Chinese President Xi Jinping said his country will no longer finance coal-fired power plants abroad, surprising the world when it comes to climate for the second year in a row at the UN General Assembly.
That came hours after US President Joe Biden announced a plan to double financial aid to the poorest nations to $ 11.4 billion by 2024 so those countries could switch to cleaner energy and cope. the worsening impact of global warming. That puts rich nations within reach of their long-promised, but unfulfilled goal of $ 100 billion a year in climate aid for developing nations.
“This is an absolutely pivotal moment,” said Xinyue Ma, an expert on financing energy development at the Center for Global Development Policy at Boston University.
This could give a boost to major climate talks in Glasgow, Scotland, in less than six weeks, experts said. In preparation for the landmark 2015 Paris climate agreement, a joint agreement between the United States and China launched successful negotiations. This time, with Sino-US relations at risk, the two nations made their announcements separately, hours and thousands of miles apart.
“Today was a really good day for the world,” UK Prime Minister Boris Johnson, who is hosting the upcoming climate talks, told Vice President Kamala Harris.
United Nations Secretary-General Antonio Guterres, who has made a frenzy this week to push for greater efforts to curb climate change, called the two announcements good news, but said “we still have a long way to go.” to make the Glasgow meeting a success.
Depending on when China’s new coal policy takes effect, it could shut down 47 planned power plants in 20 developing countries that use the fuel that emits the most heat-trapping gases – roughly the same amount of energy from coal. than Germany’s, according to the European report. E3G Climate Expert Group.
“It matters a lot. China was the only significant foreign coal funder left. This announcement essentially ends all public support for coal globally,” said Joanna Lewis, an expert on China, energy and climate at Georgetown University. “This is the announcement that many have been waiting for.”
From 2013 to 2019, data showed that China was financing 13% of coal-fired power capacity built outside of China, “by far the largest public financier,” said Kevin Gallagher, who runs the Boston University center. Japan and South Korea announced earlier this year that they would exit the coal finance business.
The fact that all three countries withdraw from financing overseas coal “sends a signal to the world economy. This is an industry that is fast becoming a stranded asset, ”said Gallagher.
While this is a big step, it is not a death sentence for coal, said Byford Tsang, a policy analyst at E3G. That’s because last year China added as much new coal power domestically as it was potentially canceled abroad, he said.
Tsang cautioned that the sentence line in Xi’s speech mentioning this new policy lacked details such as effective dates and whether it applied to both private and public funding.
What also matters is when China stops building new at-home coal plants and closes old ones, Tsang said. That will be part of a push at G20 meetings in Italy next month, he said. “The Chinese are going to respond to international pressure, rather than just US bilateral pressure right now,” said Deborah Seligsohn, a China policy and energy expert at Villanova University.
“A coal-free energy mix is still decades into the future” because coal-fired power plants generally operate for 50 years or more, said Stanford University environmental director Chris Field.
Many nations trying to build their economies, including China and India, the main polluters, have long argued that they needed to industrialize with fossil fuels, as developed nations have already done. Beginning in 2009 and then with “a big bargain” in 2015 in Paris, the richest nations pledged $ 100 billion a year in financial aid to the poorest nations to make the switch from dirty fuel to clean, the expert said. Climate Finance from the Joe Thwaites World Resources Institute.
But as of 2019, the richest nations were only providing $ 80 billion a year, according to the Organization for Economic Cooperation and Development.
So when rich nations like the United States asked poorer nations to do more, “it gives any other country a very easy answer,” Thwaites said, “‘You made commitments and you haven’t kept them either.”
In April, Biden announced that he would double the Obama-era financial aid pledge from $ 2.85 billion a year to $ 5.7 billion. On Tuesday he announced that he hopes to double that to $ 11.4 billion a year starting in 2024, but needs congressional approval.
The European Union has been distributing $ 24.5 billion a year and the European Commission recently increased that to more than $ 4.7 billion for seven years. “The Europeans are doing much more and the Americans are falling behind,” Thwaites said.
He said various studies estimate that based on America’s economy, population and carbon pollution, it should contribute 40-47% of the $ 100 billion fund to be doing its fair share.
But Republicans in Congress are not convinced. “We shouldn’t contribute to a fund that picks winners and losers and further subsidizes China in the process,” said Rep. Garret Graves, R-Louisiana, the highest-ranking Republican on the House Climate Committee.
The time for global grandstanding is over, said Michael Oppenheimer, professor of climate science and international affairs at Princeton University. “What matters is what is happening on the ground.”
“Accelerating the global phase-out of coal is the most important step” in keeping the key warming limit of the Paris agreement within reach, UN chief Guterres said.