Economists make the case for “phase down finance”

In an article for the World Economic Forum, Emily Tyler and Celeste Renaud of Meredian Economics, a South African consultancy argue that evidence surrounding the ability of engagement to slow down the expansion of carbon-intensive assets is weak and in comparison, “phase down finance” could provide better results. According to Tyler and Renaud, phase down finance means that investors “remain invested, but only on conditions of responsible and Paris-aligned phase-down of emitting assets”. They write that in the case of South Africa, “ the country has a legitimate claim to concessional finance under the international climate finance architecture. While capital markets are likely to be able to finance much of the green infrastructure necessary, this requires Eskom to be a financially viable counterparty. Concessional international Phase Down Finance – compensating for asset value loss – can play a strategic role, together with domestic public finance, in achieving this”.