While the IEA is the world’s leading energy forecaster, it also has continually overestimated coal consumption and simultaneously underestimated clean energy growth. The fact that the IEA no longer sees growth for the coal industry will therefore send a powerful signal to the market.

What’s next: Coal plant retirements in the OECD may gather speed given the rapid fall in clean energy prices, which are now lower than coal everywhere in the world except Japan. More importantly, 96% of existing coal plants will be more expensive to run than to replace with clean energy by 2030.

• This could be a point of no return, after which retirements will accelerate faster than historical averages as utilities realize economic gains from clean energy.

Yes, but: The IEA found pockets of coal-consumption growth in the developed world, particularly South Korea. More significantly, the IEA still forecasts long-term growth in South and Southeast Asia, especially in India, which led the world in increasing consumption by 40 million tons in 2018.

The bottom line: Staving off the worst impacts of climate change will require curbing the growth of the coal industry in the developing world and phasing it out entirely in OECD countries. Peak consumption is significant on its own, but the time it takes to go from that peak to shuttering the last coal plant will prove the most important variable.

Justin Guay directs global climate strategy at the Sunrise Project and advises the ClimateWorks Foundation.

Details: With a collective $40 trillion in assets under management (AUM), the world's 15 largest asset managers have all increased their holdings in thermal coal by 20% since the Paris Agreement was signed. BlackRock alone holds shares and bonds totaling $11 billion in 56 coal plant developers around the world, with Vanguard in second at $6.2 billion.

InfluenceMap has also analyzed the thermal coal intensity (TCI) — measured in tons of thermal coal per million dollars in AUM — of the 60,000 largest listed funds. 

• BlackRock was 50% more "coal heavy" than the average.
• Allianz’s funds, on the other hand, including those of its U.S. arms, show TCI values of roughly 80% less than the global fund benchmark, likely indicating a strategic underweighting of companies with thermal coal businesses since the Paris Agreement.

What's next: Reducing exposure to thermal coal looks increasingly like the right business move for investors. Of existing coal plants around the world, 42% are losing money, and 1 in 4 tons of coal in the U.S. is sold to plants that have already committed to retiring. Meanwhile, new renewable energy is now cheaper than existing coal, which will hasten these retirements.

What to watch: In addition to the financial risks posed by a contracting market, companies may start to worry even more about the reputational risks of investing in coal. Asset managers such as BlackRock are responsible for trillions in investments, rendering their coal holdings relatively trivial. That means the coal industry needs BlackRock, but BlackRock may not need, or want, the cost of doing business with the coal industry.

Justin Guay directs global climate strategy at the Sunrise Project and advises the ClimateWorks Foundation.

Coal pollution contributes to 800,000 premature deaths annually, and, as coal becomes increasingly uncompetitive, governments across Asia are considering new clean-air regulations that could further undermine coal-plant economics. But incumbent forces continue to keep coal afloat.

Where it stands: Despite progress from global insurance companies — including stricter limits on coal from Europe’s third-largest insurer — U.S. insurance companies remain out of line with emerging global standards: AIG, Chubb, Berkshire Hathaway, and Liberty Mutual rank last in reducing their exposure to coal, even as costs associated with wildfires and hurricanes keep growing. Thus far, the only U.S. company to distance itself from coal is the Silicon Valley–backed startup Lemonade.

Between the lines: U.S. insurance companies clearly don't see climate change as a major risk to their bottom lines. As global insurers exit the coal sector, their U.S. counterparts are effectively offering a lifeline to new coal projects that align with the Trump administration’s energy policies.

Yes, but: As long as customers don't default on their premiums, insurers (like other suppliers) will benefit from selling services to a sector that's losing its competitiveness. This will change only once insurers start to lose other customers because of reputational harm.

What to watch: Last year was the second costliest since 1970 for insurers, hitting $337 billion, 73% of which was from Gulf Coast hurricanes and California wildfires. U.S. insurers may either raise consumer premiums, passing on the cost of extreme weather to consumers, or decline to insure people in risk-prone areas.

Justin Guay directs global climate strategy at the Sunrise Project and advises the ClimateWorks Foundation.