SHARM EL-SHEIKH | November 9, 2022 – U.S. Special Presidential Envoy for Climate John Kerry, the Bezos Earth Fund, and The Rockefeller Foundation announced a process to design an Energy Transition Accelerator (ETA) with the potential to catalyze private capital for the clean energy transition in emerging and developing economies.
The three partners were joined at the announcement in the U.S. pavilion at COP27 by SEforALL, EDF, PepsiCo, Microsoft, and Nigeria. Others including RMI, C2ES, CPI, Global Optimism, and Chile offered support.
According to the IEA, the world needs $4.2 trillion dollars in clean energy investment, half of which is required in developing and emerging economies. The process aims to design a new type of high-quality carbon credit framed by robust guardrails to channel much needed private sector investment to phase out fossil fuels and accelerate renewable energy.
“If we’re going to phase out fossil fuels in our energy systems, we believe voluntary carbon markets have a role to play,” said Andrew Steer, President of the Bezos Earth Fund. “They must have high standards on both the supply side and demand side with appropriate environmental and social safeguards. The purpose of the proposed scheme is precisely to design and agree to such standards, then to move to implementation. The need is urgent, and we must bring people together to move the needle forward.”
Burning fossil fuels for power generation in emerging and developing economies accounted for 9.8 billion tons of CO2 emissions in 2020, double the annual emissions of the United States. Without sufficient investment to reduce these emissions, it will be impossible to prevent the worst of the climate crisis. A just energy transition offers the opportunity to connect billions of people to reliable, renewable electricity, many for the first time.
“Humanity is already being battered by climate change—at 3 degrees of warming, life for too many people will be not only hot but harsher, poorer and more fragile,” said Dr. Rajiv J. Shah, President of The Rockefeller Foundation. “To avoid that fate, the world must come together in new ways and behind new innovations like the ETA, which could, for the first time, unlock the true potential of carbon markets to scale resources needed for clean energy transitions. Our teams will work in the year ahead to answer the hard questions required to reimagine what’s possible.”
Over the next year, the Bezos Earth Fund, The Rockefeller Foundation, and the U.S. State Department will engage with developing countries, political and thought leaders, climate champions, and the world’s foremost experts to design the ETA. The Science Based Targets Initiative (SBTi), the Voluntary Carbon Markets Initiative (VCMI), the Integrity Council for the Voluntary Carbon Market (ICVCM), and WRI for the Greenhouse Gas Protocol will be consulted to ensure broad alignment with best practice environmental and carbon market standards.
The intent is to gather input and expertise from the people and institutions with the know-how and networks to design an ETA that produces verified greenhouse gas emission reductions which participating jurisdictions will have the option of issuing as marketable carbon credits. The credits could then be purchased by companies, including through advanced purchase agreements, which would create a predictable finance stream to de-risk and leverage other forms of finance. The process will focus on a methodology designed to operate at a broad or jurisdictional scale while steering carbon finance to discrete projects. Five percent of the value of all credits generated through the ETA will be dedicated to international support for adaptation.
Over the next year, the Bezos Earth Fund, The Rockefeller Foundation, the U.S. State Department, and others will seek to address a number of tough issues, including:
- A methodology which contains rigorous protocols for crediting and for monitoring, reporting, and verification so that any carbon credits generated are real, additional, and permanent.
- Rules and safeguards, which ensure that the use of carbon credits by companies is consistent with a science-aligned net zero pathway. Participating companies will need to achieve deep reductions in their own value chain emissions, with emission reductions generated through the ETA supplementing their internal abatement.
- Parameters that maintain integrity while ensuring sufficient supply (i.e. developing country participation) and demand (i.e. company participation).
- Guidance for social safeguards, benefit-sharing arrangements and support for job creation and training in participating jurisdictions.
- Stringent end-to-end transparency guidelines.
Any revenue eventually raised through the ETA would supplement other sources of finance being mobilized by governments, donors, and multilateral and private financial institutions in support of developing countries’ energy transition.
The Bezos Earth Fund and The Rockefeller Foundation will support the necessary logistical and expert support for the design of the ETA. Additional details will be released over the coming months, as the partners seek to finalize the standards. Interested parties should sign up to learn more about the design of the accelerator in the months ahead by emailing firstname.lastname@example.org.
