An international effort seeking to phase out coal use throughout the world has insisted “the end of coal is in sight” in spite of four major economies declining to back a global agreement at Cop26.
The text of the agreement was weakened to allow another decade or longer to phase out coal power, while the United States, China, India and Australia have not come on board.
Burning coal is the single biggest emitter of carbon emissions, while phasing out coal use in the UK was a major factor in reducing its emissions by more than 40 per cent over the past 30 years. There has been a 76 per cent drop in the number of new coal plants planned globally over the past six years since the Paris Agreement was adopted.
The "powering past coal" pact was endorsed by more than 40 countries including Poland, Indonesia and Vietnam. Developing countries vowed to quit coal in the 2030s "or as soon as possible thereafter" a significant change to the original 2030 goal.
Major international banks, however, committed to effectively end all international public financing of new unabated coal power by the end of 2021.
Meanwhile, at least 25 countries and public finance institutions committed to ending international public support for the unabated fossil-fuel energy sector by the end of 2022. Collectively, this could shift an estimated $17.8 billion a year in public support out of fossil fuels and into the clean-energy transition.
In a new "Global Coal to Clean Power Transition Statement", countries also committed to scaling up clean power and ensuring a just transition away from coal. This follows recent announcements from China, Japan and South Korea to end overseas coal financing which now means all significant public international financing for coal power has effectively ended.
Cop26 president Alok Sharma said: "We have been clear that Cop26 must be the Cop that consigns coal to history. With these ambitious commitments we are seeing today, the end of coal power is now within sight."
Fossil-fuel assets
About half of the world’s fossil-fuel assets will be worthless by 2036 under a net-zero transition, according to research published on Thursday. Countries that are slow to change will suffer but early movers will profit, it predicts. Renewables and freed-up investment will more than make up for the losses to the global economy.
The risk of producing far more oil and gas than required for future demand, which is estimated to leave $11 trillion-$14 trillion in so-called stranded assets – infrastructure, property and investments where the value has fallen so steeply they must be written off.
Lead author Jean-Francois Mercure of the University of Exeter said the shift to clean energy would benefit the world economy overall but needed to be handled carefully to prevent regional pockets of misery and possible global instability.
“In a worst-case scenario, people will keep investing in fossil fuels until suddenly the demand they expected does not materialise and they realise that what they own is worthless. Then we could see a financial crisis on the scale of 2008,” he warned.
The challenge is evident at the ongoing Cop26 where some of the states most at risk of being left with stranded assets – such as the oil and gas exporters Russia and Brazil – are likely to try to slow down the transition as they have done at previous climate meetings, while those most likely to gain – such as the fuel-importing European Union – are pushing for faster action.
The study published in Nature Energy, illustrates how a drop in demand for oil and gas before 2036 will reshape the geopolitical landscape. Current investment flows and government commitments to reach net-zero emissions by 2050 will make renewable energy more efficient, cheaper and stable, while fossil fuels will be hit by more price volatility.
Many carbon assets, such as oil or coal reserves, will be left unburned, while machinery will also be stranded and no longer produce value for its owners.
The most vulnerable assets are those in remote regions or technically challenging environments. Most exposed are Canadian tar sands, US shale and the Russian Arctic followed by deep offshore wells in Brazil and elsewhere. – Additional reporting: Guardian
