The dominance of coal isn't an argument for expanding the industry, especially when it has no credible plan to tackle climate change, writes Matt Grudnoff.

The Minerals Council of Australia (MCA) has jumped on a new report by the Energy Policy Institute of Australia (EPIA) that shows coal will continue to dominate global power supply.

The Minerals Council declared that attempts to resist expanding Australia's coal industry were "simply a reckless attack on Australian jobs and the economy". And, as usual, the MCA is keen to dismiss those who disagree, but reluctant to address their criticism that an expansion of the coal industry is incompatible with avoiding dangerous climate change.

Attacking anyone who dares to think coal is not Australia's greatest natural advantage might be a good political strategy, but it's not an argument for expanding coal mining in Australia.

Companies shouldn't be given a green light to dig coal up as fast as they can just because the EPIA report shows that it's likely to remain a large source of global power generation.

Coal accounts for 41 per cent of global electricity generation. Power stations are huge facilities with long life spans and so because coal dominates now, it will continue to do so for some time. This is not an argument for expansion but rather a prediction if there are no major policy changes.

There were some very important facts the Minerals Council failed to mention. The report also shows a rapid expansion of renewable energy. So rapid that by 2025 renewable energy will be adding more electricity to the developed world's power grids than coal. The report also predicts renewables will expand rapidly in developing countries.

If history tells us anything it's that organisations like the International Energy Agency (IEA) that provided the data the EPIA report is based on has consistently underestimated the growth of renewables. Every IEA report since 2006 has upgraded its predictions of the amount of renewable energy being deployed. It may well be that their current predictions are also conservative and renewable uptake will happen even faster.

It's clear from the IEA data in the report that while coal certainly dominates now, it is being replaced by renewable energy. Renewable energy prices have been falling rapidly for many years and are predicted to continue to fall. As renewable energy becomes cheaper than coal, then, regardless of environmental concerns, the economics will drive coal out of the market.

The question for policy makers is what we should do during the transition.

The Minerals Council is the coal industry's lobby group and they want to capitalise on their product while they are still the biggest players. They want support to dig it out of the ground as quickly as possible. Time is money for them.

The attitude of the Minerals Council completely ignores the effect the industry is having on the global climate. The burning of fossil fuels is the biggest producer of greenhouse gas and coal is the biggest fossil fuel.

While the EPIA report acknowledges the serious impact that the coal industry is having on climate change, it proposes few solutions. It points out that replacing older coal fired power stations with super-efficient ones would have a small effect. But in the end it falls back on carbon capture and storage (CCS).

CCS is a grand idea that has yet to work on a commercial scale. If it is ever possible to make it economically viable, that time is well in the future, far beyond the point that the world needs to make significant cuts if it is to avoid dangerous climate change.

While the coal industry likes to talk about CCS it is far shyer when it comes to putting up its own money. The mining and power industries are not currently making any meaningful investment in CCS. While the EPIA report describes CCS as a "game changer" for coal, it seems strangely reluctant to back it.

This highlights the biggest problem the coal industry and its backers face. They have no credible plan on how they can expand and have the world avoid dangerous climate change. If the industry wants to see less resistance to coal's expansion then they need a real solution.

Concern about the coal industry is widespread in the community. A 2012 survey by the Australia Institute found that two-thirds of people supported limiting the number of new mines. If the industry wants a social licence to expand then it needs a climate change plan.

While the coal industry might like to pat itself on the back and point out that even though its dominance is declining it is still the biggest producer of electricity in the world, it should be more concerned about the long-term impact its industry is having on the planet.

Matt Grudnoff is the Senior Economist at the Australia Institute. View his full profile here.