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64 BLOOMBERG MARKETS
n the flat scrubland of Pakistan’s scorching Thar
Desert, hundreds of workers have been toiling for two
years in the vast open pit of the Sindh Engro Coal
Mining Co. Taking three-hour breaks during the
hottest part of the day and living in a makeshift village of shipping
containers, they’re digging for fuel to sustain a $3.5 billion power
project. So far they’ve scraped away about 500 feet of Aeolian sand,
dirt, and coal to create a milewide hole.
Seven hundred miles to the north, in the Cholistan Desert,
lie the skeletal beginnings of a solar farm that’s supposed to expand
to eight times the size of New York’s Central Park. It’s the largest
solar project in Pakistan, where the government has recently
announced an ambitious plan to generate 60% of its power from
renewable sources such as sun, wind, and water in about a decade.
If these grand developments in the desert suggest that coal
and solar are in a close-run contest, they’re not. Before 2016,
Pakistan had a single coal-fired plant. It now has nine, supplying
15% of the nation’s electricity, with another four under construction.
Solar power provides about 1% of energy needs and is getting a tiny
sliver of investment compared with what’s going into coal. Solar
and other renewables may someday eliminate Pakistan’s depen-
dence on coal, but that day is probably decades away.
And that’s fine as far as Akhtar Mohammad is concerned.
“Coal is good. It’s cheap,” he says at his roadside kiosk in Port Qasim
on the outskirts of Karachi, where air pollution is “among the most
severe in the world,” according to the nongovernmental Pakistan
Air Quality Initiative. He sells sweets, sachets of Head & Shoulders
shampoo, and other basics in the shadow of transmission lines that
carry power from a new electricity plant that burns imported coal.
What about carbon emissions? He shrugs. “This is a small problem,”
he says. “There is a lot of smoke and bad air already. We need
electricity—any fuel, it doesn’t matter.”
Mohammad’s pragmatism sums up the planet’s quandary.
“Coal is the absolute No. 1 cause of carbon emissions globally and
the leading driver of climate change,” says Tim Buckley, Sydney-
based director of energy finance studies at the Institute for Energy
Economics & Financial Analysis. But though wealthy nations may
be able to afford to wean themselves off the combustible carbon
that’s one of the biggest contributors of greenhouse gases, in coun-
tries where electricity is scarce, unreliable, or unaffordable, local
politics often takes precedence over economics: Coal remains the
cheap fallback.
Especially in Asia, dozens of coal plants have come on line
in recent years or are in the planning stages—with a normal lifetime
of almost a half-century. In South and Southeast Asia, coal burning
is expected to increase about 3.5% a year for the next two decades,
according to the International Energy Agency. Globally, the IEA
predicts, coal demand won’t peak until 2040. And that may be
optimistic. Forecasts such as the IEA’s often assume governments
will choose the cheapest option based on optimum efficiency while
factoring in environmental constraints and the falling cost of solar
and wind power.
The world grew up on coal. People in China burned it to smelt
copper 3,000 years ago. Britain used it to power the boilers of the
Industrial Revolution in the 1700s. In the 19th century, Americans
shoveled it into locomotives to connect the country. When Thomas
Edison built the first power station for his electric lightbulbs in
1882, it was fired by coal.