3 May 2022

Why China Funds Renewable Energy at Home, but Invests in Fossil Fuel Projects Overseas

Lars Oehler, Mathias Lund Larsen

Across the world, energy investments are gradually shifting towards renewables as part of commitments to curb global warming. In this trend, China is seen as both a climate hero and a climate criminal – the country is simultaneously by far the largest investor in both renewable energy and coal power (IEA, June, 2021). As China’s global role expands, its energy investments have an increasing impact outside its borders. However, there is a significant difference in the proportion of fossil fuels and renewables in China’s domestic energy development, and in its overseas energy investments. China invests in both renewables and fossil power generation domestically, but a clear majority of its investment is in clean energy. Yet, overseas, fossil fuel power generation comprises the majority of Chinese investment (Fudan University, February 2). According to a recent study by the authors, an often overlooked reason for this disparity is the nature of the Chinese financial system. This highlights the need for Chinese government intervention to align energy investment with the goals of the Paris Agreement. [1] This discrepancy is also particularly notable as Chinese President Xi Jinping stipulated in his September 2021 UN General Assembly address that China would cease construction of new coal power plants overseas, but did not provide a timeline for doing so (State Council Information Office. October 27, 2021; CGTN, September 22, 2021).

No comments: