The US government has announced at the COP27 climate summit in Egypt an international, public-private effort to catalyse a clean energy transition in developing nations.
The Rockefeller Foundation and the Bezos Earth Fund are joining the US government in developing an Energy Transition Accelerator (ETA) that intends to help reduce emissions, strengthen developing nations’ national determined contributions (NDCs), accelerate the deployment of renewable power, and retire fossil fuel assets in developing countries.
The ETA is expected to operate through 2030, and potentially through 2035.
The initiative was launched with goals to limit warming to 1.5 degrees Celsius, expecting required clean energy investment of $4.2 trillion annually by 2030, according to the International Energy Agency. More than half of this investment would have to be in emerging and developing economies, the US government said.
The countries Chile and Nigeria have shown early interest in the accelerator, along with Bank of America, Microsoft, PepsiCo, and Standard Chartered Bank.
The partnership aims to produce verified greenhouse gas emission reductions, which will then be potentially available as marketable carbon credits in participating jurisdictions.
The credits, for example, could be used to contribute to climate finance or contribute to a host country’s NDC achievement, as well as toward some Scope 3 emissions.
The US government plans to work with a range of stakeholders on environment, social, and technical aspects of the initiative, including the Science Based Targets Initiative, the Voluntary Carbon Markets Initiative, the Integrity Council for the Voluntary Carbon Market, and the World Resources Institute for GHG Protocol.
Companies and governments are turning their attention to developing countries, specifically countries in Africa.
Just after this initiative was announced, the US International Development Finance Corporation (DFC) signed a letter to explore financing of a new green hydrogen project in Egypt.
Developing economies tend to be more vulnerable to climate change due to food insecurity and a lack of energy access.
The DRC also said it has committed more than $2.3 billion in climate-linked development projects in the 2022 fiscal year.
“I am proud to announce that DFC committed more than $2.3 billion in financing over the past fiscal year to climate-linked projects around the world,” said DFC chief executive Scott Nathan.
“This record number is a reflection of the important priority that DFC places on climate financing. Today’s retainer letter with [Norwegian renewable power company] Scatec is a great example and signals our intent to explore financing for innovative projects like this new green hydrogen facility in Egypt.”