What does China's announcement not to finance more coal plants in other countries mean?

The United Nations General Assembly has become Chinese President Xi Jinping's favorite place to launch large environmental announcements by surprise. Last year he pledged to achieve carbon neutrality in his country by 2060. This Wednesday, in a previously recorded video speech, he promised that Beijing will stop financing the construction of coal-fired power plants abroad. A statement that, in practice, eliminates financing for this type of energy in the rest of the world with a stroke of the pen.

China, the world's largest emitter and the main source of funds for the construction of coal-fired power plants (the most polluting), financed 13% of all global projects between 2013 and 2019, according to the Global Development Policy Center of the Boston University.

Today, according to the E3G think tank, it is behind 55% of projects in development worldwide.

A practice that had generated numerous criticisms from international environmental organizations.

Both the United States and the European Union had repeatedly urged this country to end the financing of this technology and thus contribute to reducing carbon emissions on a global scale to curb climate change.

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• Xi Jinping announces at the UN that China will stop financing coal plants abroad

Japan and South Korea, the other major Asian economic powers, had already publicly renounced this year to continue financing those projects.

And Chinese banks, in a policy preview now confirmed by the presidential announcement, had slashed deals for the construction of those plants in 2021.

In the first half of this year, Beijing did not contribute money to any such project within its global infrastructure initiative known as the New Silk Road, according to the Beijing-based International Green Finance Institute.

"We need to accelerate the transition to a low-carbon and green economy," Xi said in his recorded speech.

“We will spare no effort in meeting those goals.

China will increase its support to other developing countries so that they can develop green, low-carbon energy, and will not build new coal-fired plants abroad. "

According to E3G, China currently has agreements for the construction of plants in 20 countries such as Bangladesh, Vietnam or Indonesia, with a total of 40 gigawatts of coal.

This is equivalent to half the capacity currently planned.

Xi's announcement may give a boost to talks ahead of the COP26 climate summit in Glasgow, UK, next November. Emissions continue to increase, at a rate of 16% compared to 2016, despite the fact that experts warn that it is necessary to reduce them by 50% by 2030 if extreme weather events such as those registered this summer in the hemisphere are to be avoided North, from devastating fires after severe droughts to torrential rains and floods.

Although the Chinese president's promise represents important progress if it is fulfilled, Xi did not refer to coal-fired plants within his own country.

Although the share of renewables in the Chinese basket has been growing in the last decade, coal remains, by far, the main source of energy in the world's second largest economy.

The Asian giant accounts for half of the global capacity of coal-fired plants, and last year it added an additional 38 gigawatts.

In the first half of 2021, China's provincial governments approved the construction of 24 new projects, with a total capacity of 5.2 gigawatts, Greenpeace noted in August.

But since the Paris agreements it has reduced the scale of its new projects by 74%, according to E3G.

In a statement, the US envoy for the climate, John Kerry, welcomed the initiative of the Chinese president, which he considered a "great contribution" to make the Glasgow talks a success. “We have been talking to China about this issue for a good season. And I am delighted to hear that President Xi has made this important decision, ”he added.

As Li Shuo, Senior Climate and Energy Policy Officer at Greenpeace Asia, tweeted, “The commitment is a good step forward, one that has been in the making for some time. The New Silk Roads initiative has left behind its fervent early years, when quantity was paramount. Now the priority is the quality of the projects. And coal projects abroad have been reduced in recent years ”. But, the expert points out, after the announcement “the attention is now returning to focus on the internal terrain. (Reaching the goal of warming no more than 1.5 degrees) clearly demands more from China, and almost everyone else. Beijing has not yet submitted its national contribution proposals. It is curious to consider what is saved and if that leaves room for more on the way to the G20 and COP26 summits ”.

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