Mechanisms to Prevent Carbon Lock-in in Transition Finance

Carbon lock-in occurs when high-emission infrastructure or assets continue to be used, despite the possibility of substituting them with low-emission alternatives, thereby delaying or preventing the transition to near-zero or zero-emission alternatives. Transition finance, which focuses on the dynam...

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Bibliographic Details
Corporate Author: Organisation for Economic Co-operation and Development
Format: eBook
Language:English
Published: Paris OECD Publishing 2023
Series:Green Finance and Investment
Subjects:
Online Access:
Collection: OECD Books and Papers - Collection details see MPG.ReNa
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245 0 0 |a Mechanisms to Prevent Carbon Lock-in in Transition Finance  |h Elektronische Ressource  |c Organisation for Economic Co-operation and Development 
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505 0 |a -- Glossary -- Carbon lock-in considerations in financing and investment frameworks -- Foreword -- Overview -- Ten key elements of credible corporate climate transition plans -- Abbreviations and acronyms -- Carbon lock-in considerations in transition finance definitions: the role of feasibility assessments -- Executive Summary -- Carbon lock-in considerations in transition financial instruments 
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520 |a Carbon lock-in occurs when high-emission infrastructure or assets continue to be used, despite the possibility of substituting them with low-emission alternatives, thereby delaying or preventing the transition to near-zero or zero-emission alternatives. Transition finance, which focuses on the dynamic transformation and decarbonisation of hard-to-abate sectors, frequently faces the issue of carbon lock-in, particularly in considerations of investment feasibility and eligibility. Despite most transition finance approaches incorporating lock-in avoidance as a core principle, existing transition instruments and approaches put in place varying or limited mechanisms to prevent lock-in. Building on the OECD Guidance on Transition Finance, this report takes stock of how carbon lock-in risk is addressed in existing transition finance approaches (such as taxonomies, roadmaps, or guidance), financial instruments, and relevant public and private investment frameworks and methodologies. The report provides good practices on the integration of credible mechanisms to prevent carbon lock-in, address greenwashing risks and build confidence in the market. It can inform both public and private actors in the development of transition finance approaches, standards for green, transition and sustainability-linked debt, frameworks for corporate transition plans, or broader climate-related disclosure frameworks