Last year environmental and social costs associated with China's use of coal came to RMB1.7 trillion – that's about 7.1 percent of the nation's GDP for the same year.

This staggering amount was calculated by China's top economists  in The True Cost of Coal, a new report commissioned by Greenpeace, the Energy Foundation and WWF.

These so-called "external" costs come from air and water pollution, ecosystem degradation, damage to buildings and infrastructure, and human death and injuries.

Read the report here (pdf).

Read a summary of the report here (pdf).

So what's Greenpeace recommending?

Greenpeace is strongly urging the government to readjust the fuel's pricing mechanism to incorporate these killer costs.

• If the coal pricing system was made fairer it would allow the sustainable energy sector to become more competitive.

• It would make it easier for China to quit its coal addiction.

• And moving away from coal would help ensure China's energy security and protect the environment.

"Recognizing the true cost of coal would create incentives to developing cleaner, sustainable energy sources," says Yang Ailun, Greenpeace's climate and energy campaign manager.

"The government should introduce an effective price signal for coal, which would ensure a massive improvement in energy efficiency and large-scale implementation of renewable energy. This would reduce China's environmental pollution and show its leadership in fighting climate change."

China: the king of coal

The problem is so urgent because coal is such a key part of China's energy sector.

Coal makes up 70 percent of China's energy needs – compare that with a world average of 40 percent.

What's so bad about coal?

Right from the world go coal is bad news.

Coal mining causes human death and disability and creates land subsidence causing people's homes to collapse.

Trucks piled with coal spread coal dust into the atmosphere. This choking dust coats trees and grass, gets into your lungs and covers historical treasures

The 1.500 year old Buddha carvings of the Yungang grottoes in Datong are smeared in acidic soot from the local coal industry.

Coal processing and coal combustion release huge amounts of polluting gases such as sulphur dioxide and particulate matter, greenhouse gases (carbon dioxide), and releases huge amounts of polluted water.

According to government figures burning coal produces 85 percent of the country's annual sulphur dioxide emissions and 67 percent of its nitrogen dioxide emissions.

It also produces one quarter of the country's waste water.

And if that's not bad enough

Some 80 percent of China's carbon dioxide - a key greenhouse gas -- emissions comes from burning coal.

Climate change is the single greatest threat to human life on
Earth.

Climate change also threatens China’s food security.

According to recent scientific data, rising temperatures, loss of arable land and water scarcity may cut China's overall food production by up to 23 percent by 2050.

So whichever way you look at it coal is bad news.