By Mushfiqur Rahman

World leaders and experts from more than 200 countries have gathered (31 October 2021) in Glasgow, Scotland for the Global Climate Conference (COP 26) to assess the achievements of the Paris Climate Agreement 2015.  The expectation from the COP 26 is that the world leaders will agree to the ‘Rule Book’ to contain Green House Gas (GHG) emissions for restricting atmospheric temperature rise within 1.5 degrees Celsius to avoid the looming threat of climate disaster. Senior officials of the United Nations, the host country leaders and the scientists so far have been sceptical that COP 26 will deliver any major consensus among the parties to significantly reduce GHG emission and to help developing nations fight the damaging impacts of climate change (for mitigation and adaptation with the climate change impacts).

The UN climate experts suggest that they so far received part of the nationally determined contribution (NDA) reports (e.g., many countries including China have not communicated their NDA targets so far). The developing nations’ leaders including Prime Minister of Bangladesh Sheikh Hasina have been asking the developed economy nations to publish their NDA and concrete action plans for reducing GHG. Unfortunately, so far, available information on NDA leads to a 2.7 degree Celsius rise in atmospheric temperature at the end of this century. G20 group countries have been responsible for 80 GHG emissions which accelerates climate change. The USA and the European Union made commitments to achieve a net-zero emissions target within 2050, while China and Saudi Arabia and Russian Federation suggested their targets to attain net-zero within 2060. India, the third-largest (after the USA and China) emitter of carbon dioxide (GHG) pledged to attain a net-zero target by 2070.

On the other hand, industrially advanced countries have been away from fulfilling their Paris Climate Conference 2015 commitments (to contribute annually 100 billion dollars fund for capacity development and to minimise climate change impacts in the developing nations) to help the developing countries to fight climate change impacts.

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The major challenges for GHS emission reduction have been linked with fossil fuel burning. Major industrial and economic powers have been trying to switch to cleaner renewable energy and to reduce the use of dirty fossil fuels, especially coal. But the International Energy Agency (IEA) report forecasts a 2.6 per cent rise in global coal demand in 2021 as a result of electricity and industrial demands escalation. China, India and South-East Asian countries account for most of the coal demand growth. IEA report indicates that China and India account for 65 per cent of global coal demand. Coal demand further rises to 75 per cent if demands for China, India, Japan, Korea, Taiwan and Southeast Asian countries are included.  IEA further predicts that ‘the coal use is not set for a rapid decline in the immediate future.’

The attempts for transition to low carbon development for arresting the rise of atmospheric temperature have invited manifold challenges worldwide. For many countries the situation emerged as a paradox — a choice between securing national energy security, fueling economic activities for improving livelihood and living conditions of the population and reducing energy consumption, restricting economic and industrial activities.

One of the major carbon-rich primary energy sources in the world is coal. China and India are the major consumers of coal in the world (coal fuels nearly 70 included of Chinese and Indian power generating plants). Interesting enough, USA, Russia, Australia, Indonesia and Columbia have been steadily increasing coal export to the international market. At the same time, other fossil fuels like mineral oil, LNG and natural gas production and export have been increasing as demands continue to surge. The petroleum producing and exporting countries including those who strongly advocate for getting rid of fossil fuels have been continuing (and increasing) petroleum exports (for instance, Norway). However, the post-pandemic recovery of the world economy has been pushing for increased primary and electric energy demands. The petroleum producing and exporting countries have been taking the situation as an opportunity for them.

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Bangladesh has been feeling pressure as petroleum products including crude oil and LNG prices rose manifold in the recent weeks. Various projections hint at no tendencies of price decline for the energy commodities in the near future. The government agencies involved in energy commodity import and marketing are in a dilemma whether to continue more (may enhance threefold compared to last fiscal year) subsidies or to raise the sales price of primary and electric energy. If the prices for energy will be revised to restrict subsidies, consumers will suffer adversely. In January this year, petroleum was US$49 a barrel which has jumped to US$85 a barrel now.

A published report indicates that the Power, Energy and Mineral Resources Division of the government is likely to pay a subsidy of Taka 16,000 crore (160 billion) for the power sector this year (last year the amount of subsidy in the power sector was approx. Taka 100 billion). Also, the subsidy for LNG imports is expected to rise from last year’s 40 billion to 100 billion during this year.

Dependence on the import of primary fuel has been steadily increasing. Although Bangladesh aspires to attain a 40 included share of renewable energy in 2041, within the next couple of years import dependence on coal and LNG will increase significantly. The present annual requirements for more than 8 million tonnes of coal import will increase three-fold within the next couple of years.

The huge demand growth for coal for China and India and in Europe have already pushed coal rice per tonne at USD120 now (from USD 70/tonne a year ago) resulting in the rise of coal price in Bangladesh’s domestic market at Taka 18000/tonne ahead of the start of brick (the major construction material in Bangladesh) making season. The Bangladesh Brick Manufacturing Owner’s Association (BBNOA) leaders anticipate that the soaring coal price will cause a rise of almost USD12 per thousand pieces of bricks.

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Media reports suggest that the concern on the ‘squeeze in fossil fuel-based primary energy markets, surging prices and the resurgence of coal will cast a shadow on efforts to curb emissions in COP26.’ On the other hand, the limitations for the increased supply of gas (as a transitional fuel from coal to renewable energy) make the choices for policymakers difficult. Saying good buy to coal is difficult at least until 2030-2040.

After all, for the policymakers, the choice is limited until a proven technology breakthrough suggests a cost-competitive sustainable alternative. The low carbon future so far is a high-cost energy future for the world!

By Mushfiqur Rahman

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