The Big Plan to Help Developing Nations Go Green Is Foundering
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Climate finance is likely to be a focus of December’s COP28 meeting in the United Arab Emirates, with the oil-exporting host saying it will address ways to fund the energy transition in poorer countries that simultaneously need to expand access to electricity. That adds pressure on industrialized nations and oil producers to step up.
While Vietnam’s $15.5 billion and Indonesia’s $20 billion planned JETP agreements are at an earlier stage, they’re also much bigger and potentially more complex. A smaller deal envisaged with Senegal is complicated by its plan to start producing gas.
“We could have done an amazing, amazing model right here in South Africa,” said Tasneem Essop, executive director of Climate Action Network International, which represents over 1,900 climate-focused organizations in more than 130 countries. But “we got embroiled in the politics of it all.”
Coal might be dirty, but it is cheap, reliable, many countries have domestic supplies, plants can rapidly be constructed and last for decades. That’s hard to compete with. The unspoken drawback of forcing developing countries to abandon coal is higher electricity usage is a major contributor to higher standards of living.
Intermittent supply is a non-starter for emerging economies since they need to be able to attract inward investment in manufacturing, if they are to have any hope of employing large young populations. That suggest kicking the coal habit is going to take a long longer than the idealistic ambitions of western politicians.
No one seems to have a good answer for how cash strapped countries are supposed to be to afford the spare back up power generation needed to deploy renewable energy.
Glencore’s bid to acquire Teck Resources is part of the wider aim of consolidating coal assets as other miners avoid the sector. It appears Canada is increasingly unwilling to allow the merger to go through and Glencore’s share is pausing below the 200-day MA. It needs to sustain a move above the trend mean to confirm a return to medium-term demand dominance.