World embraces challenge to phase out coal generation

Source: UN Environment Programme (UNEP)

Signatories of the agreement, made at the COP26 climate conference, committed to shun investments in new coal plants at home and abroad, and phase out coal-fuelled power generation in the 2030s in richer countries, and the 2040s for poorer nations, the British government announced.

Vietnam is showing its strong commitment to cut carbon by announcing clear commitments to phase out coal power, although an energy supply crisis is showing how difficult it will be to end dependence on fossil fuels.

The biggest coal financiers, such as China, Japan, South Korea, and India, however, decided not to join the new deal.

China was responsible for about 54 per cent of global coal consumption in 2020, while India used 11.6 per cent, according to BP’s 2021 world energy statistical review. The United States, which also did not join the pledge, consumed 6.1 per cent.

Nevertheless, UK business secretary Kwasi Kwarteng insisted that the end of coal was in sight. “The world is moving in the right direction, standing ready to seal coal’s fate and embrace the environmental and economic benefits of building a future that is powered by clean energy,” he said at the summit.

To meet the goals of the Paris Agreement to limit global temperature rises to 1.5oC, the global transition to clean power needs to progress 4-6 times faster than at present, noted the UK government’s press release on the deal. “With coal being the single largest contributor to climate change, phasing it out and delivering a rapid, inclusive transition to clean energy is essential if the world is to keep 1.5oC alive,” it added.

However, the statement is likely to increase pressure for governments to take action as increasing costs of natural gas and shortages of coal have led to significant spikes in the price of electricity.

According to a new United Nations Environment Programme report named “The Gathering Storm”, the finance needed to implement adaptation plans is still far short.

It said the costs are likely to be on the higher end of an estimated $140-300 billion per year by 2030 and $280-500 billion per year by 2050 for developing countries only. Meanwhile, climate finance flowing to developing countries for mitigation and adaptation planning and implementation reached $79.6 billion in 2019.

Estimated adaptation costs in developing countries are 5-10 times greater than current public adaptation finance flows, and the adaptation finance gap is widening because the opportunity to use pandemic recovery stimulus packages to back adaptation finance and implementation is being missed, the report added.

Richard Folland, policy and government affairs advisor at the Carbon Tracker Initiative think tank, noted at a roundtable on the sidelines of COP26 that there is a disparity when it comes to capacity to limit coal in both a policy and financial sense across the world.

“Our analysis shows that by 2025, 74 per cent of the US coal fleet will be uncompetitive – but some Eastern European markets are still very reliant on coal, and five Asian countries are still going to be responsible for 80 per cent of the world’s planned new coal plants,” Folland said.

Coal power plants account for over 32 per cent of total power capacity in Vietnam and have played an important role in ensuring its energy security.

Minister of Industry and Trade Nguyen Hong Dien said that Vietnam is to gradually eliminate plants that have been operating for many years with outdated technology.