{"id":51633,"date":"2024-06-12T09:23:59","date_gmt":"2024-06-12T08:23:59","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=51633"},"modified":"2024-06-12T09:23:59","modified_gmt":"2024-06-12T08:23:59","slug":"g7-coal-charade-funding-the-fire-they-claim-to-fight","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2024\/06\/12\/g7-coal-charade-funding-the-fire-they-claim-to-fight\/","title":{"rendered":"G7 coal charade: Funding the fire they claim to fight\u00a0"},"content":{"rendered":"<p><em><strong>Danielle Koh is a policy analyst with Reclaim<\/strong> <\/em><strong><i>Finance and Daniela Finamore is a finance and climate campaigner at ReCommon<\/i>.<\/strong><\/p>\n<p><strong>The G7\u2019s top leaders convene in Italy this week as the world swelters through its 12th hottest month on record. One key issue that needs to be addressed is G7 members\u2019 continued bankrolling of coal, from fossil fuel subsidies to <a href=\"https:\/\/priceofoil.org\/2024\/06\/04\/walk-the-talk-time-for-the-g7-to-make-the-cop28-fossil-fuel-pledge-a-reality\/#:~:text=The%20G7%20provided%20USD%20%2425.7,went%20to%20low%2Dincome%20countries.\">public financing<\/a> and private investments. <\/strong><\/p>\n<p>The latest evidence shows that the world\u2019s largest banks &#8211; the majority of which are headquartered in G7 nations &#8211; continue to pour fuel on the fire of coal expansion.<\/p>\n<p><span data-contrast=\"auto\">As the G7 summit approaches, there is a chance for countries to match their rhetoric with action. It is not enough for governments and regulators to <\/span><a href=\"https:\/\/www.g7italy.it\/wp-content\/uploads\/G7-Climate-Energy-Environment-Ministerial-Communique_Final.pdf\"><span data-contrast=\"none\">\u201ccall on\u201d private finance<\/span><\/a><span data-contrast=\"auto\"> to end their support for coal power. The continued financing of coal by the private sector shows that countries must take concrete steps to implement policies that stem the global flow of funds that fuel the expansion of the coal industry and redirect them to clean energy investments.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/06\/11\/bonn-talks-on-climate-finance-goal-end-in-stalemate-on-numbers\/\" target=\"_blank\" rel=\"noopener\"><strong>Bonn talks<\/strong> on climate finance goal end in stalemate on numbers<\/a><\/p><\/blockquote>\n<p><span data-contrast=\"auto\">While attention is often directed at public fossil fuel subsidies for coal (which are a problem), the billions of dollars in commercial financing for the coal industry\u2019s expansion cannot be ignored. Commercial banks provided a staggering <\/span><a href=\"http:\/\/stillbankingoncoal.org\"><span data-contrast=\"none\">$470 billion<\/span><\/a><span data-contrast=\"auto\"> to the coal industry between 2021 and 2023 &#8211; money that could have otherwise been channelled into clean energy investments, grid infrastructure improvements, and energy efficiency.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">And the majority of this financing comes from financial institutions headquartered in G7 countries. Collectively, these banks provided $101 billion for coal development in the form of loans and facilitated bonds between 2021 and 2023. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<h3>Worst offenders: US and Japan<\/h3>\n<p><span data-contrast=\"auto\">Topping the list of offenders are US and Japanese banks, which are the largest coal lenders in the world. Bank of America, actually <\/span><i><span data-contrast=\"auto\">increased <\/span><\/i><span data-contrast=\"auto\">its funding of the coal industry by 30% between 2016 and 2023. It provided a whopping $6 billion in loans and facilitation of capital market issuances to the coal industry in the last three years. For perspective, $6 billion is the size of the entire GDP of the Maldives<\/span><i><span data-contrast=\"auto\">.<\/span><\/i><\/p>\n<p><span data-contrast=\"auto\">Japanese banks are not faring better.\u00a0 Coal financing between 2021 and 2023 remained dominated by its megabanks, Mizuho ($8.1 billion), MUFG ($6.1 billion) and SMBC ($4.7 billion). <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Estimates suggest that the absolute greenhouse gas emissions associated with the activities financed by commercial banks in G7 countries are <\/span><a href=\"https:\/\/www.recommon.org\/en\/biggest-banks-finance-more-carbon-pollution-than-emissions-of-italy-germany-france-and-uk-combined\/\"><span data-contrast=\"none\">more than the combined emissions<\/span><\/a><span data-contrast=\"auto\"> of Germany, Italy, the UK, and France. While banks do not directly produce all these emissions, they are borne out of their lending and investment activities of companies that they support.