0:03

I think one of the problems when we talk about climate

0:06

finance is we just get our orders of magnitude

0:08

wrong. We spend hundreds of billions of dollars on

0:11

COVID. We're spending hundreds of billion dollars supporting

0:13

the Ukraine. And the

0:15

delta between a slow transition to net zero

0:17

and a fast transition is order of magnitude,

0:19

$10 trillion a year of global

0:21

economic impact. So we're

0:24

really just collectively not investing enough

0:26

in the transition. The success of

0:29

the energy transition hinges on the

0:31

availability of affordable capital to fund

0:33

clean energy projects around the world.

0:36

The rise of green industrial policy and

0:38

wealthy economies has mobilized public capital to

0:40

fund clean energy projects and attracted a

0:43

lot of private capital through subsidies and

0:45

tax incentives. In

0:47

emerging and developing economies, there are many

0:49

more barriers to deploying capital for clean

0:51

energy at the scale and speed needed.

0:54

The IMF, for example, projects that of the

0:56

$5 trillion in annual investments needed globally by

0:59

2030 to meet the world's net zero

1:01

goals, $2 trillion will need to

1:03

be made in emerging and developing economies. So

1:06

what is the role of private capital in

1:08

accelerating the clean energy transition? How

1:10

do we mobilize that capital in emerging and

1:12

developing economies? How can

1:14

private sector coalitions accelerate the energy

1:17

transition amidst an anti-ESG

1:19

backlash or a higher cost to

1:21

capital environment? And what's

1:23

the role of the private sector in

1:25

global climate negotiations? This

1:31

is Columbia Energy Exchange, a weekly podcast

1:34

from the Center on Global Energy Policy

1:36

at Columbia University. I'm Jason

1:38

Bordoff. Today

1:46

on the show, Nigel Topping. Nigel is

1:49

a distinguished visiting fellow here at the

1:51

Center on Global Energy Policy and a

1:53

global advisor to governments, financial institutions, and

1:55

private companies on climate and industrial strategy.

1:58

He served as the United Kingdom. High Level

2:01

Climate Action champion for Cop Twenty

2:03

Six. In this role he mobilize

2:05

the global private sector and local

2:07

governments to take action on climate

2:09

change, launching the Race to Zero

2:11

and Race to Resilience campaigns and

2:13

with Mark Carney G fans the

2:15

Glasgow Financial Alliance for Net Zero.

2:17

Nigel also a non executive director

2:19

of the Uk Infrastructure Bank and

2:21

an honorary professor of economics at

2:24

Exeter University. I spoke with Nigel

2:26

about the pace of technological innovation

2:28

scale be energy transition. We

2:30

also discussed his experience of Top Twenty Six

2:32

as the Uk is high level climate champion

2:34

and the outcomes of the most recent Up

2:37

Twenty Eight including the significance of the new

2:39

Thirty Billion Dollar Climate Fund launched by the

2:41

U A E and the Loss and Damage

2:44

Fund announced their i Hope You Enjoy. Nigel.

2:47

Topping! Ah New distinguished visiting fellow at Columbia

2:49

Center on Global Energy Policy which is a

2:51

privilege for us. It's great to have you

2:53

join us on the podcast. Thanks for being

2:56

with us for the success of this produces

2:58

a as well built this infamous I'm delighted

3:00

to the great to have you involved with

3:02

us here at Columbia and spending time with

3:04

a C or of the courses this year

3:07

and and part of last year and dad

3:09

why we have the time to sort of

3:11

have a bit more of an indepth conversation

3:13

about your career and what you see happenings

3:15

in the clean energy transition. So just to

3:18

help people understand what you're doing now

3:20

and what brought you to this work

3:22

cause your. Background

3:24

I think was studying math or max

3:27

and pleural as as you bring you

3:29

Brits confusingly call it's and then worked

3:31

in manufacturing for quite awhile. So just

3:34

talk about how how did that lead

3:36

to a career in climate action and

3:38

clean energy investing? Oh I mean by

3:41

accident. Really? I'm

3:43

I'm how went into industry as to

3:45

study mass them are bilingual in this

3:47

American. I hope I'm. Because.

3:50

I wanted to. was in the real

3:52

economy. I'm I'm. And so

3:54

many industry or had at a time

3:56

in single combat this in the Uk

3:58

where the idea. Component of his

4:01

strategy. This is often right in the late

4:03

eighties right? In fact to be like as

4:05

the and see it does your stress is

4:07

kind of a communist plot and that hope

4:10

I spend my free market and we we

4:12

know what I did into the hollowing out

4:14

of American an an An and to dismantle

4:16

that advice and but I was I was

4:19

also. I'm a very good mountaineers. I spent

4:21

close on a spit expeditions the Greenland ice

4:23

than than that.the Guardian site actually saw climate

4:25

signs. Up front international

4:28

incentive proceeded glaciers in that this has caused us

4:30

to constables and this was this is quite a

4:32

while ago when I'm talking at last year's Europe.

4:34

you're talking now about the first on the seventh

4:36

or was an accident or what is Greenland and

4:38

with those residents of a set on this not

4:40

have a dicey and we got to where we

4:43

thought it was it is it was one of

4:45

the big ice is joining the east. Greenland.

