The G20’s move may still have some multiplier effects that reach into the private sector. Public financing “is the essential enabler through de-risking investments for private sector and reducing overall cost of capital,” said Chris Littlecott, an associate director at E3G, a London-based climate think tank. Without public finance, private sector investors would have to carry all the risk directly, Littlecott said—a prospect that may deter them from projects they might otherwise have pursued.

The US and other governments can outlaw coal altogether

As yet, government measures targeting the private sector’s investment in coal tend to be indirect. In January, for instance, France’s central bank announced (pdf) that it would excuse all companies with coal-related activities from its investment and pension portfolio. Last week, the UK said that its biggest companies, including banks and insurers, will have to disclose their exposure to climate-related activities, which would include investment in coal power projects.

Governments haven’t yet adopted direct, regulatory ways of curbing private sector financing in coal—a policy that appears at first glance to be tantamount to compulsory divestment. But worldwide, the inventory of proposed coal-fired plants is already collapsing, according to data compiled by E3G; since the Paris Agreement in 2015, the number of such plants has shrunk by 76%. The end of coal is in sight, Littlecott and his colleagues believe. Given that momentum, G20 governments should easily ban their private companies outright from investing in coal projects overseas—a precursor to the final, necessary step of outlawing coal at home as well.

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