Biden Climate Ambassador John Kerry Announces New Plan to “Accelerate” Energy Transition in the Global South
The debate on how to finance the energy transition lands in Sharm el-Sheikh. This Wednesday, on the fourth official day of negotiations at the Egyptian climate summit, the United States announced a new initiative to afford the leap from fossil fuels to renewable energy all over the world. The plan, presented by US climate ambassador John Kerry, transfers to large companies the responsibility for financing energy transition plans of the countries. Especially in the case of the global south. “Financing the energy transition would cost between 2.5 and 4 trillion dollars a year. No government has that much money. We need to partner with private companies to mobilize this capital and accelerate the transition,” Kerry explained during the presentation of this plan.
The initiative has been baptized as “energy transition accelerator” and, for the time being, it already has the support of private initiatives such as the Rockefeller and Bezos foundationsas well as multinationals such as Microsoft and Pepsi. As Kerry explained on Wednesday during an appearance organized by the US government, there are other large companies interested in the initiative and many others that have shown interest in entering the talks. More details about the profile of these companies have not yet come out but, as Biden’s climate ambassador has detailed, the initiative will not include companies related to fossil fuels. That is, oil, coal and gas companies are excluded.
The plan consists, essentially, in the creation of a new mechanism for buying and selling carbon credits (the instrument launched under the Kyoto Protocol by which each country has a maximum quota of annual emissions). As Kerry explained, the companies that adhere to this initiative will be able to buy carbon credits directly to the countries of the global south. In this way, companies will be able to “offset” their greenhouse gas emissions and, at the same time, countries will have a “extra injection of money” to finance their energy transition projects.
The initiative is still in its embryonic phase and, for the time being, so only a few details have come out about how it will work. The plan, in fact, starts in Sharm el-Sheikh but it is given until next year, at the next climate summit, to be officially consolidated. Kerry, for his part, has advanced that this proposal is presented as “one more tool” to promote the energy transition in the global south and that in no case replaces the emission reduction commitments of governments.