.

The Environment Ministry hosted an event on the “green belt and road” as part of a leaders’ summit in Beijing to promote Chinese investment in partner countries.

According to the official progress report on President Xi Jinping’s flagship foreign policy: “The Belt and Road Initiative pursues the vision of green development and a way of life and work that is green, low-carbon, circular and sustainable.

READ MORE: Climate Weekly: Activists hold London landmarks

“The initiative is committed to strengthening cooperation on environmental protection and defusing environmental risks.”

However, China’s energy investments abroad – it is a major investment and aid donor in the Pacific – continue to favour coal, threatening to blow the global carbon budget.

More than 30 heads of state were due at the summit, including from countries with shared coal, oil and gas interests such as Russia, Indonesia and Pakistan.

In a press conference before travelling to join them, UN chief Antonio Guterres said greening the initiative was important to meeting international climate goals.

“We need a lot of investments in sustainable development, in renewable energy, and a lot of investments in infrastructure that respect the future,” he said, as reported by Xinhua.

Test for China
The test is whether China will require its belt and road projects to meet international standards, in line with the Paris Agreement on climate change, said Greenpeace China climate analyst Li Shuo.

“China is certainly becoming more conscious about the criticisms around president Xi’s diplomatic initiative, particularly the environmental impacts of some of the Chinese projects,” said Li.

“Now comes the hard part – will any substantive progress be made at the policy level?”

China is financing 102 gigawatts of coal power capacity outside the country, 26 percent of the total under development, according to green think tank the Institute for Energy Economics and Financial Analysis.

It has become the “lender of last resort” for projects Western banks deem too risky.

Investment in renewables grew in 2018, US-based campaign group NDRC noted, but was still dwarfed by support for fossil fuels.

“There is a huge potential for renewable energy in these partner countries, but then they don’t have great policy set-ups for renewables,” NRDC energy policy expert Han Chen said.

Indonesian coal plants
In a commentary for the Jakarta Globe, campaigner Pius Ginting criticised the Indonesian government for seeking investment in four coal power plants instead of cleaner hydroelectric projects.

An opinion poll of six key emerging economies commissioned by UK-based thinktank E3G found a strong preference for renewables over fossil fuels. In Pakistan, 61 percent of respondents said renewable energy was a better investment for development in the long term, rising to 89 percent in Vietnam.

In these and Turkey, Indonesia, South Africa and the Philippines, solar power was seen as top priority. Coal had some positive associations, most strongly in Pakistan, where 41 percent said it created jobs, but in the rest of the countries polled these were outweighed by pollution concerns.

Republished under a Creative Commons licence.

Article by AsiaPacificReport.nz

China is currently building more coal plants than it needs and in doing so is misallocating capital at an unprecedented rate.

As of July 2016, China had 895 GW of existing coal capacity being used less than half of the time – and perversely has 205 GW under construction and another 405 GW of capacity planned, with a total overnight capital cost of half a trillion US dollars.

This misallocation of capital is a microcosm of wider structural woes within the Chinese economy. China’s rapid economic growth, demographic profile and geographical size has meant it often made sense for the government to build power infrastructure first and ask questions later.

The days when China could grow at a fast pace by accumulating capital, safe in the knowledge that this capital would achieve high returns, appear to be over.

China’s coal power investments have reached an important juncture: keep pouring capital into increasingly unviable projects and put the financial system under additional pressure from the risk of large-scale defaults, or stop investing and promote efficiency.

As power demand growth slows from a historical average of 10 percent to 3 percent or less per year, the coal capacity in the pipeline, as well as some existing coal capacity, risks becoming stranded due to low carbon capacity targets, ongoing reforms in the power sector and carbon pricing.

A new report, Chasing the Dragon? China’s coal capacity crisis and what it means for investors, presents analysis which finds China no longer needs to build any additional coal plants and therefore it makes sense to act with conviction to contain its coal overcapacity crisis.

To prove this, Carbon Tracker Initiative developed a short-term scenario analysing the 2020 targets in the 13th five-year plan (13 FYP) and a long-term scenario analysing the implications of limiting the average global temperature increase to 2°C.

Carbon Tracker Initiative also develop a 2020 reform scenario which models the potential impact of power market reforms and a national emission trading scheme (ETS) on the gross profitability of each operating coal plant in China.

Investors who fail to understand the immediacy of China’s energy transition could find themselves chasing fossil fuel demand that is not there.

13th five-year plan doesn’t add up for coal generation
Low carbon capacity targets in the 13 FYP coupled with a low power demand environment will likely strand coal capacity. Additional capacity beyond existing plants is only required by 2020 if power generation growth exceeds 4% per year and coal plants are run at a capacity factor of 45% or less. If plants under construction are built and existing capacity are run at a 45% capacity factor, then 210 GW of coal capacity is unneeded in 2020 in an environment where power generation growth is 3% per year. Indeed, even in the most optimistic scenario (i.e. sub 45% capacity factor and above 5% power generation growth) there would still be a surplus if capacity under construction is built and operated alongside existing capacity.

