COP26 began in Glasgow, Scotland last week with several goals. Although phasing out coal was not an explicitly listed objective, it was on the agenda of many parties. This is not surprising, considering nearly 90% of all known coal reserves must stay in the ground to give humanity a fighting chance to limit global warming to 1.5 degrees over preindustrial levels. Or, put simply by the International Energy Agency, all new fossil fuel development must end after this year.
First, some good news:
3 countries, China, South Korea, and Japan, who together represent more than 95% of all foreign coal financing, announced earlier this year they would end international coal projects by the end of this year.
20 countries and several development banks signed the Statement on International Public Support for the Clean Energy Transition at COP26, committing them to ending new direct public support for foreign coal projects and diverting funds to clean energy efforts.
40 countries, including 23 new signatories, agreed to the Global Coal to Clean Power Statement at COP26, which phases out all investment in new coal power generation both domestically and abroad.
These long-term pledges signal a tectonic shift on the horizon that is informed by what we are learning about energy markets today: in many places, coal cannot compete.
Now, some not-so-good news:
If you look closely, there’s reason to be disappointed in each of these pledges: there are important countries notably absent from one or all of these commitments and in some cases, the timeframes for reaching important milestones have been pushed back or left ambiguous (at least for now).
But more importantly, these commitments expose a clear tension between international climate agreements and domestic energy policy agendas.
United States: President Biden tried to smoothly return to negotiations after the U.S. was absent for several years. And while the U.S. did not sign the Global Coal to Clean Power Statement, it did pledge last week to end overseas coal financing. In contrast, at home the Biden administration is struggling to pass a domestic policy agenda through a polarized congress that would halve emissions by 2030 (though a fair share would actually require four times the reductions). At the same time, he is appealing to OPEC to increase oil production to meet demand and price increases at home.
China: Xi Jinping’s climate commitment for China includes an ambition of reaching carbon neutrality by 2060. Yet the country finds itself in the throes of an energy crisis and soaring electricity prices. In the face of rolling blackouts, the government has ordered more output from state-owned coal mines as it tries to balance the power grid.
India: Last week for the first time, Prime Minister Modi committed that half of India’s energy would come from renewables by 2030 and that the country would reach net zero by 2070. Meeting these targets would require bold and immediate action. Yet at the same time, India has more than $60 billion in coal-fired power plants under construction today.
China, India, and the United States, albeit in extremely different circumstances, remain the top three global coal producers today. They collectively represent real climate ambition and are each developing policy pathways to achieve their clean energy goals. But the reality is that in addition to negotiating long-term solutions to long-term global problems, the same leaders need short-term solutions to short-term domestic problems—especially as far-off climate change consequences loom ever more present.