4:47

Ice sheet of Assists a five

4:49

why five mile wide fjord. Of.

4:53

Siege with little bit of Australia to city

4:55

and we thought we'd made a mistake this

4:57

before. This to much for those younger viewers

4:59

advocates a dog eventually prevails wins the right

5:02

place on the matter, they're closer to see

5:04

the distinct. I'm just sorry I was opposed

5:06

by emissions a lot of them flush toilets

5:08

or than I did hours or midcareer pause

5:10

or went back to school and stuff and

5:13

and close up it again into because of

5:15

his climbing experience or get interested in and

5:17

light and hearing about climate change but I

5:19

went I went to. Study. To

5:21

assist of science and and subsistence behavior not

5:23

an attempt was a lot of advantages to

5:26

the to tell me that the problem was

5:28

is a state of which was i kinda

5:30

thought was a rather nice is an an

5:32

an. Electrical tape was a

5:34

with have a car and have a lot

5:36

something in an illegitimate of modern life or

5:38

mates or later than by businesses and then

5:40

just Lacy said the from his business or

5:42

the promised a despairing debts and be very

5:45

simple. So

5:47

dismissive some rest of the problem and so

5:49

was I Decided then I won't have

5:51

worked on how do we use the power

5:53

of business to solve. Global.

5:56

Issues, particularly climate change is specific as

5:58

Monday night. That seems to have

6:00

gripped me for the last 18 years now. You

6:03

did that for a while with

6:05

the carbon disclosure project, as I recall. And

6:07

so just talk about the connection there.

6:09

We're obviously having a lot of discussion

6:11

today about what disclosure should

6:13

be expected here in the U.S. We have

6:16

these SEC roles that will be coming out

6:18

soon. Why is

6:20

that where you went and how important is disclosure

6:22

to the role of the private sector in this

6:24

transition? I went there because

6:26

I did my master's thesis on

6:29

the role of business in addressing

6:31

global problems. And I did that

6:33

by looking at some initiatives which had taken

6:35

as they're starting framing that transforming the role

6:37

of business would be a way of transforming

6:39

the outcomes, not campaigning against businesses

6:41

is what most environmentalists were doing there. And

6:44

CDP, the carbon disclosure project, was a really interesting example

6:46

that I was introduced to that

6:49

was founded in 2000. As

6:53

a kind of judo throw with

6:55

capitalism sort of ideas that pension

6:57

funds and asset managers are,

6:59

you know, holds the

7:01

stocks of publicly listed equities. And

7:04

just like in the great crash in

7:07

29, there was a flowering

7:10

of disclosure requirements because people realized that investors

7:12

had no idea what they were holding because

7:14

there was no transparency. The

7:17

first thing was investors or asset

7:19

managers are owners who hold public

7:22

equities but don't know what the

7:24

effect of climate change would be

7:26

on those stocks are investing blind

7:28

to some pretty important basis.

7:31

So it wasn't like you companies need

7:33

to change your behavior, you tell us what you're doing.

7:35

It was like a lot of written

7:37

on behalf of the owners of the company saying

7:40

as your owner, we'd like to

7:42

know how climate change is affecting you and how you're affecting

7:44

climate change. So we can

7:46

make that decision. That's become a very big

7:48

and important platform. That's led directly to PCST

7:51

and, you know, rightly mixed up

7:53

moving from voluntary to regulatory standards.

7:57

So I'll come back to some of that, but just to

7:59

sort of bring the career. to present, and

8:01

then there was COP26 in Glasgow.

8:04

There's maybe more and less significant COPs,

8:06

quite a significant one. And so your

8:08

role there was

8:11

the high-level champion. And for those listening who

8:13

may not know, being high level

8:15

sounds good, being a champion sounds good. What

8:19

is that role? And what did you do in COP26?

