New Delhi, Dec. 12 -- The Philippines is testing a new type of carbon credit aimed at encouraging companies to cut their climate warming emissions by creating funds that can be used to turn coal-fired power plants into renewable energy facilities.

Called transition credits, they are meant to help pay for phasing out coal use by creating value out of the emissions that would prevent. The funds would then pay to replace fossil fuel equipment with clean energy gear.

Proponents say transition credits could unlock a windfall of investment for the power hungry Asia-Pacific region and speed up Southeast Asia's transition to renewable energy. But some experts wary of longstanding problems in the carbon market view them as a dead end.

Transitio...