20131118_GG

Source: World Coal Association

URL: http://www.webcitation.org/6LcOtS7AQ

Date: 28/11/2013

Event: Godfrey Gomwe: "As much as some may wish it, coal is not going away"

Attribution: World Coal Association

People:

• Godfrey Gomwe: CEO, Anglo American Thermal Coal

[Address by Mr Godfrey Gomwe, Chair, WCA Energy & Climate Committee, Chief Executive, Anglo American Thermal Coal to the International Coal and Climate Summit - 18 November 2013.]

Godfrey Gomwe: Thank you Milton. Mr Deputy Prime Minister, Madam Executive Secretary, Mr Buzek. Ladies and gentlemen, it is my pleasure to address you today on behalf of the World Coal Association at this International Coal and Climate Summit. I would like to thank the Ministry of Economy for hosting us for our conference today.

We are all gathered here in Warsaw for the 19th Conference of the Parties to the United Nations Framework Convention on Climate Change. COP19 is an important step towards what we all hope will be a comprehensive climate agreement in Paris in 2015. The urgency of acting on climate change was highlighted by the release of the Intergovernmental Panel on Climate Change report on climate science this September. That report highlighted the urgent need to limit emissions of carbon dioxide if we are to limit global temperature rises below 2 degrees. It highlights the need to ensure that we do reach a new agreement in Paris in 2015.

Climate change is a complex and challenging issue. There are no easy solutions. The challenge of climate change must also be seen in the light of continuing efforts to address poverty across the globe. The Copenhagen Accord, agreed in 2009, highlighted the need to balance the objectives of addressing climate change and the urgent need to eradicate poverty in the developing world. I believe these needs can be more than balanced, I believe they can and must be treated as integrated priorities.

These issues are inextricably linked. The world’s least developed countries need access to low cost energy, but they are also the most vulnerable to the impacts of policies aimed at reducing anthropogenic greenhouse gas emissions. Today there are 1.3 billion people in the world who live without access to electricity and 2.6 billion who rely on traditional fuels for cooking. A life lived without access to modern energy is a life lived in poverty. Lack of access to modern energy services has serious implications for women and children in particular. Women suffer most from the effects of burning fuels in the home causing many to die prematurely from respiratory diseases. And for many children their education is hampered because they have to stop studying when the sun goes down.

If you would permit me to get personal for a moment. I can recall the first electric light I studied under was when I first went to university, until then I’d had to study under the glow of a paraffin lamp. Even still I was lucky. Today across Africa and in many developing countries it is not at all uncommon to see children outdoors late at night studying under street lamps because they have no electricity at home. Even more fundamentally, without electricity economies can't grow because there isn't the power for industry to provide jobs and promote growth. Without that growth there is no long-term sustainable pathway to eradicate poverty. We can and we must do more to address these integrated challenges of climate change and poverty eradication.

The energy sector as a whole, and coal in particular, is a major contributor to global greenhouse gas emissions. We acknowledge we are part of the problem. But that is exactly why we must be part of the solution. This summit has been convened to bring together leaders in government and industry and the environmental community to discuss how we can build a sustainable future for coal in the twenty first century. As much as some may wish it, coal is not going away. Coal provides 40 percent of the world's electricity. According to the International Energy Agency it may overtake oil as the largest source of primary energy in the world within the next few years. Ignoring coal, the cornerstone of the global energy system, and simply hoping it will go away is no way to find a realistic solution to the challenges we face.

Many developing countries have significant coal reserves. They want to use those reserves to power their economies because coal is an affordable and reliable way to provide electricity – especially to those who currently lack it. The IEA’s 2011 World Energy Outlook made an important point. That year they made a comprehensive review of what is needed to address global energy poverty. It was revealing. That report highlighted that more than half of the on-grid electricity needed to meet their energy for all scenario would come from coal. That figure alone underlines the fact that coal is not going away. Can we justify removing such a significant contributor to the fight against global poverty from the global energy mix? Most definitely not.

This is why the coal industry, and all of us as members of the international community, must come together to help those countries utilise their natural resources in the cleanest possible way. We must, and we can, reduce emissions from burning coal for electricity. The technology exists to significantly reduce CO2 emissions from coal. Modern, high efficiency, low emission coal fired power plants emit significantly less carbon dioxide than older, less efficient plants. A one percent improvement in efficiency results in a two to three percent

reduction in CO2 emissions. If we were to raise the global average efficiency of coal plants from its current average of 33 percent up to 40 percent we could reduce global carbon emissions by more than 2 gigatonnes - that's the equivalent of running the Kyoto Protocol three times over.

Modern highly efficient plants are also a key step towards near zero emissions from coal because they can be built ready for the deployment of carbon capture and storage technology. In the World Energy Outlook released last week the International Energy Agency has made this point very clearly. The IEA has called for the use of older, less efficient plants with higher emissions to be limited, but they've also called for new coal construction to prioritise high efficiency technologies.

Their report also highlighted the role of coal in Southeast Asia. Governments in that region have huge challenges in economic development and poverty eradication - so an affordable, abundant and reliable fuel is essential to addressing those challenges. Three-quarters of the thermal capacity currently under construction in the region is coalfired, leading the IEA to forecast a steady increase in coal demand of around 4.8 per cent a year through to 2035 in that region.

Coal is doing most of the heavy lifting when it comes to improving energy access in Southeast Asia – and the IEA makes it clear that it will continue well into the future. There is no other realistic or affordable pathway for the region to follow. That's why the IEA has explored what it calls the Efficient ASEAN Scenario, which shows emissions from burning coal in the region could be reduced by as much as 25 per cent. by using high efficiency, low emission technology. Indeed it led the Executive Director of the IEA to declare that "the rising share of coal in power generation underscores the urgent need to deploy more efficient coalfired power plants."

But 21st century coal technologies with fewer emissions come at a cost. Modern highly efficient plants have significantly higher capital costs than cheaper but more polluting plants. But they are also one of the cheapest ways of mitigating CO2 emissions. That's why international support is essential. National governments looking to coal should be looking towards modern highly efficient plants. In many cases though they can't afford them, or a cheaper solution is more easily accessible. It's therefore critical that the international community become involved in supporting the deployment of high efficiency low emission technologies. It's because of this that it is important for multilateral development banks and others in the international community pay attention to the need for higher efficiency coal plants with lower emissions. This is especially as work begins towards setting energy access targets as part of the Sustainable Development goals in the post-2015 development framework. We must also recognize this fact as we begin to implement new climate finance mechanisms.

Recently development banks have begun to shift away from coal. While it might seem counter-intuitive, the prospect of multilateral development banks and others in the international community backing away from funding for coal could have unintended consequences. Many countries are relying on coal to fuel their growing economies. Coal’s role is likely to grow in many places regardless of whether development banks are involved or not. The risk, however, is that without support from these institutions, cheaper, less efficient and more

polluting technologies might be used because they are all that can be afforded in the absence of concessional finance.

It is important that the international community recognise that much of the developing world is turning to coal to fuel development. We need to help them do that in the cleanest way possible. This conference has been convened to engage the coal industry in the climate process. We know we have to act, we know we must contribute to the solution. The technology is available to make sure we do that. Over the next two days we look forward to engaging in a constructive dialogue to ensure that the twin objectives of addressing climate change

and eradicating global poverty can be treated in an integrated way. Thank you.