France, with support from the United States, is set to propose a groundbreaking initiative at the upcoming U.N. climate conference in Dubai, aiming to halt private financing for coal-based power plants. The plan, dubbed the ‘New Coal Exclusion Policy,' was revealed to India earlier this month, introducing a divisive element into the discussions at COP28.
Chrysoula Zacharopoulou, France's minister of state for development, personally conveyed the proposal to the Indian government, outlining measures targeting private financial institutions and insurance companies. The initiative, not previously disclosed, seeks to cease private funding for coal-fired power plants, intensifying the ongoing debate over the construction of such facilities, particularly in nations like India and China, where the demand for energy remains high.
While the Indian ministries and international organizations involved have yet to officially respond to queries, a source in Europe familiar with the plan highlighted its significance. The objective is to diminish private funding for coal power, making it a top priority for French President Emmanuel Macron during COP28—a critical platform for advancing global efforts to combat climate change.
According to insiders, the proposal suggests empowering the Organisation for Economic Co-operation and Development (OECD) to establish standards for coal-exit policies, which private finance firms would need to adhere to. The aim is to create a system where regulators, rating agencies, and non-governmental organizations can track and monitor the financing activities related to coal.
The urgency of transitioning away from coal has gained international attention, with the U.S., European Union, Canada, and others expressing concern over the persistent support for new coal capacity in developing nations. The proposal highlights that approximately 490 gigawatts of new coal capacity, equivalent to one-fifth of the existing global capacity, is either planned or under construction, predominantly in India and China.
Rick Duke, Deputy U.S. Special Envoy on Climate Change, emphasized the need for a rapid transition to clean power, noting the global pipeline of around 500 gigawatts of new coal-fired power plants. Despite differing opinions among member countries on emission abatement technologies, the proposal aims to set a global expectation for a swift transition away from unabated coal power.
India, heavily reliant on coal for about 73% of its electricity consumption, may resist committing to a specific deadline for fossil fuel phase-out at COP28. Instead, the country could advocate for a focus on reducing emissions from alternative sources and push developed nations to achieve carbon negativity by 2050, rather than just carbon neutrality.