8:22

Well, just as the bridge to the role, why I

8:24

got the point to that role, I'm sure, is that

8:27

I'm head of

8:29

the Paris COP, we formed this coalition,

8:31

We Mean Business of NGOs Working. We're

8:33

the business groups, CDP was one of

8:35

them, BSR series, the World Business Council,

8:38

and there's two others. Because

8:41

we felt that the voice of businesses

8:44

who understood the science and recognised that the whole

8:46

economic system was going to have to change, it

8:48

was being crowded out by a very

8:51

well-effective project through delayed hydrocarbon

8:53

lobby. So we formed We

8:55

Mean Business Organised as a

8:57

very effective campaign to tell

8:59

the negotiators that an awful

9:01

lot of businesses wanted a good outcome from Paris

9:03

in terms of a strong goal, ratchet

9:06

processes, prices and cards, etc. And so I

9:08

ran Women Business for five years. And then

9:10

when the UK got the presidency of COP26,

9:13

one of the things that came out of Paris was the

9:15

creation of this role. I think the official

9:18

side is high-level climate action champion. It's very long,

9:20

but I like the action bit more than the

9:22

high-level bit. And so I guess because I'm working

9:24

with Women Business, the UK government appointed me to

9:27

that role for COP26. And then it's

9:29

one of those roles that in trying to persuade me to

9:31

do it, everyone told me it's the most important role in the

9:33

world. It's all about motivating the real

9:35

economy to change. And we know that that's where the

9:38

real change comes from. And negotiations are nice, but nothing

9:40

much happens there. So I said yes to the job

9:42

and then asked about my budget and

9:44

discovered that there was basically no team and no

9:46

budget. I was very lucky I

9:49

got to work with Gonzalo Munoz who was a

9:51

Chilean high-level champion, who's a serious entrepreneur, and

9:54

one of the godfathers of the B Corps

9:56

movement in Latin America. So we

9:58

just went at it quite and said, we've

10:01

got this very powerful platform and role. The

10:03

job of the champion is to work with

10:05

what the UN calls non-state actors, the private

10:07

sector, cities, states. California is not a state

10:09

actor. It doesn't have a vote in the

10:11

UN, but it's a pretty important economy and

10:15

civil society to

10:17

mobilize more ambition and more action in support

10:19

of national governments implementing the Paris Agreement. So

10:21

we basically decided to turn that into a

10:24

series of campaigns, reflecting the three pillars of

10:27

the Paris Agreement. The Race to

10:29

Zero, which is about mobilizing science-based

10:31

short-term ambition, but

10:34

also over 1000 cities

10:36

and universities and other actors. The

10:39

Race to the Zero is about partnering

10:41

with individuals which are driving implementation

10:43

of actual solutions to climate risk.

10:47

And then the Glasgow Financial Alliance for Net Zero,

10:49

which I founded with Mike Carney, which

10:52

mobilized right now over 500 financial institutions, 152, a

10:55

lot of assets. Yeah,

10:59

and then of course we had an extra year

11:01

because of COVID. So we decided to go from

11:03

mobilizing ambitions and mobilizing more action and that

11:05

kind of 20-30

11:08

dates to agenda in Glasgow, which is

11:10

very specific deployment goal for each sector, like

11:13

70 green field plants by 2030,

11:15

15% sustained radiation field by 2030. And

11:19

then in Sarma, Srej, the year later, we launched

11:21

the SARM adaptation agenda. So it's the same thing,

11:24

like how many hectares of mango need to be

11:26

restored, how many millions of kiln of coal to

11:28

sell, et cetera. And is that your general take

11:30

on kind of where we are with the COP,

11:32

UNFCCC process now that there are

11:34

negotiated texts and they are important, but

11:36

as or maybe even more important, I

11:39

don't want to put words in your

11:41

mouth, is what happens on the margins,

11:43

these annual events where commitments are made

11:45

by financial institutions or the private sector.

11:48

Is that actually what you look to,

11:50

to figure out whether these COPs are

11:52

useful in making progress?

11:54

I think there are two important domains. Did

11:56

you say that? I mean, the formal multilateral

11:58

negotiations are really important. important. But

12:01

partly as a result of the Paris

12:03

construct that recognises that this

12:05

is an agreement between sovereign nations and

12:07

so it's about the sovereign plans and

12:09

that's the same contributions. But

12:11

also partly as a result of the realisation

12:14

that the parties made when they created the

12:16

Trump control that most

12:18

of the implementation will be done by the private

12:20

sector. I think

12:23

the process hasn't quite woken up to that yet.

12:25

I think civil society and

12:27

media still tend to take some more on the negotiations

12:29

than we also take. I think perhaps

12:32

the pace of charge of what I see

12:34

as a way forward is the troubling of renewables outcome.

12:37

I mean that had already been agreed as

12:39

part of the G20 communique and G7 communique.

12:42

There's a whole massive private sector

12:44

coalition, the Global Renewables Alliance which is the

12:47

wind, solar, storage, geothermal

12:51

and other renewable

12:54

sectors all behind that troubling renewables by

12:56

2030. And actually if you look at

12:58

the institutional landscape now, pretty much every

13:00

sector there are those coalitions

13:02

of the ambitious forming

13:04

focused on getting to those breakthrough goals by 2030. And

13:07

what I think we really need to see now is

13:09

that bit of a quick choreography

13:11

beast up because that, the

13:14

other thing to remember is that cops are

13:16

the domain of environment ministers but

13:18

the energy transition and the industrial

13:21

transformation is not the domain

13:23

of energy ministers, industry ministers,

13:26

finance ministers. So there's

13:28

a bit of a mismatch between the negotiating

13:31

portfolio and the policy portfolio

13:33

that we have to bridge

13:36

intelligently. Yeah,

13:38

I thought at COP28 in Dubai, I mean

13:40

just something I spent a lot of time

13:42

thinking about is the geopolitics of this transition.

13:44

It was the first ever trade day and

13:46

you had ministers thinking about international economics and

13:48

foreign policy. Certainly there

13:51

to discuss the war in the Middle East

13:53

but really focused on this agenda as well.

13:56

To Your point,: it's beyond just the realm

13:58

of environment ministers. What it?

14:00

What did you think of the outcome

14:03

of Cop Twenty Eight in Dubai or

14:05

relative to what people were hoping or

14:07

expectations? There were questions among Sama. That's

14:10

the way. As a major oil gas

14:12

producer being the host of this damn,

14:14

how consequential do you think the outcomes

14:17

the outcome once passengers are pretty positive

14:19

on either coast. On a simple level

14:21

one understands the concern about this. See

14:24

a little Thompson presiding have an international

14:26

climate was us as one of the

14:28

of it is the simple. To

14:30

Germany. And it ended

14:33

as a consultant so times. Also one of

14:35

the most noticeable and biggest investors in renewables

14:37

to his work of mass. All right Man

14:39

for is an incredible organization for more than.

