The Rockefeller Foundation and Global Energy Alliance for People and Planet (GEAPP) announced the Coal to Clean Credit Initiative (CCCI) will set a new comprehensive standard for the use of carbon finance to incentivize a just transition away from coal-fired power plants to renewable energy in emerging economies. This initiative, which is supported by Climate Policy Initiative (CPI), RMI, and South Pole, 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 with the endorsement of a leading carbon standard.
“Emerging and developing countries have the right to create opportunity, jobs, and electricity for their people without triggering a climate emergency,” said Dr. Rajiv J. Shah, President of The Rockefeller Foundation. “The Coal to Clean Credit Initiative can help these countries retire coal plants and replace them with cleaner power, which can avoid tens of millions of tons of emissions per plant while still unlocking opportunity for people.”
Over 90% of coal plants are shielded from competition due to regulation or long-term contracts that guarantee their returns, resulting in many coal plants having no financial motivation to retire early. In response, the 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.
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The revenue generated from selling the 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 has developed a detailed concept, with input from a technical advisory group of leading experts, and identified real-world cases that are most suitable for the generation of coal-to-clean credits. CCCI’s ambition is to begin signing transactions as soon as 2024 and to apply the methodology to as many plants as possible this decade, avoiding millions of tons of planned carbon dioxide emissions.
Led by GEAPP, CCCI has secured a high-level partnership with the Republic of Indonesia to develop a roadmap for the generation of coal-to-clean credits for the managed and equitable phase-out of coal plants, and has begun scoping work in South Africa and Vietnam for similar partnerships.
“The JETP Indonesia Secretariat welcomes the Coal to Clean Carbon Initiative. We view this as a real opportunity to support one of the key priorities 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.”
With the right kinds of investment and support, affected communities will have a critical role to play in the transition from coal to clean power. CCCI’s just transition plans will be developed in partnership with local communities for each project. These include routes to new employment, entrepreneurship, and reskilling to ensure that the needs of coal workers and local communities are kept at the forefront throughout.
“By 2030 the cost of renewables will undercut fossil fuels almost everywhere, enabling an estimated 25 million secure jobs in Asia and Africa alone. GEAPP is proud to support countries such as Indonesia, whose request to participate in the Coal to Clean Credit Initiative will place them at the forefront of energy transition and carbon market development,” said Simon Harford, CEO of GEAPP. “This initiative is important not only because it creates financial incentives for emerging economies to rapidly transition from coal to renewable energy but does so in a just way to ensure jobs and livelihoods are properly accounted for as each project develops and scales.”
SOURCE: PRNewswire