Policy Memo

Energy Transitions and the Future of Thermal Coal


Coal power generation is in decline globally, not only because of
the increasing urgency of climate change, but also because the
costs of clean energy are dropping, renewables are becoming
more efficient, and fossil fuel markets are beginning to falter.
Though some of these trends have started from technological
and economic developments, governments must work to ensure
that transitions are socially and economically just. Coal mining and
other fossil fuel extraction activities are typically geographically
concentrated in isolated places. Although fossil fuel industries
represent a relatively small share of most economies, the impacts
of shifting away from fossil fuels could be disproportionately high
for specific workers, citizens, and future generations that depend
on fossil fuel extraction for their livelihoods.

International collaboration on a transition to clean energy will
expand energy access, help create mindful social protections,
avoid stranding assets, and create resilience against sharp mac-
roeconomic shifts. Governments need to plan early and connect
policies and agendas across geographic locations and levels of
government. The momentum already exists internationally—with
important movements in high-emissions countries like Germany
and China and the emergence of international bodies to tackle
the transition, such as the Powering Past Coal Alliance.

While transitions away from coal do present significant risks
that need to be managed, they also present opportunities. Coal
extraction and power production are sources of jobs, exports,
and energy security but impose significant costs on public health,
vital natural resources, access to energy, and technological innova-
tion. Historically, transitions out of coal have often been managed
poorly, with unabated consequences for workers, citizens, and
private industry due to a lack of need anticipation and care in
managing the transition. Although coal-fired power remains a
necessary bridge technology for some emerging economies, it is
important that anticipation and planning to manage the transition
to cleaner alternatives begins today.



    • Stanley Foundation

    • Climate Strategies

    • IDDRI

    • Energy Research Centre, University of Cape Town

    • KR foundation