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A delegate is seen at the G20 environmental and climate sustainability ministers’ meeting in Chennai on July 28, where ministers failed to agree on targets to reduce emissions and accelerate the energy transition. Photo: AFP
Opinion
Vibhuti Garg
Vibhuti Garg

Amid global climate crisis, G20 nations need to commit to phasing out coal

  • Building new coal plants locks the region into higher carbon emissions and energy costs for decades
  • A G20 ‘no new coal’ pledge can be the first critical step to averting climate disasters and building the green energy infrastructure the region needs
Vibhuti Garg
Vibhuti Garg
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After a summer of unprecedented heatwaves, intensified by climate change, Group of 20 leaders are set to meet this weekend for the G20 summit in New Delhi, India. UN Secretary General Antonio Guterres has warned that time is running out as the world inches closer to meltdown, and called on all countries to accelerate action to cut emissions.
But while the G20 is responsible for around 80 per cent of global carbon emissions, and was founded to enable the necessary coordination to prevent world crises, leaders are not expected to deliver any substantive progress on emissions reductions at the summit.
Fast-growing G20 heavyweights, including China, India and Indonesia, have argued that the cost of aggressively cutting emissions is simply too high and stiff targets would hamper economic development. But these arguments are getting weaker. The cost of onshore wind and solar power has fallen below the cost of coal power, with offshore wind on a par with coal, according to BloombergNEF analysis.

A report by energy think tank Ember, the Centre for Research on Energy and Clean Air, and the Institute for Energy Economics and Financial Analysis found that solar generation helped seven Asian countries avoid at least US$34 billion in fossil fuel costs in the first half of 2022.

Governments across the region recognise that the development of renewable energy is the key to future prosperity. The Indian government plans to add 250GW of renewable energy capacity in the next five years to achieve its target of 500GW of clean energy by 2030.

This year alone, China aims to add a whopping 160GW of solar and wind energy capacity. It aims to bolster its position as a global renewable energy leader and is on track to reach its 2030 goal of 1,200GW wind and solar capacity five years early.

The construction site of a solar energy project is seen in Taizhou city, Zhejiang province, on August 17. At the end of July, the installed capacity of clean energy in Zhejiang had reached 57.51 million KW, surpassing that of coal power units for the first time. Photo: Xinhua
Yet despite leading the world on renewable energy development, regional governments, worried about supply security in the face of growing energy demand, are yet to stop building coal-fired power plants. Last year, China, India, Indonesia, Turkey and Zimbabwe all added coal plants and announced new coal projects.
China accounted for 92 per cent of all new coal project announcements. India is also pressing ahead with new coal power capacity, with 11.5GW of capacity moving through various approval stages in the first five months of this year.

These policy choices have potentially disastrous consequences for the region, which is predicted to bear the brunt of climate change in the form of heatwaves, floods and rising sea levels. These are also policy choices that have no strong economic basis; the additional coal capacity appears to be surplus to requirements.

A study by Transition Zero indicates that Indonesia’s coal capacity already far exceeds its needs, and the country could save US$2 billion by replacing many of its coal plants with cleaner power sources. In India, the National Electricity Policy shows the development of coal power capacity exceeds estimated demand for 2027 and 2032.

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By building new coal plants, we are not only locking in emissions for decades, we are also locking in contracts that will leave us paying more for energy, undermining the ability of our economies to compete globally.

What is needed to ensure energy supply security in our fast-growing region is access to technological know-how and low-cost capital. We need investments to deploy new, clean technologies and transition financing to phase out coal plants. The public sector, along with multilateral development banks and philanthropic capital, can de-risk investments by providing guarantees or concessional capital to unlock private capital, especially for new technologies and coal phase-outs.
But the unwillingness of governments to more clearly signal a shift away from coal reduces the willingness of public, philanthropic and even private finance to invest. The Just Energy Transition Partnerships, pioneered by South Africa and Indonesia, show how clear climate commitments can be used to send the signals that public and private finance need to give them the certainty to invest.

There is no need to choose between energy security and the environment – the two go hand in hand. A commitment to no new coal projects by G20 leaders this week would be the first, most critical step to averting a global climate crisis and building the energy infrastructure the region needs to maintain its competitive advantage.

Vibhuti Garg is director, South Asia, of the Institute for Energy Economics and Financial Analysis

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