The two biggest economies and largest carbon polluters in the world announced separate financial attacks on climate change Tuesday.
Chinese President Xi Jinping said his country will no longer fund coal-fired power plants abroad, surprising the world on climate for the second straight year at the U.N. General Assembly. That came hours after U.S. President Joe Biden announced a plan to double financial aid to poorer nations to $11.4 billion by 2024 so those countries could switch to cleaner energy and cope with global warming’s worsening impacts. That puts rich nations close to within reach of its long-promised but not realized goal of $100 billion a year in climate help for developing nations.
“This is an absolutely seminal moment,” said Xinyue Ma, an expert on energy development finance at Boston University’s Global Development Policy Center.
This could provide some momentum going into major climate talks in Glasgow, Scotland, in less than six weeks, experts said. Running up to the historic 2015 Paris climate deal, a joint U.S.-China agreement kickstarted successful negotiations. This time, with China-U.S. relations dicey, the two nations made their announcements separately, hours and thousands of miles apart.
“Today was a really good day for the world,” United Kingdom Prime Minister Boris Johnson, who is hosting the upcoming climate negotiations, told Vice President Kamala Harris.
United Nations Secretary-General Antonio Guterres, who has made a frenetic push this week for bigger efforts to curb climate change called the two announcements welcome news, but said “we still have a long way to go” to make the Glasgow meeting successful.
Depending on when China’s new coal policy goes into effect, it could shutter 47 planned power plants in 20 developing countries that use the fuel that emits the most heat-trapping gases, about the same amount of coal power as from Germany, according to the European climate think-tank E3G.
“It’s a big deal. China was the only significant funder of overseas coal left. This announcement essentially ends all public support for coal globally,” said Joanna Lewis, an expert on China, energy and climate at Georgetown University. “This is the announcement many have been waiting for.”
From 2013 to 2019, data showed that China was financing 13% of coal-fired power capacity built outside China – “far and away the largest public financier,” said Kevin Gallagher, who directs the Boston University center. Japan and South Korea announced earlier this year that they were getting out of the coal-financing business.
With all three countries pulling out of financing coal abroad “that sends a signal to the global economy. This is a sector that’s fast becoming a stranded asset,” Gallagher said.