Economic Affairs: The bumpy road to a green economy

Demand for fossil fuels is notoriously sticky as seen in the recent surge in demand for coal by China and India, pushing up prices

Coal is trading at sky-high levels and savvy investors such as those of Peabody Energy are enjoying “a few last puffs of the cigar”.PHOTO: BLOOMBERG

During the year to date, the share price of Peabody Energy, the world's largest private coal producer, has risen more than sixfold, making it one of the best investments among energy companies or indeed, any industry category. This was largely because the price of coal, the most unloved of energy sources, has been on a tear, more than tripling since the start of this year.

There is a connection between these developments and what has been happening lately in China and India, which together account for about two-thirds of the global demand for coal. Over recent days, there have been rolling blackouts in Beijing, Shanghai and many cities in the rust belt of China's north-eastern provinces because of crippling power shortages.

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