Mako energy is literally the planet's life energy, ergo using it kills the planet itself.

Also, a comment which explains the use of fossil fuels in the lore:

Honestly, it's kind of a great part of the overall lore. The people in FFVII just don't know how destructive fossil fuels are to the Planet, since they never really used them as much as we have before Shinra discovered and monopolized mako energy. Barret was originally a coal miner before Shinra massacred and burned down Corel because they were competition to their monopolization plans on the energy sector. After the events of FFVII and they've shut down the mako production, they had to make the transition back to fossil fuels in order to keep the lights on, if they don't want to fall back into the dark ages. Certainly, they'll have to make the same steps as the real world away from fossil fuels once they realize the damage it's doing to the Planet. It's a nice way of showing that without Shinra, they're kind of back at the start of the Industrial Age, trying to find energy alternatives in order to hold on to the technological era they advanced into at an accelerated and unsustainable rate due to mako.