Biden’s Plan To Stop Funding Coal Projects Could Risk Losing Countries to China

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"His Excellency Mr. Xi Jinping, President of China" (CC BY 2.0) by UNclimatechange

As President Biden plan to stop U.S. funding for overseas fossil fuel projects, the global spotlight will be redirected to China for bankrolling coal projects around the world. This move could also drag developing countries closer to Beijing and risk relinquishing the United States’ position as the leading financier for developing economies.

Last month, President Biden’s directive to move toward withholding funds from international institutions such as the World Band that assists poor countries to build fossil fuel power plants stands in stark contrast to China’s plan on how to direct cash flow under its Belt and Road Initiative. 


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China’s Belt and Road initiative is intended to supply 70% of the financing for the world’s new coal-fired plants and factories. 

Meanwhile, John Podesta, the person who led the Obama administration’s climate strategy and is close to President Biden’s team, stated that the White House would need some “diplomatic choreography” if it plans to work.

Podesta also added that the United States’ move “leaves China isolated. The pressure will build on China to stop its coal finance and to green the Belt and Road Initiative.”

However, the Biden administration plan will require his team to closely coordinate its foreign policy, trade, and clean energy initiatives. This is because the absence of U.S. funding for the coal project will not on its own convince other nations to change their plans. The United States also cannot unilaterally offer sweet financial terms to transform into clean energy that is enough to lure countries to step away from China’s plan to coal finance. 

To outwit China, the United States have to build support from other countries and international institutions. 

A Biden administration official said, “To be successful, we need to meet China on the field of Belt and Road, and you put together packages with partners that are non-fossil.” The official added, “We’ll have to look at the investment opportunities here country by country by country.”


The United States has to pressure the communist country to end coal financing separately from other issues such as trade, intellectual property theft, and human rights. This statement was made by David Sandalow, who served as the secretary for international affairs at DOE during Obama Administration.

Sandalow added, “The U.S. government needs to be clear that we think climate cooperation is both in the interest of our nations and the world.”

So far, the foreign ministry of Chine has ridiculed such separation. 

“China State Visit” (CC BY 2.0) by Foreign, Commonwealth & Development Office

On January 28, it issued a statement denouncing Blinken’s characterization of China’s handling of Uighur Muslims as “genocide” by saying climate change “cooperation cannot stand unaffected by the overall China-U.S. relations. It is impossible to ask for China’s support in global affairs while interfering in its domestic affairs and undermining its interests.”

Meanwhile, climate veterans in the White House said that the two countries have to work together if the most serious consequences of global warming can be avoided. 

This negotiation could start with discussing the dirtiest sources of energy worldwide.

Podesta said, “First things first — let’s get a global ban on overseas development on new coal-fired power. If they can get that done in the near-term, that would be a significant achievement.”