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nvestors Are Abandoning Coal Even if Some Countries Aren’tPublished:
Nov. 15, 2021 at 12:22 p.m. ET

Seemingly small word choices mean a lot when it comes to global agreements about climate change. At the latest major climate conference in Glasgow, Scotland, this weekend, the key phrase that most countries wanted to see was a deal to “phase out” coal use. What they got, after interventions by China and India, was a plan to “phase down” coal.On the one hand, it is a landmark deal, because an explicit agreement to reduce coal use had not previously been included in the statements following climate meetings. And more than 20 countries at the conference agreed to stop building or permitting coal plants.
Investors don’t seem to have much hope for coal companies right now, and that in itself is significant. U.S. producer Peabody Energy (ticker: BTU) was down 8% on Monday and rival Arch Resources (ARCH) was down 6.6%. The VanEck Vectors Coal exchange-traded fund (KOL) closed in December, returning its remaining $35 million in assets to shareholders, as interest in the industry tumbled despite strong recent returns. At its height, the ETF had more than $900 million in assets. Without capital to expand, private coal companies are unlikely to grow in the years ahead. But the Glasgow deal also leaves quite a bit to be desired, given that coal is the single largest contributor to climate change. And some governments continue to fund the expansion of coal. If India and China don’t start powering down their coal use, it will be very difficult for the world to limit global warming to 1.5 degrees Celsius.The Glasgow pledges are not binding, but they at least signal an acknowledgment of the issue. If they were completely irrelevant, the final language would not have been so hotly debated.