Coal phase-out

Coal phase-out is an environmental policy intended to stop burning coal in coal-fired power plants and elsewhere, and is part of fossil fuel phase-out. The health and environmental benefits of coal phase-out, such as limiting respiratory diseases and biodiversity loss, are greater than the cost. Coal is the most carbon-intensive fossil fuel, therefore phasing it out is critical to limiting climate change as laid out in the Paris Agreement. The International Energy Agency (IEA) estimates that coal is responsible for over 30% of the global average temperature increase above pre-industrial levels. Some countries in the Powering Past Coal Alliance have already stopped.

China and India burn a lot of coal. But the only significant funding for new plants is for coal power in China. Developed countries may part finance the phase out for developing countries through the Just Energy Transition Partnership, provided they do not build any more coal plants. It has been estimated that coal phase-out could benefit society by over 1% of GDP each year to the end of the 21st century, so economists have suggested a Coasean bargain in which already developed countries help finance the coal phase-out of still developing countries.

The health and environmental benefits of getting rid of coal quickly exceed the costs, but some countries still favor coal, and there is much disagreement about how quickly it should be phased out. However many countries, such as the Powering Past Coal Alliance, have already or are transitioned away from coal; the largest transition announced so far being Germany, which is due to shut down its last coal-fired power station between 2035 and 2038. Germany is using reverse auctions to compensate coal-fired power plants for shutting down ahead of schedule. Some countries are making a just transition and pensioning off coal miners early. However, low-lying Pacific Islands are concerned the transition is not fast enough and that they will be inundated by sea level rise, so they have called for OECD countries to completely phase out coal by 2030 and other countries by 2040. Phasing down coal was agreed at the 2021 United Nations Climate Change Conference in the Glasgow Climate Pact. Vietnam is among few coal-dependent developing countries that pledged to phase out unabated coal power by the 2040s or as early as possible thereafter

In 2022–2023 coal use rose. The IEA pointed out high gas prices due to the Russian invasion of Ukraine and extreme weather events as contributors to the increase. The G7 countries have agreed to close all coal power plants by 2030–2035 unless their greenhouse gases are captured.