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As Prepared

Thank you, Liz. And welcome, all of you, to the U.S. Center. I’m thrilled you can all join us for the start of what I believe is an absolutely critical conversation.

The starting point of this conversation – and the bottom line – is the urgency of keeping a 1.5 C limit on warming within reach. That is the reason we are all here in Sharm.

The science is clear: We can only achieve that goal if we urgently and dramatically reduce our emissions. We must act now to accelerate the clean energy transition. And it takes money to do that.

The U.N. finance report says we need to invest $2.5 trillion to $4.5 trillion a year for the next 30 years to reach net zero – with a majority of that investment in emerging and developing economies.

I’ve traveled the world meeting with leaders. They tell me they want to transition to clean power. The single biggest thing standing in their way – the single biggest barrier to achieving our goals and saving our planet from the worst consequences of the climate crisis – is the absence of money dedicated to emissions reduction.

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.

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.

That is why I am so pleased to be joining today with my good friends Raj Shah and Andrew Steer to announce a new partnership to catalyze private capital to accelerate the clean energy transition in developing countries. We’re calling this effort the Energy Transition Accelerator.

What we’re doing today is laying out a concept – one that I believe holds enormous promise, and that we are putting forward today to initiate a more intensive process to fully vet and develop. We plan to work closely with governments, with experts, with NGOs – with all the relevant stakeholders – to take this idea and make it real.

We want to make sure this new initiative delivers finance at scale. We want to make sure it delivers a just energy transition. And we want to make sure it delivers full environmental integrity.

Our aim is to have the Energy Transition Accelerator up and running no later than COP 28.

Here’s the concept: Our intention is to put the carbon market to work to deploy capital to speed the transition from dirty to clean power—specifically, to retire unabated coal fired power and accelerate the buildout of renewables.

We want to bring to the power sector – for the first time ever – the type of broad, jurisdictional approach that is proving so effective in the forestry sector. This is an approach that can deliver deep, rapid emission reductions – and that can convert these reductions into high-quality carbon credits.

We also plan to establish strong safeguards on the use of these high-quality credits. To buy them, companies must have net zero goals and science-based interim targets. And they must use these credits to supplement, not substitute for, deep reductions in their own emissions.

What’s more – and this is important – we plan to make sure that a portion of the finance generated goes toward supporting adaptation and resilience in vulnerable countries.

We believe this can be catalytic: By ensuring a predictable finance stream for energy transition, this approach will increase the bankability of clean energy projects, and unlock more concessionary, upfront finance.

One idea we would like to explore is to provide companies the option to use some of these credits to address a very limited portion of their near-term targets. This would be limited in time. This would be limited in quantity. And companies would acquire additional credits to go above and beyond their targets – achieving a greater overall level of emission reduction.

This is just one tool, but it’s a critical one. It will supplement, not replace, other sources of climate finance. And I believe it will drive deeper, faster emissions reductions than individual companies are able to achieve on their own.

We know there’s a range of views on this. Unfortunately, past abuses have in many minds discredited any use of carbon credits. But we also know that, with the right safeguards, crediting can be done well. And frankly, we believe we shouldn’t let the mistakes of the past keep us from employing a powerful tool for steering private capital where it’s most needed.

We’re hearing strong interest from companies: Microsoft, PepsiCo, and others have said they want to provide input as we shape this idea.

We’re hearing strong interest from developing countries: Nigeria and Chile are among those that want to work with us. We’d like to explore ways that the African Carbon Markets Initiative announced yesterday can complement this effort.

We’re also hearing strong support from many in the environmental community.

We know this will be challenging. There are a lot of details still to be worked out.

But here’s the hard reality. The bottom line. But if we don’t come up with creative ways to mobilize the money to accelerate the clean energy transition, we will blow through 1.5. That’s the choice.

I believe the idea that we, the Rockefeller Foundation, and the Bezos Earth Fund are introducing today holds enormous promise. And we are fully committed to working closely with all stakeholders to deliver on that promise – to deliver real and lasting benefits for developing countries, and for the climate.

We look forward to continuing this vital conversation.

U.S. Department of State

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