In a bold move, France, backed by the United States, is set to propose a ban on private financing for coal-based power plants during the upcoming UN climate conference, COP28, stirring divisions at the summit scheduled in Dubai from November 30 to December 12. The plan, named the “New Coal Exclusion Policy,” aims to halt private financial support for coal-fired power plants, a proposition that has raised opposition from India and China, both reliant on coal for their energy needs.
France’s Minister of State for Development, Chrysoula Zacharopoulou, communicated the plan to the Indian government earlier this month, revealing a significant policy shift. The “New Coal Exclusion Policy” targets private financial institutions and insurance companies, signaling a commitment to limiting global warming.
While details of the plan were not directly commented upon by Zacharopoulou’s spokesperson, it is understood that the proposal, if adopted, would have the Organisation for Economic Co-operation and Development (OECD) establish coal-exit standards for private finance firms. This move could enable regulators, rating agencies, and non-governmental organizations to monitor and assess the impact of private financing on coal projects.
The US, European Union, Canada, and others have been actively seeking ways to expedite the phase-out of coal, considering it a significant threat to climate goals. The plan shared by France underscores concerns about private international financing supporting substantial additions to coal capacity, particularly in developing nations like India and China. Currently, approximately 490 gigawatts of new coal capacity is in the pipeline, equivalent to one-fifth of existing global capacity.
Rick Duke, Deputy US Special Envoy on Climate Change, emphasized the urgency for a global power sector transition away from coal. He highlighted the need for countries to refrain from building new unabated coal power plants, as around 500 gigawatts are still in the planning or construction phase globally.
As member countries remain divided on emissions abatement technologies, India, heavily dependent on coal for 73% of its electricity consumption, is expected to resist setting a deadline for fossil fuel phase-out or phase-down at COP28. India may advocate for a focus on reducing emissions from other sources and could propose that developed nations aim for carbon negativity rather than neutrality by 2050.
By Reuters
