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August 15, 2023

Dos and don’ts of the John Kerry coal-to-renewables plan

Air pollution smoke from factory
The Energy Transition Accelerator has ‘the potential to be a critical player in the race against climate change’ (Photo: Sandsun/Envato)

The Energy Transition Accelerator risks greenwashing and inflating the value of coal plants, if poorly designed, warns a Germany and UK-based think-tank.

In a report published this month, think-tank the Universal Owner Initiatives analyses the Energy Transition Accelerator framework, which is sold as a way to kill two birds with one stone: accelerating the phase out of coal plans, and the phase in of renewable energies in developing countries.

The ETA — launched in November 2022 at COP27 by US climate envoy John Kerry, in partnership with the Rockefeller Foundation and the Bezos Earth Fund — is still being designed and Universal Owner Initiatives agrees it has “the potential to be a critical player in the race against climate change”, given its dual approach.

This approach “contrasts starkly with traditional climate finance mechanisms, which typically focus on funding new renewable projects rather than directly tackling the decommissioning of existing fossil fuel infrastructure”, it says.

However, as is so often the case, the devil is in the detail, and the report lists a plethora of dos and don’ts, which it insists policymakers would be wise to follow if they wish to avoid making problems worse rather than better.

“In a worst-case scenario, an unintentional rise in coal market value spurred by the ETA could extend the lifespan of existing plants and de-risk new coal construction projects,” the report argues. “The outcome of this would be a staggering 22 billion tonnes of CO2 increase against a baseline of non-intervention.”

Further, if the ETA opts to use the least-stringent method for emissions avoided calculation, “they risk inflating their estimate for emissions avoided by one-third and compromising the credibility of ETA offsetting claims”, it suggests.

“We are not opposed to the scheme,” writes Thomas O’Neill, the think-tank’s director on LinkedIn. “We are just concerned that badly managed it could go more wrong than right.”

You can read the full report here.

A service from the Financial Times