China's unbridled export of coal power imperils climate goals
AFP reported that even as China struggles to curb domestic coal-fired power and the deadly pollution it produces, the world's top carbon emitter is aggressively exporting the same troubled technology to Asia, Africa and the Middle East. The carbon dioxide (CO2) emissions from these Chinese-backed plants could cripple global efforts to rein in global warming caused by the burning of fossil fuels—especially coal, analysts warn.
Mr Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis (IEEFA), said that "China is a world leader in terms of embracing the policy and investment needs to progressively decarbonise its economy. But internationally, China continues to invest in a range of coal project in direct contradiction to its domestic energy strategy."
Globally, coal use accounts for 40 percent of CO2 emissions, and is on the rise after declining slightly from 2014 to 2016. More than two-fifths of the world's electricity is generated by coal-fired power, nearly double the share of natural gas and 15 times as much as solar and wind combined.
A quarter of coal plants in the planning stage or under construction outside China are backed by Chinese state-owned financial institutions and corporations, according to research by IEEFA, an energy finance think-tank based in Cleveland, Ohio.
Remove India from the picture, and the share of coal development supported by China rises to above a third.
"The risk is locking these countries into something that won't be good for them in the long-run, and that is incompatible with the Paris climate agreement's temperature goals," said Christine Shearer, an energy analyst for CoalSwarm and lead author of the research, which is slated for publication later this month.
Many of the recipients of China's largesse—Egypt, Nigeria, Kenya, Senegal, Zimbabwe and half a dozen others—currently have little or no coal-fired power, and no coal to fuel future plants.
Shearer told AFP that "That means they will have to build import infrastructure, or even coals mines."
The 2015 Paris treaty calls for capping global warming at "well under" two degrees Celsius (3.6 degrees Fahrenheit), and a landmark report by the UN's climate science panel warned last month that even the 2C target may not be ambitious enough to avert catastrophic impacts.
With only one 1C of warming so far, the planet has seen a crescendo of lethal heatwaves, flooding, drought and storms surges made worse by rising seas.
SE Asian coal boom
And yet, Chinese banks and investment agencies have committed more than USD 21 billion to developing 31 gigawatts (GW) of coal-fired capacity in a dozen countries, and an additional $15 billion is on offer to support projects that would generate 71 GW in 24 nations, for a total of more than 101 GW, IEEFA found.
Worldwide, there are nearly 2,500 30-megawatt-or-larger coal-fired stations in operation, with a combined capacity of about 2000 GW, according to the Global Coal Plant Tracker.
Mr Heffa Schuecking, director of Urgewald, an environmental NGO based in Germany which tracks the coal sector, told AFP that "A glut of new coal infrastructure would bury our chances of keeping global warming well below 2C. The Chinese government needs to stop bankrolling new coal plants both at home and abroad."
Any pathway to a 1.5C world—even one that allows for "overshooting" the target and depends heavily on extracting CO2 from the air—requires the near elimination of coal from the energy mix by mid-century, according to the UN.
A "sustainable development" scenario laid out by the International Energy Agency (IEA) sees coal power dropping 60 percent by 2040.
Spectre of stranded assets
But their shares were dwarfed by China's, whose financing covered as much power generation as Japan and South Korea combined. The three East Asian rivals supported 90 percent of the 135 GW built since 2013 or in the pipeline.
Chen told AFP "China is winning more bids, and Chinese firms are more willing to consider countries and markets with high risk profiles."
All this external funding comes at a time when financial institutions in the rest of the world are starting to shy away from coal.
Cheap solar and wind energy combined with mounting concern about climate impacts have cast a shadow over coal-fired power, raising the spectre of stranded assets.
At least 19 major insurers with more than $6 trillion in assets—20 percent of the global total—have divested from coal, up from $4 trillion a year ago, the Unfriend Coal Scorecard, which tracks divestment in the insurance sector, reported this week.
Insurers Generali, Lloyd's, Hannover Re, AG2R La Mondiale and Groupama all announced new divestment policies this year.
Investors, pension funds, export credit agencies, and multilateral development banks—including the World Bank—have also pulled back, as have many private banks.
'China has to choose'
"Every conference, every discussion is about how to green the Belt and Road Initiative," she told AFP upon returning from a round of meetings in Beijing.
Domestically, the barriers to rapidly drawing down coal use—despite a cap on coal production—are evident.
"China has built up an enormous coal-power generation industry—workers, companies, technology manufacturing—and now they have a lot of surplus," said energy analyst Shearer.
At the same time, China's juggernaut economy is slowing, which has left these state-run behemoths "looking for new markets".
Source : AFP