Fuel mix forecasts tend to fall into one of two categories. One says that coal, and fossil fuels more generally, will enjoy growing demand and supply based on their expected economic competitiveness. The alternative sees fossil fuels, and coal in particular, as falling victim to policies designed to transition to a low carbon economy. Which of these two potential outcomes takes place appears to depend on the extent to which the developing economies that rely on coal for their growth can bear the additional costs of alternatives.

History shows that the future can differ widely from expectations. Only 15 years ago it was common to assume that coal was a declining energy source — a relic of 20th-century industrialization. In fact, it has grown more quickly than any other source of energy and, by some estimates, may exceed even oil as the largest component of the global energy mix. Whatever the future holds, it will likely be different than the one imagined. One of the most pressing questions on the minds of policymakers is therefore: what should the future be for coal?

Coal faces an almost certain future of declining demand in the West, contrasted by a very likely increase in consumption in Asia and the rest of the developing world. In particular, China and India have become the central focus of future discussion as, together, they consume over 60 percent of the coal produced in the world. Efficiency improvements in power generation and technology pathways to lowering the environmental impact of coal use do not come without challenges. But success in either of these two dimensions may not produce enough abatement to reverse coal’s negative impacts.