Working Paper

The 1,000 GtC Coal Question: Are Cases of High Future Coal Combustion Plausible?

Nov 3, 2016 | Justin Ritchie, Hadi Dowlatabadi

Summary

Global energy projections commonly assume, absent policy interventions, that coal will substitute for oil and gas after 2050. We consider evidence for a coal backstop energy supply and its continued use in the IPCC’s baseline greenhouse gas scenarios.

Key Findings

  • After the oil crises of the 1970s, coal was viewed as the bedrock of energy security, with reportedly vast geologic deposits. Energy models adopted this assumption by anticipating that coal would meet demand for energy that exceeded oil or gas supplies.
  • Five generations of IPCC energy assessments use economic models that project future baseline greenhouse gas emissions with the assumption of a coal backstop.
  • The past three decades have witnessed significant technological change in coal mining, and a doubling of production and of coal prices. Meanwhile, estimated recoverable reserves have declined by two-thirds.
  • These trends are inconsistent with the simplified resource economics used in modeling of long-term global energy-economy projections.
  • Meanwhile, future baseline GHG emissions scenarios for IPCC assessments continue to rely on coal as the energy system backstop—using coal reserves that are many times larger than current estimates.
  • We argue baseline GHG emissions are unlikely to be as high as those presented in the IPCC’s Fifth Assessment report—lower baseline emissions from updated global coal economics can reduce the policy cost of achieving a 2˚C end-of-century warming target.

Abstract

Twenty years ago, legacy reserve-to-production (R-P) ratios of 300 or more indicated a possibility of vastly expanding global coal consumption. Studies of energy futures commonly adopted similar R-P values as equilibrium conditions, establishing coal as a virtually unlimited backstop supply for long-term scenarios. Yearly consumption and market prices for hard coal have doubled since 1990, calibrating the next century’s baseline. Over the same two decades, improving knowledge of global coal reduced estimates of total reserves by two-thirds, while costs increased much faster than anticipated by long-range coal resource models with long and flat supply curves. Consequently, the underlying assumptions for many future global energy projections no longer hold. Past coal-dominant projections of future global energy supply now significantly exceed modern assessments of the reserves recoverable under baseline trends and need to be revised. The energy system reference cases used for future greenhouse gas (GHG) emission pathways in climate change research are a case in point: baseline emission scenarios commonly project levels of coal combustion many times higher than current reserve estimates by the year 2100. In this paper, we explain why baselines depicting vast expansion in twenty-first century coal consumption should not be used as a business-as-usual assumption.