The mining industry under the thumb of politicians: the environmental consequences of the Spanish Coal Decree

The Coal Decree has changed the gradual decrease of coal in the Spanish energy mix since the end of the 1990s. The environmental efficiency gains accumulated over the past several years would be lost as a result of this change of direction in policy. In the last fifteen years, the coal industry in Spain has been under pressure from political decisions that have forced the dismantling of the industry, a labor reconversion of mining areas, and the conversion of coal-fired power plants into combined-cycle gas power plants. This situation considerably reduced CO2 emissions from coal combustion in Spain, improving the environmental efficiency of the entire economy for many years. Nevertheless, the implementation of the Royal Decree has changed these trends. This paper will examine the environmental consequences of the Coal Decree from 2010 to 2014 based on actual economic and energy demand requirements and actual electricity mix composition. A post-Keynesian energy AGE model to forecast energy demand and the derived CO2 emissions will be applied to evaluate the change in the reduction of emissions observed in the electricity sector since 2005 and in the Spanish economy since 2010. The results will be compared to other alternative scenarios of CO2 emissions evolution.