ENERGY TRANSITION ACCELERATOR
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Context: US climate envoy John Kerry announced the launch of a new carbon offset plan that will allow companies to fund clean energy projects in developing countries and gain carbon credits that they can then use to meet their own climate goals, at least partly.
Details:
- Kerry said the plan, called the Energy Transition Accelerator (ETA) will be developed by the US along with the Bezos Earth Fund and the Rockefeller Foundation and receive inputs from public and private sectors.
- The concept according to Kerry is to put the carbon market to work, deploy capital otherwise undeployable, and speed up the transition from dirty to clean power.
- Experts said the proposed initiative would be insufficient to make up for the lack of funding from rich countries.
- What developing countries need is predictable finance - not offset markets. The proposed initiative cannot make up for the US’s failure to provide its fair share of climate finance - an estimated $40 billion of the unmet goal of $100 billion a year. It also should not substitute for deep decarbonization needed within the US and other industrialised countries. For developing countries like India, the first priority would be to meet their own targets and not provide offsets for reductions in developed nations.
- Kerry’s announcement may solve a political narrative problem -- telling a story about unlocking finance - but is highly unlikely to actually get sufficient, predictable finance moving
- The US’s Energy Transition Accelerator is arguably the first large scale structured programme that will demonstrate how Article 6.2 will look in practice
- Kerry’s announcement of a carbon market scheme comes at a time when there is growing mistrust among developing countries about developed nations failing to deliver on climate finance commitments.
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