Half a trillion US dollars of wasted capital could be avoided
To remain consistent with the IEA’s 2°C scenario (2DS) China can avoid building any new coal plants from now until 2032 by marginally increasing the utilization of their existing fleet. After 2032, the existing fleet becomes inconsistent with the 2DS due to rapidly declining capacity factors and therefore units will need to be progressively retrofitted with Carbon Capture and Storage (CCS) or retired prematurely.

Since China can rely on its existing units to generate the power allocated to unabated coal plants in the 2DS, all units currently under construction and planned are not needed and pose a significant financial risk. Based on a capital cost of US$800 million per kW, US$490 billion of capital could be wasted on plants under construction and planned.

2°C carbon budget bust in 2030s without further policy reform
If no new coal plants are built and each existing unit is retired when it turns 40 years old, the 2°C carbon budget will still be exhausted by 2040. After 2040, coal capacity would need to emit no carbon to remain consistent with the 2°C budget. This is currently technically impossible as existing CCS-equipped coal plants still emit around 100 grams of carbon per kWh. If under construction capacity is built alongside existing capacity with a 40-year lifetime, the 2°C budget will be exhausted by 2036.

Given it would not be practical to phase-out a large amount of generation in a single year, the transition away from coal will obviously require retirements before this date. It is important to note that this scenario analysis uses a capacity factor of 50% and is based on a 50% chance of limiting the average global temperature increase to 2°C.
he following factors will both reduce the 2°C budget and consume it more quickly: (i) holding temperate rise to well below 2°C as described in the Paris Agreement; (ii) a higher probability of limiting temperature rise; and (iii) a higher capacity factor.

Reforms on the rise
Whether through an economic, air quality or climate lens, the Chinese government has every reason to contain its coal overcapacity crisis. The National Development and Reform Commission (NDRC) and other government institutions are aware of the overcapacity crisis and the need for policy interventions to return coal generation investments to equilibrium.

The reforms from the government have increased in frequency and severity in 2016. A policy proposal was released in April to halt the construction of 372 GW of planned capacity – greater than the entire US coal fleet. Even plants under construction are not safe: more recently, the NDRC made the decision to halt 17 GW already under construction, setting a legal precedent that will likely be repeated in the future.

Power market reforms, in combination with the national ETS, could strand coal units with higher operating costs by promoting least cost units and low carbon generation.

Carbon Tracker Initiative developed a 2020 reform scenario to illustrate the impact of a national ETS and power market reforms.

Incorporating a carbon price of $US10/tCO₂ to reflect the introduction of a national ETS in 2017 and a 15 percent reduction in coal power tariffs from ongoing power market reforms, the gross profitability of the operating fleet halves by 2020, with 27 GW becoming cash flow negative and 140 GW making a gross profit of US$5 per MWh or less.

The NDRC put – China to become a net exporter of coal again
The Chinese government are like the central bank of the seaborne coal market. The stellar gains in thermal coal prices this year are entirely a result of China’s NDRC. It’s becoming harder to see how these gains can be sustained.

The NDRC has intervened to supress prices by relaxing its production cuts. By restarting mothballed capacity seaborne investors are actively challenging the effectiveness of Chinese policy.

If history is any guide, betting against the efficaciousness of Chinese policy is not sensible. With China acting as the marginal buyer on the seaborne coal market, investors should prepare themselves for a world where China is a net exporter.

Given the expected coal generation levels by 2020 under the 13 FYP, Carbon Tracker Initiative expects thermal coal demand to be lower than 2015 levels. Even if Chinese domestic supply is curtailed somewhat during this period, it could still result in China no longer being a net importer.

The technology race
The bilateral agreements between China and the US administrations to make efforts to reduce emissions to prevent dangerous levels of climate change sent several signals. One key section related to how both of the world’s largest economies would be investing in the technologies to deliver a low carbon future.

Clearly there are huge opportunities to export the solutions for the companies that win the race.

Questions have been raised as to whether the US will still be in the race under its incoming President – hopefully the economic opportunities and energy independence offered by new energy technologies will make them attractive to the new administration.

Regardless, we believe China will keep racing forward either way for all the reasons outlined above.

Conclusion
The basic maths of continued growth in China’s coal capacity does not add up, and the 13 FYP marks the point where this cannot be ignored any longer. The changing generation mix, the slowdown in power generation growth and existing coal plant overcapacity combine to present a different challenge for China.

With coal generation set to peak, there is no need for further coal capacity, whilst on the supply side, there is the potential for China to become a net exporter of coal again.

Chasing the Dragon? report