U.S. Climate Envoy John Kerry on Wednesday unveiled a carbon offset plan that would allow corporations to fund renewable energy projects in developing countries that are struggling to transition away from fossil fuels.

The program, called the Energy Transition Accelerator, is in partnership with philanthropic groups like the Rockefeller Foundation and the Bezos Earth Fund and will be finalized over the coming year. Officials argue it could funnel billions of dollars from the private sector into the economies of developing countries working to shift to renewable power sources like wind or solar.

The plan will create a new class of carbon offsets that represent investments in projects that help accelerate renewable energy projects or build climate change resilience in a developing country. Businesses can buy these offsets to balance out some portion of their CO2 emissions, and the money will go to these projects.

Chile and Nigeria are among the developing countries interested in the program, the State Department said, and Bank of America, Microsoft, PepsiCo and Standard Chartered Bank have “expressed interest in informing the ETA’s development.”

Voluntary carbon offset programs have been widely criticized as insufficiently regulated schemes that allow governments and corporations to undermine net-zero emission targets. Reports have shown, for example, that land managers are not changing their logging practices in some forests where offsets were purchased, and that some stands of timber that were supposedly “saved” had already been preserved and weren’t slated for logging anyway.

In order to buy these credits under the new program, companies must commit to achieve net-zero emissions by 2050 and report annually on emissions as well as progress toward the target, according to a draft of the plan. Fossil fuel companies are also not allowed to participate in the program.

But several major environmental groups said they are not supporting the plan, arguing the proposal lacked details and could ultimately undermine efforts to reduce global emissions.

Rachel Cleetus, policy director with the climate and energy program at the Union of Concerned Scientists, said the proposal fails to meet the urgency of the climate crisis and is not a substitute for the public finance that developing countries require to shift away from fossil fuels.

“Carbon offsets are not an answer in a world already on fire, under water and facing mounting climate losses and damage,” Cleetus said. “A voluntary carbon credit program won’t guarantee deep, real cuts in emissions — it’s tantamount to rearranging the deck chairs as the climate ship is going down.”

World Resources Institute CEO Ani Dasgupta said in a statement that the program “has to ensure guardrails for how companies participate and that the funding advances developing countries’ own priorities for a just energy transition.”

Kerry announced the proposal at the United Nations Climate Change Conference in Egypt, also called COP27. The summit has in part focused on directing funding to help poor nations recover from loss and damage caused by climate change.

According to cnbc.com. Source of photos: internet