From black to green: A new type of carbon credit could speed up the region’s shift to renewable energy and cut air pollution

Synopsis: Every first and third Tuesday of the month, The Straits Times analyses the beat of the changing environment, from biodiversity conservation to climate change.

Carbon credits are increasingly regarded as a key way to accelerate investment in renewable energy in Asia while also shutting down polluting coal plants early. Burning coal is a top source of planet-warming CO2 and air pollution.

Asia faces a major challenge of meeting its growing appetite for electricity while also curbing emissions growth. A further challenge: The average age of coal power plants in the region is about 15 years – when the plants have a life of up to 50 years.

To compensate plant owners, a coalition of power companies, banks, governments and philanthropy have come together to embrace transition credits, which monetise each tonne of CO2 saved from shutting down a coal plant early. The money from credit sales helps pay for the renewable energy power generation that replaces the coal power plant.