UK falls out of love with coal as it pledges climate action

Intro

Dirty coal just can’t get any love this Valentine’s Day. As people all around the world unite to pull their money out of fossil fuels, the leaders of the UK’s three major political parties have agreed to end unabated coal use in power generation, making the UK the first major economy in the world to do so. The pledge, signed by David Cameron, Nick Clegg, and Ed Miliband, also commits them to seek a strong global climate deal in Paris at the end of the year and to agree national carbon budgets in line with the UK’s climate change legislation. The announcement comes after a week where hundreds of thousands of people showed the love for all that could be lost to climate change, and has been welcomed by green groups, business leaders and politicians alike as “a vital step towards making a real difference”. Commentators say it represents another “warning shot for investors” highlighting dirty coal is no longer a sound investment. This cross-party commitment to tackle climate change runs in stark contrast to those countries – such as the US, Australia and Canada – where climate action remains a hugely partisan issue, and further highlights the political and economic risks for those who “continue to peg their economies on the hopes of continued growth in the coal industry”. With 2015 such a crucial year for climate change, as governments prepare to sign on to a new global climate agreement in Paris this December, the UK is following hot on the heels of the US, China and India all of who have recently signaled a shift away from dirty energy, providing further momentum to the growing call for a complete phase out of fossil fuels and a shift to a 100 per cent renewable future.

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RT @senatormilne Excellent news on #GlobalDivestmentDay. UK gets serious on global warming, rejecting coal. http://bit.ly/1A6cdVF

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Key Points

The UK government signals its love affair with coal could be over. Today’s pledge, signed by leaders of the UK’s three largest political parties, states that they will work together towards a low carbon future, phasing out the dirtiest form of electricity generation. The UK’s aging coal-fired power stations are responsible for 79 per cent of power sector emissions, and an estimated 1,600 premature deaths every year. And as the country gets ready to say goodbye to coal, the UK’s renewable industry is going from strength to strength, producing 17.8 per cent of electricity in the last three months of 2014.

Coal is the energy of the past. Across Europe demand for coal is falling, as governments and development banks halt their investment in the dirty energy source, and the UK’s phase out has been described as another “warning shot for investors”. The message is clear; continued support for coal, such as that seen by many OECD countries, flies in the face of the global reality that renewables are in and coal on its way out. A smooth transition to a clean energy future starts with a phase out of coal, protecting health of citizens and the climate, and providing business confidence and long term security for clean alternatives.

2015 is a crucial year in the shift towards a low-carbon future. Through its bi-partisan pledge, the UK government has shown its commitment to the low-carbon transition and the international climate talks. This positive step ahead of the UN conference in Paris comes on the heels of announcements by the US, China and India all signalling a shift away from dirty energy. It provides further momentum for the growing calls for a complete phase out of fossil fuels and a shift to a 100 per cent renewable future and leaves countries falling to match such commitments evermore isolated.

Background

Coal is the dirtiest fossil fuel used for electricity generation, accounting for 79% of CO2 emissions from the UK power sector. The government’s independent climate change advisors, the Committee on Climate Change, have said that in order to meet our legally binding climate change commitments “there can be no role for conventional coal generation in the UK beyond the early 2020s.” The recent high-profile New Climate Economy report, which was jointly commissioned by the UK government, lends weight to this position, stating that: “high-income countries should commit now to end the building of new unabated coal-fired power generation and accelerate early retirement of existing unabated capacity”.

Despite these warnings, emissions from coal-fired power stations increased by 19% between 2010-13, with UK coal plants emitting more annual CO2 than the entire economies of Norway and Sweden combined. In the first three quarters of last year coal power stations accounted for between 20% and 37% of UK electricity generation.

The UK’s ageing fleet of coal power stations, most of which date back to the 1960s, were due to come offline by the early 2020s due to European air pollution laws. But a number of factors have combined to dramatically improve the economics of keeping coal plants open, including, a drop in global coal prices; the freezing of the UK’s tax on carbon (Carbon Price Floor) from 2016 and uncertainty over its trajectory post-2020; a low price in the EU Emissions Trading Scheme; and subsidies for existing coal plants of £293 million through the new Capacity Market.