14:43

Anything other than perhaps the catalytic of the case.

14:45

I have to drive the cars that are enables

14:47

and and to spread investment in a lot of.

14:51

The some Asian and African countries with

14:53

that was has not had lots of

14:55

orphan. So different it's so sad Cases

14:57

Williams and Sin. And

14:59

and he already has a young country

15:01

that has managed to take its oil

15:03

wells and translate into it. And

15:06

a lot of wellbeing. And.and starts to

15:08

the swine as a desert. Twenty fifty

15:10

targets So and and and and by

15:12

the way that's the multilateral process right?

15:14

and and beside it spreads we'd sit

15:17

around is educating. I mean if it

15:19

is enough for stuck between the Uk

15:21

the Us in I would have a

15:23

thick If it can become a lot

15:25

worse stay as as as our own

15:27

put up with schools and. So

15:30

circumstances wax and wane size of I

15:32

think he to job I mean value

15:34

but not not a lot of the

15:36

language. About thousand miles of those this

15:38

is wrong is is remarkable, is and

15:40

of Iraq's it and and I have

15:42

a more and more than as was

15:44

a real close as a result is

15:46

also outside of fun of the thirty

15:48

billion in a lot of it consists

15:50

of a So I think they both

15:52

put their money where their as is

15:54

that a pretty good others of choreographing

15:56

and articles very significant to it was

15:58

getting the agreement on. The last Donnish

16:00

fund on day one was a very

16:03

very smart political to our desires. You

16:05

know that whether they just locked up

16:07

undertake stood a chance that Dynamics consensus

16:09

is how could the venerable have to

16:12

sell about outcomes and how much like

16:14

a focus on understood rather than fight

16:16

to the to that one think they

16:18

raise the bag. Yeah. I'm just

16:20

so for people listening who who

16:22

have made I know the details

16:24

that you a launched a thirty

16:26

Billion Our Climate Fund in partnership

16:28

with some large institutional investors. I

16:30

think five billion of it targeted

16:32

for slows to the global south

16:35

as the Altera fund the Us

16:37

and get to say another word

16:39

about how significant that is in

16:41

terms of mobilizing private capital. but

16:43

also we know so much of

16:45

this capital. Ah, Estimates vary

16:47

between one and two trillion by twenty thirty, but

16:49

these are. Much many times larger

16:51

than they are today. It's need to

16:53

go into emerging in developing economies. do

16:55

you think guy to think I'll terrorism

16:57

meaningful step forward and that I did

17:00

I just think this is where the

17:02

conversation some sometimes. When. The conversation

17:04

about what needs to change is overly

17:06

framed on walk through the five in

17:08

the com or can often slower songs

17:10

and climate mobile phone as good as

17:12

often as the that the fullness hundred

17:14

billion. Commitment my son's other night

17:16

and. On. And

17:18

why is that a lot considering that

17:20

is little take an interest in. It

17:22

was delivered there is light on saw

17:24

it all out frustration with the over

17:26

focus on on on that and doctor

17:28

back movement he did was Egyptian chapters

17:30

and I is always to jump into

17:32

overlapped right into Scott Nice among the

17:34

presence is where you had on a

17:36

battle of the temperatures he says to

17:38

to have so you're overlaps as it

17:40

is of we we we and it's

17:42

a person's mixed earn the. Uk

17:45

see the Climate Scientists in the London School of

17:47

Economics and virus on was of a sudden running

17:49

the. Your

17:52

the senate as possible to just write a

17:54

paper on. What's the what's

17:56

the whole once and as. The. Consensus.

17:59

I just. Prices. In

18:01

Emerging doesn't have his, That's where the

18:03

roads are numbered. I target with his

18:06

two points. Or to live in twenty

18:08

thirty six. Imagine in developing countries including

18:10

China Have an idea? Totally. Half

18:12

a lot com it's a domestic source

18:15

my position and. Com a couple

18:17

of the politics of negotiations often becomes zero

18:19

sum game so. whenever. A wealthy

18:21

country would raise the issue of. Was.

18:23

Year American countries me to get your

18:25

policy and barman straight and you to

18:27

to put your own money into the

18:30

transition in our country they would. The.

18:32

Immediate response from only does it should be. You're.

18:35

Just saying that to try get off the hook from

18:37

pay the money to you I was causing the problem

18:39

said accomplished doesn't go anywhere since the start somewhere type

18:41

is very helpful the same his whole this were a

18:43

lot more fun to mess it was was my brothers

18:46

and a half him on his on his i'm. Gonna

18:48

set of the most of in the classes. On

18:51

and at wholesale discount reforms by

18:53

his unorthodox assisted also domestically. That.

18:55

Would be needed to mobilize that is a set of

18:57

four or five x to the Carnival says. On

19:00

it's minutes. And then

19:02

you mention a loss and damage

19:04

sons and it's talk about talk

19:06

about that both the concept of

19:08

loss and damage given that steps

19:10

we need to take moving forward

19:12

to decarbonise as fast as possible.

19:14

There are also in on discussions

19:16

internationally multilaterally on a lot of

19:18

discussion is there should be about

19:20

who's responsible historically for the cumulative

19:22

emissions to date and there was

19:24

concerned that that really could break

19:26

down between wealthy and poor countries

19:29

in a lot of acrimony. Their

19:31

ended. Up as you said on the

19:33

first day being a commitment for just

19:35

under I think Seven hundred million dollars.

19:37

Only seventeen million as I recall from

19:39

the United States, the largest historic a

19:41

metre. I'm Matt, how should we think

19:43

about what was achieved on loss and

19:45

damage? Meaningful amount of a large amount

19:47

of money but still quite small relative

19:49

to the scale of climate damages to

19:51

be shores. And and that that

19:53

issue. How do we think about how to fuck out

19:55

for how much of a parody that should be and

19:57

where we go from here? With.

19:59

It. a little bit about loss and damage,

20:01

but then just broadly about how we think about

20:04

investing in taking

20:07

the advantage of an accelerated energy transition

20:09

and avoiding the worst damages,

20:11

just a macro level. I mean,

20:14

loss and damage is hugely important.

20:17

Remember, there's nearly 200 countries

20:20

who are parties to the UN Convention, 120 of themself

20:23

identify as vulnerable. So

20:26

they've made a small island of states and

20:28

emerging markets opposite exposed

20:31

to hurricanes and storm

20:33

surges and droughts and fires

20:35

are getting worse and worse. The

20:39

constructors of the convention talked about mitigation, like how do

20:41

we get to zero, adaptation

20:43

and resilience, like how do we do stuff

20:45

to cope with what's changing

20:48

anyway. And then loss and damage, we're not going to

20:50

be able to adapt our way out of everything. So

20:52

some bad stuff's going to happen. So how

20:54

do we compensate people for

20:57

that? And even that you can split between

21:00

say, an

21:03

increased frequency of harvest failure versus

21:07

the complete loss of a habitat like

21:10

an island, which is just a permanent.

21:12

And so

21:16

it's politically very important, I mean, Philip

21:18

Shook is sadly a part

21:21

of the Bangladesh academic, really

21:23

loved the task and I remember in

21:27

San Jose, I remember the absolute delight

21:29

with which he came into my office

21:31

and announced that we

21:33

were going to get an operationalism of the

21:35

loss and damage fund agreed in

21:37

San Jose. Huge

21:39

political breakthrough faster than people thought. And then

21:42

they're getting Dubai, the actual structure of it

21:44

and where it would be housed and the

21:46

initial pledges were

21:48

landed. So, but it's a tiny amount, less than

21:50

a billion dollars, as you say, I think, again,

21:54

it's something to calculate, but we're talking sort of $300

21:56

billion a year. of

22:00

loss and damage in emerging markets. I think one of

22:02

the problems that we talk about climate

22:04

finance is we scare orders of magnitude wrong.

22:06

We spend hundreds of billions of dollars on

22:09

COVID. We're spending hundreds of billion dollars supporting

22:11

the Ukraine. And

22:14

if we get the delta between

22:16

a slow transition to net zero and a fast

22:19

transition is order of magnitude 10

22:21

trillion dollars a year of global

22:23

economic impact.

22:26

So we're really just

22:28

collectively not investing enough in the transition. And I

22:30

think you think more about the geopolitics than I

22:32

do. One of my

22:35

concerns is that we're not factoring not

22:37

only the economic damage, but the

22:40

geopolitical damage of a slow transition when you

22:42

just create the conditions for mass migration

22:44

and the way that that

22:46

tilts politics very much to the isolationist

22:49

rights and the way that makes a more bellicose

22:51

environment. Yeah, no, it's a

22:53

really important point. And you're helping us as a

22:55

distinguished visiting fellow with the kind of initiative we've

22:57

created here at the Center on Global Energy Policy

23:00

and with the Institute of Global Politics at

23:02

the School of International Public Affairs focused on

23:04

the geopolitics of the energy

23:06

transition and of climate change, the physical impacts

23:08

of climate change that we are, as you

23:10

said, we're seeing decades ago when

23:12

you were hiking in Greenland, but are seeing

23:14

with increasing severity today.

23:17

We could have a whole separate

23:19

podcast and we will on that topic. I

23:23

wanted to ask you about where we are today in

23:26

the private sectors, climate

23:29

commitments, actions, particularly the financial community. You

23:31

mentioned G fans when you were high

23:33

level champion, the

23:35

Glasgow Financial Alliance for net zero,

23:39

significant commitments from financial institutions to play

23:41

a more active role in putting capital

23:43

to work and maybe pulling out of

23:45

parts of the fossil fuel economy. And

23:49

a lot of these initiatives seem to have Faced

23:51

some headwinds. ESG Broadly is a

23:53

highly politicized issue now. And I

23:55

See a lot of financial institutions concerned

23:57

with navigating that and maybe. Paulina

24:00

breaks seemingly putting the brakes

24:02

a little bit Defense: Saw

24:04

the withdrawal of Munich gray

24:06

and Dams and Zurich out

24:08

last year just the other

24:10

day dad too. Large asset

24:12

managers on St. Street and

24:14

Morgan Asset Management All that

24:16

of climate action? One hundred.

