The head of the United Nations climate change secretariat has warned the global coal industry that it must rapidly and dramatically transform itself in order to tackle climate change or risk decline.
Speaking at the controversial World Coal Association's International Coal and Climate summit on the sidelines of the UN's Climate Summit earlier today, Christiana Figueres, said the industry can no longer afford to ignore the threat posed to it by efforts to tackle climate change.
"Development banks have stopped funding unabated coal," she said. "Commercial financial institutions are analysing the implications of unburnable carbon for their investment strategies. Pricing of GHG emissions is on the rise, evidenced by trading markets coming online around the globe."
Setting out the so-called "carbon bubble" argument, which warns carbon intensive industries could be left with stranded assets as cleaner energy sources come online, Figueres warned the audience of coal industry executives that "like any other industry, you have a fiduciary responsibility to your workforce and your shareholders".
Figueres had attracted criticism from green groups for agreeing to speak at the coal conference, which falls in the middle of UN climate change negotiations taking place in Warsaw this month.
A coalition of NGOs today staged a protest in Warsaw, accusing the Polish government of hypocrisy for promoting coal while hosting UN climate change negotiations.
But Figueres today maintained her attendance was "neither a tacit approval of coal use", nor "a call for the immediate disappearance of coal".
Her comments came as a group of 27 scientists from around the world refuted claims from the coal industry that so-called "high efficiency" coal could help tackle climate change.
The World Coal Association's Warsaw Communique, developed with the Polish Economy Ministry, calls for the immediate use of "high-efficiency low-emissions coal combustion technologies" as an immediate step in lowering greenhouse gas emissions.
But the scientists today warned the continued development of new coal power plants would significantly undermine global efforts to limit temperature rises to 2ºC, unless they are fitted with carbon capture and storage (CCS) technology.
"We are not saying there is no future for coal, but that unabated coal combustion is not compatible with staying below the 2ºC limit, if we like it or not," Professor P.R. Shukla of the Indian Institute of Management said in a statement.
Speaking at the summit today, Figueres agreed it was crucial for the coal industry to implement safe CCS on all new plants, close all less than critical plants, and leave most existing coal reserves in the ground.
She told the industry that today's summit should be seen as an historic turning point of the coal industry and urged every coal company to honestly assess the financial risks to its business model and to expect further tightening of emissions regulations, as well as "diminishing public acceptance of coal".
Her comments echo analysis from the Carbon Tracker group and growing numbers of institutional investors, who have warned the long term outlook for coal companies is being badly undermined by the emergence of shale gas supplies in the US, growing investment in renewables, and the introduction of carbon pricing schemes in Europe, China, and parts of the US.