Note4Students

From UPSC perspective, the following things are important :

Prelims level: ETA

Mains level: Climate finance committments by Developed Countries

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The US has unveiled a new carbon offset scheme called Energy Transition Accelerator (ETA) for climate finance.

Energy Transition Accelerator (ETA)

ETA is carbon offset plan that will allow companies to fund clean energy projects in developing countries and gain carbon credits that they can then use to meet their own climate goals.
The plan will be developed by the US along with the Bezos Earth Fund and the Rockefeller Foundation.
It would receive inputs from public and private
The concept is to put the carbon market to work, deploy capital otherwise undeployable, and speed up the transition from dirty to clean power.

Benefits of ETA

It may be good for renewable energy projects for sure and for those coal plants that are very old and unviable and which India wishes to shut down.
The scheme comes at a time when there is growing mistrust among developing countries about developed nations failing to deliver on climate finance commitments.

The proposed initiative would be insufficient to make up for the lack of funding from rich countries.
What developing countries need is predictable finance – not offset markets.
The proposed initiative cannot make up for the US’s failure to provide its fair share of climate finance – an estimated $40 billion of the unmet goal of $100 billion a year.

ETA appears to be a substitute for deep decarbonization needed within the US and other industrialized countries.
For developing countries like India, the first priority would be to meet their own targets and not provide offsets for reductions in developed nations.