24:18

Are you seeing things slowing

24:20

down? or or maybe even

24:22

reversing? As as both these,

24:24

there's political headwinds. But there

24:26

there's also Costa Capital increases,

24:28

supply chain problems, The Economics in

24:31

clean energy. And

24:33

becoming in some cases more challenging

24:35

for some of these investors. Airbus

24:38

it's a it's a mixed bag

24:40

is still with that. The.

24:42

The. With. This collective mobilization

24:44

first opening what we we

24:46

divulge, I launched the Rice

24:48

Zero in June. Twenty.

24:53

Twenty. When we thought

24:55

the cops can be that yeah because the

24:57

end up twenty twenty one arm and then

24:59

and then with Mark we launched his hands

25:01

as a partnership I think I guess he

25:03

was an alchemist April the year off in

25:05

particular we did it rather than another. There's

25:07

a Biden Climate summit and will use that

25:09

on the misuse or into insects is so

25:12

true though. the order was it that you're

25:14

as owners allies that we use that persists

25:16

that's a credit netzer by he lost his

25:18

answers as their are some managers of the

25:20

whole to be so satellites to see what

25:22

who and I'm. Ah alms,

25:25

By. The topic got to Glasgow

25:28

we have a foreigner system Financial

25:30

institutions for were in G sans

25:32

Vibe Fire and Vince Net Zero

25:34

Alliances. Of and I'm. Closer

25:37

as to these alliances was that you have

25:39

to commit to setting us sides by snacks.

25:42

I target and I'm an avid in a

25:44

year publish it is quite topic as into

25:46

do alive or Dead or then. Publish.

25:48

Registered on the other did write a plan a

25:50

publisher on an effect on protests salt person says

25:52

the bugs it's less successful I'm starting to for

25:55

assisting photos of the and and in the most

25:57

the most awesome opposite of others and bumps in

25:59

the. The old and a lot

26:01

of his own letting us. I

26:04

don't like us that that was such a

26:06

joint. It is that not everybody had a

26:08

target or a plan in Glasgow. Since then

26:11

we've seen. The. Vast majority

26:13

those organizations move was actually. Opera.

26:15

Singer, a target and and a plan and

26:17

so you to get. Most.

26:19

Of the big banks and will have an other. A

26:22

sign that Emissions Reduction Target which has. A

26:26

deck that are going off and similar of is

26:28

that by some the on the on on the

26:30

size of the lots of autobiographies. Sixty percent reduction

26:32

in finance the missions in the power sector and

26:35

thirty percent. In the and

26:37

or is justified by choice

26:39

as is an act. As

26:41

it does yes, the speed.

26:43

But. As you get the membership Juventus continue

26:45

to grow the happiness that that that the

26:48

in the insurance initiative. On.

26:51

And. And and some of the the that

26:53

the bachelor and is. Mainly

26:55

driven by this very strange

26:57

thing going on in the

26:59

states where you has people

27:02

to protect into the the

27:04

defenders of capitalism actually attack

27:06

and capitalism by to stop.

27:08

Loss Loss cause of Susan Storm

27:10

multiple loss of seasons. Of

27:13

thought by asserting that something view

27:15

and on disappears and an. You.

27:18

Visit the middle of that says and

27:20

does help you to on don't I

27:22

don't but it is problematic because of

27:24

course he was This disproportionately important to

27:26

note that the scientists have a i

27:28

think the an. Increasingly

27:30

receive the evidence that the transition is happening

27:32

and it's gone exponential in renewables, electric vehicles,

27:35

doctors heat pumps as old as the oldest

27:37

was don't see this was is why the

27:39

traveling by on his. thirties.

27:41

Actually, Uncharted. Consistent with that. And

27:44

we know that it doesn't recent happenings.

27:47

Honestly I I think them the biggest

27:49

risk for. Both bolstered

27:51

and my street in the states is

27:53

that it is it going slow, resistor

27:55

risk losing competitiveness and again I always

27:58

use it out if it first. In

28:00

the seventies and Detroit decided that they

28:02

could keep selling. It just doesn't cause

28:04

and last. The structural

28:07

more successful Rosa. And

28:10

centesimus I've been happening now. is this and other setting

28:12

up in the finance or to if you're not Do

28:14

I was. It was easy to sing. There's

28:17

a lot more than adults with a lot money in China. Supported.

28:20

The transition and the most amorphous an awful

28:22

lot of instructor the world and could go

28:24

in emerging markets and astronomers this is not

28:26

was less than capital. It will

28:28

be was I'm. On the

28:30

source the capital and mustn't restaurant

28:32

was released Officer. Let

28:35

me ask you about that exponential point

28:37

cause cause you talk often about it

28:39

my think we're we're talking a few

28:42

days before this podcast comes out. Ah

28:44

on the same day that headline and

28:46

the Ft today is that despite. Our

28:49

own dramatic and rapid growth and

28:51

clean energy emissions once again and

28:53

Twenty Twenty Three reached a record

28:56

high So. I guess the

28:58

question is. Does. It isn't necessarily

29:00

the case that this sort of rapid

29:02

annual gross may be exponential growth in

29:04

clean energy happens at the speed and

29:07

scale necessary to meet targets like one

29:09

and a half or even two degrees

29:11

and mean tripling renewables in twenty three

29:14

at six years. Not that lox. Ah,

29:16

we are on pace for roughly doubling

29:18

and even that is that significant improvement.

