So-called “transition credits” could be sold to incentivise owners of coal-fired power plants (CFPPs) to retire their assets early and replace them with renewable energy. These high-integrity carbon credits could plug an estimated US$70 million ($95.76 million) economic gap arising from retiring a CFPP with a 1-gigawatt (GW) capacity five years earlier.
These findings were released in a working paper by the Monetary Authority of Singapore (MAS) and McKinsey & Company on Sept 26, which sets out how high-integrity carbon credits can be used as a complementary financing instrument to accelerate and scale the early retirement of CFPPs.
