The United States is expected to back a French initiative aimed at prohibiting private financing of coal-fired power plants worldwide during the imminent UN conference, known as COP28. This move is anticipated to create a divide between nations such as the U.S. and France, and others like China and India, which heavily depend on coal for affordable and reliable electricity to fuel their economies.
The proposed scheme would empower the Organization for Economic Co-operation and Development (OECD) to establish coal standards for private financing firms. This would enable regulators, ratings agencies, and non-governmental organizations to monitor coal financing, Reuters reported.
The U.S., the European Union (EU), and Canada have been collaborating on a strategy to phase out coal, which they perceive as the primary obstacle to achieving global climate goals. Approximately 73% of the electricity consumed in India is generated using coal, and China authorized an average of two new coal plants each week in 2022, according to an analysis by the Centre for Research on Energy and Clean Air.
India is expected to resist the proposal, or any other suggestion to set a deadline for phasing out fossil fuels. Indian delegates may reportedly urge representatives from developed nations like the U.S. and France to aim for carbon negativity, rather than merely carbon neutrality, by 2050 to keep targets attainable.
In addition to the reported plan to curtail private financing for coal plants, delegates are likely to discuss the structure and conditions of a proposed “loss and damages” fund, essentially an international climate reparations program, at COP28. Special Presidential Envoy for Climate John Kerry recently hinted that the U.S. will contribute “millions” to the fund, a figure that many activists and representatives of less affluent countries deem insufficient.
China, despite being the world's top emitter and second-largest economy, is unlikely to have any significant obligations to the fund due to its classification as a developing country.