France and the United States are set to suggest a prohibition on private financing for coal-fired plants during the 28th Conference of the Parties (COP28)

22 Nov, 2023

France and the United States are set to suggest a prohibition on private financing for coal-fired plants during the 28th Conference of the Parties (COP28)

In a groundbreaking move, France, backed by the United States, is set to advocate for the cessation of private financing for coal-based power plants at the upcoming UN climate conference, COP28, scheduled from November 30 to December 12. This initiative, known as the "New Coal Exclusion Policy," aims to restrict financial support from private institutions and insurance companies, a plan not previously disclosed.

France's Minister of State for Development, Chrysoula Zacharopoulou, conveyed the proposal to India, terming it a crucial step to limit global warming. The strategy involves the Organisation for Economic Co-operation and Development (OECD) establishing standards for coal-exit, enabling regulators, rating agencies, and non-governmental organizations to monitor financing from private firms.

The plan has garnered support from the US, European Union, and Canada, emphasizing the urgency of phasing out coal, identified as the "number one threat" to climate goals. Concerns persist about international private financing contributing to significant coal capacity expansions, particularly in developing nations like India and China.

Approximately 490 gigawatts of new coal capacity, equivalent to one-fifth of the existing global capacity, is in the planning or construction stages, with a primary focus on India and China, according to officials. Rick Duke, Deputy US Special Envoy on Climate Change, underscored the imperative for a swift transition to clean power, given the 500 gigawatts of new coal-fired plants in the global pipeline.

Member countries remain divided on emission abatement technologies, especially in developing nations where commercial-scale options are yet to evolve. India, where 73% of electricity is coal-generated, resists setting a deadline for fossil fuel phase-out at COP28, advocating for a focus on emissions reduction from various sources. The nation may also encourage developed nations to aim for carbon negativity by 2050 instead of carbon neutrality.