industrialised nations (G7) committed funding of up to $2 billion in order to accelerate the coal transition, as part of the efforts to limit global warming well below 2°C, as agreed under the Paris Accord. Accordingly, the CIFs is in the process of selecting two or three developing nations in order to pilot the programme, and South Africa, India and Indonesia are said to be potential candidates who will benefit from the first tranche of investment.
The reason for the selection of these countries is that coal mining is an important but precarious source of employment for them. For instance, Coal India, one of the largest mining companies in the South Asian nation, has announced plans to reduce its workforce by 5 per cent each year over the next 5-10 years as part of its efforts to shut down several unviable mines in the country.
According to Duarte, although an estimated 42 per cent of global coal power plants are said to be running at a loss (according to Carbon Tracker), however, “pure economics are not going to play in favour of divesting from [relatively new] coal assets in time for meeting the Paris goals”. Therefore, it is more complex to divest from existing infrastructure, in comparison to investing in renewable energy. In order to address this issue, the funds committed by the G7 will be utilised to support countries in their efforts to move away from coal, by de-risking private sector capital, lowering investment costs, creating alternative job opportunities and launching social protection schemes for communities whose livelihoods depend on the coal industry.
Therefore, while India, South Africa and Indonesia have been selected as potential candidates, however, the CIFs CEO called on all coal-dependent nations to reach out since the programme may be extended depending on support from donor countries.
