4 February, 2021

Coal phase-out and energy transition pathways for Asia and the Pacific

Authors

Ursula Fuentes, Anna Chapman, Gaurav Ganti, Fahad Saeed, Jessie Ruth Schleypen, Bill Hare

This report, prepared by Climate Analytics for the UN Economic and Social Commission for Asia and the Pacific, provide insights into how the Asia and the Pacific region can transition away from coal to a renewable based efficient energy system compatible with the Paris Agreement and Sustainable Development Goals.

The Asia-Pacific region, more than any other global region, is highly reliant on fossil fuels. How it transitions away from fossil fuels will be a pivotal issue for Asia-Pacific and the world in the coming years, in light of the current and future climate impacts and the sustainable development benefits possible through an energy transition.

How can the region can transition away from coal to a renewable based efficient energy system compatible with the Paris Agreement and Sustainable Development Goals? What is the current situation, what drives coal expansion in the region, what are the options for a clean energy transition and benefits that would stem from it?

Key findings

Coal generation is still expanding in the Asia-Pacific against trends elsewhere in the world

A total of 27 countries in the Asia-Pacific account for about 76% of current global coal generation capacity.
The region accounts for almost the entire (94%) global pipeline of new coal plants.
Even without building new plants, emissions from coal fired power generation in the Asia-Pacific would continue at a very high level until after 2040 and would only be phased out by around 2060.
To be in line with the Paris Agreement, coal fired power generation must peak in 2020 globally, then decrease rapidly to 80% below 2010 levels by 2030, and be phased out by 2040.
Non-OECD Asia needs to reduce coal generation by 63% below 2010 levels by 2030 and phase out by 2037, completing a global coal phase-out before 2040.
Non-OECD Asia faces the most challenging gap between potential generation from coal and Paris Agreement benchmarks, with generation from currently operating coal fired power generation already largely exceeding the Paris Agreement benchmarks.

Political economy drives the support for coal and expansion of coal-fired power generation in the region

Key factors include high demand growth in South and Southeast Asia, the presence of a large share (more than 60%) of global coal reserves in the region, and a high dependency on income from coal exports in some of the countries in the region whose governments support coal mining and coal fired power generation, including through subsidies and public finance.
Support for coal in the region is driven by the geopolitical influence of four countries that have historically relied on coal and are large coal importers: China, Japan, the Republic of Korea, and India.
Governments, government-owned financial institutions or government-owned utilities in these four countries are strongly supporting coal expansion in the region.
The main recipients of this support are countries in South and Southeast Asia: Bangladesh, Indonesia, Pakistan, and Viet Nam.

It is feasible to achieve a Paris Agreement-compatible 50-85% share of renewable energy by 2030 in South and Southeast Asia by 2030, and 100% renewable electricity generation by 2050.

Utilisation of solar and wind could satisfy the needs of almost all South and Southeast Asian countries many times over.

Renewable energy provides a large range of benefits for sustainable development

It can be deployed rapidly, and in areas that are not connected to the grid, important for a region where not all of the population has access to electricity.
Installation of renewable energy can replace fossil imports creating security and also avoid the price fluctuations of fossil fuel imports.
It provides employment opportunities, and employment is crucial for post-COVID-19 recovery.
Phasing out coal reduces air, water and soil pollution, as well as negative impacts on water quality and water scarcity.
It is crucial for the region to contribute to achieving the Paris Agreement temperature limit.

