Even if the world stopped building new coal-fired power plants today, currently operating projects are more than enough to drive us to worse climate catastrophe. Phase-out needs to happen very soon – the Intergovernmental Panel on Climate Change in 2018 said coal use should be reduced by about 80% from 2010 levels by the end of this decade. This is no small feat, and requires outside the box thinking and unprecedented action. ADB’s Energy Transition Mechanism (ETM) attempts to be that. But as it is today, it falls short of being an equitable, genuinely transformative, and climate-aligned solution.

For one, ETM seems eager to bail out coal developers and their financiers – using resources that include public funds, to boot – even though many of them pursued projects aware of stranding risks and social, environmental, and climate destruction they would bring. Meanwhile, consumers are given little assurance that their pockets will not be emptied out further from additional charges thanks to the scheme, and stakeholders have so far had little to say in the whole planning of the ETM leading to its announcement at COP 26.

Coal companies should be made to shoulder their proper part in early closure expenses, including reparative and just transition costs – on top of any penalties that those of them who incurred complaints or violations are required to pay. The companies responsible for the spate of red and yellow alerts in Luzon earlier this year are an example – will ETM also shoulder fines imposed on them?

Moreover, any emissions reduction achieved by the planned buy-out risks being undermined by the fact that its pilot period is staged in countries that still have several new coal plants lined up for construction, and the fact that ADB and the Philippines are both looking to develop another polluting industry – fossil gas. ADB and its partners need to pursue a massive push for renewable energy and a 1.5°C-aligned plan to phase out coal and other fossil fuels, which should both be integrated into target countries’ overall energy transition plan. We know for sure that this is not the case for the Philippines, as there is no such plan and since the DOE itself has so far been very clear it is not fully on board the ETM.

ADB needs to address these concerns on the mechanism, or else it risks making Filipinos and fellow climate-vulnerable peoples terribly lose the climate fight, and risks wasting crucial financial resources that could instead be bolstering the development of renewable energy in the region.