Emissions accounting in coal phaseout finance

  • 20/12/2022

  • Climate Policy Initiative

There is increasing awareness that existing, unabated coal plants need to be retired before the end of their lifecycle, and a growing demand for financing to meet those objectives. However, such financing creates a potential dilemma: adding emissions-intensive assets to the financing institution’s portfolio during a time when financial institutions are increasing efforts to reduce the emissions covered in their portfolios. This brief outlines several approaches to deal with this dilemma.