Policy recommendations

National governments: Adopt best practice policies – phase out fossil fuel subsidies, carbon pricing, renewable energy support, encourage and push shift in investment through green recovery
National governments: Move to transformational policies, targets, long-term planning – ratcheting up NDC targets and adopt Long-Term Strategies in line with the Paris Agreement
Clear pathways to enable anticipation of change and avoid more stranded assets – moratorium for new coal, targets and phase-out plans for coal before 2040
Financial support and capacity building need to be informed by Paris Agreement benchmarks to shift investments at scale in the near term.
Regional and international cooperation: Alignment with Paris Agreement goals, engaging stakeholders, private sector and civil society
Trans-boundary grid transmission and integration
Financial institutions: Cooperation on sustainable Finance, clear policies and transparency
Private sector engagement

Decarbonisation targets and 1.5℃ pathways

Publications

Climate Action Tracker: 2024 warming projection update

Despite an escalating climate crisis marked by unprecedented wildfires, storms, floods, and droughts, the Climate Action Tracker annual global temperature update shows global warming projections for 2100 are flatlining, with no improvement since 2021. The aggregate effect of current policies set the world on a path toward 2.7°C of warming.

Decarbonising light-duty vehicle road transport

The Climate Action Tracker provides updated 1.5ºC compatible benchmarks for the transport sector for the world as a whole and for seven individual countries; the US, EU, China, India, Brazil, South Africa and Indonesia.

Emissions Gap Report 2024: No more hot air … please!

The 2024 edition of UNEP’s Emissions Gap Report shows how much higher nations must aim. To get on a least-cost pathway for 1.5°C, emissions must fall 42 per cent by 2030, compared to 2019 levels. G20 nations, particularly the largest-emitting members, would need to do the heavy lifting.

The role of northern forests in limiting warming to 1.5°C

Northern forests are critical in the race to net zero CO₂ by mid-century. Protecting and restoring these forests, alongside steep and rapid reductions in fossil fuel emissions, is essential both to mitigating emissions and to supporting forest ecosystem services and biodiversity.

Methodology underpinning the State of Climate Action series: 2024 update

This technical note describes the State of Climate Action series’ methodology for identifying sectors that must transform, translating these transformations into global mitigation targets primarily for 2030, 2035 and 2050 and selecting indicators with datasets to monitor annual change. It also outlines the report’s approach for assessing progress made toward near-term targets and comparing trends over time.

LNG shipbuilding industry heading to huge oversupply

The LNG shipbuilding industry appears to be doubling down on building new carriers, ignoring the global shift to a low carbon economy and putting itself into an even worse oversupply situation than a year ago, we find in our updated report.

Setting 1.5°C compatible wind and solar targets

Based on global energy system modelling sense-checked against key national studies, this report presents new analysis on what a 1.5°C-aligned rollout of wind and solar could look like for key countries. It aims to inform target setting for 2030, 2035 and beyond in third generation NDCs.

Technical guide for the development of long-term low emission development strategies in Africa

This technical guide proposes concrete steps and actions to help African countries develop strong, high-performing Long-Term Low Emission and Climate Resilient Development Strategies that chart a low-emission development path, build resilience, encourage innovation, and create new opportunities for green growth.

Evaluating the near and long-term role of carbon dioxide removal in meeting global climate objectives

For 1.5°C pathways with limited overshoot, most of the mitigation between now and 2030 should come from emissions reductions (70%), with reductions from cutting non-CO2 emissions (20%) and land-based carbon dioxide removals such as afforestation and preventing deforestation (10%) making up the remainder.

What good looks like: G7 climate policy 2024 update

This brief outlines seven key policy recommendations for this June’s G7 summit that, if adopted, would demonstrate the ambition and leadership needed to keep the Paris Agreement’s 1.5°C limit in sight.

Tripling renewables by 2030: interpreting the global goal at the regional level

At COP28, governments agreed to triple global renewable capacity by 2030. This report breaks down what a 1.5ºC-aligned renewables rollout would look like at the regional level and calculate the associated investment needs.

Submission to the Australian Treasury consultation on the Petroleum Resource Rent Tax

As the gas industry in Australia has grown exponentially, the profit taxes it pays to the government have proportionally plummeted, presenting an opportunity to change this regime. Here, we respond to the Australian Government Treasury consultation on the Petroleum Resource Rent Tax (PRRT) – anti-avoidance provisions and clarifying treatment of ‘exploration’ and Mining, Quarrying or Prospecting Rights.

About us

Decarbonisation targets and 1.5℃ pathways

Comment