National politics and Russia’s war in Ukraine are impeding efforts to negotiate multi-billion-dollar financing packages to help poor countries get off coal.
The talks “stem from a landmark US$8.5-billion pledge by the United Kingdom, United States, and European Union before last year’s COP 26 summit to support South Africa’s move away from fossil fuels,” writes Bloomberg.
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The drive to secure similar agreements with countries like India, Indonesia, and Vietnam in advance of COP 27 owes in part to the desire by rich countries to generate “some good will” after failing yet again to deliver on their long-promised US$100 billion per year in climate finance.
Securing an agreement with Indonesia is a key focus as the Southeast Asian country is this year’s host for the G20 meetings, a role that gives it “significant influence over COP 27,” writes Bloomberg.
There is trouble on the horizon, though, with reports that Indonesian President Joko Widodo’s cabinet “remains split over the need to end the use of coal,” a division that has been worsened by Russia’s war in Ukraine, which has seen strong resurgence in demand for coal exports.
According to a U.S Treasury official involved in the Indonesian negotiations, however, discussions about the speed of the country’s energy transition “have become more granular” and progress is being made.
Discussions with India are also encountering headwinds, with the Indian government objecting to its sense of being “talked down to” by Western officials who have little in the way of concrete solutions to offer.
But activists and insiders are feeling optimistic for Vietnam, with its “smaller coal industry and more potential for wind energy,” notes Bloomberg.
As for the deal with South Africa, “major elements of the financial package are still being developed six months after the agreement was signed.”
Furthermore, “finer points about how the money will be spent have yet to be confirmed, including how much will go to heavily indebted utility Eskom Holdings SOC Ltd., how communities will be compensated, and how any loans will be structured.”