While negotiations at the COP 27 climate summit lag and fossil interests strive to dominate the conversation, countries are announcing side agreements that point toward emission reductions and energy transition in parts of the world that need them most.
Last Friday, while rich countries took criticism for a “toothless” joint declaration on methane reductions, the United States and Germany announced a funding deal that will enable Egypt to speed up renewable energy deployment and shut down 12 “inefficient” gas-fired power plants totalling five gigawatts (five billion watts) of capacity.
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The gas will still be extracted, Climate Home News reports, but an estimated two billion cubic metres of will be exported to help Europe deal with the short-term energy crunch brought on by Vladimir Putin’s war in Ukraine—and any resulting methane emissions will be the continent’s to reduce, not Egypt’s. That follows a deal earlier this month in which Germany and Egypt announced a new partnership for liquefied natural gas and green hydrogen production.
“With this announcement, Egypt as [COP 27] host sends a strong signal for more ambition,” German Development Minister Svenja Schulze said last week. “I especially welcome that Egypt’s new climate policies will also address the social dimension of transitioning to green economies. Without social justice there will be no successful answer to climate change.”
To make the project work, the U.S. and Germany put together €100 million in debt forgiveness, €85 million in grants, and €100 million in low-interest loans—enough, they said, to “unlock” US$10 billion in private investment led by the European Bank for Reconstruction and Development. Climate Home writes that some of the proceeds from the debt swap will be used to create new jobs for people affected by the gas plant closures.
The EBRD says the deal will add at least 10 gigawatts of new solar and wind in Egypt by 2028, a quadrupling of the country’s previous renewable energy target that will show up in a revised Nationally Determined Contribution (NDC) under the Paris agreement. Climate Home reports that Egypt will now commit to producing 42% of its electricity from renewables by 2030, rather than 2035.
On Tuesday, meanwhile, a coalition of countries led by the United States and Japan announced $20 billion in public and private financing to help Indonesia shut down coal-fired power plants and peak greenhouse gas emissions from its electricity sector in 2030, rather than 2037, Reuters reports. That upper limit will be 290 million tonnes per year, 25% less than if emissions had increased for another seven years.
Reuters says the Indonesia Just Energy Transition Partnership (JETP) will eliminate 300 million tonnes of emissions through 2030 and more than two billion tonnes through 2060. It’s modelled on an $8.5-billion just transition partnership for South Africa that was launched last year at the COP 26 climate conference in Glasgow.
In addition to the U.S. and Japan, JETP funding will come from Canada, Denmark, France, Germany, Italy, Norway, the United Kingdom, and the European Union.
“Indonesia is committed to using our energy transition to achieve a green economy and drive sustainable development,” said President Joko Widodo. “This partnership will generate valuable lessons for the global community.”
“We’ve built a platform for cooperation that can truly transform Indonesia’s power sector from coal to renewables and support significant economic growth,” said U.S. climate envoy John Kerry. A U.S. treasury official called the JETP “probably the single largest climate finance transaction or partnership ever.”
In September, a net-zero roadmap from the Ember climate and energy think tank explored how Indonesia could decarbonize its power sector by 2040, rather than 2050. “Renewables, especially solar and wind, are breaking records around the world, providing widely available lessons to reshape existing energy systems,” Asia Electricity Analyst Achmed Shahram Edianto said at the time. “It is possible for Indonesia to decarbonize by 2040 and provide a sustainable, affordable, and secure energy supply. It just needs integration of government vision, political commitment, and the implementation.”
But the Washington Post cites the just transition process in South Africa to illustrate some of the complexities the Indonesia plan will have to navigate. “Some environmentalists have criticized a similar $8.5-billion package that seeks to wean South Africa off coal, saying civil society has not been adequately consulted and that the financing pales in comparison to what is needed,” the Post writes.
The Life After Coal coalition estimated South Africa will need at least $86.7 billion to get the transition done, the news story states. And “in South Africa, our partners were being consulted on plans that they didn’t have the actual documents for, so they didn’t have a lot to base their actual input on,” said Luísa Abbott Galvão, a senior international policy campaigner at Friends of the Earth U.S.. “So JETPs still have a lot to prove, frankly, to live up to their name.”