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<blockquote><p><a href=\"https:\/\/www.climatechangenews.com\/2024\/06\/10\/no-shortage-of-public-money-to-pay-for-a-just-energy-transition\/\" target=\"_blank\" rel=\"noopener\"><strong>No shortage of public money<\/strong> to pay for a just energy transition<\/a><\/p><\/blockquote>\n<p><span data-contrast=\"auto\">The ironic cherry on top is that this amount provided by commercial banks in G7 countries to the coal industry is more than twice the total pledged by the G7-led International Partners Group (IPG) to support the Just Energy Transition Partnerships (JETPs), an intergovernmental initiative intended to provide technical assistance and financial resources to help developing countries with their clean energy transitions.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<h3>Coal phaseout unclear<\/h3>\n<p><span data-contrast=\"auto\">Nor is the G7 showing great leadership when it comes to their own coal phaseout plans. The US alone still has over 200 gigawatts (GW) of remaining operational coal capacity alone. While this has been falling, there are also signs that <\/span><a href=\"https:\/\/www.ft.com\/content\/ddaac44b-e245-4c8a-bf68-c773cc8f4e63\"><span data-contrast=\"none\">this decline is stalling &#8211; <\/span><\/a><span data-contrast=\"auto\">200 GW is more than the entire coal operating capacity of all the JETP recipient countries. And Japan has no clear coal phaseout plan despite its commitment. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">This shows that the capital required for the energy transition is available, but just poorly allocated. Financial regulations, such as stricter capital requirements and outright prohibitions, play a crucial role in redirecting capital and investments towards the energy transition. This must include setting <\/span><a href=\"https:\/\/www.reuters.com\/business\/environment\/major-world-economies-seek-halt-new-private-sector-coal-financing-2024-06-07\/\"><span data-contrast=\"none\">international standards<\/span><\/a><span data-contrast=\"auto\"> to stem the flow of funds towards the continued expansion of the coal industry and restrict financing to coal developers that continue to contribute to environmental degradation and air pollution.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<h3>Financial regulation<\/h3>\n<p><span data-contrast=\"auto\">The Italian presidency of the G7 2024 has a responsibility to prioritise climate-forward action across different sectors, including financial regulation. G7 Central Banks need to keep up the pressure on keeping climate action at the forefront of negotiations, and call for more international coordination and standard setting.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Even if the G7 achieves its coal exit goal by the \u201cfirst half of the 2030s&#8221;, this timeline falls short of what scientists say is necessary to limit global warming to 1.5\u00b0C, a critical threshold to avoid the most catastrophic impacts of climate change. <\/span><\/p>\n<p><span data-contrast=\"auto\">As UN Secretary-General Antonio Guterres said last week, \u201cWe are in control of the wheel that takes us off the highway to climate hell.\u201d Individual G7 members must take an introspective look at changing outdated policies to adopt strong, binding regulations on private financing for coal. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><i><span data-contrast=\"auto\">The data on private finance for coal is attributable to Urgewald and can be accessed<\/span><\/i> <i><span data-contrast=\"auto\">at <\/span><\/i><a href=\"http:\/\/www.stillbankingoncoal.org\"><i><span data-contrast=\"none\">www.stillbankingoncoal.org<\/span><\/i><\/a><i><span data-contrast=\"auto\">.\u00a0<\/span><\/i><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"Rich countries should take concrete steps to stem the global flow of funds from their commercial banks which are fuelling expansion of the coal industry","protected":false},"author":234,"featured_media":51659,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3863,3861,3015,4272],"tags":[3892,73,4569,3566],"coauthors":[5189,5190],"class_list":["post-51633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-comment","category-divestment","category-fossil-fuel-subsidies","tag-banks","tag-coal","tag-coal-phase-out","tag-g7","type-comment"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>G7 coal charade: Funding the fire they claim to fight\u00a0<\/title>\n<meta name=\"description\" content=\"Rich countries should take concrete steps to stem the global flow of funds from their commercial banks which are fuelling expansion of the coal industry G7 governments must take 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