Power

Phase out unabated coal and fossil gas electricity generation

One of the most fundamental challenges to achieving climate goals is ending the current reliance on coal and fossil gas in the power system. These two fuels generate around 60% of the world’s electricity, but their use creates vast amounts of greenhouse gas (GHG) emissions. 

Burning coal contributes around 75% of total carbon dioxide (CO2) emissions generated by the global power sector, with the remaining emissions primarily from the use of fossil gas. And power sector emissions account for about 23% of total global GHG emissions — the single largest sectoral contribution. 

Coal- and fossil gas-fired power need to be rapidly phased out. 

Backed by mounting scientific evidence and economic analysis, the best course of action is to quickly phase out fossil fuels and replace them with clean zero-carbon power sources. Coal consumption is declining in certain regions, such as North America and Europe, but not quickly enough. At the same time, the use of unabated fossil gas is increasing globally, creating a barrier to achieving the goals of the Paris Agreement.

While burning of fossil fuels in conjunction with technologies to capture and store CO2 emissions is technically feasible, there remain large uncertainties and risks of these carbon capture and storage technologies at scale. They are not economically competitive and do not eliminate all emissions, such as methane emissions during production and transport. This means carbon capture and storage technologies cannot be viewed as an alternative to zero-carbon power in the global displacement of fossil fuels. 

Efforts need to accelerate in order to limit warming to 1.5 degrees C.

The carbon intensity of power supply needs to be reduced by about 80% before 2030 and reach zero by 2050. The current scale and pace of change is not enough to meet the ambitions set forward in the Paris Climate Agreement; countries need to dramatically increase their zero-carbon electricity ambitions and actions. For example, the decline of coal needs to accelerate six-fold over the next eight years in order to limit warming to 1.5 degrees C.

 

Data Insights

What targets are most important to reach in the future?

Systems Change Lab identifies 4 targets toward which to track progress. Click a chart to explore the data.

What factors may prevent or enable change?

Systems Change Lab identifies 3 factors that may impede or help spur progress toward targets. Click a chart to explore the data.

Progress toward targets

Systems Change Lab tracks progress toward 4 targets. target. Explore the data and learn about key actions supporting systems change.

Share of unabated coal in electricity generation

To align the power system with the Paris Agreement, efforts to phase out coal generation need to accelerate six-fold to reach zero by 2040.

Of all the emissions generated by the global power sector, the burning of coal contributes the largest share. In fact, around 75% of power sector emissions are due to coal consumption. Therefore, the removal of coal from the global power fleet is fundamental to decarbonizing the power sector.

Globally, the share of coal in electricity generation peaked in 2013, reaching around 41.2%. Since then, it gradually decreased at an average of 1.8% per year. While this is a positive trend, the overall consumption of coal is actually rising. In absolute terms, coal use has risen by 20% since 2010, with total generation estimated at 10,042 terawatt hours (TWh) as of 2021.

We need a rapid, likely exponential, decline in coal consumption, and any new coal capacity additions run an increasingly high risk of becoming stranded assets under pathways that achieve the 1.5 degree C goal.

Globally, coal generation shares need to fall sharply to around 0-2.5% of total generation by 2030 and reach zero by 2040. To meet this goal and align the power system with the vision of the Paris Agreement, there must be a six-fold increase in the rate at which global coal generation shares are now falling.

Share of unabated fossil gas in electricity generation

Relative to 2019 levels, unabated fossil gas needs to fall to around 17% of total power generation globally by 2030. From then on, this decline should continue so that unabated fossil gas use contributes no more than 5% by 2040, and is completely phased out by 2050.

Fossil gas is the second-most used fuel in the global power sector, generating 24% of electricity as of 2019 and contributing 22% of total CO2 emissions. In addition, the production and transport of fossil gas generates significant quantities of fugitive methane emissions, a potent GHG. For more on methane emissions from energy production, see Reduce methane emissions from oil and gas operations.

The use of fossil gas for electricity generation has been increasing sharply since 1995 — a trend that must reverse in order for the power sector to align with the Paris Climate Agreement’s long-term temperature goal. Relative to 2019 levels, unabated fossil gas needs to fall to around 17% of total power generation globally by 2030. From then on, it should contribute no more than 5% by 2040, so that unabated fossil gas is completely phased out by 2050.

The specific year by which a country should reach near zero fossil gas will depend both on the amount of gas in the power system and the pace at which renewables and other alternatives can be scaled up. For many developing countries, this will require the availability of adequate finance. New investments in fossil gas power generation this decade are to a large extent stranded assets.

Percent of displaced coal and gas workers that re-gained employment

Since renewable energy technologies are likely to progressively replace fossil fuels in the coming years, many coal and gas workers may lose their jobs. These workers will need assistance to reenter the labor force.

Since renewable energies are likely to progressively replace fossil fuels in the coming years, many coal and gas workers may lose their jobs. Workers who lose their jobs due to closures or reductions associated with the energy transition will need support and providing this type of support to workers will be a main component of a just transition.

Both public and private initiatives can help retrain workers. For example, in the gold mining town Ballarat, Australia, companies have funded a wind power training tower, providing a space for students and ex-coal workers to gain skills and knowledge for important jobs in renewable energy.

