The United States has announced its intent to withdraw from the Paris Agreement reflecting the current Federal government’s priorities, which include enhanced support for the coal industry. The domestic mining industry and power generation are closely connected, with the power sector accounting for over 90% of coal consumed in the US.
However, the coal industry is under transition as production and consumption of coal have declined to about two thirds of 2011 levels. The American coal industry’s recent decline has had negative impacts on employment and local economies, which in part have shaped the Administration’s recent efforts to revive coal.
However, market fundamentals challenge the return of coal. The steep decline in natural gas prices after the shale gas boom has made natural gas significantly cheaper and more economically attractive than coal. This shift to natural gas, coupled with low energy demand, increasingly inexpensive renewables, and a continued expectation of future carbon regulation, have made coal increasingly unattractive in the market.
Furthermore, a wide range of public and private actors have stepped up to compensate for the federal pro-coal policies that are at odds with actions needed for climate change mitigation, thus creating alternative drivers to curb coal use.