Not only is this extremely significant for the country’s efforts to tackle climate change, but also for our health. A recent study by the Health and Environment Alliance (HEAL) found that air pollution from the UK’s coal power stations causes an estimated 1,601 premature deaths per year and costs the taxpayer between £1.1 – £3.1 billion per year in health impacts.

The UK’s continued reliance on coal would also have profound implications for our energy security, with the latest figures from the Department for Energy and Climate Change (DECC) revealing that the UK is dependent on Russia for 44% of its coal imports. In the last year, the UK spent almost £1 billion on Russian coal, more than any other country in the EU. Staggeringly, UK imports of Russian coal increased by 21% during the Crimea crisis and while sanctions were being imposed on Russian energy companies.

In a highly unusual move, UK politicians from the three main political parties have today signal a u-turn on this coal growth, committing to a phase out of unabated coal use in the power sector. The pledge, signed by Prime Minister David Cameron, Deputy Prime Minister Nick Clegg, and the Leader of the Opposition Ed Miliband commits the three parties to work together to tackle climate change. The pledge includes commitments to seek a fair, strong, legally binding global climate deal which limits temperature rise to below 2DegC; to work together, across party lines, to agree carbon budgets in accordance with the Climate Change Act; and to accelerate the transition to a competitive, energy efficient low carbon economy and to end the use of unabated coal for power generation.

The agreement comes after the launch of a short film featuring stars such as Stephen Fry, Dermot O’Leary and Emilia Fox – inspiring people to care about climate change.  The film ‘A simple love poem’ has already been seen by hundreds of thousands of people and shared by a host of high profile faces, including Hollywood actor Mark Ruffallo.

Today’s announcement has been welcomed by green groups, business leaders and politicians alike as “a vital step towards making a real difference.” Commentators say it offers “a stark admission that coal does not have a future” and should represent another “warning shot for investors” highlighting dirty coal is no longer a sound investment. This cross-party commitment to tackle climate change runs in stark contrast to those countries – such as the US, Australia and Canada – where climate action remains a hugely partisan issue, and further highlights the risk to those governments who “continue to peg their economies on the hopes of continued growth in the coal industry.” With 2015 such a crucial year for climate change, as governments prepare to sign on to a new global climate agreement in Paris this December, the UK is following hot on the heels of the US, China and India all of who have recently signaled a shift away from dirty energy, providing further momentum to the growing call for a complete phase out of fossil fuels and a shift to a 100 per cent renewable future.

