I

t was December 11, 2001—three months after the attack on the Twin Towers and three days after the largest bankruptcy in history, that of Enron—when the news that China was joining the World Trade Organization (WTO) passed almost unnoticed. Yet that moment marked the beginning of a transformation that would reshape the global economy. In the years since, economic gravity has shifted decisively toward Asia, driven by an explosion in energy demand that has profoundly altered markets and geopolitics alike.

Between 2000 and 2024, China’s economy expanded nearly fivefold, with its share of global GDP rising from about 10 percent to 20 percent. Its energy consumption jumped from 10 percent to 25 percent of the world total, quadrupling from 1 billion to 4 billion tons of oil equivalent (toe). Much of this growth came from coal—the dirtiest fuel and the single largest contributor to rising anthropogenic CO2 emissions. The ambition of many, especially in the European Union, to reverse the buildup of CO2 in the atmosphere runs up against this stark reality: China, and much of Asia, remains dependent on coal—an archaic but widely accessible fuel, abundant in domestic reserves and available even to the poorest populations. From the perspective of economic history, these dynamics confirm that the coal-based development model still dominates the world economy, more than three centuries after the European Industrial Revolution.

 

 

China’s exponential growth

The speed of China’s growth—which has lifted more than a billion people out of poverty—is extraordinary. In 2000, more than 40 percent of China’s population still lived in absolute poverty; by 2016, that figure had fallen to zero. This achievement was made possible in part by doubling coal consumption to more than 2 billion tons of oil equivalent. Yet this success also poses a global challenge: the path out of poverty for billions—many of them in Asia—still depends heavily on coal. Reducing that dependence will require decisive action to curb consumption and accelerate alternatives such as renewables, bioenergy, and, crucially, greater use of natural gas.

Worldwide, the 60 percent increase in total energy demand since 2000 has been met largely by coal—a trend that lofty long-term climate targets have yet to reverse. Every country, including China, wants to cut CO2 emissions and reduce coal use, but viable substitutes remain difficult to deploy at scale. China’s entry into the WTO in 2001 turned it into the world’s factory, as much of Western manufacturing shifted there to take advantage of low labor costs and low energy prices, particularly cheap electricity.

As the September 2024 Draghi report underscored, energy remains far cheaper in China than in Europe, largely because of its reliance on domestically produced coal. In 2024, 60 percent of China’s electricity still came from coal-fired plants, and that same year the country brought online roughly 90,000 MW of new capacity—about 70 large power stations. In 2025, electricity prices for Chinese industry are estimated at between €60 and €80 per megawatt-hour, compared with more than €210/MWh in Italy and Germany, Europe’s two largest manufacturing economies.

 

 

The global push toward electrification—most visible in Asia, the world’s manufacturing hub—remains heavily dependent on coal. Of the 31 trillion kilowatt-hours of electricity generated worldwide in 2024, 34 percent came from coal, making it the dominant source. Natural gas ranked second and continues to grow, while hydropower accounted for 14 percent, and renewables—including wind, solar, modern biomass, and geothermal—reached 17 percent. Nuclear power, despite renewed discussion and interest, supplied only 9 percent and continues to face major challenges to expansion.

Coal’s central role in electricity generation remains the world’s foremost environmental problem. A single kilowatt-hour produced from coal—particularly in China’s aging power plants—emits nearly one kilogram of CO2.

 

 

Gas is the simplest solution

The most straightforward alternative is natural gas, which can generate large amounts of electricity efficiently through combined-cycle technology while emitting only about 0.35 kilograms of CO2 per kilowatt-hour—roughly one-third the emissions from coal. Coal’s impact extends well beyond climate change, contributing heavily to particulate matter, smoke, and other local pollutants released from power plant smokestacks.

Reducing coal use is therefore not only a climate imperative but also a public health necessity, essential for improving air quality across Asia’s major cities. In places such as Beijing and Shanghai, the thick smog that once defined daily life has largely disappeared—thanks in large part to the expanded use of natural gas, initially in heating and industry, and increasingly in power generation.
 

 

The slowdown in China’s coal consumption is now evident, reflecting both a structural shift in its economy—toward services and away from heavy industry—and a concerted effort to diversify its energy mix. Investment in renewables, where China has become a global technology leader, continues to grow. Even more striking, however, is the rise in natural gas consumption, supplied by both domestic production and, increasingly, imported LNG. China’s LNG imports were nonexistent in 2000; by 2010 they had reached 10 billion cubic meters (bcm), and by 2024 they exceeded 100 bcm—a figure expected to double by the end of the decade. China now accounts for roughly 20 percent of global LNG trade, surpassing Japan, historically the world’s largest importer.

While China is gradually easing its dependence on coal, the same cannot be said for other Asian economies that are emerging as new manufacturing hubs, attracted by the same combination of low labor and energy costs. India, striving to replicate China’s industrial boom, continues to increase coal consumption at an annual rate of around 10 percent. Vietnam, similarly eager to escape poverty through rapid industrialization, is expanding coal-fired generation even more aggressively, with consumption rising about 15 percent per year along with corresponding CO2 emissions.

It is therefore critical to facilitate the integration of these fast-industrializing Asian nations into the global gas market, allowing them to transition toward lower-emission energy sources. Given the distance from most gas-exporting countries and the limitations of pipeline infrastructure, LNG represents the only viable path forward. Large-scale investment in LNG is enabling greater use of methane—a valuable energy source that can sustain rising electricity demand while reducing dependence on coal. The undeniable right of poorer Asian nations to expand energy access as they lift their populations from poverty must be paired with access to cleaner fuels—first for the sake of the air in their cities, and ultimately for the health of the planet as a whole.