Transition from coal to clean energy: how countries responded to COP26

The UK climate presidency of COP26 announced on November 3 a declaration of a global transition from coal to clean energy. clean energy use.

Contrary to expectations, the majority of countries did not instantly come forward to sign the declaration – only 47 countries signed the declaration until November 5. The main countries that have signed the agreement are Canada, Belgium, Chile, Denmark, Egypt, Germany, France. , the Maldives, Nepal, the Netherlands, Korea and Great Britain.

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Among the major coal producing and using countries, Indonesia and Vietnam signed the declaration. China, Australia, India, Japan and the United States have yet to sign it. Countries are expected to come forward to sign the declaration in the coming years.

Sadly, Bangladesh did not show up to sign the deal, although it did show a strong political stance against coal-fired electricity at COP26.

What is in the declaration?

The declaration specified four commitments on coal-fired power generation and the promotion of clean energy. In the background, the statement clarified that coal-based power generation is the most important reason for the temperature rise and recognizes the imperative to step up the deployment of clean energy.

The four commitments are as follows: (a) rapidly step up the deployment of clean energy production and energy efficiency measures to be implemented thanks to the support of the Energy Transition Council (CTE); (b) rapidly scale up technologies and policies to move away from relentless coal-fired power generation by 2030 for major economies and by 2040 for other economies through the Powering Past Coal Alliance (PPCA); (c) stop issuing permits, new construction and new government support for new coal-fired power projects relentlessly through initiatives such as No New Coal Power Compact; and d) strengthen national and international efforts to provide a solid framework of financial, technical and social support to affected workers, sectors and communities.

The declaration, if accepted by countries as part of their nationally determined contribution framework, may well be facilitated by the phasing out of coal and could provide a solid foundation for clean energy. Each of the commitments was supported by international institutional arrangements, which could extend support to countries aspiring to fulfill their commitments.

For example, the ETC will work until at least 2025 to support countries in eight areas: developing integrated energy planning; develop bankable and large-scale renewable energies; help countries in transition to coal and fossil fuels to retire their coal-fired power plants; develop policies and instruments to attract more private investment in clean energy; modernization of domestic networks to integrate renewable energies; access to technologies for renewable energies; and supporting a just transition through a social dialogue mechanism that would help create new quality jobs for coal-dependent regions.

Likewise, the Powering Past Coal Alliance (PPCA) is working to secure commitments from governments and the private sector to phase out coal-fired power. At the same time, it encourages a global moratorium on building new coal-fired power plants, shifting investments from coal to clean energy, and achieving coal phase-out in a sustainable and economically inclusive manner.

Bangladesh is associated with the ETC, but it is not a member of the PPCA. Therefore, Bangladesh could seek financial and technical support from ETC to phase out coal-fired energy and promote clean energy.

Commitments to stop financing fossil fuels abroad by 2022

A group of 20 countries and multilateral development banks (MDBs) have pledged to stop financing fossil fuels abroad by the end of 2022. This pledge not only includes stopping funding for the production of fossil fuels. electricity from coal, but also electricity production from oil and gas. More importantly, this includes the diversion of funds towards the development of clean energy abroad.

The countries that have signed the pledge are the United States, Canada, Denmark, Italy, Finland, Costa Rica and a number of MDBs, including the European Investment Bank and the Development Bank of East Africa. Major Asian countries investing in fossil fuels overseas, such as China, Japan and South Korea, have yet to sign the pledges. However, China recently pledged to stop investing in new overseas coal-fired power generation, which partially covers its pledge.

Since China, Japan, Korea and India are major investors in the generation of fossil fuel-based electricity in Bangladesh, failure to meet their commitments when signing the commitments would make it difficult for Bangladesh to switch from fossil fuel-based electricity generation financed by these countries. In addition, Bangladesh would lose the opportunity to shift the financing of these countries from fossil fuels to clean electricity generation.

According to one estimate, if the commitment of countries and MDBs materializes, approximately $ 18 billion could be made available for investments in clean energy projects globally. Despite the funding opportunities, the funding required for clean energy for net zero carbon emissions would be much higher. At least $ 2-4 trillion per year would be needed for low-carbon technologies until 2050.

Commitments to reduce domestic consumption of coal or fossil fuels

While countries make commitments on their role in the use of coal and fossil fuels or in overseas investments, in most cases they are reluctant to make commitments on their domestic use of coal.

China has expressed willingness to reduce the use of coal by 1.8 percent for power generation over the next five years. Similarly, Indonesia, one of the largest coal producers, has pledged to end the use of coal by 2040. Under this mechanism, it plans to withdraw a number of coal-fired power plants operational with credit assistance from the Asian Development Bank.

The Philippines would withdraw 50% of its coal-fired power plants by 2030-2035. The AfDB, as part of its Energy Transition Mechanism, would provide a seed fund to raise low-cost capital for these countries to accelerate the withdrawal of coal-fired power plants in Indonesia and the Philippines. Such a funding mechanism could work in Bangladesh to allow for the early retirement of coal-fired power plants that are currently in operation or under construction.

Commitments made by Bangladesh

The Prime Minister of Bangladesh told the Climate Summit that plans to build a total of 10 coal-fired power plants have been scrapped.

According to the Bangladesh Working Group on External Debt, Bangladesh has nine other coal-fired power plants that are either in operation or under construction, with a combined generating capacity of 9,875 megawatts.

The two plants in operation, Barapukuria and Payra, would generate 1,845 MW. The remaining seven plants with a potential generating capacity of 8,030 MW are in various stages of construction.

Among the factories under construction, three grew at a considerable level: Rampal (80%), Matarbari (60%) and Banshkhali (55%). The rest made little or no progress, with implementation ranging from 0 to 35%.

The projects are implemented in the public or private sector with the financial support of a number of Asian countries, including Japan, China and India.

If coal-fired power plants were phased out, Bangladesh could take a phased approach. As part of the approach, factories that have made limited progress (five factories) could be targeted for retirement at the construction stage. The rest of the factories could be considered for phased retirement with the availability of financial support from MDBs or development partners.

Bangladesh could rely on the Energy Transition Council to help provide technical support to phase out coal-fired power plants. As China recently pledged to stop overseas investing in new coal projects, it is expected that China-backed Bangladeshi projects will be phased out in the coming years.

In the case of other coal-fired power plant projects, Bangladesh could look to Indonesia or the Philippines to seek funds from the ADB to withdraw the projects. Bangladesh could seek technical and financial support from Japan and India for the construction of renewable energy projects.

It is better to put more emphasis on national initiatives to reduce coal-fired electricity generation and improve clean energy. In this case, the support of neighboring countries will complement our national initiatives.

The author is research director of the Center for Policy Dialogue.

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