China pledges to halt funding of overseas coal-powered projects: Its effects on China and other countries

The year of 2021 has been a remarkable year for the Chinese. With the
centenary year of the communist party, and 50th anniversary of the restoration
of the local seat of Peoples’ Republic of China in the United Nation. Following
the path started this year by Japan and South Korea, President Xi Jinping
pledged at the UN General Assembly that China would stop funding new coalfire power projects overseas.
Xi, in his approach to maintain harmony amongst human and nature,
green and low carbon economy- peak co2 emission before 2030 and achieve
carbon neutrality by 2060 and promised to make every effort to meet these
goals. It will further step up in supporting developing countries in order for them
to developing green and low carbon energy and therefore decided to stop
building any new coal-fired projects abroad. China is currently using its Belt and
Road Initiative in order to build and finance various projects of infrastructure
that include power plants, roads, railways, highways and ports with an aim to
connect 70 countries across Asia, Africa, Europe via a “New Silk Road.” Now,
putting numbers in mind, this pledge by China will impact 44 nations around the
world running a capacity of 42,200 megawatts (650 average homes can be
supplied by each MW of a coal power station’s capacity). Furthermore, this
pledge shall eliminate 30 million tonnes of yearly coal demand saving around
$130 Billion, with $50 Billion in construction and $80 Billion in fuel and
operational expenses over the lifetime. This particular announcement serves as
good news for climate change activists all around the globe but Xi did not
disclose much on this topic. What may be concerning all the activists is to
ascertain when shall this pledge taken come into force, whether China even
though deciding to stop funding new coal-fire power projects would finance
other coal plants in other nations. However this pledge shall affect countries
that import majority of their coal from China thereby having a colossal global
impact. We are talking about Bangladesh, Kenya, Madagascar, Mongolia shall
be looking at complete elimination and 90% reduction of proposed coal plants.
Africa shall too be affected as this pledge will be reducing the proposed coal
power in the continent by 50%.
This pledge was not a surprise for a lot many people because Pakistan
already pledged to stop commissioning new coal plants an entire year ago.
Japan and South Korea too took the same steps earlier this year. Even so,
shifting the paradigm of this sector from coal to low carbon energy sources is
also not going to happen immediately. We are looking at a blurry line depicting
the timeline of enforcement of this pledge, whether this pledge will include new
power plants approved but not yet built or not.
However, it is pertinent to gauge that though this is a positive step taken
by the largest emitter of carbon emissions, China is yet a long way away from
doing away with its domestic usage of coal. China burns about half of the coal
burnt on Earth fairly give a picture of how reliant China is on coal. More than
57% of energy investments of China overseas channeled through the Belt and
Road Initiative were in hydro, solar and wind projects, as told by the
International Institute for Green Finance. Chinese Coal made around 26.85%
of those investments.
China’s pledge comes as a blow to various countries dependent on
overseas financing for their coal projects which was done by China up till now.
Many coal-powered projects may be cancelled or delayed which we shall only
know which further developments brought to light in this domain. In drawing
things to a close, the method that China will now adopt to accomplish its new
goals will be recognised in the time forward when specific laws, rules and
regulations are adopted to minimize and eventually eliminate the use of coal
and convert China into carbon neutrality by 2060.