G7 agrees to stop overseas funding of coal to limit global warming – Financial Times
G7 countries have vowed to stop all new financing for overseas coal projects by the end of this year, in a breakthrough in the global effort to fight climate change.
“International investments in unabated coal must stop now,” the G7 environment ministers, including the Biden administration’s John Kerry and the UK’s Alok Sharma, said in a communique on Friday. They pledged to take “concrete steps” to end new direct government support for international thermal coal power generation, where no effort is made to capture the emissions.
The strongly worded statement sets the stage for more climate pledges when G7 country leaders, including British Prime Minister Boris Johnson and US President Joe Biden, meet in Cornwall next month.
“This commitment sends a clear signal to the world that coal is on the way out,” said Sharma, the president of the COP26 climate summit. “We have all agreed to accelerate the transition away from dirty coal capacity.”
The G7 countries also pledged to make “accelerated efforts” to limit global warming to 1.5C relative to pre-industrial times — a major shift from previous statements that focused on limiting warming to 2C, a slightly easier target.
“This is the first time we have come together with a public statement about 1.5C,” said Kerry, the US climate envoy, who urged all the world’s major economies to follow suit.
The 2015 Paris accord binds all signatories to limit warming to “well below” 2C, and also says that 1.5C — seen as a stretch target — would be even better.
“This is a watershed moment . . . There’s a tremendous difference between 1.5C and 2C,” said Alden Meyer, a senior associate with think-tank E3G.
However the ministers failed to reach any concrete agreement on climate-related aid to developing countries, which is shaping up to be one of the thorniest issues at the UN COP26 summit in November. They reiterated the goal of mobilising $100bn annually by 2025, which remains unmet, but did not outline plans for helping developing countries financially beyond 2025.
There had been concerns that the G7 might be unable to make a clear commitment to end international coal financing if Japan did not support the pledge, as it was seen as the most reluctant due to its reliance on coal.
On Friday, Kerry noted the “work that we did with Japan, and Japan’s important steps and important effort to find unity on the road ahead”.
The move increases pressure on China as a heavy consumer of coal. The communique also came just days after the publication of the International Energy Agency’s landmark report that called for an end to all new coal, oil and gas exploration.
Kerry said the group believed “very deeply” in the importance and significance of the IEA report.
Ministers said they would phase out new financing for international fossil fuel energy projects, “except in some limited circumstances.” But they noted that natural gas may be needed to help with the transition to cleaner fuels “on a time-limited basis”.
Rebecca Newsom, head of politics at Greenpeace UK, said the action on fossil fuels “needs to go much further, ending all new coal, oil and gas projects at home as well as their financing internationally”.
The commitment to end overseas coal funding, she added, “leaves China isolated globally with its ongoing international financing for the most polluting fossil fuel”.
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