The spectre of de-assetization: legal infrastructures and fragile fixes in fossil decommissioning

Efforts to decommission coal power plants in the Global South are constrained by the legal infrastructures that create and protect them as assets. This article examines the Asian Development Bank’s Energy Transition Mechanism (ETM) as a case of managing these constraints via a series of increasingly complex and fragile spatio-temporal fixes: First, power purchase agreements and investment treaties require compensation of investors at business-as-usual asset valuations; second, for lack of public funding, this compensation is to be generated via a blended finance mechanism; third, its inability to stem these costs necessitates further legal-financial engineering, including a novel guarantee mechanism and ‘coal-to-clean’ credits. The ETM and its successive fixes are haunted by the power relations inscribed in asset creation and protection in the Global South. This renders ‘de-risked’ transition finance dubious as a blueprint for fossil decommissioning and highlights the troubled nature of climate-related asset stranding in transnational, hierarchical legal space.