In a groundbreaking move, the U.S. Department of State, along with prominent entities including the Bezos Earth Fund, The Rockefeller Foundation, and the World Bank, has unveiled an unprecedented collaboration between the Energy Transition Accelerator (ETA) and the World Bank. This strategic partnership aims to mobilize significant financial resources to drive equitable and accelerated energy transitions within developing nations.
The ETA, a collaborative venture between the State Department and the two philanthropic organizations, is dedicated to galvanizing private capital support for the transition from fossil fuels to clean energy through innovative, jurisdictional-scale carbon crediting mechanisms. Simultaneously, the World Bank, in conjunction with its new initiative known as SCALE (Scaling Climate Action by Lowering Emissions), assists developing countries in formulating power sector policies and establishing carbon market infrastructure to effect genuine emissions reductions in an inclusive and participatory manner.
The strategic collaboration announced during a Climate Week event hosted by The Rockefeller Foundation seeks to harness the strengths of each initiative to facilitate the mobilization of financial resources for effective energy transitions. This collaboration will enable developing nations to receive direct compensation for verified emissions reductions from a pool of contributions committed by both public and private sector stakeholders.
The ETA will contribute its innovative crediting methodology and enlist a coalition of private sector participants. In contrast, SCALE will provide a platform for sovereign government buyers and offer support to develop in-country capabilities to produce high-quality verified emissions reductions. The United States, as the inaugural contributor to SCALE, will collaborate with the World Bank to attract additional contributors.
John Kerry, U.S. Special Presidential Envoy for Climate, emphasized, “Getting to net zero is possible only if we quickly ramp up investment to help fast-growing economies meet their power needs with clean energy. The Energy Transition Accelerator and the World Bank’s SCALE initiative each bring vital tools to this effort. Working together, we can more effectively leverage both public and private finance to accelerate a just transition from dirty to clean power, drive emissions down faster, and help keep a 1.5 C limit on warming within reach.”
Axel van Trotsenburg, Senior Managing Director of the World Bank, emphasized the importance of partnerships between the public and private sectors, stating, “Helping countries accelerate their just energy transitions can reduce emissions, strengthen economies, and create jobs. This will require stronger partnerships between the public and private sectors, such as the new collaboration between the World Bank and ETA, which will catalyze carbon finance for developing countries.”
Dr. Andrew Steer, President and CEO of the Bezos Earth Fund, underscored the urgency of accelerating the global clean energy transition, saying, “We must accelerate the global clean energy transition, full stop. This needs new and innovative financing mechanisms, bringing public and private funding together to phase out dirty fossil fuels and fast-track clean, renewable energy. The Energy Transition Accelerator can bring new, environmentally sound funding to the table and leverage even more private investment toward the massive financial packages necessary to achieve this climate imperative. It’s very good news that the World Bank is joining this important coalition.”
Dr. Rajiv J. Shah, President of The Rockefeller Foundation, added, “Because the latest data makes clear that the world is not doing enough to address climate change or meet the Sustainable Development Goals, we need to take climate actions that are in both the planet’s interest and peoples’ interests. The ETA is the sort of innovative partnership we need to unlock the capital required for investments and initiatives that lower emissions and lift up people around the world.”
According to the International Energy Agency, clean energy investment must triple to $4.2 trillion annually by 2030 to keep the 1.5°C warming limit within reach, with more than half of that investment required in emerging and developing economies. The ETA plans to mobilize new finance by assembling a coalition of private sector companies and institutions to commit to funding verified reductions in power sector emissions, resulting from ambitious energy transition programs in developing nations. These reductions will be delivered as high-integrity carbon credits.
The jurisdictional crediting methodology being developed for the ETA by the nonprofit Winrock International will incentivize countries to intensify their near-term activities contributing to power sector decarbonization, including clean power deployment, fossil fuel asset retirement, storage capacity enhancement, and policy adjustments. This methodology will generate new finance for climate adaptation and resilience in vulnerable countries.
Key supporting organizations in the ETA initiative’s design efforts include the Center for Climate and Energy Solutions (C2ES), the Environmental Defense Fund (EDF), the Climate Policy Initiative (CPI), and the Glasgow Financial Alliance for Net Zero (GFANZ). These partners also seek input from experts, governments, the private sector, and civil society through a High-Level Consultative Group comprising more than 30 stakeholders representing diverse geographic regions.
With over two decades of experience in results-based climate and carbon finance, the World Bank has managed over $4.5 billion in carbon funds, supporting developing countries in generating and monetizing emission reduction credits. Through the SCALE trust fund, the World Bank aims to expand its efforts to support impactful climate programs across various sectors, from halting deforestation to promoting just energy transitions.