The Monetary Authority of Singapore (MAS) and McKinsey & Company have published a working paper outlining how high-integrity carbon credits can be used as a financing tool to accelerate the early retirement of coal-fired power plants (CFPPs). The paper explores conditions for generating these carbon credits and developing a high-quality market for them. The approach involves quantifying the economic gap for retiring CFPPs early and leveraging "transition credits" generated from emissions reductions. These transition credits must adhere to the Core Carbon Principles and be issued later when emissions reductions are verified. MAS and McKinsey have proposed a template to help market participants assess and execute such transactions, and they invite interested parties to join a coalition to validate this approach further.

Source: Carbonherald