Green Energy vs. Economic Reality: Why Developing Nations Still Rely on Coal
Alastair Caithness
Strategic Business Development Leader | 15+ Years in Fintech, Energy, SaaS and Financial Sectors | ?? Mental Health Advocate | Follow for Energy, Bitcoin and Blockchain updates!
In the past decade, the world has seen an aggressive push toward clean energy, with policies aimed at reducing fossil fuel reliance. However, despite these efforts, coal production in developing nations has continued to rise. The reason? Economic survival and poverty alleviation.
The Energy-Wealth Connection
Energy consumption is directly correlated with economic growth and poverty reduction. The more energy a country uses, the wealthier its population becomes. This is not theoretical, it is an observable reality across every developing nation.
Consider China, which lifted 800 million people out of poverty largely by harnessing coal-powered industrialization. The country is responsible for 14.3% of global emissions, not out of environmental disregard, but because it fuels the manufacturing industries that the world depends on. While wealthy nations champion renewables, their consumption habits continue to demand the very fossil-fuel-based infrastructure they criticize.
The Harsh Reality for Developing Nations
For many countries, the transition to renewables is neither feasible nor a priority. The immediate challenge is not carbon reduction but it is economic survival. With limited resources, nations face an impossible choice: prioritize slow, expensive renewable adoption or accelerate economic growth through fossil fuels.
The modern world operates on fossil fuels. From global shipping to industrial manufacturing, there are no viable large-scale renewable alternatives. Developing nations depend on coal to power their industries, build infrastructure, and elevate millions from poverty.
When energy resources are developed, transformations occur:
The Misplaced Blame
Wealthy nations, comfortably operating in energy abundance, often point fingers at the emissions of developing economies. However, much of the world’s carbon footprint comes from nations producing goods for wealthier economies. Manufacturing-heavy countries generate 4 times more emissions per capita than those with service-based economies, yet their emissions serve global demand.
Wealthy countries have promised to pool billions of dollars annually to help developing nations transition to cleaner energy, but they have failed to meet these commitments. A pledge to provide $100 billion per year by 2020 remains unfulfilled. By some estimates, developing nations will need $2 trillion per year by 2030 to combat climate change. Meanwhile, institutions such as the World Bank and the European Investment Bank have reduced financing for fossil fuel projects in developing nations, slowing the construction of much-needed coal and natural gas power plants.
Rising Coal Demand Despite Global Pressures
Despite global efforts to curb coal production, demand continues to grow, especially in developing nations. China’s coal imports reached a record high in 2024, totaling 542.7 million metric tons, this represents a 14.4% increase from 474.42 million tons in 2023. This surge was primarily driven by lower international coal prices, prompting buyers to favor imports over domestic supplies.
In the initial months of 2025, China's coal imports continued to rise, with a 2.1% year-on-year increase to 76.12 million metric tons for the January-February period. However, the outlook for future imports is uncertain due to various factors, including falling domestic coal prices, reduced import profits, and industry calls to limit low-quality coal imports amid an oversupplied market.
Despite global efforts to reduce coal production, China's growing imports underscore the ongoing necessity of coal in sustaining industrial growth and ensuring energy security.
A Pragmatic Approach
Eliminating fossil fuels overnight is not a viable solution. Instead, a pragmatic, multi-faceted strategy is necessary:
Developing nations must be allowed to grow, and for now, coal remains a necessary part of that process. The long-term transition to cleaner energy is crucial, but economic development and poverty reduction cannot take a backseat to idealistic energy policies. The real solution lies in smart investments that balance economic reality with environmental responsibility, ensuring that the world's poorest nations can build a better future without being left in the dark.
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