Canada and UK launch anti-coal alliance in Bonn

On Thursday, the United Kingdom and Canada launched an alliance of 27 countries and states that have pledged to phase out traditional coal power plants and cease all investment in coal domestically or abroad.

The "Powering Past Coal Alliance" is the brainchild of Canadian climate minister Catherine McKenna and British climate minister Claire Perry, who came up with the idea while meeting at the UN climate conference in Bonn, Germany. "Claire and I cooked this up, and we're delighted to have so many partners so fast," said McKenna at a launch event on Thursday.

Twenty countries have already joined the alliance, including France, Austria, Costa Rica and New Zealand. Five Canadian provinces and two US states — Washington and Oregon — have also joined the alliance. During the launch event, El Salvador announced it would join as well.

A symbolic statement

The alliance is not a bold new commitment, but more a recognition of existing commitments. It does not include the world's top ten consumers of coal. Several of the countries, such as Fiji and the Marshall Islands, have never even used coal.

Others, such as Austria and New Zealand, only have one coal plant that they were already preparing to close. All of the countries already had plans to phase out coal.

The two biggest users of coal in the group are Canada and the Netherlands. Canada, which gets about seven percent of its energy from coal, last year committed to phasing out all coal by 2030.

The Netherlands is the most coal-reliant member of the alliance with a 32 percent share of its energy generation. But the new Dutch government decided in its coalition agreement last month to phase out all coal power by 2030. An earlier decision to close down the oldest coal plants has already resulted in a 10 percent drop in Dutch coal generation in 2016.

Day without coal in the UK

The UK government adopted a law in 2015 to phase out coal by 2025 – one of the first countries to do so. It was a recognition of the fact that coal use had already been falling because of market forces,

"In July 2012 we still had 40 percent of coal in our generation profile," said Perry in Bonn. "In July of this year it was down to two percent. In April we had our first day without coal since 1882."

"We could do it in the UK, a country who iconically started our industrial revolution on the back of using the coal under our island," she added.

Wooing Germans

Perry said the current group of countries is just the start. The alliance plans to grow to more than 50 members by the time of the next UN climate conference in Poland in 2018. They also want businesses who have pledged to divest from coal to join the alliance.

The potential number of countries that could join is quite large. A report released yesterday by the group Unfriend Coal found that leading insurance companies have now pulled $20 billion out of investments in coal, as more companies divest. The latest is Zurich, which announced this week it will cease offering insurance to companies which depend on coal for more than 50 percent of their business. With an increasing number of countries adopting phase-outs, the risk of insuring these entities has become too great.

"Sometimes very good ideas start from very small beginnings," said Perry. "This isn't a pilot project. This feels like a very firm commitment to actually make a major change to the way we power our economies, and in the process achieve our Paris goals."

One of those new members could be Germany. The country was asked to join at COP23, Environment Minister Barbara Hendricks said.

"I asked for their understanding that we couldn't make this decision before we have our next government," Hendricks said. "But the initiative will keep us up-to-date."

Coal a sticking point in coalition talks

German Chancellor Angela Merkel is heading into the home stretch of exploration talks with the Liberals and Greens about building a government coalition, following September's federal election. The Greens have made a phase-out of coal a red line for entering into any coalition. The subject has become one of the most contentious issues in the talks.

The anti-coal alliance of Germany's neighbors may add to the pressure to phase out.

"This is a strong signal to Chancellor Merkel and her negotiation partners who are trying to form the next German government," said Lutz Weischer, head of climate policy at the campaign group Germanwatch. "In the G7, Germany will now have to choose whether it wants to stand with the coal friends — Japan and the United States under Trump — or with the friends of climate action — UK, France, Italy and Canada."

Germany is the fifth-largest consumer of coal in the world, with about 40 percent of its energy coming from coal. Merkel acknowledged Germany's addiction to coal during her address to the climate summit yesterday, but said any phase-out needed to be done in a "calm and reliable manner".

Anti-Trump coalition

The alliance was seen by many in Bonn as a symbolic gesture of defiance against Donald Trump, who has pledged to revive America's coal industry. The US government held a controversial side event at the Bonn climate summit on Monday night promoting coal as part of a clean energy mix.

But Brian Ricketts, secretary-general for the European coal industry association Euracoal, said he does not see the new alliance as a reaction to Trump's policy.

"It's no different from what was happening under Obama — it's a continuation of something that started a long time ago," he said, noting that most of the national phase-out decisions were taken before Trump took office. "Coal in the UK seems to be toward the end of its days."

Countries in the alliance would still be able to keep coal plants that use carbon capture and storage (CCS), trapping their CO2 emissions underground. But the technology is still unproven, and companies and governments have been hesitant to invest. Ricketts said the messaging of the phase-outs is likely to discourage investment, even as European countries tell China it should get moving on CCS.

"The reaction to the phase-out of the biggest power plant in the UK was to cancel a CCS project and change i's plans completely to repurpose a coal powered station with gas," he said. "It would be very naïve of the British government to think that industry is going to be helping with CCS if at the same time they're having a phase-out of coal."

Launch of alliance 'an embarrassment to Germany'

Analysts agree that the symbolic message can drive investment decisions. But to be really effective, the alliance will have to attract major coal users.

"The symbolism is already powerful, with the alliance to end coal use driven by the country that started it, the UK," said Richard Black, director of the analust Energy and Climate Intelligence Unit. "And it must be an embarrassment to Germany, which proudly proclaims ‘climate leadership' while keeping its lignite plants burning, to have the alliance launch on its own soil."

"But to be really effective," Black added, "it's going to have to bring in some of the really big coal countries, such as Germany, Poland, Australia and, eventually, the United States and China — and accelerate their transitions away from coal. That's a big challenge."