29:21

So maybe that's to your point. No.

29:24

prob What

30:00

commentators say is likely to happen Intererences

30:03

policymakers and markets So

30:05

we so once the one thing I'm really committed

30:08

is trying to make sure that everyone's educated into

30:10

the fact about exponential change Now does that make

30:12

sense? Well, it will

30:14

inevitably happen. Of course not I mean it happens because

30:16

people solve problems of the lovely interview I came across

30:18

by a chip designer You

30:20

know the most famous so example of exponential

30:22

changes Moore's law and this is a

30:25

tip desire Why didn't into the 90s? He said everybody

30:27

thinks that Moore's law is inevitable But we

30:29

come to work every week and face unsolvable

30:31

problems and then someone solves the problem and

30:33

then we move on to the next one

30:35

so so the exponential Adoption

30:38

of new technologies is driven by problems

30:40

by it by by by academics and

30:42

entrepreneurs and industrial engineers solving problems but

30:45

it's you can model it in a reasonably

30:47

bounded way and and the academic evidence is

30:50

that modeling an exponential is a

30:52

more accurate way of predicting the fork at the future than

30:54

the sort of Adding

30:56

up policies, which is what the Ia do or

30:58

trying to understand what everything that you can see

31:00

is happening right now It's all of course misses

31:02

the things you can't see so

31:04

I think we should be much more confident especially

31:06

in those technologies which are On

31:09

the esker of like renewables and EVs that they

31:11

were happen faster than most mainstream people think and

31:13

it's a clue to that if a mainstream forecast

31:15

to upgrades their forecast every year, then they're there's

31:17

been a Fundamentally have a methodological

31:20

flaw which means you should you should

31:22

you should do that for them and

31:24

not just take for granted What they say is gonna happen. Yeah,

31:26

I just had a whole exchange with one

31:28

of my one of our other colleagues here

31:31

about the IAs projections

31:33

reference cases forecasts and and and

31:36

I think there has been criticism of the

31:38

Ia in the past for missing the dramatic growth

31:40

in renewables part of that may be Technological

31:43

change that happens faster than you think part of

31:45

it is because policy gets stronger and I do

31:47

think for policymakers Having having

31:49

been one it is helpful to know where the world is

31:51

headed if you don't take more policy actions because otherwise You

31:53

don't know how strong those policy actions need to be Think

31:57

I think it's important for the Ia to both tell

31:59

people where things are likely headed, but also what

32:01

additional things need to be done in policy

32:03

and in technology to make sure that we achieve

32:06

that outcome. As you said, it's not inevitable. People

32:08

have to go to work every day to do

32:10

it. It's not just engineers. It's also policymakers. I

32:12

mean, we should – but I would say you

32:14

see one of the shortcomings

32:16

of one of the problems

32:18

created by not thinking exponentially in the sort

32:22

of realization like in the last 24

32:24

months that, oh my God, we need to restrict and

32:26

the grid a lot more and we need to deal

32:28

with planning and permitting. If you had expected exponential

32:31

growth, you could have seen that problem coming. Instead,

32:33

we've tripped up over exponential growth and then we've

32:35

got to come. Yeah,

32:37

so the exponential growth is driven by

32:40

human innovation. It's a familiar pattern, but

32:42

it's only delivered by humans doing remarkable

32:44

things. Let

32:46

me ask you about that, which is there

32:48

are certainly cases of exponential growth and people

32:50

talk about the horse and buggy to the

32:53

car and landlines to cell phones and other

32:55

things. And just to

32:57

play devil's advocate and get your reaction to

32:59

this, I mean, in cases like that, the

33:02

consumer utility, the benefit of moving from

33:04

a horse to a car is

33:06

exponential, right? So it takes off very

33:08

quickly because the user experience is dramatically

33:11

better. The user experience for electricity coming

33:13

out of the wall socket and whether

33:15

it's solar or coal isn't

33:18

particularly different. Moore's

33:21

law was about the power of

33:23

the device increasing exponentially. We

33:26

actually haven't seen that in solar.

33:28

We've seen the cost decline exponentially.

33:30

We've seen adoption and deployment and

33:32

installed capacity increase exponentially. But

33:35

I guess I'm wondering whether you think those...

33:38

There are many other cases you can point

33:40

to like fuel efficiency after the Arab oil

33:42

embargo. And to your point, the

33:44

US and Detroit was behind the

33:46

curve to smaller competitors, to other

33:49

competitors overseas. We didn't

33:51

actually see fuel efficiency increase exponentially. I, as you

33:53

know, got home at four in the morning because

33:55

of a delayed plane flight. Air

33:57

Aviation is not much different today than it was...

34:00

The years ago take longer to need to

34:02

get from New York to Chicago by train.

34:04

And it and sixty years ago so that

34:06

everything happens. expense. I'm wondering why you think

34:08

clean energy? and again for many people the

34:10

user experience of energy is not that different.

34:13

Maybe a Tesla? Nicer than an internal combustion

34:15

engine car for for some people, not the

34:17

same as going from a horse to a

34:19

car. Why will clean energy happen exponentially without?

34:21

Unless policy makes it happen. says.

