COP26: Countries sign pledges to phase out coal and fossil fuel finance

These articles were written by Fiona Broom and originally published on 4 November in SciDev.Net, the media partner of the Global Landscapes Forum at COP26.

Twenty countries and five international finance institutions have today pledged to end fossil fuel finance by the end of 2022. These are primarily wealthy countries, but the list does include some developing countries that are recipients of fossil finance.

“This is a historic commitment,” says Jean Su, energy justice programme director and senior attorney at the US-based Center for Biological Diversity. “Over the course of the last few years we’ve seen different countries commit to phasing out coal finance, but this is the first political commitment to phase out oil and gas finance as well.

“Among those signatories are the United States and Canada, two historic, highly financed countries who fuel coal, oil and gas. And we also have first movers like Costa Rica and Mali. And just ten minutes ago we had the European Commission sign on as well.”

The five development institutions include the European Investment Bank and the East African Development Bank.

“If implemented, this commitment will shift US$18 billion a year from fossil fuels to renewable energy. This is a very welcome development,” added Su.

That ‘if’ that Su mentions is the key sticking point here. Observers say that COP26 country delegations are pact-happy, but the question of whether these declarations materialise into action will remain until pledges are fulfilled.

Su also pointed out that difficulties faced by developing countries in securing finance for new energy projects that may be considered ‘high risk’ makes the pledge “woefully insufficient in and of itself”. The commitment only relates to new fossil fuel projects – existing projects can continue – and unabated fossil fuel projects are not included, she said.

“That means that carbon capture and storage and other fossil fuel projects that have some type of ‘technical fix’ are still allowed,” Su said. “It’s very similar to the false promises on net zero commitments by 2050.”

“At the same time though, if we want to give the benefit of the doubt, there is also a push for clean energy, especially clean energy manufacturing.”

Su said that these countries viewed domestic and international investments in clean energy technology as potential boons for their own economies.

The gradual end of coal

It’s Energy Day at COP26, with coal power top of the agenda.

The UK government, hosting the UN climate summit in Glasgow, says 190 countries and organisations have signed a deal to phase out coal power and end support for new coal power plants.

Vietnam and Chile are among 18 countries making this commitment for the first time as they put their names to the new Global Coal to Clean Power Transition Statement.

The statement commits the world’s major economies to phasing out coal in the next 20 years, and the rest of the world to doing so in the next 30 years. Countries must also rapidly scale up deployment of clean power generation as part of the deal, and ensure the transition from coal benefits communities, the UK government says.

The UK’s minister for Africa, Vicky Ford, says transition to clean energy will create hundreds of thousands of green jobs across the developing world. We’ll bring you reaction to this later in the day.

At yesterday’s finance meetings, Indonesian finance minister Sri Mulyani Indrawati said that replacing coal in Indonesia would require massive infrastructure projects, making the role of long-term financial support critical. Indrawati estimated it would cost US$270 billion just to meet Indonesia’s commitments under their national climate plan, but that would not take the country to net zero.

It is expected that Indonesia could announce plans to bring forward its coal deadline, from 2056 to 2040, with financial support.

Among the finance commitments so far this week, $10 billion of philanthropy-led financing has been pledged to support developing countries deploy clean power under the Global Energy Alliance for People and Planet, plus $8.5 billion for the South Africa Just Energy Transition Partnership, according to the UK government. It says the Philippines has also agreed a new partnership with the Asian Development Bank to support the early retirement of existing coal plants.

Further financing announcements are expected today.

The Powering Past Coal Alliance is hosting a mainstage event later today to showcase new commitments to end coal power generation by governments and businesses. Discussion will include the important role of non-state actors in driving the transition from coal to clean energy. The alliance, formed in 2017, is a coalition of national and sub-national governments, businesses and organisations working to advance the transition from unabated coal power generation to clean energy.

Indigenous raise finance concerns

Indigenous groups from Brazil gathered at the indigenous peoples’ pavilion yesterday (Wednesday) to voice their concerns about climate change financing. They said it would be useless to have more funds if the bureaucracy that hinders international resources from reaching indigenous organisations is not broken down.

“Actions to mitigate climate impacts in Brazil have not been implemented due to a lack of resources and will on the part of the Brazilian government,” said indigenous representative Marcos Avilquis Campos.

At the event, Torbjorn Gjefsen, of Rainforest Foundation Norway, spoke about the Falling Short Report, an assessment his foundation made of the forest management funding that has been dedicated to indigenous groups and local communities.

“Between 2011 and 2020, these groups received approximately $2.7 billion from bilateral and multilateral donors as well as private philanthropies,” Gjefsen said. That represents less than one per cent of mitigation and adaptation funding.

Don’t forget the farmers 

Farmers, scientists and representatives of farmers’ organisations also participated in a panel at COP26 yesterday to present a guide for public policies in the agricultural sector.

“The first COPs did not even include farmers,” said Theo De Jager, president of the World Farmers’ Organisation. Since then, he says, the agricultural sector has struggled to have a seat in the climate discussions. It has been judged as if it were the same as the hydrocarbon sector, when in fact “farmers are not part of the problem, we are part of the solution”, he said.

For that solution to be realised there must be public policies that include farmers from the ground up, said De Jager, adding: “Invite us to the kitchen of climate solutions.”

Colombian Ana María Loboguerrero, head of global policy research at the CGIAR Research Program for Climate Change, Agriculture and Food Security (CCAFS), presented a toolkit for implementing policies that include the living conditions and perspectives of farmers.

“We need public policies that put farmers at the centre. If they don’t, they will fail,” said Loboguerrero.