China's crush on coal costs economy $250bn a year

There is a strong economic case for China to curb its reliance on coal, according to a major new report which argues that the country's reliance on the fossil fuel costs it $250bn (£160bn) a year in social and environmental effects

The report, from a coalition of Chinese academics and environmentalists including green groups Greenpeace, The WWF and The Energy Foundation, found that the wider impacts of coal mining and energy generation such as mining deaths, water and air pollution, carbon emission and land subsidence totalled 1.7tr yuan renminbi (£0.16tr) a year, or more than seven per cent of the country's GDP.

China is currently the world's largest producer and consumer of coal, a fact that has led to the country recently displacing the US as the world's largest emitter of carbon emissions. But the report claims China's reliance on coal for up to 70 per cent of its energy mix is having an adverse impact on the economy.

"Behind China's large production and consumption of coal ... lie expensive and worrying environmental and social costs," the report argues, adding that " from extraction to combustion, every step in the process of using coal damages the environment".

The study claims that despite a safety drive from the Chinese government in recent years, 3,800 miners died in accidents last year, while subsidence caused by mining caused damage to roads, buildings and other infrastructure.

Meanwhile, pollution arising from mining and energy generation not only contributes to climate change, but also pollutes water tables, results in acid rain and creates air pollution that contributes to respiratory diseases.

The report calls for the Chinese government to act to ensure that the true cost of coal is included in its price, recommending the introduction of a tax that would increase the price of coal by 23 per cent and help drive the transition to lower carbon energy sources.

It argues that while such a move would lead to a modest 0.007 per cent fall in GDP, this would be more than offset by environmental and social gains, and an improvement in China's international standing.

The study comes just days after a new report from the Chinese Academy of Sciences warned that the country's greenhouse gas emissions could more than double within two decades.

China's carbon emissions are estimated to currently stand at about 1.8bn tonnes a year, but the study claims that could reach between 3.1bn and four billon tonnes by 2030, unless a major change in the country's energy mix is achieved. Currently, global emissions stand at 8.5bn tonnes.

According to Reuters, the study argues that the Chinese government has no alternative but to ramp up its investment in alternative energy sources.

"No matter how historical responsibility is defined, our country's development path cannot repeat the unconstrained emissions of developed countries' energy use," the report claims. "Therefore, we must soon prepare and plan ahead to implement emissions reduction concepts and measures in a long-term and stable energy development strategy."