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Key Quotes

  • “This agreement represents inspiring leadership and true statesmanship by all three men. The political courage it represents on all sides is exactly what our world most needs in order to solve the climate crisis. Thank you! Thank you! And thank you!” – Former Vice President of the US, Al Gore
  • “I welcome this cross-leader agreement which will send a signal to our partners around the world that the UK is serious about our responsibilities as stewards of the environment.” – Lord Howard of Lympne, former leader of the Conservative Party
  • “With nearly three quarters of British women saying that tackling climate change cannot be left to future generations, the global leadership shown by the three main UK parties today is a vital step towards making a real difference for future generations, something that’s a real priority for Women’s Institute members.” – Marylyn Haines Evans, co-chair of the Public Affairs Committee at the National Federation of Women’s Institutes
  • “The importance of this pledge cannot be overstated. In this critical year, both for the international climate change negotiations and the agreement of the sustainable development goals, this statement of cross-party recognition of the importance of climate action, as well as support for a legally binding global deal, sets a terrific example for other countries to follow.” – Paul Polman, CEO of Unilever
  • “As insurers and investors, we are well used to thinking about sustainability in the long term. This statement represents political leadership on a key issue at a crucial time.” – Mark Wilson, Group CEO, Aviva plc
  • “Consensus is a rare thing in British politics, but this makes agreement even more powerful when it is reached. I applaud party leaders for setting aside their differences to lay out the common ground on climate action that exists between Labour, Liberal Democrats and Conservatives. Investors should take reassurance that the UK will remain on its current path to decarbonise its economy irrespective of who wins the election.” – Lord Ashdown of Norton-sub-Hamdon, former leader of the Liberal Democrats
  • “The low-carbon transition represents a major economic opportunity and a consistent UK policy framework was a crucial factor in Siemens’ decision to make a multi-million pound investment in wind turbine production and installation facilities in Hull. This demonstration of cross-party support sends a clear message that the UK remains a good place for global companies to do low-carbon business.” – Juergen Maier, CEO, Siemens plc
  • “This is another warning to investors on the increasing financial risks of stranded assets. Coal mining and the associated infrastructure assets are at risk, as are the Governments who continue to peg their economies on the hopes of continued growth in the coal industry. Continuing an economic strategy that rests on coal investments for growth is putting the Australian economy at increased risk as it fails to facilitate the inevitable transition our energy market.” – Tim Buckley, Director of Energy Finance Studies, Australasia for IEEFA.
  • “The UK party leaders have overcome partisan divisions to agree on a united response to climate change. This is the kind of approach that we should be seeing in all major countries, including Australia. With its leaders in a climate coalition, the UK is sending a powerful signal about the strength and stability of its commitment to tackle climate change. This announcement adds further momentum as we head toward the climate negotiations in Paris in November, where the world will agree on a framework for post-2020 carbon pollution reduction.” CEO of The Climate Institute, John Connor
  • “We welcome the announcement made today by all major UK political parties that they will work together to accelerate the transition to a competitive and low-carbon economy. Climate change is an issue that affects everyone; it is right that these leaders put tackling climate change above party politics. The UK’s cross-party agreement serves as a positive example to other countries struggling to act on climate change. A focus on the simultaneous economic and climate benefits of low-carbon growth makes sense from any angle, and can help bridge typical partisan divides. By pledging to accelerate the transition to a competitive, energy efficient low-carbon economy, David Cameron, Ed Miliband and Nick Clegg all recognise that it is in the UK’s self-interest to act now to reduce climate risk by investing in a better, lower-carbon, less polluting growth model. Ending the use of unabated coal for power generation is a crucial commitment.” – Felipe Calderón, former President of México and Chair of the Global Commission on the Economy and Climate
  • “I am glad to see the leaders of the three main Westminster parties giving their support to strong international and domestic action on climate change. The next UK Government will need to ensure a step change in the pace of the transition to a low-carbon economy in order to meet the statutory carbon budgets and to decarbonise the power sector by 2030. A key part will be to end emissions from coal, which are twice those from natural gas per unit of electricity generated. The Coalition Government has already introduced regulations to prevent the construction of any new coal-fired power stations unless they are equipped with carbon capture and storage technology. We now need to bring a speedy end to coal-burning by existing power stations which release carbon dioxide and other pollutants into the atmosphere. The transition to a low-carbon economy and investment in our cities and transport to make them more efficient, less congested and cleaner has great potential to drive a dynamic, more attractive and sustainable growth story for the UK, and indeed help the UK with design and technology it can take to the world. I hope that the leaders will embody their commitment to a low-carbon economy in overseas aid to help poor countries to overcome poverty and make their transition to low-carbon growth and to become more resilient to those impacts of climate change that cannot now be avoided.” – Nicholas Stern, Co-Chair of the Global Commission on the Economy and Climate and Chair of the Grantham Research Institute on Climate Change

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  • RT @andrewbradleyhc: #British Party #leaders unite for #climatechange #Battle http://t.co/ei6Kj4Z7i2 Bravo. @GreenAllianceUK
  • RT @georgefwoods: Wow… Historic UK Labor, Tory and Lib-Dem joint agreement to fight #climate change & #endcoal http://t.co/crAMIcCAGf
  • MT @GreenAllianceUK: Cameron, Clegg and Miliband sign joint climate change agreement brokered by Green Alliance http://t.co/7YACJ0vJDU
  • RT @JigarShahDC Even the #UK is now phasing out #coal http://bloom.bg/17wpVaX @arthurhcyip @AlexEpstein @TheEnergyGang
  • MT ‏@nwoje Cameron, Clegg, & Miliband pledge includes ending “use of unabated coal for power generation”. Significant http://bit.ly/1A6cdVF
  • RT @wwwfoecouk UK is first major economy to commit to end unabated coal in power generation. #showthelove http://bit.ly/17wB63x