‘Writing is on the wall for coal power’: China to ditch overseas coal funding, as US vows to double climate finance
Hopes grow that COP26 Climate Summit could deliver a breakthrough, after two of the world’s biggest emitters deliver key climate pledges
World leaders have delivered a raft of crucial climate commitments at the UN General Assembly this week, with China, the US, and South Africa among countries coming forward with fresh pledges that will fuel hopes the COP26 Climate Summit in Glasgow in November could yet mark a step change in global decarbonisation efforts.
Yesterday China’s President Xi Jinping used his address to the Assembly to confirm the world’s biggest emitter plans to stop building overseas coal plants, in a move expected to drastically reduce the global pipeline of new coal power plants.
The pledge is hugely significant as China is the world’s largest public financier of foreign coal projects, and although specific details underpinning how the country plans to implement the policy are yet to emerge it was immeditely interpreted as a major blow to coal investors and operators worldwide.
Moreover, President Xi signalled that China would shift its overseas support towards greener sources of energy, bolstering hopes that developing nations around the world can leapfrog fossil fuels and move straight towards scaling renewable energy infrastructure instead.
“China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad,” Xi said in his pre-recorded video address at the annual UN gathering yesterday.
Xi also reiterated China’s 2060 net zero target and plan to peak its emissions by 2030. “We need to accelerate the transition to a green and low carbon economy and achieve green recovery and development,” he said. “This requires tremendous hard work, and we will make every effort to meet these goals.”
China remains hugely reliant on coal power domestically, and still has a sizeable pipeline of new coal power projects within its own borders, in addition to being the world’s biggest developer of renewable energy and the largest global market for electric vehicles.
However, with just weeks to go until governments and world leaders meet in Glasgow for the COP26 Summit ina bid to iron out a host of outstanding issues underpinning the Paris Agreement, President Xi’s announcement marks a major win for the UK hosts and those countries pushing for an ambitious agreement.
The announcement follows similar pledges earlier this year from South Korea and Japan, both of which have promised to end overseas financing of coal projects.
However, it is China’s decision that will single-handedly help curtail much of the current coal power plant pipeline. The move should “open the door to the cancellation of over 40GW of pipeline projects in 20 countries”, which would make up the overwhelming bulk of the world’s remaining pre-construction coal pipeline, according to Carbon Brief.
Hongqiao Liu, China specialist at Carbon Brief, said the pledge “opens a new era for the global movement of coal phase-out”, while stressing the importance of President Xi’s commitment to not just end financing of overseas coal plants, but to stop building them.
Note, Xi Jinping used the word “build” rather than “finance”
This, for me, covers more than just ¥ ¥ ¥. It could mean stoping all sorts of Chinese engagements in overseas coal-fired power projects, i.e., lending, underwriting, insurance, construction, technology transfer, etc.
— LIU Hongqiao (@LHongqiao) September 21, 2021
The announcement was also widely welcomed by green groups and politicians worldwide, including COP26 President-Designate Alok Sharma, who said it was “clear the writing is on the wall for coal power”.
It is clear the writing is on the wall for coal power
I welcome 🇨🇳 President Xi’s commitment to stop building new coal projects abroad – a key topic of my discussions during my visit to China
At #COP26, we must consign coal to history
#UNGA https://t.co/eW4vKHcxUJ— Alok Sharma (@AlokSharma_RDG) September 21, 2021
Biden vows to double climate finance
Xi’s address followed President Biden’s speech to the UNGA in New York yesterday, during which he vowed to double the US’s climate finance to $11.4bn annually by 2024 in a bid to help developing nations bolster their resilience in the face of worsening climate impacts.
Biden also used his speech to urge other nations around the world to ramp up their climate commitments ahead of the upcoming Glasgow Summit, as he repeatedly warned of the growing dangers of the warming planet and resulting volatile weather impacts.
“To keep within our reach the vital goal of limiting global warming to 1.5C, every nation needs to bring their highest-possible ambitions to the table when we meet in Glasgow for COP26 and then to have to keep raising our collective ambition over time,” Biden said.
Earlier this year Biden had promised to commit another $5.7bn towards global climate resilience and adaptation projects, but has been facing pressure from the UK and developing nations to ramp up support further ahead of COP26, where climate finance is set to be a major bone of contention.
Richer nations have long pledged to collectively provide $100bn a year in climate finance to vulnerable nations by 2020, but this target has still yet to be met, which has served to sour relations between developing and industrialised nations at several UN climate summits in recent years. The OECD recently estimated that richer nations only stumped up just under $80bn of climate finance in 2019 and the 2020 is widely thought to have been missed.
Earlier this week UK Prime Minister Boris Johnson had himself urged fellow G20 leaders to step up their climate finance support for vulnerable nations, stating that he was “increasingly frustrated” with countries’ failure to stump up the cash.
However, despite Biden’s decision to ramp up US’s climate finance pledge this year, green activists have pointed out that richer nations are still falling short of the $100bn goal.
Mohamed Adow, director of energy and climate think tank Power Shift Africa, said climate finance was “the elephant in the room heading towards COP26”.
“It’s good to see the US President is upping the amount that the US is contributing and others should certainly follow suit,” he said. “But the US is still woefully short of what it owes.”
South Africa submits enhanced NDC
Elsewhere yesterday, South Africa approved a new national Climate Change Bill for submission to its parliament, which includes several stronger emissions reduction targets for 2025 and 2030.
The new targets form part of the country’s enhanced Paris Agreement pledges – also known as nationally-determined contributions (NDCs) in UN jargon – which all countries have been under pressure to deliver ahead of COP26, as set out under the terms of the global climate treaty.
Sharma welcomed the announcement from South Africa’s government yesterday, which he described as “a strong signal of intent to push forward with a just low carbon transition” across the country.
“Great to see the increase in ambition from South Africa in their revised NDC and Adaptation Communication ahead of COP26,” he said. “This includes lower emissions thresholds targets for 2030.”
In addition, Sharma also welcomed Turkey’s announcement yesterday that it has moved to ratify the Paris Agreement, becoming the final G20 nation to do so. Turkey’s President Recep Tayyip Erdogan made the announcement during his address to the UN General Assembly yesterday.
Following his own address to the Assembly yesterday, UN Secretary General António Guterres welcomed the announcements from both China and the US, but warned that “we still have a long way to go to make COP26 a success and ensure that it marks a turning point in our collective efforts to address the climate crisis”.
“Let us be reminded that based on the present emissions reduction commitments of Member States the world is on a catastrophic pathway to 2.7 degrees of heating,” he said. “We need decisive action by all countries, especially the G20, to go the extra mile and effectively contribute to emission reductions. All countries must bring their highest level of ambition to Glasgow if we are to keep the 1.5-degree goal of the Paris Agreement within reach.”
