Critical letters to Vietnam’s leaders followed. The World Bank and United Nations labeled the draft at odds with the government’s stated goals of promoting sustainable power sources. Local environmental groups wrote that the plan, if approved, would leave Vietnam isolated and “will be very unfavorable for the Vietnamese delegation” at the COP26 climate talks.
The announcement by Chinese President Xi Jinping has been hailed as a breakthrough ahead of critical climate negotiations by world leaders from Oct. 31 to Nov. 12 in Glasgow, Scotland. But it has also renewed attention on the thorny question of how to coax economies that had bet on fossil fuels to power development toward a faster adoption of wind, solar and other renewable sources.
Even as richer nations look to drive down carbon emissions to net-zero, many low- and middle-income nations remain hesitant to set similarly stringent targets, in part because doing so would mean abandoning often the most readily available source of electricity: coal.
That reluctance is a problem for any hopes of a global solution to the climate crisis in Glasgow. In a May report, the International Energy Agency made clear that an immediate phaseout of coal would be essential for reaching net zero by the middle of the century, a goal seen as necessary to keep global temperature rises below 1.5 degrees Celsius (2.7 degrees Fahrenheit) over preindustrial levels.
The envisioned global moratorium will depend largely on China, which consumes more than half the world’s annual output of the black rock. As part of goals to peak carbon dioxide emissions before 2030 and reach carbon neutrality by 2060, Xi has said China will “strictly control” coal use and begin a phase-down after 2025 but has stopped short of banning projects.
Beyond China’s borders, its institutions have supported coal’s continued use by becoming the lender of last resort for plants abandoned by Japanese and South Korean banks.
In Vietnam, after Mitsubishi pulled out of the 2-gigawatt third stage of the Vinh Tan power station in Binh Thuan province on the southern coast, state-backed media reported talks with China Southern Power Grid to take over.
The project is among nearly 19 gigawatts of planned coal capacity under Vietnam’s current draft plan that are at high risk of not coming to fruition, according to the Institute for Energy Economics and Financial Analysis, a nonprofit.
The mounting financial difficulties for projects meant that official sign-off on Vietnam’s power plan, expected in mid-October, never came. Climate activists expect that criticism and Xi’s decisions had made reliance on fossil fuels no longer tenable.
While the timing of China’s move was a surprise, the trend of reduced investment in coal had long been clear, said Nguyen Thi Hang, manager of the just energy transition program at Green Innovation and Development Center, a Vietnamese nonprofit.
“Transition in the power sector can only happen if it goes together with the transformation of the whole economy,” but as yet Vietnam lacks the political will and social consensus to put green development first, Nguyen said. “It will definitely take place, the question is just when.”
Similar debates about how to replace coal with renewables are taking place in other countries that have been leading recipients of Chinese energy finance. Since China’s Belt and Road infrastructure investment program was announced in 2013, low- and middle-income nations have taken ready advantage of easier access to Chinese financing to upgrade their power sectors.