By Laura Barron-Lopez - 12/16/13 01:24 PM EST
The International Energy Agency (IEA) on Monday said "radical action" is needed to combat climate change as it released new projections for the use of coal.
The agency's five-year outlook says global demand for coal will grow at an average rate of 2.3 percent through 2018, down from last year's forecast of 2.6 percent through 2017.
"But it is equally important to emphasize that coal in its current form is simply unsustainable," she added.
The IEA said more stringent Chinese policies on reducing dependence on coal are helping to tamp down global demand.
Still, coal remains the top electricity source worldwide, and the IEA said steps must be taken to reduce the greenhouse gas emissions that are produced by the fuel.
"Radical action is needed to curb greenhouse gas emissions, yet radical action is disappointingly absent," van der Hoeven said.
She added that despite knowing how to build "efficient, supercritical coal-fired power plants since the 1960s," countries still fail to do so.
"Progress on (carbon capture and storage) is effectively stalled and meaningful carbon price is missing."
The agency projects that coal consumption in the U.S. will stay below its peak 2005-2007 levels due to low gas prices and the uncertainty surrounding carbon pollution policy.
"While growing shale gas production will push coal prices down, environmental regulation will cause the closure of considerable coal capacity and carbon dioxide policy will prevent investments in new coal plants," the report states.
In the end, the growth of coal will depend on the actions of China, which maintains a dominance over markets, the IEA said.