Building a future without coal
China, a leading source of public financing and construction know-how for coal-fired power generation, has pledged to no longer build such projects overseas – undercutting a pipeline of dozens of power plants in developing countries.
The announcement by Chinese President Xi Jinping last month has been hailed as a breakthrough ahead of critical climate negotiations by world leaders at the COP26 talks in Glasgow, starting next weekend. But it has also renewed attention on the thorny question of how to coax economies that have bet on fossil fuels to power their development towards faster adoption of wind, solar and other renewable sources instead.
Even as richer nations look to drive down carbon emissions to net zero, many low- and middleincome nations remain hesitant to set similarly stringent targets, in part because doing so would mean abandoning often the most readily available source of electricity: coal.
That reluctance is a problem for any hopes of a global solution to the climate crisis at the Glasgow conference.
In a May report, the International Energy Agency said an immediate phasing out of coal was essential for reaching net zero by the middle of the century, a goal seen as necessary to keep global temperature rises below 1.5 degrees Celsius over pre-industrial levels.
The envisioned global moratorium will depend largely on China, which consumes more than half the world’s annual output of coal. As part of goals
for carbon dioxide emissions to peak before 2030 and reach carbon neutrality by 2060, Xi has said China will ‘‘strictly control’’ coal use and begin a phase-down after 2025 – but China has stopped short of banning power plant projects.
Beyond China’s borders, its institutions have supported coal’s continued use by becoming the lender of last resort for plants abandoned by Japanese and South Korean banks.
Debates about how to replace
coal with renewables are taking place in other countries that have been leading recipients of Chinese energy finance. Since China’s Belt and Road infrastructure investment programme was announced in 2013, low- and middle-income nations have taken ready advantage of easier access to Chinese financing to upgrade their power sectors.
Even before Xi’s announcement, the poor economics of coal, combined with the coronavirus pandemic
slowdown, meant that China – for the first time since the programme was launched – made no new investments in coal in the first half of 2021.
After Xi’s announcement, Beijing’s partners like Pakistan, Bangladesh and Indonesia are waiting to find out what will happen with unfinished power plant projects.
There are at least 40 planned coal-fired power plants with Chinese financing or contractors in limbo, according to Global Energy Monitor (GEM), a San
Francisco-based nongovernmental organisation that tracks global fossil fuels infrastructure.
‘‘The risk with China’s announcement is that if coal plants are not funded, countries might just turn to gas,’’ said Christine Shearer, programme director for coal at GEM. ‘‘New gas plants running for 30 or 40 years is also not compatible with the Paris climate agreement.’’
Although the developed world is responsible for most historic greenhouse gas emissions, the ability to avoid further warming will largely depend on what happens in countries where emissions are still rising.
One projection holds that, in the worst-case scenario, the mostly developing countries along China’s Belt and Road initiative could account for twothirds of global emissions by 2050, up from about 26 per cent in 2019.
‘‘We are talking about countries that are still building up the power systems. They are asking, ‘If we want to go the route of just solar and wind, what are the examples?’. And there really aren’t any,’’ Shearer said.
In the past year, China’s international development strategy has shown signs of shifting.
In July, Beijing released voluntary guidelines to promote ‘‘green’’ foreign investment, following the launch of a green Belt and Road partnership.
As Beijing promises to embed sustainability in its overseas investment, the richest nations have come under pressure to do more to help the poorest ones address the climate crisis.