LONDON (BLOOMBERG) - Asian governments are stepping up their support for coal-fired power plants, handing a lifeline worth US$64 billion (S$86.6 billion) a year to an industry struggling to maintain investment from private investors.
The finding from four research organisations contrasts with pledges by the Group of 20 (G-20) nations to rein in greenhouse gases and wean the world off the most polluting fossil fuel. China, India and Japan were responsible for the biggest proportion of that spending.
The report released in advance of the G-20's annual summit in Osaka, Japan, underscores the importance of government-backed development banks and export credit agencies, which were major conduits for the increased financing. Their backing for coal explains why more plants are being built even as commercial banks and utilities have scaled back investment.
"It has now been 10 years since the G-20 committed to phasing out subsidies for fossil fuels, yet astonishingly some governments are actually increasing the amount they give to coal power," said Mr Ipek Gencsu, lead author of the report and a researcher at the Overseas Development Institute, a charity backed by the UK government.
While funds for coal production dropped, finance for coal power almost tripled to US$47 billion compared with 2013 and 2014. Countries providing the biggest levels of support for coal in 2016 and 2017 were China at US$19 billion a year on average, India at US$17.9 billion and Japan at US$5.2 billion, Mr Gencsu said.
About half of the funding from China came from international public finance, the ODI found. Both the Export-Import Bank of China and the Japan Bank for International Cooperation provided money for coal projects in Indonesia.
Coal use is on the wane in the US as the cost of natural gas, wind and solar power fall and some consumers show a preference for generating power near where it's used. In Europe, nations led by the UK and Germany have set targets for phasing out use of coal in power generation.
The research groups also include Oil Change International, the International Institute for Sustainable Development and the Natural Resources Defence Council. They're pushing the G-20 to phase out coal, noting that tighter environmental regulations may leave investments in new plants a "stranded asset" in future years.
Through his philanthropies, Mr Mike Bloomberg, the founder and majority owner of Bloomberg LP and this news organisation, has funded campaigns to reduce coal use in the U.S.
"The lock-in is dangerous," Mr Gencsu said. "For developing county populations, we now know how awful this power source is. If you put this money behind renewables, you could boost their development."