Coal “lock-in,” rather than rational investments in coal power, is one of the largest global threats today. This lock-in results from high capital costs and long asset lifespans associated with coal-fired power plant investments. Over the past six years due to large scale public opposition, mounting costs, and dramatic changes in the energy market, an irrational coal lock-in was successfully averted in the US and the EU. However, excessive coal reliance is now becoming a serious economic, as well as long-term environmental and public health threat, to China, India, and other parts of the developing world.
While the environmental and human health impacts of coal plant investments are increasingly well known, the financial impacts are not. This report examines the wide ranging risks these coal investments force countries to bear in today’s rapidly changing energy market. Understanding and incorporating these risks in decision making is particularly important given the potentially untenable opportunity cost of financial flows that could otherwise be directed to increasingly affordable clean energy and energy efficiency alternatives.