Although there is currently no defined target or comprehensive public data for the percentage of displaced coal and gas workers that regained employment, this percentage should be as high as possible.

Premature deaths from air pollution

Premature deaths from the world's leading environmental health risk factor, air pollution, are strongly correlated with fossil fuel use. As fossil fuels are phased out, premature deaths from air pollution will likely decrease.

Air pollution is the world’s leading environmental health risk factor. In 2019, about 7% of all deaths worldwide were attributable to exposure to fine inhalable particles — also known as particulate matter with a diameter of less than 2.5 micrometers (PM2.5). Nearly half of all exposure from fine particles is caused by unsustainable energy practices, including the combustion of fossil fuels.

The highest population-weighted concentrations of air pollution are found in Africa, the Middle East and South and East Asia. Children, residents of low-income areas and Black, indigenous and other communities of color are also disproportionately impacted by air pollution. Premature deaths from fine particulate matter exposure more than doubled from about 2 million in 1990 to over 4 million in 2019.

Premature mortality from exposure to PM2.5 is a proxy indicator of the global health impacts of a power system based on fossil fuel and traditional biomass combustion. As their use is phased out, related premature deaths from air pollution will also decrease. Because of its strong correlation with fossil fuel and biomass combustion, the reduction of premature mortality due to PM2.5 exposure is a reliable indicator of global progress in the power sector.

Achieving the U.N.’s Sustainable Development Goal 7, including phasing out biomass combustion for heating and cooking by 2030, would result in a 20% reduction in premature deaths from PM2.5 exposure from 2015 levels (authors’ analysis), reducing the total to about 3.1 million. Meeting three interrelated goals — phasing out internal combustion engines, thermal power generation (without pollution controls) and other fossil fuel combustion by 2050 — would translate to a 50% reduction from 2015 levels to about 1.9 million (authors’ analysis). Unfortunately, this indicator is headed in the wrong direction. Premature deaths from PM2.5 exposure must peak immediately and fall quickly to meet the 2030 goal.

Enablers and barriers

We also monitor change by tracking a critical set of 3 factors factor that can impede or help spur progress toward targets. Explore the data and learn about key actions supporting systems change.

Number of banks restricting lending for fossil fuel exploration and production

Leadership
All large banks need to halt financing for new fossil fuel exploration and production projects to limit global warming to 1.5 degrees C. Financial data on lending by 59 of the world’s largest banks shows only 3.3% of these banks have begun restricting financing for fossil fuels.

According to the International Energy Agency (IEA), all new fossil fuel exploration and production projects need to be halted to limit global warming to 1.5 degrees C. Organizations have to restrict lending for projects exploring new fossil fuel reserves in order to prevent additional fossil fuels from entering the economy.

Data on economy-wide fossil fuel funding is scarce. However, one way to track fossil fuel financing is to focus on lending by major banks. This proxy metric provides an indication of wider trends in the economy.

Financial data on lending by 59 of the world’s largest banks shows only two of these banks have begun restricting financing for fossil fuels as of 2021. By continuing to lend funds for fossil fuel projects, these organizations risk carbon lock-ins and stranded assets.

Number of countries with coal phase-out plans

Regulation and Incentives
Only 35 countries have pledged to phase out coal power or to remain coal-free as of 2021. Currently, the three largest consumers of coal — China, India and the United States — do not have phase-out pledges.

The evidence is overwhelming: coal power has no place in 1.5 degree C compatible pathways.

To meet the ambitions of the Paris Agreement, global coal power should account for around 0-2.5% of total power generation by 2030 and be entirely phased out by 2040. Because the required pace of change to meet this goal is immense, it is vital that countries make strong commitments to remove coal. Such commitments should be backed by robust strategies.

As a means of assessing governmental commitments to decommissioning coal, this indicator tracks the number of countries with strategies in place to phase out coal power. Only 35 countries have pledged to phase out coal power or to remain coal-free as of 2021.

Several European countries, such as France, Spain and the United Kingdom, are aiming to phase out coal power by 2030, as are Canada and New Zealand. Currently, the three largest consumers of coal — China, India and the United States — do not have phase-out pledges.

Meanwhile, other countries have targets that do not align with the Paris Climate Agreement. Germany, for instance, is the fourth largest consumer of coal and aims to phase out coal power by 2038.

Active programs to relocate workers from coal and gas industries to other jobs or areas

Strong Institutions
For a transition to be just and equitable, it is essential that workers in fossil fuel industries receive support in finding new jobs or skills. This support can be provided in different ways, including public or private initiatives.

Since replacing fossil fuels with renewable energy technology will displace oil and gas workers, new employment and training options should be part of policy commitments. For a transition to be just and equitable, it is essential that workers in fossil fuel industries receive support in finding new jobs or skills. This support can be provided in different ways, including public or private initiatives.

There are many different instruments that governments can use to improve employment opportunities and moderate the effects of demand shocks. These can include job search assistance and placement services, training programs, support for microenterprises and self-employment, subsidies for companies that hire unemployed individuals, and new job opportunities created by the government.

There is currently no global, comprehensive data on the number of active programs to relocate coal and gas workers to other jobs, so we are unable to assess progress for this indicator. It is likely that these programs are tracked at the country or local level, but this information has not yet been aggregated into a global database.

Photo credits

Photo by Arnold Paul

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