A group of financial firms have come together to speed the closure of Asia’s fossil fuel power plants, the world’s largest source of carbon emissions.
Under the proposals, HSBC, Citi, Prudential and Blackrock Real Assets, together with the Asian Development Bank, will form private-public partnerships to buy out the plants.
They will then work to shut them down over a 15 year time period, far shorter than the normal lifespan of such an asset.
The group plans to have a working model for the proposal, which was revealed by Reuters, ready by the start of COP26 in Glasgow in November.
Sources said that early talks with Asian governments and multilateral banks had been “promising”.
“The private sector has great ideas on how to address climate change and we are bridging the gap between them and the official-sector actors,” Asian Development Bank vice president Ahmed Saeed said.
He added that the first purchase under the scheme could come as early as next year.
Coal-fired power accounts for about a fifth of the world’s greenhouse gas emissions, making it the biggest polluter.
Ahead of the UN’s flagship climate summit this November, UK COP26 chair Alok Sharma has called on the world to “consign coal power to history”.
However, the plan was met with some scepticism by environmental campaigners. Adam McGibbon, a campaigner at Market Forces, told the Guardian that the move would only be effective if banks like HSBC stopped financing fossil fuel plants.
“Otherwise, this is just HSBC trying to make money from both ends of the climate catastrophe,” he said.