Greenpeace: China's coal use cost it $248 billion
BEIJING
China's reliance on cheap coal to fuel its economy cost a hidden $248 billion last year through damage to the environment, strain on the health care system and manipulation of the commodity's price, according to a report released Monday by Greenpeace.
Coal accounts for more than 70 percent of China's energy use, helping to buttress the country's double-digit economic growth. But as demand for electricity has soared, supplies of coal have been strained -- and the government's role in keeping prices low has become more expensive.
Coal-fired power plants and smelters have also polluted China's water and air, resulted in massive loss of life in accidents, and contributed to endemic respiratory problems from coal dust and other particulates.
"Nobody has calculated the costs," said Han Xiaoping, senior vice president of Beijing Falcon Pioneer Technology Co., an energy consultancy. "We are shouldering the costs and the whole world is shouldering the costs."
The damages associated with use of coal cost the country 1.7 trillion yuan ($248 billion) last year, or the equivalent of 7.1 percent of China's gross domestic product, according to the report, conducted in collaboration with the Energy Foundation and the conservation group WWF.
Economists and other experts arrived at their figures by calculating, for example, the lost income from those sickened by coal pollution and the cost of their care.
They also took into account coal's role in climate change, which has led to the loss of farmland through desertification and made water for irrigation more scarce. China is the world's biggest emitter of carbon dioxide, a greenhouse gas, produced from coal combustion among other pollutants.
"Recognizing the true cost of coal would create incentives to developing cleaner, sustainable energy sources," said Yang Ailun, climate and energy campaign manager at Greenpeace.
"The government should introduce an effective price signal (price set by the market) for coal, which would ensure a massive improvement in energy efficiency," she said.
Phones at the National Development and Reform Commission, which handles economic policy, rang unanswered after hours on Monday. This summer, the government raised prices for coal from 840 to 860 yuan ($123 to $125) per ton at China's three main markets to ensure supply.
If all the costs associated with coal use were reflected in its price, the commodity would cost 23 percent more, the study said. China's GDP would likely fall by less than a percent if coal's price rose to that level, it concluded.
Chinese miners already pay a heavy price for the use of coal, the report noted. China's coal mines are the world's deadliest, with numerous fires, floods and other disasters killing an average of 13 miners a day.
The death rate of Chinese miners per million tons of coal extracted is 70 times higher than for their American counterparts. Many accidents occur in small mines with low safety standards or in mines operated illegally.
The report urged China to phase in taxes on energy use and emissions, ease price controls on coal and create insurance funds for those harmed by mining accidents.
A fair price for coal would make sure it is being used more efficiently and increase the competitiveness of China's companies, but also spur development in renewable energy sources, the 63-page report said.
"The government of China has the opportunity to make a real improvement to the environment by reforming the current coal pricing system," it said.
Han said the report might help to bring such issues to public attention.
If the they knew how damaging coal was, "the Chinese people will be shocked, and if they are shocked, they will take some action," he said.
