Asian power pivot is a warning to Australia: sticking to coal is bad for the economy
COP26 climate talks are just a few weeks away, and the wave is now turning to global coal-fired power grants. Australia's results cannot be ignored.
China, Japan and South Korea have been the three largest government sponsors of overseas coal projects, investing billions of dollars in new coal-fired power plants across Asia-Pacific. This has fueled a wave of coal projects in Bangladesh, India, Indonesia and Vietnam.
But in recent months, the three countries that sponsor each country have made public statements about reducing or eliminating taxpayers' support for new international powers. Following a pledge in May this year by the G7 nations, including Japan, to stop paying for overseas coal-fired power generation by the end of 2021.
In Australia, the text is on the wall - the earth is far from the power of coal, and we should do the same.
Major coal suppliers :
Between 2010 and 2019, Japan sent about US $ 2.98 billion in foreign investment to the coal-producing generation of Asia-Pacific.
For example, Japan Bank for International Cooperation supported the construction of the PLTU Tanjung Jati B power station in Indonesia, as well as a group of independent lenders.
Governments lending to overseas coal-fired power projects say it helps to end energy poverty, or energy shortages in developing countries. But achieving the goals of reducing carbon emissions is in part dependent on the reduction of coal-fired power generation pipelines, including in Southeast Asia.
So while investing in coal projects in developing countries can increase access to energy in the short term, the effects of climate change are much worse. In addition, the risk that these assets will be "in crisis" appears to have been not systematically included in the evaluation of the project in the host countries, or in lending countries.
This means that the value or profitability of these assets may decrease, especially as the host countries adopt more stringent climate policies. The second driver of overseas coal financing to provide companies from a country that finances international competition.
Government-sponsored bodies can provide direct loans, insurance and guarantees, known as export loans to foreign buyers. This could help improve competition for outsourcing of infrastructure, such as energy crop technology, from companies in the funding country.
China's aggressive use of export credits to support its companies abroad, including in the coal industry, has been one of the reasons why countries like Japan and South Korea continue to do the same.
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