Guidelines for Financing a Credible Coal Transition

The paper argues that while coal transition mechanisms (CTMs) are essential for turning phaseout commitments into action, they carry risks that can undermine climate and social outcomes. To address this, the authors propose a framework consisting of four 'stage gates' to assess coal plant eligibility, transition pathways, social protection, and accountability.

• Existing coal plants are projected to consume two-thirds of the remaining 1.5°C carbon budget if no action is taken to transition the current fleet, despite the fact that over 95 percent of coal consumption occurs in countries with net zero or phaseout pledges.
• Coal transition mechanisms (CTMs) are being utilized globally, with examples including ratepayer-backed bond securitization in the United States, the Asian Development Bank’s Energy Transition Mechanism (ETM), and the Climate Investment Fund’s Accelerating Coal Transition (ACT) Investment Program.
• The proposed framework for CTMs is structured around four stage gates to mitigate risks related to climate outcomes, social and economic impacts on workers and communities, and the reputational risks of financing coal plant owners.

APA

RMI (2022). Guidelines for Financing a Credible Coal Transition. https://rmi.org/resources/guidelines-for-financing-credible-coal-transition/

Chicago

RMI. Guidelines for Financing a Credible Coal Transition. 2022. https://rmi.org/resources/guidelines-for-financing-credible-coal-transition/.

Wikipedia

{{cite report |author=RMI |title=Guidelines for Financing a Credible Coal Transition |date=21 November 2022 |url=https://rmi.org/resources/guidelines-for-financing-credible-coal-transition/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022guidelines, author = {{RMI}}, title = {{Guidelines for Financing a Credible Coal Transition}}, institution = {RMI}, year = {2022}, month = nov, url = {https://rmi.org/resources/guidelines-for-financing-credible-coal-transition/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }