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Add to Preferred SourcesSome countries that participated in the world’s biggest climate event, COP26, this November committed to phase out coal by 2030 or 2040, depending on their level of economic development. Others such as China and India decided only to phase out its use but did not specify any exact deadline. Against this background, the prospects of giving up the most pollutant fossil fuel seem rather controversial.
State of things
At COP26, 40 states committed to phase out coal by 2030 or 2040. The commitment comes as today 30% of global energy is generated from coal, a highly pollutant fossil fuel. The top energy consumer and producer is China which is still building new coal-fired power plants and in 2020 was responsible for the construction of three-quarters of new coal capacity. Apart from this, China was the only big economy where, in 2020, coal demand increased. India is the second-largest coal consumer, generating 55% of the energy used from coal, mostly to produce electricity. Although there are still many other countries that rely on coal, the number of coal-fired projects has recently been shrinking. This trend is visible in the US and OECD countries. Furthermore, the top 20 coal-consuming countries, including Indonesia, Japan, and Vietnam, committed to completely phase out coal use.
Why is quitting coal that important?
According to the International Energy Agency (IEA), coal-fired power generation continues to be the single largest emitter being responsible for about 41% of all global emissions coming from fossil fuels. Coal emits the most CO2 per unit of heat or energy produced, followed by oil and natural gas, thus it is the least efficient.
Apart from CO2, coal combustion emits sulfur dioxide which contributes to acid rain and respiratory illnesses, nitrogen oxides which create smog and thus respiratory illnesses, and mercury and other heavy metals which have been linked to both neurological and developmental damage in humans and other animals.
Withdrawal of public financing for coal projects
Another important decision concerning coal that was made during COP26 was the commitment of 25 countries, including the G20, to stop financing fossil fuel projects overseas including coal projects with effect from 2022. Between 2018 and 2020 alone, the G20 channeled US$8 billion to finance coal projects abroad. However, the pledge concerns only public financing which means that it will still be possible to finance coal projects through the private sector. As of today, the largest public financier of coal-fired projects overseas is China. However, it produces 10 times more energy from coal domestically compared to the energy generated from the coal projects it funds in other countries. Overall, the number of coal projects is falling and private capital is also increasingly reluctant to finance new projects as investing in renewables is more attractive and financially beneficial.
Is that enough?
Halting public financing for fossil fuel projects is a necessary step in an attempt to keep global warming at 1.5 degrees. However, experts have warned that this will not be enough as in order to meet the global warming target the world needs to put an end to coal use completely. Therefore, they pointed out the need to:
Experts emphasized that for the world to get close to the target of 1.5 degrees global warming, every country would have to phase out coal plants by 2040.