With plans to finance at least $24 billion more, dirty fuel investment guarantees decades of climate pollution and undermines Paris climate agreement goals and shift to clean energy
WASHINGTON –(ENEWSPF)–November 14, 2016. In a glaring conflict with their global climate commitments, the world’s largest economies are continuing to pour billions into financing of overseas coal power plants, coal mining and coal infrastructure—trapping the world into decades of dangerous carbon emissions that will worsen climate change, a new report shows.
Over the last nine years, the G20 countries—led by China, Japan, Germany, South Korea and the United States— have kicked in $76 billion to further coal development in countries such as Vietnam, South Africa, Australia and Indonesia, according to the report, “Carbon Trap: How International Coal Finance Undermines the Paris Agreement and Clean Energy Deployment.” It was released today by the Natural Resources Defense Council and Oil Change International in a press conference at the COP22 meeting in Morocco.
Essentially, this means that, on one hand, some of the world’s leading polluters have pledged to lower climate-changing carbon pollution within their borders under the Paris climate agreement.
But, on the other hand, these countries are facilitating a massive boom in that carbon pollution by financing coal development elsewhere—and the planet ultimately suffers.
“Our climate knows: Countries can’t have it both ways. They can’t publicly boast about are slashing climate pollution at home while also continuing to finance enormous coal development abroad,” said report co-author Han Chen, international climate advocate at NRDC. “These nations need to clean up their act. They should stop pouring billions into dirty energy and instead put more financial muscle behind clean, renewable energy, and energy efficiency. That will create jobs and protect the planet from climate catastrophe.”
The Intergovernmental Panel on Climate Change states that the burning of fossil fuels is contributing to the rise in global temperatures. To meet the Paris agreement’s goal of limiting that temperature rise to less than 2 degrees Celsius—and avoid major climate disruption—the world must transition to cleaner energy and phase out fossil fuels, the report notes.
Unfortunately, key governments continue to invest in projects that further the world’s dependence on coal, making climate change worse.
“Japan and China are both leaders in renewable energy technology, yet instead of growing their share of the clean energy market, they are choosing to choke the planet by backing dozens of new coal-fired power plants around the world,” said Alex Doukas, senior campaigner at OCI. “Meeting the commitments in the Paris climate deal means rapidly moving away from fossil fuels, but the use of scarce public money to fund new coal plants by China and Japan is taking the world in the opposite direction.”
Japan has the most financing in the pipeline for future coal projects. Kimiko Hirata, International Director of the Kiko Network said: “Even after the historic Paris Agreement and the OECD agreement were reached, Japan is still investing significant amounts of money in coal and encouraging new projects — ignoring the fact that there’s no space in the global carbon budget to build new coal. Japan cannot be proud of competing with China over spreading dirty energy all over the world. As a signatory to the Paris Agreement, Japan should stop financing coal immediately and stop causing health problems and climate disaster.”
Among key findings in the Carbon Trap report:
- Between 2007 and 2015, G20 nations financed $76 billion worth of international coal projects. China, Japan, Germany, and South Korea accounted for four-fifths of this financing.
- China financed $25 billion
- Japan financed $21 billion
- Germany financed $9 billion
- South Korea financed $7 billion
- G20 nations are considering financing new coal projects worth more than $24 billion.
- Japan plans to finance $10 billion
- China plans to finance $8 billion
- South Korea plans to finance $2 billion
- The top three recipient countries for G20 coal project financing are Indonesia ($11 billion), Vietnam ($10 billion), and South Africa ($7 billion). Indonesia and South Africa are G20 members.
- Low-income countries received less than 2 percent of G20 international coal financing. Instead, most of the money went to middle- and high-income countries, contrary to frequent claims that public finance for coal is intended to help the poorest countries expand access to energy.
The report observes that China has several mechanisms in place that could limit its future coal finance. But Japan plans to greatly expand its financing of coal power plants and coal development abroad.
The report may underestimate the extent of overseas coal finance because it moves through opaque institutions, such as export credit agencies, which have hidden their support for fossil fuel development. The report compiled findings from export credit agency and public finance reporting, news articles, an international infrastructure journal and data from the Organisation for Economic Co-operation and Development.
The report makes these recommendations:
- G20 nations that are members of the OECD should better restrict coal finance so they apply not only to coal plants but to all coal activities, such as exploration and mining.
- Policymakers should develop clear guidelines for limiting coal finance—in line with their national circumstances, with clear criteria for ensuring that future energy financing is consistent with the Paris Agreement, and with appropriate accounting for the cost of externalities.
- Governments and multilateral organizations should disclose coal financing from all public institutions, such as export credit agencies, development banks, majority state-owned banks, and others.
The Carbon Trap report is here: https://www.nrdc.org/resources/carbon-trap-how-international-coal-finance-undermines-paris-agreement
It builds on two previous reports: the June 2015 “Under the Rug: How Governments and International Institutions are Hiding Billions in Support to the Coal Industry,” here, and the May 2016 “Swept Under the Rug: How G7 Nations Conceal Public Financing for Coal Around the World,” here.
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The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 2 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world’s natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Livingston, Montana, and Beijing. Visit us at http://www.nrdc.org and follow us on Twitter @NRDC.
Source: http://nrdc.org
