The slow pace of coal plant retirements around the world has a veteran climate advocate calling for a “cash for clunkers” program to speed up the process of getting the world’s most carbon-intensive fuel out of circulation.
Cash for clunkers incentives are usually set up to encourage owners of older cars to trade them in for more fuel-efficient or, now, electric vehicles. But Justin Guay, global climate strategy director for the Sunrise Project, says it’s time to apply the same approach to coal, at a time when the U.S. industry is taking advantage of pandemic recovery funding and old, uneconomic coal plants continue to receive subsidies around the world.
“In the U.S. and Europe, we’ve grown far too accustomed to the coal industry death watch,” Guay writes for Greentech Media. “Nearly every day, articles appear announcing new record lows in coal generation, coal retirements, and the generalized economic train wreck that is the coal industry. It’s enough to make the average person think the job is done, the transition beyond coal over.”
But “nothing could be further from the truth,” he warns. “The reality is that for the world to be on track to meet the Paris Agreement goals, every coal unit across the 37 member countries of the Organization for Economic Cooperation and Development (OECD) must be offline by 2030; the same must happen in Asia and the rest of the world by 2040.”
But “despite hitting global peak coal several years ago, we are not heading toward a steep decline; instead, we seem to be on a long, flat plateau,” with China operating 1,000 gigawatts of “new or very young” coal plants and still planning a large number of new installations. One recent analysis found that 93% of the world’s coal plants are “sheltered from the economic storm,” protected from shifting electricity markets by long-term contracts and non-competitive tariffs.
Those realities make a cash-for-coal-clunkers program an essential tool in the toolkit, Guay says. He suggests four criteria for buying existing coal plants out: clear eligibility criteria, processes to ensure the public doesn’t overpay, an absolute threshold on total expenditure, and a just transition for coal workers and communities.
Guay estimates a price tag of US$116 billion to retire all the world’s coal plants—one-quarter the cost of a cash-for-clunkers car program floated in the U.S. Senate, and about 5% of what the country has spent so far on COVID-19 recovery.
Click here for the rest of Justin Guay’s argument for a global cash-for-coal-clunkers program.