Norway is considering a ban on coal related investments; Brown College is on a similar path. The World Bank and the U.S. government are limiting funding for coal plant construction around the world. Although the environmental concern behind these initiatives is nice, it misses the long-term energy picture: Low-cost coal power is needed to help move billions of people out of poverty.

Helping to keep the environment clean is a noble cause. However, coal power provides around 40% of the world's electricity. That's a huge number, and there's no easy way to bring it down. The problem is that, according to the International Energy Agency (IEA), 1.3 billion people in the world don't have access to electricity.

Nearly all are in sub-Saharan African or developing Asia, with 84% located in rural areas. Essentially, they live in poverty stricken regions. But, as the IEA points out, "The lack of access to modern energy services is a serious hindrance to economic and social development..."

Simply put, the world needs more power, and coal is cheap and abundant. Instead of putting the kibosh on coal investments, perhaps large investors, and you, should be focused on investing in coal related companies that are working to make coal power better.

The best of coal, environmental edition
Southern Company (SO -0.61%) is in the process of building a high-tech coal plant that will feature carbon capture technology. It's working with KBR (KBR 0.31%) on this first of its kind project. Once the plant is complete, it will be one of the cleanest coal plants in the world. It will also be a showcase for the next generation of coal facilities.

Unfortunately, the plant is billions of dollars over budget and running a little late. That's been a drag on Southern shares, keeping the U.S. utility giant's yield close to 5%. That's fairly high for a financially strong and diversified utility that's increased its dividend annually for over a decade.

KBR, meanwhile, is a large engineering and construction company. Southern's Kemper facility is just one of the company's many projects. However, the technology behind the plant could be a much bigger part of both companies' businesses if the it proves successful. That's because they jointly own it and, thus, can license it to others.

Putting its money where its mouth is
Another company to consider is Peabody Energy (BTU). Peabody is one of the largest coal miners in the world, with major operations in the United States and Australia. It is also the only foreign partner in China's GreenGen project.

GreenGen is a research project working on clean coal technology, including carbon capture. Unlike Southern and KBR, which are working in a developed nation, GreenGen is located in a country actively dealing with energy poverty. That means building more power plants, including coal-fired generation. Although Peabody stands to benefit from increased coal demand, it's also working to help improve the fuel.

Existing technologies
General Electric (GE 5.68%), and Siemens (SIEGY -0.80%) are two others to watch on the technology front. Both companies have gasification systems that turn coal into a relatively clean burning gas. That's a key part of the process at Southern and KBR's Kemper facility and at GreenGen. The technology is increasingly being looked to as countries like China and India try to reduce the environmental impact of coal.

Like KBR, GE and Siemens are both large businesses. However, both are big players in the energy industry and will benefit from increased demand for electricity, including cleaning up coal. Note that, while carbon capture is new and untested, coal gasification isn't, so GE and Siemens are already big proponents of the clean coal initiative.

Power, the growth market
Electricity in the United States is a mature market, but that's not the case in developing nations around the world. Coal is already playing a big part in powering these up and coming countries and it's likely to continue doing so. If you don't like the idea of a "dirty" fuel in your portfolio, change gears and invest in the companies that are making coal cleaner. Southern, KBR, Peabody, GE, and Siemens are all doing just that.

Another way companies like GE are using energy more efficiently...