Climate change: China should bankroll renewable energy transition in coal-dependent countries, analysts say

Name: Climate deal to ‘phase down’ coal reached at COP26 as nations seek to avert climate disaster
Uploaded: 2021-12-07T07:30:11.000Z
Duration: 3 min 7 s
Description: Climate deal to ‘phase down’ coal reached at COP26 as nations seek to avert climate disaster

Japan is supporting energy transition in Southeast Asia through the Asian Development Bank and China will follow, analyst says

As Japanese and Chinese investors have reaped the benefits from over investment in Indonesia’s coal-powered energy sector, ‘it is only logical for them to be part of the solution in supporting’ its energy transition

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Coal barges in Indonesia’s East Kalimantan province. The country is the world’s third-largest coal producer and largest exporter. Photo: Reuters

Eric Ng

Published: 3:30pm, 7 Dec 2021Updated: 4:18pm, 7 Dec 2021

China, which has pledged not to build more coal-fired power plants overseas, should financially help other coal-dependent developing countries such as Indonesia – where it has been the biggest foreign project financier – transition to renewable energy, analysts said.

Indonesia, the world’s third-largest coal producer and largest exporter, will need to invest US$150 billion to US$200 billion per year in low-carbon energy over the next nine years to meet its goal of reaching net-zero carbon emissions by 2060, a government study estimated in October.

“Indonesia does not have this kind of money,” said Frank-Jurgen Richter, chairman of the Zurich-based think tank Horasis and former director of the World Economic Forum. He was speaking during an interview on the sidelines of Horasis’ annual Asia meeting late last month.

“Japan, through the Asian Development Bank, is supporting energy transition in Southeast Asia, but it is not enough to bridge the huge funding gap. I expect China to follow. Otherwise, it would send a wrong signal on China’s influence in the region. The question is – to what extend and at what speed,” he said.

Japan has vowed to end public financing of overseas coal projects by year-end, and has committed US$70 billion in public and private money between this year and 2025 to fund decarbonisation projects in low and middle-income nations to mitigate climate change.

03:07

Climate deal to ‘phase down’ coal reached at COP26 as nations seek to avert climate disaster

Chinese President Xi Jinping pledged in September in a speech to the United Nations General Assembly that China would stop building new coal-powered plants abroad, and step up support for other developing countries to build low-carbon energy projects. It is unclear whether the pledge covers coal energy projects already in the construction and planning stages.