In May 2019, Queensland Premier Annastacia Palaszczuk declared she was “sick of” the Adani Carmichael coal project’s assessment process and set a time line for its completion.
G20 countries have a critical role to play in leading efforts to combat climate change, as they account for 79% of global greenhouse gas emissions. In 2009, they committed to phasing out fossil fuel subsidies in the medium term, and since then many have played an important part in driving forward climate action internationally.
Adding up lending and underwriting from 33 global banks to the fossil fuel industry as a whole reveals stark findings: Canadian, Chinese, European, Japanese, and U.S. banks have financed fossil fuels with $1.9 trillion since the Paris Agreement was adopted (2016 to 2018), with financing on the rise each year. Fossil fuel financing is dominated by the big U.S. banks, with JPMorgan Chase as the world’s top funder of fossil fuels by a wide margin.
The best available science shows an urgent need to keep global temperature increases below 1.5°C to avoid severe disruptions to people and ecosystems. Recent analysis shows that burning the reserves in already operating oil and gas fields alone, even if coal mining is completely phased out, would take the world beyond 1.5°C of warming. The potential carbon emissions from all fossil fuels in the world’s already operating fields and mines would take us well beyond 2°C.
The federal government of the United States remains custodian and manager of a large amount of fossil fuels on public lands. While sales of minerals do bring in some revenue to the government, there are many elements of federal management that result in artificially low realized revenues for taxpayers or subsidize extractive activities. Key findings of this review include:
Subsidies to coal in 10 countries responsible for 84% of Europe’s energy-related greenhouse gas emissions remain extensive. These include France, the Czech Republic, Germany, Greece, Italy, Hungary, the Netherlands, Poland, Spain and the United Kingdom (UK).
Federal law requires coal companies to reclaim and restore land and water resources that have been degraded by mining. But at many sites, reclamation occurs slowly, if it all. Mining companies are required to post performance bonds to ensure the successful completion of reclamation efforts should they become insolvent, but regulators have discretion to accept “self-bonds,” which allow many companies to operate without posting any surety or collateral.
The US coal industry faces not just overcapacity but crippling liabilities that will outlive mine closures. Setting the industry on a viable course will require all stakeholders to step up with new ideas.
Illuminating the Hidden Costs of Coal: How the Interior Department Can Use Economic Tools to Modernize the Federal Coal Program
This report aims to illuminate some of the hidden costs of coal production, which Interior should account for in order to modernize the federal coal program and earn a more fair return. If Interior had used a higher royalty rate that accounts for even a fraction of the public costs of mining, it could have earned an additional $2 billion from 2009 to 2013, from coal production in four western states-Wyoming, Colorado, Montana, and Utah.
To modernize the coal program and earn a more fair return, Interior should:
G20 country governments are providing $452 billion a year in subsidies for the production of fossil fuels. Their continued support for fossil fuel production marries bad economics with potentially disastrous consequences for the climate. In effect, governments are propping up the production of oil, gas and coal, most of which can never be used if the world is to avoid dangerous climate change. It is tantamount to G20 governments allowing fossil fuel producers to undermine national climate commitments, while paying them for the privilege.