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What about coal? Interactions between climate policies and the global steam coal market until 2030

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  • Haftendorn, C.
  • Kemfert, C.
  • Holz, F.

Abstract

Because of economic growth and a strong increase in global energy demand the demand for fossil fuels and therefore also greenhouse gas emissions are increasing, although climate policy should lead to the opposite effect. The coal market is of special relevance as coal is available in many countries and often the first choice to meet energy demand. In this paper we assess possible interactions between climate policies and the global steam coal market. Possible market adjustments between demand regions through market effects are investigated with a numerical model of the global steam coal market: the “COALMOD-World” model. This equilibrium model computes future trade flows, infrastructure investments and prices until 2030. We investigate three specific designs of climate policy: a unilateral European climate policy, an Indonesian export-limiting policy and a fast-roll out of carbon capture and storage (CCS) in the broader context of climate policy and market constraints. We find that market adjustment effects in the coal market can have significant positive and negative impacts on the effectiveness of climate policies.

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  • Haftendorn, C. & Kemfert, C. & Holz, F., 2012. "What about coal? Interactions between climate policies and the global steam coal market until 2030," Energy Policy, Elsevier, vol. 48(C), pages 274-283.
    • Handle: RePEc:eee:enepol:v:48:y:2012:i:c:p:274-283
    DOI: 10.1016/j.enpol.2012.05.032
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    2. Rioux, Bertrand & Galkin, Philipp & Murphy, Frederic & Pierru, Axel, 2016. "Economic impacts of debottlenecking congestion in the Chinese coal supply chain," Energy Economics, Elsevier, vol. 60(C), pages 387-399.
    3. Pangan, Melboy & Mulder, Machiel, 2016. "Influence of Environmental Policy and Market Forces on Coal-fired Power Plants," Research Report 16017-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    4. Franziska Holz & Clemens Haftendorn & Roman Mendelevitch & Christian von Hirschhausen, 2016. "A Model of the International Steam Coal Market (COALMOD-World)," Data Documentation 85, DIW Berlin, German Institute for Economic Research.
    5. Wang, Wenya & Fan, L.W. & Zhou, P., 2022. "Evolution of global fossil fuel trade dependencies," Energy, Elsevier, vol. 238(PC).
    6. Peter Erickson & Michael Lazarus, 2018. "Would constraining US fossil fuel production affect global CO2 emissions? A case study of US leasing policy," Climatic Change, Springer, vol. 150(1), pages 29-42, September.
    7. Clemens Haftendorn & Franziska Holz & Claudia Kemfert & Christian von Hirschhausen, 2013. "Global steam coal markets until 2030: perspectives on production, trade and consumption under increasing carbon constraints," Chapters, in: Roger Fouquet (ed.), Handbook on Energy and Climate Change, chapter 4, pages 103-122, Edward Elgar Publishing.
    8. Paulus, Moritz, 2012. "How are investment decisions in the steam coal market affected by demand uncertainty and buyer-side market power?," EWI Working Papers 2012-3, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    9. Roman Mendelevitch, 2018. "Testing supply-side climate policies for the global steam coal market—can they curb coal consumption?," Climatic Change, Springer, vol. 150(1), pages 57-72, September.
    10. Kim Collins & Roman Mendelevitch, 2015. "Leaving Coal Unburned: Options for Demand-Side and Supply-Side Policies," DIW Roundup: Politik im Fokus 87, DIW Berlin, German Institute for Economic Research.
    11. Wang, Wenya & Fan, Liwei & Li, Zhenfu & Zhou, Peng & Chen, Xue, 2021. "Measuring dynamic competitive relationship and intensity among the global coal importing trade," Applied Energy, Elsevier, vol. 303(C).
    12. Guangyong Zhang & Lixin Tian & Min Fu & Bingyue Wan & Wenbin Zhang, 2020. "Research on the Transmission Ability of China’s Thermal Coal Price Information Based on Directed Limited Penetrable Interdependent Network," Sustainability, MDPI, vol. 12(18), pages 1-23, September.

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