Behind Japan’s move is a theory that, if developed nations provide financial support for new coal plants, developing countries won’t build cheaper, less efficient and more polluting plants.
Japan plans to provide public loans and insurance for new coal technologies, Ministry of Economy coal director Takafumi Kakudo said.
According to the Natural Resources Defense Council, Japan invested $19.7bn in coal power projects in other countries between 2007 and 2013, making it the world’s biggest public financier of such projects. With second- and third-ranked investors the US ($9.01bn) and Germany ($6.07bn), as well as other countries, total investment in overseas coal power was almost $60bn during the period.
But Japan’s policy statement comes as the US, with Denmark, Finland, Iceland, Norway and Sweden, move to limit international public financing for coal power. The US Export-Import Bank has changed its guidelines and no longer supports coal plant development unless it includes carbon capture, while a coalition of environmental groups has called on Japan to end its support for coal, casting doubt on claims made for clean coal technology.
“Encouraging the adoption of the most efficient coal technology as possible is a realistic way to cut CO2. … In theory, replacing all coal power capacity in China, India and the US with the Japanese up-to-date technology would bring about a cut of 1.5 billion tonnes a year of CO2 emissions, more than Japan’s total,” the Japanese policy statement said.