China Pledges to Stop Financing New Coal Projects Abroad

The nation funds more than 70% of global coal-fired power plants.

green channel unload coal
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When faced with climate accountability on a national level, many citizens fall back on the same argument: “But what about China?” It's a retort that will be familiar to anyone who has advocated for renewables or lower carbon policies. That response has just essentially been blown out of the water.

In his statement to the United Nations General Assembly yesterday, Chinese President Xi Jinping delivered a single sentence that caused climate activists and advocates around the world to do a double-take: “China will step up support for other developing countries in developing green and low-carbon energy things and will not build new coal fired power projects abroad.”

That’s right—no new coal. This could impact 40 gigawatts-worth of coal-fired projects currently in pre-construction, according to think tank E3G.

Xi's pledge comes following similar announcements earlier this year from Japan and South Korea. The Guardian reports the three nations—China, Japan, and South Korea—collectively "were responsible for more than 95% of all foreign financing for coal firepower plants, with China making up the bulk." China alone funds more than 70% of global coal-fired power plants, according to Green Belt and Road Initiative.

“We’ve been talking to China for quite some period of time about this. And I’m absolutely delighted to hear that President Xi has made this important decision," U.S. climate envoy John Kerry said in a statement Tuesday. "It’s a great contribution. It’s a good beginning to the efforts we need to achieve success in Glasgow.”

Political statements can often play a little fast and loose with definitions. And almost everyone who commented on this yesterday stated they’d be waiting to see what China means by "new." There's also the fact that this pledge, which is expected to impact $50 billion investment in projects across Asia and Africa, doesn't account for domestic coal: China's domestic coal program is reportedly growing. But the fact that China, the single biggest backer of new coal capacity worldwide, is signaling a new path is a much-needed glimmer of hope in this often frustrating fight. 

Ketan Joshi, an Australian renewable energy expert and author of Windfall, took to Twitter to emphasize quite how groundbreaking this could be: 

Meanwhile, Michael Davidson, an academic who studies the politics of decarbonization in China, offered some much-deserved credit to those who have worked hard to make this happen, both inside and outside of China. 

A factor that may be playing into this news is the catastrophic and deadly flooding that China was dealing with just a few months ago. After all, early-stage climate negotiations in previous decades were, somewhat rightly, held up by the historical inequities in emissions. We are now facing a situation where the sheer urgency of the crisis may focus the need for action from all parties. This, combined with the rapidly falling costs of renewables, may just change the equation of where China chooses to invest its money moving forward. 

A climate story about China is not just a story about China these days: It is about the direction that the whole world is headed in. That’s why some of the folks celebrating this shift the loudest were organizations like Groundworks, which seeks to promote environmental justice on the continent of Africa. Here’s how they described the news in a statement, delivered from the 3rd African Coal conference that happened to coincide with the announcement: 

“The meeting sees this as a victory for the thousands of community activists in Lamu, Kenya; Sengwa and Hwange, Zimbabwe; Ekumfi, Ghana; Senegal; San Pedro, Ivory Coast; Makhado, South Africa and the many other sites here and across the Global South who have challenged their governments and China, and said no to coal.”

They were careful, however, not to let China off the hook for its broader economic policies and its impact on vulnerable communities, both in Africa and beyond. The statement ends with an unequivocal demand that China steps up and choose a different path than previous global powers: 

“We call on China to be a responsible partner in supporting a renewable phase in in Africa, especially one that will respond to the basic needs of people first instead of the continent’s big mining and smelting corporations. We insist that next-generation solar, wind, pumped-storage and tidal power be based upon democratically-run and socially-owned energy, rather than the extractivist, privatised character of the fossil fuel industry that has ruined so many parts of Africa and the world through its anti-democratic war on people and their environments.”

There is still indeed a lot of work to be done and there are still a lot of unknowns in this equation. There is likely also a lot of accountability to be demanded. But yesterday was unequivocally a good day for those of us who would like to see the world take a different path. 

Now let’s keep pushing to make sure it happens.