Coal is on the ropes right now. Earlier this year, the Norwegian Sovereign Wealth Fund, one of the largest asset owners in the world, decided to divest from coal, and then the Californian State Pension System and the University of California chose to do likewise. The total amount of divestment pledges now totals $2.6 trillion—that equals one percent of global wealth and represents a fiftyfold increase in divestment pledges compared to this time last year. The Dow Jones Coal Index is down 80 percent this year, and perhaps most telling of all, the world’s largest PR firm, Edelman, recently announced its decision to stop working with coal firms because the association is too damaging to its own public image. When the public relations people will no longer touch you, you know things are looking bad.

But while coal is down, it is not yet out. A significant amount of the coal currently mined (approximately 15 percent, according to the World Coal Association) is not used for energy production but as part of the process of making steel. (Some of the divestment pledges that make up the $2.6 trillion total, in fact, are specifically worded so as to allow continued investment in coal used for steel production. This is notably the case with Stanford’s own pledge, which excludes “publicly traded companies whose principal business is the mining of coal for use in energy generation” but not those that service the steel industry.)

Coal is also still an important part of the energy mix in poorer countries. It would be a sad outcome indeed if coal were phased out in the wealthy world, but maintained or even grew its market share in poorer nations. The very places that are already feeling the brunt of climate change would find themselves saddled with dirty energy and a source of localized pollution..

With regard to steel production, several viable alternatives to coal are worth pursuing. The easiest is to recycle more steel, since the recycling process—unlike the process of extracting steel from iron ore—does not require any coal. Only 30 percent of steel is currently recycled so there are easy gains to be made there. Another option is to reduce total steel consumption by altering consumption habits or by finding ways to replace steel with other materials. The move to find replacements, in fact, is already underway in the construction business, where high-technology timber is being used as a steel substitute for buildings up to ten stories high. Finally, various firms are trying to improve the efficiency and environmental sustainability of charcoal from forest residues as a replacement for coal in the steel-making process. With the right policy incentives and investment, the argument that we need coal for steel could very quickly disappear.

Addressing coal as an energy source in poorer countries is a more difficult challenge, but there is some very good news on that front as well. A consortium of NGOs is backing an initiative called The Paris Pledge, which calls on banks to pledge to stop financing the coal economy. Just 11 small banks have signed up as of this writing, but the movement has the potential to grow rapidly, not least because many banks while not necessarily signing the pledge are nevertheless scaling back their activities in this sector. In September of this year, the National Australia Bank ruled out any financing for Adani’s $16 billion Carmichael coal mine, making it the fourteenth financial institution to distance itself from coal projects in Australia’s Galilee Basin—a vast area of coal reserves, which, if developed, would be the seventh largest source of carbon on the planet. That same month, Crédit Agricole, the third-largest French bank, responded to shareholder pressure and announced further cuts to its own coal finance program. In October, America’s third largest bank, Citigroup, updated its environmental policy guidelines and committed to continue reducing its global credit exposure to coal mining companies. A week later another French bank, Natixis, went a step further and announced a complete end to all coal project finance.

The move to ditch coal is not just coming from asset owners or financial institutions. In the build-up to the COP21 international climate change conference scheduled to take place in Paris this December, the French energy utility, Engie, has committed to halting all new investments in coal, while the French government has announced that it will end export credits for new coal plants, following the lead of the United States. In recent days, Japan—the world’s largest issuer of export credits for coal—has indicated that it may do likewise. These are very positive steps, but pressure now needs to be put on the other large suppliers of credits (Germany, China, Australia and South Korea) to follow suit.

There is a huge amount of work still to do if we are to address climate change in the short amount of time that remains (and of course coal is only one small part of the equation), but the scale of the problem should not blind us to the fact that we are making progress on this particular front. With concerted efforts from activists, asset owners, and entrepreneurs, we may see the end of the dirtiest of energy sources far quicker than we had hoped. To use the words of the former New York mayor and billionaire investor, Michael Bloomberg, “King Coal is dying of natural causes.” But that doesn’t mean we shouldn’t help put it out of its misery.

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