Skip to main content

Policy Brief: The dilemma of coal phase-out: How to facilitate a transition to cleaner energy sources in Asia-Pacific?

There is no doubt that phasing out coal in the Asia-Pacific region will significantly reduce CO2 emissions and contribute towards meeting the 1.5 °C global warming limit set in the Paris Agreement. In 2019, the Asia-Pacific coal market increased by 6.1% to US$751.8 billion, rising for the third consecutive year after four years of decline.i In terms of production, China produced close to 80% of coal in the region 2019 followed by Indonesia and Australia while regarding consumption volumes, China and India were the 1st and 2nd countries respectively on the list followed by Japan.

However, coal has played a vital role in fueling the economic growth of certain countries in the region. In both wealthier and emerging countries such as China, India and Australia, coal has provided employment as well as stable electricity production and enabled the rise of key industries (e.g. cement, steel). For example, in 2019, Australia’s coal mining industry alone employed more than 58 thousand people.ii In India, the coal mining and power generation sector – excluding the transport sector – directly employed around 0.5 million people.iii For China, 2.7 million people were employed in the coal industry by the end of 2020.iv It is thus clear that a significant proportion of the Asia-Pacific population relies on coal for livelihoods.

Moreover, in the region’s emerging economies, coal accounts for a large proportion of total CO2 emissions.

It is therefore clear which countries would have to make the most effort and whose populations would be most affected by a phase out of coal in the region – especially if no re-employment provisions are made.

On the other hand, poorer Asia-Pacific countries – especially Small Island Developing States (SIDS) - not only use coal to a much lesser extent but in many cases, face the earliest and worst consequences of coal emissions. This can justify early action to phase out coal in the region.

But is phase out of coal expected in the region already?