Indonesia and India on Thursday underscored a call by emerging nations for more climate change financing, warning that rising energy prices due to the Ukraine war would make it difficult for countries to cut emissions.
With inflation rising globally amid the Russia-Ukraine conflict, some countries, including in Europe, have reverted to coal and other fossil fuel-based power or delayed their energy transition out of concerns over affordability and supplies.
India’s Finance Minister Nirmala Sitharaman and her Indonesian counterpart, Sri Mulyani Indrawati, said at a G20 event in Bali that emerging markets’ energy transition should not come at high costs to the public.
They both noted current high energy prices and Sri Mulyani said rising interest rates would also make it more expensive for emerging countries to raise funds for climate action.
“If we cannot pay and you cannot also help, then this is not going to be delivered,” she said, referring to Indonesia’s plans to build renewable power sources and to phase out coal power plants.
Indonesia and India, among the world’s largest coal producers and users, have committed to reaching net-zero emissions by 2060 and 2070 respectively.
Rich nations have pledged to provide $100 billion per year from 2020 to help poorer countries tackle climate change, but have so far failed to meet the promised amount. The Group of Seven (G7) economies last month said they will be paying the full amount every year by 2023.
A U.S. official said the private sector will have to augment government funds to meet the massive global need, noting that some $250 billion in assets were now available in private environmental, social and governance funds.
Andy Baukol, acting undersecretary of the U.S. Treasury for international affairs, said his country had launched an inaugural $8.5 billion energy transition partnership with South Africa, and that further partnerships were now being set up by the G7 with India, Vietnam, Indonesia and Senegal.
“All of these partnerships are relatively new … We think they have a lot of promise,” he said.
Since electric vehicles rely on regular charging from a local electricity network, it is quite obvious that coal is being used at another source, one of them said.