G20 Nations Pledged To End Overseas Coal Plant Financing

The G20 is the international forum that brings together the world’s major economies and when they make strong decisions it is bound to impact the global economy. This time, the G20 Summit left a mark on the coal industry. The leaders from the G20, who today represent the world’s biggest coal producers and consumers, agreed to take the first steps to weaken coal’s future, though they fell far short of what is necessary to sufficiently address climate change. As per the joint statement released, they would end the financing of coal power plants overseas, but the statement included no new commitments on curbing the use of coal domestically.

Coal has ruled the industrial era and made many of the G20 countries the world's largest economies. It is the fossil fuel, responsible for about 44 percent of man-made CO2 emissions. The economic and political interests of the regions where coal is mined and burned will be an obstacle for the complete shift to renewable energy. Russia is a large coal exporter, especially to China, and also uses the fuel at home. Australia earns about 50 billion Australian dollars a year from coal exports. China has huge coal reserves but little oil and gas, fears relying on others for its energy supplies. In India, coal is the pillar of the power industry and fundamental to livelihood, state revenues, and sustainable development. There are exceptional difficulties and concerns of the developing countries but how fast you can make the transition is the key to a better future.

Coal remains the single largest source of electricity globally, and yet its combustion is the largest source of carbon dioxide emissions. Those emissions trap heat in the atmosphere and have already warmed the planet by over 1 degree Celsius, wreaking havoc on weather patterns around the world. Prime Minister Mario Draghi of Italy, the host of the summit, pressed G20 leaders to speed up the exit from coal. “We need to set long-term goals that are consistent with the objectives of the Paris Agreement and make short-term changes to achieve them”. He added,? “We must accelerate the phasing out of coal and invest more in renewable energy.”

Moving the world’s biggest economies away from coal by 2030 is vital to reaching the 1.5 degree target (Paris Agreement). But there are powerful countries that rely on coal. China has stepped up coal power production in recent weeks, in the wake of electricity shortages. India, too, relies on coal to produce most of its electricity and plans to consume more of it to meet its energy needs. Australia is a large coal exporter and keen to hold on to the revenues it creates. The United States, Britain, and the countries of the European Union have started relying on natural gas instead of coal, though gas burns cleaner than coal, it also produces carbon dioxide.

The G20 leaders’ call to limit global warming to 1.5 degrees Celsius is very significant and needs to be backed up with measures to cut emissions rapidly in this decade and urgently scale up climate finance. Keeping 1.5 within reach will require meaningful and effective actions and commitment by all countries, taking into account different approaches, through the development of clear national strategies. Countries need to stop building new coal plants and end subsidies on fossil fuels.?

The G20 statement pledged to end the practice of financing coal power plants in foreign countries but resistance from members can be expected. However, the transition is necessary and eventually will take place. This is the golden time to invest in renewable energy and grab the opportunities while keeping up with the climate requirements.

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