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COP26 deal signals the end of the age of coal

The floodgates have broken. In shock after shock, diehard coal nations across the developing world have been lining up in Glasgow to forswear use of the dirtiest of fossil fuels.

Four of the biggest coal emitters in East Asia have signed the pledge, promising to abandon new projects and shut down existing plants far earlier than almost anybody expected.

“It’s a massive deal. The whole region is turning around and this really puts the screws on China to do more,” said Dave Jones from the anti-coal group Ember.

“The really big surprises for all of us are Indonesia, Vietnam and the Philippines. These were countries that were planning an aggressive expansion of coal and now they are on the list. So is South Korea, which is the fifth biggest coal user in the world. We never thought we’d see this in Glasgow,” he said.

Malaysia, Pakistan, Sri Lanka, Bangladesh, Egypt, Morocco, Ukraine, Poland, Chile, Zambia, and Cote d’Ivoire, among others, have signed the global ‘coal to clean power’ statement, vowing never again to issue new coal permits.

The accord commits rich states to shut down existing plants by the 2030s and halt any construction under way. Poorer states have until the 2040s, but most will be well on the way years earlier. Not much remains of the ‘fuel poverty’ canard that developing economies need coal for their catch-up growth. They have looked at the numbers and concluded otherwise.

It hardly matters any more whether or not Australia’s Scott Morrison joins the pact, because there will not be much of a global market for his thermal coal exports in a few years. He might as well avoid all the political trouble and espouse virtue now.

“The end of coal is in sight. We’re choking off global financing and consigning coal to history,” said Alok Sharma, president of the COP26 climate talks.

It has been a good week for Mr Sharma. On Tuesday, deforestation and methane leakage (another low-hanging fruit) were both confronted head-on. The coal coup is a political stunner, the fruit of months of skillful diplomacy and creative forms of finance that perhaps only the City of London could have pulled off.

Pakistan’s climate chief Malik Aslam was effusive in his praise, saying the British had pulled an impossible rabbit out of the hat, a view widely shared among officials from the developing world at this COP26.

The phase-out model for the world is the Just Energy Transition Partnership with South Africa, an $8.5 billion package unveiled in Glasgow with the backing of the US, UK, and the EU.

South Africa relies on coal for 87pc of its electricity and 74pc of its primary energy. Its power behemoth Eskom is not only near bankruptcy but just about the dirtiest polluter on the planet. The problem has long seemed intractable.

From this grim starting-point, the country has committed to go all the way to a UN-approved ‘1.5 degree’ climate path as soon as 2030. Eskom will retire up to 12 gigawatts (GW) of coal, using a mix of grants and concessionary loans to re-employ the work-force and switch the whole system to renewables.

“We’re doing this with unprecedented speed and scale,” said president Cyril Ramaphosa.

Indonesia could be next in line for this formula. It is planning to shut 5.5 GW of coal plants over the next eight years so long as the world helps to fund the wind, solar, and geothermal needed to replace them. It is pressing ahead against entrenched vested interests, even though it mines coal in abundance and relies on the fuel for 65pc of its energy. The Philippines is eyeing closure of 10 out of its 28 coal plants.

The Asian Development Bank has teamed up with HSBC, Citigroup, and others to help these states, eyeing a ‘bad bank’ resolution mechanism to take the coal plants off their hands.

While India’s Narendra Modi has not signed the pledge on coal, he has committed to 500 GW of renewables by 2030, with a clean power target of 50pc. “We’re not worried about rising coal in India any more because they are not going to need it. The story is really about how quickly they are going to retire plants,” said Ember’s Mr Jones.

The US is still the world’s third biggest coal burner but the sector is in terminal run-off: uninsurable, unable to raise funds at market rates, and now facing Joe Biden’s renewable tsunami, as well as regulatory squeeze by the Environmental Protection Agency. It is basically over.

Which leaves China as the last big hold-out. Global Energy Monitor says it commissioned 38 GW of new coal in 2020, three times as much as the rest of the world put together. It makes up 85pc of all plants under development anywhere. It also accounts for 28pc of global emissions – significantly more per capita than the UK – and the share is rising fast.

The world is not going to tolerate this for long. China is isolated in Glasgow. Its bid to break US dominance and court global favour with its brand of post-Western Confucian leadership is going nowhere unless it bites the bullet on coal.

China’s climate envoy Xie Zhenhua has been strangely silent at COP26 so far. It is hard to believe that he will leave without offering something. There may yet be a big surprise.

But much has already been accomplished. “Before this COP there was a lot of scepticism whether or not it would deliver anything,” said Fatih Birol, head of the International Energy Agency.

“But I have some very good news: my colleagues calculate that if all the pledges over the last few days are implemented, including methane, the world temperature increase could be limited to 1.8 degrees. This is an achievement to celebrate,” he said.

It is almost a miracle.

– Telegraph Media Group

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