The Energy Transition Accelerator (ETA) and the World Bank today announced a strategic partnership to raise money to support just, expedited energy transitions in poor nations. The announcement was made by the U.S. Department of State, the Bezos Earth Fund, The Rockefeller Foundation, and the World Bank.
Through creative jurisdictional-scale carbon crediting, ETA, a cooperation between the State Department and the two philanthropies, intends to catalyse private investments supporting the switch from dirty to sustainable energy. The World Bank and its latest SCALE (Scaling Climate Action by Lowering Emissions) project assist developing nations in creating the carbon market infrastructure and power sector regulations necessary to produce significant emissions reductions in a democratic and inclusive manner.
The Rockefeller Foundation organised a Climate Week event where ETA and SCALE announced their strategic partnership. The alliance intends to capitalise on the advantages of each project to raise money for efficient energy transitions. Through a pool of payments pledged by donors in the public and private sectors, it will be possible for developing nations to receive direct compensation for verifiable carbon reductions.
The ETA will offer a cutting-edge crediting methodology and a coalition of private sector participants, while SCALE will offer a channel for sovereign government buyers and support for local capacity to deliver a supply of high-quality, verified emissions reductions. These two initiatives will complement one another. The World Bank will collaborate with the United States, SCALE’s initial donor, to recruit more donors.
In order to help fast-growing economies fulfil their energy demands with sustainable energy, we must swiftly increase investment, according to John Kerry, the United States’ Special Presidential Envoy for Climate. “The SCALE programme of the World Bank and the Energy Transition Accelerator each contribute essential tools to this effort. Together, we can more efficiently use public and private financing to hasten the transition from dirty to clean energy, reduce emissions more quickly, and keep global warming below 1.5 degrees Celsius.
According to World Bank Senior Managing Director Axel van Trotsenburg, “aiding countries in accelerating their just energy transitions can reduce emissions, strengthen economies, and generate jobs.” This calls for tighter collaborations between the public and private sectors, including the recent World Bank and ETA cooperation that will spur carbon finance for developing nations.
The worldwide shift to renewable energy must be accelerated, period. According to Dr. Andrew Steer, president and chief executive officer of the Bezos Earth Fund, “this requires new and innovative financing mechanisms, bringing public and private funding together to phase out dirty fossil fuels and accelerate clean, renewable energy.” “The Energy Transition Accelerator can bring in fresh, environmentally responsible capital and encourage even more private investment to contribute to the enormous financial sums required to fulfil this climate imperative. The World Bank joining this significant partnership is excellent news.
The Rockefeller Foundation President Dr. Rajiv J. Shah said, “We need to take climate actions that are in both the interests of the planet and the people’s interests because the latest data makes clear that the world is not doing enough to address climate change or meet the Sustainable Development Goals. “The ETA is the kind of creative partnership we need to free up the funding needed for investments and initiatives that reduce emissions and improve the lives of people all over the world.”
In order to maintain global warming to 1.5°C or less by 2030, the International Energy Agency estimates that renewable energy investment must quadruple to $4.2 trillion annually, with more than half of that investment needed in emerging and developing economies.
A coalition of businesses and institutions from the private sector will be brought together by the ETA to commit to raising new funds in order to pay for verified reductions in power sector emissions that come from ambitious just energy transition programmes in developing nations and are provided as high-integrity carbon credits.
The jurisdictional crediting methodology being developed by the non-profit Winrock International for the ETA will encourage nations to step up their near-term efforts to contribute to the decarbonization of the power sector, including the deployment and utilisation of clean power and the retirement of fossil fuel assets, as well as the improvement of storage capacity, transmission, and distribution, as well as any necessary policy changes. A mechanism for using the credits generated by the technique to generate fresh funding for climate adaptation and resilience in vulnerable nations will be included.
The Environmental Defence Fund (EDF), the Climate Policy Initiative (CPI), the Glasgow Financial Alliance for Net Zero (GFANZ), and the Centre for Climate and Energy Solutions (C2ES) are other organisations that are aiding the ETA partners in the design process. The partners are also engaging in extensive consultations with academics, governments, business leaders, and members of civil society, including through a High-Level Consultative Group made up of more than 30 stakeholders from throughout the globe.
With more than 20 years of experience in results-based climate and carbon finance, the World Bank has handled more than $4.5 billion in carbon funds and helped developing nations create and sell emission reduction credits. The World Bank wants to expand its efforts in this area through the expand trust fund to support effective climate programmes in numerous areas, from halting deforestation to realising just energy transitions.
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