{"id":35253,"date":"2017-11-29T11:17:00","date_gmt":"2017-11-29T11:17:00","guid":{"rendered":""},"modified":"2020-06-19T08:50:55","modified_gmt":"2020-06-19T08:50:55","slug":"10253-opinion-clean-coal-doesn-t-merit-green-financing","status":"publish","type":"opinion","link":"https:\/\/dialogue.earth\/en\/energy\/10253-opinion-clean-coal-doesn-t-merit-green-financing\/","title":{"rendered":"Opinion: Clean coal doesn\u2019t merit green financing"},"content":{"rendered":"

In October, Ma Jun, a special advisor to the UN Environment Programme, co-chair of the G20 Green Finance Study Group and chair of the Green Finance Committee, shared his views on differences between Chinese and European green bond standards in an interview<\/a> with Caixin<\/em>.<\/p>\n

Ma Jun argued that developing countries have different priorities to developed ones in their approach to green finance standards. He claimed that China\u2019s air pollution problem is more urgent than its goal of reducing carbon emissions and so green finance should support upgrades to coal-fired power plants that promote cleaner burning.<\/p>\n

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New coal tech still pollutes<\/strong><\/p>\n

Addressing the air pollution problem is certainly a high priority for both politicians and the public. According to Greenpeace\u2019s PM2.5 City Rankings<\/a>, nearly three-quarters of Chinese cities failed to meet national air quality standards in 2016.<\/p>\n

But let\u2019s not overlook the fact that China\u2019s air pollution and greenhouse gas emissions stem from the same sources. According to a report<\/a> by the Natural Resources Defense Council, an environmental advocacy group, coal utilisation contributed 50% to 60% of annual PM2.5 emissions at a national level.<\/p>\n

In Ma Jun\u2019s book, \u201cEconomic Policies for PM2.5 Reduction\u201d, he notes that structural challenges such as China\u2019s reliance on sectors such as heavy industry and chemicals, its coal-based energy system, and a transportation system that prioritises road vehicles, all exacerbate air pollution.<\/p>\n

But the main cause of air pollution is China\u2019s overreliance on coal for energy. Although clean coal technologies can reduce the intensity of emissions from coal-fired power plants, coal power remains the largest source of air pollution in the country. According to the 2016 China Environmental Statistical Yearbook, the electric power industry\u2019s emissions of sulphur dioxide, nitrogen dioxide, and smoke in 2015 accounted for 36.1%, 48.7% and 20.5% of total emissions, respectively.<\/p>\n

China\u2019s green bond standards currently support coal-to-chemicals technologies, a fact that has drawn criticism given the industry emits high levels of greenhouse gases and other pollutants, and has a large water footprint.<\/p>\n

According to recent reports, Shanxi Jinmei Huayu Coal Chemical Co., Ltd, raised 1.5 billion yuan (US$230 million) in green bonds to finance the construction of a high-sulfur clean coal chemical industrial project. Since its completion, the project\u2019s CO2<\/sub> emissions have reached levels as high as 1.9 million tonnes per year \u2013 equal to one-sixth<\/a> of the carbon emissions from Chinese coal power plants shuttered in 2014.<\/p>\n

The reason this project had access to green finance is because the project used the best production technologies available at the time. Nonetheless, the coal power and coal chemical industries are highly polluting. Whether or not the most advanced technologies in these industries should be labelled \u201cgreen\u201d is an important matter for discussion.<\/p>\n

Slowing the pace of transition<\/strong><\/p>\n

Although technological upgrades of coal-fired power plants or coal chemical projects can reduce the emissions intensity of a single project, the negative environmental impacts of financing clean coal are apparent once you consider other factors such as extraction, transportation and consumption.<\/p>\n

A 2012 report, \u201cThe True Cost of Coal<\/a>,\u201d showed that the environmental and health cost of a single tonne of coal equalled 260 yuan, including external costs from coal production (66.3 yuan\/tonne, 25%), transportation (27.8 yuan\/tonne, 11%), and consumption (166 yuan\/tonne, 64%).<\/p>\n

If China continues to label technologies used in the coal power or coal chemical industries as \u201cgreen\u201d, the entire coal industrial chain will benefit from green financing. This will divert resources meant to support renewable energy towards coal companies, strengthen the position of the coal industry, and slow the pace of China\u2019s energy transition and campaign against air pollution. These outcomes obviously run counter to the principles of green finance.<\/p>\n

China\u2019s reliance on coal in its energy system means that it must use coal more efficiently. But this does not mean labelling the best technologies in the coal industry as green. Instead, China should reduce coal consumption and improve efficiency of coal as the country moves to a low-carbon energy system.<\/p>\n

China\u2019s planning body, the National Development and Reform Commission, and the People\u2019s Bank of China are currently drafting green bond standards. They should seize this opportunity to establish strict definitions of what is \u201cgreen\u201d to ensure that green bonds and green finance become more transparent.<\/p>\n","protected":false},"excerpt":{"rendered":"

China should reduce its coal use and also burn it more efficiently, write Zhang Kai and Yang Xiaotong<\/p>\n","protected":false},"featured_media":59865,"comment_status":"closed","ping_status":"closed","template":"","categories":[757],"tags":[520,547],"country":[],"class_list":["post-35253","opinion","type-opinion","status-publish","has-post-thumbnail","hentry","category-energy","tag-coal","tag-fossil-fuels"],"acf":[],"yoast_head":"\nOpinion: Clean coal doesn\u2019t merit green financing<\/title>\n<meta name=\"description\" content=\"China should reduce its coal use and also burn it more efficiently, write Zhang Kai and Yang Xiaotong\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dialogue.earth\/en\/energy\/10253-opinion-clean-coal-doesn-t-merit-green-financing\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" 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