Stories by Justin Guay

Expert Voices

Coal projects face higher investor hurdles as climate risks mount

smoke billowing out from a coal-fired power plant
A coal-fired power plant in Hamburg, Germany. Photo: Markus Scholz/picture alliance via Getty Images

The growing risks associated with financing new coal projects have driven European and American institutional investors to seek returns up to 4 times greater than those for other sources of energy, according to a survey by the Oxford Institute for Energy Studies.

Why it matters: The cost of capital is a key determinant of whether new coal plants will be built. If costs rise relative to those of competing sources, the construction, expansion and even ongoing operation of coal plants could become prohibitively expensive.

Expert Voices

2020 Democrats pushing to end public financing of fossil fuels

Illustration of rolled up money blocking a smoke stack
Illustration: Rebecca Zisser/Axios

The climate plans released this week by Democratic presidential candidates Joe BidenJay Inslee and Elizabeth Warren each include provisions to end U.S. government support for new fossil fuel investment overseas.

Why it matters: Many new coal plants — up to 91% in Asia, for example — receive public development support from state-owned enterprises, foreign governments and export credit agencies, or multilateral development banks (MDBs). Reduced access to such financing could mean fewer new plants burning coal, the most carbon-intensive energy source.

Expert Voices

Asian banks are backing away from new coal plants

MUFG's office building in Tokyo
MUFG bank's headquarters in Tokyo. Photo: Kazuhiro Nogi/AFP/Getty Images

In the first four months of 2019, four major financial institutions headquartered in Asia have announced restrictions on the financing of new coal plants — a noteworthy shift within the region.

Why it matters: Until recently, such restrictions came largely from Western financial institutions. But the majority of planned new coal plants are being built in just four Asian countries — China, India, Vietnam and Indonesia — and increasingly underwritten by Asian financial institutions.