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Coal and Sustainable Development

David Cain of Rio Tinto

for the

World Coal Institute

UNECE Ad Hoc Group of Experts on Coal and Thermal Power

Geneva, 18-19 November 2002

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Outline

• Introductions:– World Coal Institute– Rio Tinto

• Sustainable development• Energy’s crucial role• WSSD outcomes• Coal in sustainable development• Coal and the future

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World Coal Institute

• Non-profit, non government association of coal producers and consumers

• Only international coal industry body

• A voice for coal– international policy debates on energy and

the environment– improve public awareness

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Rio Tinto• Leading diversified mining and minerals

processing company• Major international coal producer and exporter

– 200Mt/a: Australia, USA and Indonesia

• Rio Tinto is committed to SD– Improving its own operations– Working with key stakeholders– Internationally:

• Promoting product stewardship along the coal chain• Encouraging programs to improve the use of coal

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Sustainable development

• “Meeting the needs of the present generation without undermining the capacity of future generations to meet their needs”

• “A better quality of life for everyone, now and for generations to come”

Integrates economic, environmental and social priorities in decision-making

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The vital role of energy in SD

• “Reliable energy is a key component of economic and social development …. Lack of energy is among the key forces slowing down poverty reduction and growth of the rural sector”

• Improved energy services can - enhance indoor air quality - reduce health hazards - boost income - provide educational opportunities

(World Bank)

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Energy and Poverty

• 1.6 billion have no access to electricity

• 2.4 billion rely on primitive biomass for cooking and heating

• In 30 years time (without new policies) these numbers will be 1.4 billion and 2.6 billion respectively

(IEA)

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How to meet energy needs

• 95% of population growth in developing countries in next 30 years will be urban

• Centralised generation needed for urban poor

• Distributed generation is part of the answer for the rural poor

(IEA)

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Which Energy?

“There are no “either-or” solutions [fossil fuels vs. renewables] ….

The real challenge is how to use carbon fuels more efficiently and …. reduce the environmental impacts….

Fossil fuels are part of sustainable development”

(UNDP)

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WSSD negotiations

• Sustainable development focus– Not just the environment as previously– Focus on combating poverty

• WEHAB– Water, energy, health and biodiversity

• Diverse views on renewables target– Not simply North vs. South– G77 split– US vs. EU

Positive focus on energy

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WSSD Outcome• improve access to reliable and affordable

energy services …. Energy facilitates the eradication of poverty (Para 8)

• diversify energy supply by developing cleaner energy technologies, including fossil fuel technologies …. and …. transfer to developing countries (Para 19 e)

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Coal

• Recent reassessment of coal’s role in sustainable development:

• Social and economic Advantages– Available– Secure– Affordable– With us for the long term

• Need to improve environmental performance

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The need for coal

• Main fuel for electricity generation in China, India, South Africa etc

• Major electricity source USA and Australia… • 23% of world’s primary energy; 38% of

electricity; 70% of steel• Demand has grown steadily - up 50% in 25

years.• 70% of world’s fossil fuel reserves

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Coal and electrification

• China: – 700 million people connected in two decades– 98% electrification

• South Africa:– doubled access to electricity in two decades– nearly 70% electrification

• Sub-Saharan Africa: – lowest rate of electrification in world - 13% outside

South Africa

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Coal production in developing countries

• Mined in over 50 countries

• Employs over 7 million people worldwide– 90% in developing countries

• $7bn annually in export revenues

• Saves up to $60bn annually in energy imports

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Coal and the environment• Meet environmental challenges within a SD

context• New technology offers higher efficiencies, lower

emissions– emissions reductions of up to 33% by use of best

current technology

• Potential for zero emissions electricity generation– cost effective CO2 control option– vast potential for emissions reduction– US target of commercial designs by 2015

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Industry commitment to sustainable development

• WCI report to WSSD– Identifies areas for improvement as well as

successes– Sets out goals for 2012

• 2002 CIAB Survey top four priorities:– Reduce environmental impacts– Provide secure energy– Develop new emissions control technologies– Provide low cost energy

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Coal and the future

• World demand will continue to grow

• Challenge is to use coal within a SD context

• Growing industry commitment to sustainable development