The Rockefeller Foundation and Global Energy Alliance for People and Planet (GEAPP) have announced the launch of the Coal to Clean Credit Initiative (CCCI), which aims to set a new comprehensive standard for the use of carbon finance to incentivize a just transition from coal-fired power plants to renewable energy in emerging economies.
Supported by the Climate Policy Initiative (CPI), RMI, and South Pole, CCCI will begin running a consultative process to develop the methodology this month, setting a global benchmark for carbon-financed coal transition projects. The Rockefeller Foundation and GEAPP plan to present CCCI’s methodology during the United Nations Climate Change Conference (COP28) in Dubai later this year with the endorsement of a leading carbon standard.
According to the foundation, more than 90 percent of coal plants are shielded from competition due to regulation or long-term contracts that guarantee their returns; as a result, many coal plant operators have no financial incentive to retire their facilities early. In response, CCCI is designing a methodology that can be used to develop a world-first project approach to accelerate the managed and equitable phase-out of coal plants and incentivize their full or partial replacement with clean power this decade. The revenue generated from selling CCCI’s “coal-to-clean” credits could provide incentives for coal plant owners to change course and invest in renewable energy, while also generating funding to support the transition of workers and communities away from coal-fired power. CCCI’s ambition is to begin signing transactions as soon as 2024 and apply the methodology to as many plants as possible this decade, avoiding millions of tons of planned carbon dioxide emissions.
“The JETP (Just Energy Transition Partnership) Indonesia Secretariat welcomes the Coal to Clean Carbon Initiative. We view this as a real opportunity to support one of the key priorities of JETP Indonesia, namely the early retirement of coal power plants,” said Edo Mahendra, head of Indonesia’s JETP secretariat. “The task may be daunting, but with the right level of international support and political commitment that you have from the Government of Indonesia, we can collectively prove that accelerating the retirement of coal power plants can be made possible.”
“If we are to avoid the threat of over 2 degrees Celsius of global warming, we must provide a credible pathway for coal plants in emerging economies to transition sooner,” said Rockefeller Foundation managing director for power and climate Joseph Curtin. “Tens of millions of tons of carbon dioxide emissions can be avoided if just one plant is retired and replaced by cleaner power decades ahead of its planned closure. Realizing this benefit requires compelling incentives and additional finance.”
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