Supporting developing countries . . .
China has pledged to continue financing coal power projects abroad, including through its Belt and Road Initiative, even though Beijing recently slashed its carbon emission goals – including hitting peak carbon emissions before 2030 – vowing to become carbon neutral by 2060. Li Gao, head of the climate change office in China’s Ministry of Ecology and Environment, suggested that coal plants would be built to very high standards and would facilitate better lives and livelihoods for people in the developing world. But even the cleanest coal-fired power plant cannot compare to renewable power generation in terms of environmental footprint. The environmental organization End Coal estimates China is supporting close to 240 coal power projects in 25 countries with up to US$50 billion in financing.
Mixing messages . . .
At last week’s climate summit convened by U.S. President Joe Biden, Chinese President Xi Jinping said, “[w]e must abandon development models that harm or undermine the environment, and must say no to short-sighted approaches of going after near-term development gains at the expense of the environment.” But critics see Beijing’s financial backing of coal power outside China precisely as the type of approach that prioritizes short-term economic gain at the expense of environmental and climate sustainability. At the climate summit, Xi also said China would curtail its growth in the use of coal over the next five years and begin phasing coal out of its energy mix in 2026.
Finance for a green future . . .
China is hardly alone in receiving criticism for making environmentally-friendly policy pledges while supporting economic activity contributing to climate change. Successive Canadian governments, for example, have been criticized for supporting oil pipelines while simultaneously setting ambitious carbon emission reduction goals. Financing the transition to renewable and sustainable power is critical for achieving national and global targets under the Paris Agreement. This is an area in which Canada – with several well-resourced pension funds and a robust, globally integrated financial sector – could well play an outsized leadership role.