{"id":31039,"date":"2023-12-02T11:18:13","date_gmt":"2023-12-02T10:18:13","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=31039"},"modified":"2023-12-02T11:18:13","modified_gmt":"2023-12-02T10:18:13","slug":"cop28-backers-of-new-coal-phaseout-initiative-need-to-walk-the-talk","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2023\/12\/02\/cop28-backers-of-new-coal-phaseout-initiative-need-to-walk-the-talk\/","title":{"rendered":"COP28: Backers of new coal phaseout initiative need to walk the talk"},"content":{"rendered":"

Copublished with the Centre for Environmental Rights (CER) and Center for Energy, Ecology and Development (CEED).<\/p>\n<\/div>

2 December 2023 \u2013 Reclaim Finance, the Centre for Environmental Rights (CER) and Center for Energy, Ecology and Development (CEED), cautiously welcome <\/span>today\u2019s announcement<\/span> by French president Emmanuel Macron at COP28 <\/span>of a multilateral initiative designed to bring an end to the construction of new coal plants (1). The initiative is also <\/span>supposed<\/span> to channel financing towards the early phaseout of coal power and the accelerated build out of renewables. But the NGOs warned that the governments and organizations behind today\u2019s announcement must ensure their promises are fully delivered, and that coal is phased out without being replaced by high-emission technologies like gas, biomass, or blue hydrogen<\/span><\/span>.<\/p>\n<\/div>

The \u201cCoal Transition Accelerator<\/span>\u201d,<\/span> led by<\/span><\/span> France, the<\/span> USA<\/span>, and the EU in partnership with countries like Indonesia and Vietnam, i<\/span>ncludes a<\/span> potential <\/span><\/span>new \u201cgold standard\u201d with the OECD and International Energy Agency asked to assess climate and financial risks attached to private sector investments in new coal assets<\/span><\/span>.<\/p>\n<\/div><\/div><\/div>

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The call to action has the potential to be a significant step forward in global efforts to end the financing and construction of new coal power plants, and to accelerate the retirement of existing plants. But breaking the logjam on coal retirements will require developed countries<\/span>,<\/span> their <\/span>bank<\/span>s<\/span> and<\/span> investors to walk the talk and <\/span>prov<\/span>ide<\/span> lar<\/span>g<\/span>e amounts<\/span> of <\/span>concessional finance as part of their historical responsibilities to help developing countries mitigate climate change<\/span><\/span>.<\/i><\/p>\n<\/div>

Danielle Koh, Policy Analyst at Reclaim Finance
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The Coal Transition <\/span>Accelerator <\/span>must assess mechanisms to phaseout the entire coal value chain, including thermal and metallurgical coal, captive coal power, and coal mines. It needs to assess how adequate financing can be made available at concessional terms that do not worsen national debt burdens, and how to ensure that phaseouts are transparent and participative, protect the rights of workers and <\/span>provide<\/span> rep<\/span>aration<\/span>s to communities harmed by decades of coal exploitation.<\/span><\/span><\/i><\/p>\n<\/div>

Leanne Govindswamy, lawyer at CER
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Reclaim Finance, CER and CEED, are among <\/span>the <\/span>12<\/span> NGOs <\/span>who yesterday published a set of <\/span><\/span>guiding principles<\/span><\/span><\/a><\/span> on finance for coal retirement mechanisms (CRMs) such as the Just Energy Transition <\/span>Partnerships<\/span> and the Asian Development Bank\u2019s Energy Transition Mechanisms.<\/span>(1)<\/span> The principles aim to ensure that CRMs are aligned with 1.5\u00b0C and protect workers and the rights of communities dependent upon and impacted by coal extraction and burning. The principles state that power lost due to coal plant closures must be replaced by <\/span><\/span>sustainable renewables<\/span><\/span><\/a><\/span> and energy efficiency, and that tradeable carbon offsets should not be used to finance CRMs.\u00a0<\/span><\/span>\u00a0<\/span>.<\/p>\n<\/div><\/div><\/div>

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Coal<\/span> retirement mechanisms <\/span>must <\/span>avoid false solutions such as retrofitting plants with carbon capture and storage and promoting high-emission alternatives such as methane gas and blue hydrogen. While it is positive to see governments and financial institutions committing to a rapid phaseout of coal, <\/span>we must ensure that this will not enable a detour <\/span>to<\/span> new oil and gas projects<\/span>,<\/span> especially considering that <\/span>Southeast<\/span> Asia<\/span> is fast <\/span>becoming a<\/span> gas hub<\/span><\/span>.<\/i><\/p>\n<\/div>

Gerry Arances, Executive Director at CEED
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Major private financial institutions most notably in Japan and the US <\/span>remain<\/span> heavily invested in the financing of coal globally. <\/span>According to the<\/span> <\/span>Coal Policy Tracker<\/span>, which <\/span><\/span><\/a>assesses financial institutions against what is needed in a robust coal policy, 84% of financial institutions assessed have not committed to exiting thermal coal by 2030 in Europe and OECD countries, and 2040 worldwide.<\/span> Only 8 members of the Glasgow Financial Alliance for Net Zero <\/span>assessed under <\/span>the Coal Policy Tracker <\/span>have a <\/span>robust coal policy in terms of no expansion, and <\/span>an <\/span>exclusion of <\/span>new thermal mines, plants, and infrastructure.<\/span><\/span><\/p>\n<\/div><\/div><\/div>

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Assuming that any early coal retirement under this initiative would rely on replacement with renewables and not lead to gas conversions, we welcome this announcement<\/span>. But we need to be careful that it does not <\/span>provide<\/span> counter-productive carbon credits which would incentivize private stakeholders not to reduce carbon in other sectors. <\/span><\/span>Nevertheless,<\/span><\/span> we are used to such high-level pledges that are never fully delivered. The challenge will be to make sure that <\/span>countries<\/span> adhere to their promises and <\/span>regulate financial institutions to stop financing coal<\/span>. While we welcome F<\/span>rench <\/span>leadership<\/span> in this overall initiative, we recall the<\/span><\/span> commitment taken five years ago by the French economy minister Bruno Le Maire about legislating to secure the adoption of coal phaseout policies by all French financial institutions \u2013 a pledge that has never been followed in practice. (<\/span>3<\/span>)<\/span><\/span>\u00a0<\/span><\/i><\/p>\n<\/div>

Lucie Pinson, Executive Director at Reclaim Finance<\/span><\/span>
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Contacts:<\/h2><\/span>
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