The world’s two largest economies and the biggest carbon polluters on Tuesday announced separate financial strikes on climate change.
Chinese President Xi Jinping said his country would no longer finance coal-fired power plants abroad, astonishing the world over the climate at the United Nations General Assembly for the second year in a row. This comes hours after US President Joe Biden announced plans to double its financial aid to poor countries to $11.4 billion by 2024 so that those countries can switch to clean energy and cope with the worsening effects of global warming. This puts prosperous nations closer to their long-held promise of $100 billion annually in climate aid for developing countries.
“This is an absolutely fundamental moment,” said Xinyu Ma, an expert in energy development finance at Boston University’s Center for Global Development Policy.
Experts said it could provide some momentum to major climate talks in Glasgow, Scotland, in less than six weeks. A joint US-China agreement kickstarted successful negotiations, leading up to the historic Paris climate accord of 2015. This time, with Sino-US relations, the two countries made their announcements separately, at a distance of hours and thousands of miles.
“Today was a really good day for the world,” Prime Minister Boris Johnson of the United Kingdom, who is hosting the upcoming climate talks, told Vice President Kamala Harris.
UN Secretary-General Antonio Guterres, who this week has made a frenzied push for major efforts to curb climate change, called the two announcements welcome news, but said that “we still need a way to make the Glasgow meeting a success”. There is a long way to go”.
When China’s new coal policy goes into effect, it could shut down 47 planned power plants in 20 developing countries, which use fuels that emit the most heat-trapping gases, as much as coal from Germany. In the same volume, according to European climate think-tank E3G.
“This is a big deal. China was the only significant funder of foreign coal left. This announcement essentially ends all public support for coal globally,” said Joanna Lewis, China, Energy and Climate at Georgetown University “This is the announcement many have been waiting for,” said the expert.
From 2013 to 2019, data showed China was financing 13% of coal-fired power capacity built outside China — “the biggest public financier,” said Kevin Gallagher, who directs the Boston University Center. Japan and South Korea announced earlier this year that they were exiting the coal-financing business.
All three countries have pulled out of coal financing overseas, a sign for the global economy. This is an area that is fast becoming a stranded asset,” Gallagher said.
E3G policy analyst Byford Tsang said, although this is a big step, it is not the death knell for coal. That’s because China added as much new coal power domestically last year as it potentially canceled abroad, he said.
Tsang cautioned that the one-sentence line referring to the new policy in Xi’s speech lacked details such as effective dates and whether it applies to private funding as well as public funding.
Tsang said it also matters when China stops building new coal plants at home and shuts down old ones. He said this would be part of the emphasis at the G20 meetings in Italy next month. “The Chinese are now going to respond to international pressure rather than just US bilateral pressure,” said Deborah Seligsohn, an expert on China’s politics and energy at Villanova University.
“A coal-free energy mix is still decades into the future,” said Chris Field, Stanford University’s environmental director, because coal power plants typically operate for 50 years or more.
Many nations trying to build their economies – including top polluters China and India – have long argued that they need to industrialize with fossil fuels, like developed countries already did. World Resources Institute climate finance expert Joe Thwaites said that starting in 2009 and then in Paris in 2015 with “a grand bargain”, rich countries have pledged $100 in financial help to help poor countries switch from dirty to clean fuels. Billion promised.
But as of 2019, according to the Organization for Economic Co-operation and Development, wealthy nations were providing only $80 billion a year. So, when rich countries like the United States asked poor people to do more, “it gives a much easier answer to any other country,” Thwaites said: “‘You fulfilled the commitments and you delivered on them as well. not completed.”
In April, Biden announced that he would double the $2.85 billion a year financial aid pledge in Obama’s round to $5.7 billion. On Tuesday he announced that he expects to double it to $11.4 billion a year starting in 2024, but they need to be passed by Congress.
The European Union is currently giving $24.5 billion a year with the European Commission, which has recently grown to more than $4.7 billion over seven years. “Europeans are doing too much and Americans are lagging,” Thwaites said.
He said several studies calculate that depending on the US economy, population and carbon pollution, it should contribute 40% to 47% of the $100 billion fund to give it its fair share.
But congressional Republicans are not convinced. “We shouldn’t be contributing to a fund that picks winners and losers and further subsidizes China in the process,” said Rep. Garrett Graves of R-Louisiana, the ranking Republican on the House Climate Committee.
The time for global grandeur is over, said Michael Oppenheimer, a professor of climate science and international affairs at Princeton University. “It’s what’s happening on the ground that matters.”
UN chief Guterres said “accelerating the global phaseout from coal is the most important step in keeping the key warming limits of the Paris Agreement within reach”.