Kerry announces proposal for public-private carbon market for developing countries

U.S. climate envoy John Kerry on Wednesday formally announced the Energy Transition Accelerator, a public-private partnership aimed at developing carbon markets to transition developing nations off fossil fuels with private funds.

In remarks at the COP27 United Nations climate summit in Egypt, Kerry said the proposed initiative will involve private capital partnering with governments and NGOs to aid the transition to renewable energy sources. The former secretary of State described conversations with world leaders in which they identified money as the number one obstacle to the transition.

“Wealthy countries are stepping up their support. Our administration is working as hard as we can to deliver on President Biden’s pledge to quadruple U.S. climate support by 2024. We are absolutely committed to doing our part,” Kerry said in remarks Wednesday. “But no government in the world has enough money to get this job done. We will only succeed with a massive infusion of private capital.”

Kerry, who has frequently spoken of the need for private-sector cooperation on decarbonization goals, said the initiative could start a snowball effect by convincing other sources of money of the opportunities presented by transition. Another possibility, he said, is allowing companies involved in the program to use a limited amount of credits toward their own short-term emission-reductions targets.  “And companies would acquire additional credits to go above and beyond their targets – achieving a greater overall level of emission reduction,” he added.

Carbon credits have been a controversial concept among environmentalists and policymakers, with some dismissing them as “greenwashing” that allows companies to mislead about their environmental impact. In a statement Wednesday morning, the international NGO ActionAid excoriated the announcement as an “exhausting … talking point.”

Kerry was first confirmed to be planning to make an announcement about the proposal earlier this week.

“Carbon markets are not climate finance. Secretary Kerry keeps repeating that public finance alone will not be enough to meet our climate goals, but no one is actually claiming this. Now is the time for the US to take responsibility for how much it has contributed towards climate injustices,” Action Aid senior policy analyst Kelly Stone said in a statement.

“Carbon markets have historically failed to fulfill climate goals and often profoundly harm communities and undermine human rights. The Secretary’s claims that this time will be different aren’t enough,” she added.