The following provided observations on the process to design an ETA:
Barbara Buchner, Global Managing Director of Climate Policy Initiative: “Carbon markets can play an important transition role in neutralizing emissions while helping developing economies fund their net zero goals. CPI supports exploring new types of high-integrity offsets that accelerate action. Amongst those, environmentally robust carbon credits from accelerated retirement of coal power plants could help finance their phase out in a just and equitable way while providing finance for sustainable, net zero alternatives.”
Christiana Figueres, Former Executive Secretary UNFCCC, Co-Founder, Global Optimism: “All that matters now is speed and scale. Corporations must urgently reduce emissions in line with a 1.5 degree pathway and they must also be part of providing much needed finance flows to support the energy transition around the world. I hope many take that opportunity.”
Damilola Ogunbiyi, CEO & Special Representative of the UN Secretary-General for Sustainable Energy for All: “We can only ensure sustainable energy for all by vastly increasing the private capital necessary to scale promising new renewable technologies. We welcome new innovative approaches like the new Energy Transition Accelerator, which can help unlock the potential of carbon markets for the good of humanity. This work complements well our efforts with the recently launched African Carbon Markets Initiative (ACMI).”
Fred Krupp, President, Environmental Defense Fund: “EDF welcomes this promising initiative which can make an important contribution to accelerate the shift from fossil fuels to clean energy in a way that supports the people most affected by the transition. Using high-quality carbon credits from jurisdictional programs will allow the private sector to provide significant financing to developing countries – which will help them to meet their Paris targets, adapt to a changing climate, and help local communities and workers.
“The Energy Transition Accelerator must be inclusive from the beginning and complementary to other government and private sector support. When it’s up and running, it must be governed in a way that respects local differences and development needs. In this way, the ETA will be set up to meet its aim, and to support developing countries’ own implementation efforts.”
Jon Creyts, CEO, RMI: “We cannot run most coal and gas power plants to the end of their economic life and achieve our climate goals. Status quo financing will not be sufficient. We need to focus on innovative financing that provides emerging economies a way to phase out fossil assets while delivering energy security and economic prosperity for their citizens. We look forward to the Energy Transition Accelerator helping to build momentum for and unlock new breakthrough solutions.”
Nat Keohane, President, Center for Climate and Energy Solutions: “Speeding the clean energy transition in developing countries, in a way that provides energy access and drives sustainable economic growth while cutting emissions and phasing out unabated fossil fuels, is a paramount priority for the planet. Alongside other vital tools, including scaled-up public finance, the Energy Transition Accelerator can be a powerful accelerant for that transition by catalyzing much-needed investment from the private sector to help countries meet their Paris targets. C2ES looks forward to working with all of the stakeholders involved in the ETA to design a framework that has high integrity: one that ensures that carbon credits are based on jurisdictional-scale emissions reductions that are real, additional, and rigorously measured and verified; that transition plans are inclusive and contribute to just outcomes in the participating jurisdictions; and that credits are used to go beyond ambitious action companies are already taking to reduce emissions in their own operations and supply chains.”
His Excellency Yemi Osinbajo, Nigeria Vice President: “Nigeria has been leading the effort to realize the potential impact of carbon credits. The government of Nigeria welcomes innovations like the Energy Transition Accelerator and the Africa Carbon Markets Initiative (ACMI) which can help us leverage carbon markets to support millions of jobs and cut billions of carbon emissions.”
About the Bezos Earth Fund
The Bezos Earth Fund is Jeff Bezos’ $10 billion personal commitment to fund scientists, activists, NGOs and others to help drive climate and nature solutions. By allocating funds creatively, wisely, and boldly, the Bezos Earth Fund has the potential for transformative influence in this decisive decade. Funds will be fully allocated by 2030 — the date by which the United Nations Sustainable Development Goals must be achieved.
About The Rockefeller Foundation
The Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation that enable individuals, families, and communities to flourish. We work to promote the well-being of humanity and make opportunity universal and sustainable. For more than 50 years, The Rockefeller Foundation has supported initiatives to protect the planet—a legacy that continues with a new commitment centering climate in all of our programmatic, operational, and investment strategies. Our focus is on scaling renewable energy for all, stimulating economic mobility, and ensuring equitable access to health care and nutritious food, through mitigation and adaptation.
The Rockefeller Foundation
Bezos Earth Fund