China: New study urges support for early retirement of overseas coal plants to boost climate leadership & reduce risks
"The Case for Early Retirement of Chinese Financed Overseas Coal Plants" 25 June 2024
China leads the world in domestic renewable energy installation and low-carbon manufacturing and is increasingly positioning itself as a climate leader through its development financing in the Global South.
However, China has built and financed a large number of coal plants abroad, predominantly in low- and middle-income countries in Asia and Africa...
A new policy brief by the Boston University Global Development Policy Center makes the case that early retirement of overseas coal plants would bring health and climate benefits, bolster China’s global green reputation, reduce financial risks for Chinese financiers and companies, and build momentum for clean energy investment...
Although there are a growing number of global initiatives aiming to support the early retirement of coal plants, there are several underexplored barriers to early retirement, including legal risks. Host countries may bear the brunt of legal risks from early retirement of coal plants, especially in cases where guarantees for power purchase have been issued (as in Pakistan)...
Chinese policymakers and development finance institutions (DFIs) are well-poised to assist host country governments in their early coal plant retirement efforts... Additional recommendations for China include exploring options with Chinese state-owned enterprises and financial stakeholders, engaging in bilateral and multilateral dialogues with governments and utilities, providing assistance in prioritizing and developing practical solutions for plant retirement, and establishing long-term bilateral agreements focused on sustainable development and energy transition...