Key details came out this weekend regarding one of the most high-profile and controversial U.S.-led initiatives launched at COP27 last year, Andrew writes.

Driving the news: At an energy conference in Abu Dhabi, participants in the “Energy Transition Accelerator” laid out how they plan to mobilize trillions of dollars from the private sector to decarbonize developing country economies, without proliferating greenwashing.

Why it matters: Tapping into private sector money from companies and financial institutions is needed to rapidly transition the world away from fossil fuels.

Context: The accelerator is a joint project of the U.S. government, Bezos Earth Fund and the Rockefeller Foundation. It aims to rapidly coax private sector dollars off the sidelines.

  • When first announced at COP27, it was met with skepticism by activists and some diplomats who sought specifics about its use of carbon credits.

The big picture: According to U.S. climate envoy John Kerry, who has championed the project, the accelerator will…

  • Focus on steering private sector money to boost renewable energy deployment while reducing fossil fuel use in developing countries.
  • Generate carbon credits that companies and governments could purchase to count toward their own emissions reductions for a limited time.

Yes, but: The history of carbon market loopholes has given this tool a poor reputation, Kerry said Sunday.

  • “There are only two purposes for which we will allow someone to be able to buy a credit: one, to be closing down or transitioning [an] existing fossil fuel facility that is providing power,” Kerry said.
  • “And two, for the actual deployment of renewables that will replace current dirty sourcing.”

Zoom in: The participants published a set of guiding principles as well as the initial makeup of a consultative group to oversee it.

  • Private capital would have to support emissions cuts within the current decade, per the principles.
  • The initial consultative group, which is equivalent to a corporate board, includes high-profile names.
  • These include Canada’s former climate and environment minister Catherine McKenna, who led a UN anti-greenwashing report last year, as well as Bank of America CEO Brian Moynihan, representing the Sustainable Markets Initiative.

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