China calls for greater French investment and a fair business environment

21 Nov, 2023

China calls for greater French investment and a fair business environment

France, supported by the United States, is set to propose a halt to private financing for coal-based power plants during the upcoming UN climate conference, COP28, from Nov 30 to Dec 12. The plan, known as the "New Coal Exclusion Policy," was shared with India earlier this month and is expected to generate tensions at the summit, with India and China opposing restrictions on coal-fired power station construction vital for their energy needs.

Chrysoula Zacharopoulou, France's minister of state for development, conveyed the plan to India, targeting private financial institutions and insurance companies. The proposal, not previously reported, aims to curb private funding for coal power, aligning with French President Emmanuel Macron's priority during COP28 to accelerate global efforts to combat climate change.

The plan envisions the Organisation for Economic Cooperation and Development (OECD) establishing coal-exit standards for private finance firms. These standards would be tracked by regulators, rating agencies, and non-governmental organizations, signaling a shift in the global approach to financing coal projects.

The US, European Union, and Canada have been advocating for a plan to expedite the phase-out of coal, identified as the "number one threat" to climate goals. The concern lies in ongoing private international financing supporting substantial additions to coal capacity, particularly in developing nations.

The proposal highlights that around 490 gigawatts of new coal capacity, equivalent to one-fifth of the existing global capacity, is planned or under construction, predominantly in India and China. Rick Duke, Deputy US Special Envoy on Climate Change, emphasized the need for a rapid transition to clean power, underscoring the global challenge of 500 gigawatts of new coal-fired power plants in the pipeline.

Member countries remain divided on emissions abatement technologies, especially those not yet commercially viable for use in developing nations. India, where 73% of electricity is coal-generated, intends to resist setting a deadline for a fossil fuel phase-out at COP28. Instead, it may advocate for a focus on reducing carbon emissions from other sources and urge developed nations to achieve carbon negativity by 2050 rather than carbon neutrality.