Underground Miners in Godavarikhani, India.
Here in New York City, the idea of green and clean energy is the rage. Many parts of the U.S. and Europe are slowly beginning to look beyond traditional fossil fuel energy to explore renewable forms of energy such as wind, solar, and geothermal. The jury is still out for the commercial viability of these new technologies, but it can be agreed upon in most circles that these new forms of energy are more expensive than traditional fossil fuels. Yet in, the developing world, energy production is humming to a different tune, an old American tune: Coal.
Elisabeth Rosenthal wrote a provocative piece for the New York Times on Monday about the growing trade of coal being mined in the United States, Indonesia, and Australia and sent off to produce energy in China and India. This is ironic on many levels. Although the United States has failed to come up with a comprehensive energy policy that would enact a cap-and-trade regulation or a carbon tax, there have been many aggressive state and regional measures to limit the amount of green house gasses that are emitted into our atmosphere. Many states have mandated that a certain percentage of their energy produced come from renewable forms of energy.
Although China might be the world’s largest producer of wind turbines and solar panels, China is powered by coal. Half of the coal burned each day to produce energy takes place in China. Many energy analysts posit that China builds a new coal fired power plant every week. These plants have a production life of 30 to 50 years. As recently as 2009, China was a coal exporter. 2010 is different as China’s demand for imported coal is growing at a breakneck pace. To fill this demand, companies are lining up to cash in on exporting the dirty fossil fuel that is now more difficult to burn in developed countries. Along with the United States, Australia has made it difficult for coal-fired power plants to maintain current rates of production. Because of the political winds forecasting stricter regulations on coal powered electrice generation in the West, coal companies are naturally looking for new markets, which usually mean China and India.
Back to the ironic part. How is India currently financing all of these new coal-fired power plants? By the west of course. About 75 percent of adults over 25 are invested in the stock market one way or another. Either through 401k, 503b, or savings accounts that you might not even be fully aware of, nearly all of us are tied to the market in one way or another. Recently, Coal India, a huge government coal company offered an Initial Public Offering to investors from all over the world. The response was overwhelming. 484 foreign funds, 195 mutual funds, 44 insurance companies, and many banks all invested in Coal India. A large percentage of the capital from these funds are the savings that our generation has put away for our retirement. What does this mean? Our generation, the one that rallies to fight climate change is bank rolling the construction of new coal-fired power plants, one of the largest emitters of green house gasses that many scientists believe is a main reason for climate change. It is hard to think of anything more counterproductive.