Why has UK decided to ban new coal mines? What could the economic impact be?

The United Kingdom announced Thursday (November 14) it will introduce legislation to ban new coal mines, part of the Labour government’s push to make Britain a global leader in clean energy.

The government plans to unveil the law to block future coal mining licenses “as soon as possible,” calling it a “crucial step” in tackling climate change.

The move comes on the heels of the October closure of Ratcliffe-on-Soar, Britain’s last coal-fired power station, making the UK the first G7 nation to eliminate coal from its power grid.

In September, a British court overturned a permit for a new coal mine in Whitehaven, Cumbria, a project initially approved by the former Conservative government to produce metallurgical coal for steelmaking — marking what would have been the country’s first new coal mine in 30 years.

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Labour, which won the July election with a climate-forward platform, has pledged to decarbonise Britain’s electricity grid by 2030.

Prime Minister Keir Starmer, speaking at a UN climate summit in Baku, Azerbaijan, announced plans to cut greenhouse gas emissions by 81 per cent from 1990 levels by 2035 as part of the country’s path to net-zero by 2050.

How will the ban impact UK’s economy?

The legislation may have mixed economic effects. In the short term, regions dependent on coal mining may face job losses and economic challenges.

However, the government plans to invest in retraining programs to help workers transition to emerging green industries.

Long-term benefits include increased investment in renewable energy infrastructure, fostering innovation, and enhancing the UK’s international competitiveness in green technologies.

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Additionally, reducing reliance on fossil fuel imports may improve energy security and stabilise energy prices over time.

All in all, the transition may lead to initial rises in energy costs and require substantial public investment. Nevertheless, the shift is projected to drive economic growth through new industries and export opportunities in clean technologies.

Environmental and public health improvements from reduced pollution are also expected to lower healthcare costs and boost overall quality of life.

With inputs from agencies