China's hidden coal cost equal to 7% of GDP

CHINA - China's dependency on coal as its major energy source is creating hidden environmental and other costs worth more than 7% of its annual gross domestic product, green groups said.

A report entitled: "The True Cost of Coal", jointly commissioned by Greenpeace, the Energy Foundation and conservation group WWF, said taking into account the real expense was vital to the nation's future energy security.

The unaccounted costs equate to an estimated 1.7 trillion yuan (US$249 billion), and would be even higher if the impacts of climate change were included, according to the report.

"Environmental and social damages are underestimated while using coal in China as a result of market failures and weakness in government regulations", said Mao Yushi, an economist and lead author of the report.

By accounting for the hidden annual costs, China could wean itself off its coal dependency and better address ecological degradation and global warming concerns, the report said. "The government of China has the opportunity to make a real improvement to the environment by reforming the current coal pricing system," the report said. "If all the external costs of coal are genuinely reflected in the coal price, this will provide a non-distorted price signal for the whole energy market."

The report said the external and unaccounted costs to China of using coal included air and water pollution, ecosystem degradation, damage to infrastructure, human injuries and loss of life.

It also takes into account the distortion of government regulations which keep the cost of coal down such as distorted land ownership policies, and inadequate worker safety and worker compensation systems.

China depends on coal for about 70% of its booming energy needs, which is one factor in its huge increase in greenhouse gas output in recent years. China now ranks alongside the U.S. as one of the world's two biggest emitters of the gases that are blamed for climate change.

Related News

global electricity demand

Surging electricity demand is putting power systems under strain around the world

LONDON - Global electricity demand surged in 2021, creating strains in major markets, pushing prices to unprecedented levels and driving the power sector’s emissions to a record high. Electricity is central to modern life and clean electricity is pivotal to energy transitions, but in the absence of faster structural change in the sector, rising demand over the next three years could result in additional market volatility and continued high emissions, according an IEA report released today.

Driven by the rapid economic rebound, and more extreme weather conditions than in 2020, including a colder than average winter, last year’s 6% rise in…

READ MORE
uk wind farm

UK windfarms generate record amount of electricity during Storm Malik

READ MORE

solar farm

Renewables are not making electricity any more expensive

READ MORE

Solar Power Batteries

Cheap at Last, Batteries Are Making a Solar Dream Come True

READ MORE

alberta power lines

Ottawa making electricity more expensive for Albertans

READ MORE