34:24

It did for the masses for is it listed

34:26

on the nights Are these that multiple times since

34:28

I think that I'm. So. Sometimes

34:30

that sometimes as types of infrastructure that products

34:33

and it's like like tunnels or otherwise was

34:35

is not as to that use a tent.

34:37

Know that you're right as up with a

34:39

fundamental difference in the dynamic of moving from

34:41

a horse to the top and moving from

34:43

a to Boston Chicago and let's have some

34:45

what but where is straight substitution? But I

34:48

understand from the. Or sexist is that.

34:51

Once. You reach the. A price

34:53

thresholds. as long as as a

34:55

desirable seen on Access Doses. As that

34:58

observers and I set myself by the continental or

35:00

rebels on the. Border

35:02

the London pension fund and under the marijuana

35:04

was insisting some quite strict top of in

35:06

a locked up in zones in London was

35:08

there seems to sinbad drives towards electric vehicles

35:11

but I have asthma went without money that

35:13

to vehicles if we should buy what would

35:15

I want we that's not what am I

35:17

The policy without my custom imposed upon sounds

35:19

will become so accessible, season and issue and

35:22

undesirables he said because it can be good

35:24

enough and they got which is with us

35:26

and ago be available. But I'm. Pretty

35:29

close dumpsters and what's what's a lot

35:32

of those wasn't as as as well

35:34

as a personal assets was I was

35:36

if you're on a fleet or not,

35:38

the new. The. New by on

35:40

the cost of ownership so even if they

35:43

have your pay more for the Colossus can

35:45

we must to present run and maintain so

35:47

that the focus lens as calculated and behold

35:49

he thought that doesn't want to sign something

35:52

with video wasn't when she passes much it

35:54

was a cop because tipping point i'm as

35:56

as we have a very get a beautiful

35:58

it's metal to them. of renewable

36:02

adoption growth as

36:05

a result of the, as you said, the

36:07

rights law, the learning effect of cost down

36:09

that you talked about earlier. So I don't

36:11

think we've, you know, the same thing with

36:14

electric vehicles. Especially to test the models, this is sanitarium

36:16

disruption. And once the market starts to realise

36:19

that, like there's no car manufacturing in the

36:21

world now who hasn't got an electric

36:24

vehicle, and most of them have

36:26

stopped developing to busing engines because it's a waste of money to

36:28

have to run through development programs. So we've

36:30

basically decided that we're going to lock in on electric vehicles, at

36:32

least for the next few generations of cars. Maybe some people will

36:34

come up with something else, but there

36:37

are technologies which don't appear to be susceptible

36:39

to this learning effect, like

36:43

nuclear and CCS,

36:45

where the costs have hardly come

36:47

for three decades. So, and

36:51

of course, you're right that in any case, policy is

36:53

a part of that. If you think, if you look

36:55

at, in the UK, I have solar panels on my

36:57

roof, which would have been way too expensive, but there

36:59

was a feed in tariffs, which meant I get paid

37:01

way more. So the earlier doctors

37:03

got paid more to drive that adoption and

37:05

the supply chain companies. You

37:08

know, we won't get everyone in the UK buying

37:10

electric vehicle if people aren't confident they can

37:12

charge their cars everywhere. So policymakers making sure

37:14

that the infrastructure also matters. So it's never

37:17

just, I don't think it's

37:19

ever just the market. It's nearly always the market

37:21

and policymakers working collaboratively to

37:23

track the conditions for exponential growth. Yeah, especially

37:25

when what you're trying to do is deal

37:27

with a fundamental externality, carbon pollution, and then

37:29

as you said, policy can help bring the

37:31

cost down. And when it does reach that

37:33

tipping point where maybe clean energy is even

37:36

cheaper than not clean energy, then of course

37:38

you can see dramatic growth.

37:40

And we may be getting close

37:42

to that in areas of renewables or electric

37:44

vehicles, but still have a

37:46

long way to go as you know, in steel,

37:48

cement, shipping, aviation, other parts of

37:50

the economy. But

37:53

interestingly, we still keep being surprised by

37:55

innovation. I mean, and I've been in some

37:57

conversations until recently, most people have been assuming

37:59

that high... temperature industrial heat is

38:02

not electrifiable because it's hard to

38:04

turn electricity into very high temperature heat, 1700, 2000 degrees

38:06

Celsius. But

38:10

guess what? That's a big market.

38:12

So there have been entrepreneurs and engineers working

38:14

on solutions and now we're starting

38:16

to see some of those electrothermal solutions come

38:19

into market. And that's changing the modular

38:21

assumptions about how much gas with CCS

38:24

or how much hydrogen will need

38:26

in industrial heat. In some

38:28

sectors, we're definitely not on the exponential

38:31

yet. We don't even know what the technology

38:33

is going to be, but we're in this very interesting kind of

38:35

experimental phase of trying out

38:37

different technologies. And our assumptions from two years

38:39

ago are still being proven wrong often. I

38:41

think when you, again, when consumers see that

38:43

clean energy can, in

38:46

some or even many cases be cheaper,

38:48

that does lead to that exponential takeoff.

38:50

I wonder if you see concerns in

38:52

Europe, and I'd love to hear what's

38:54

happening in the UK in particular, where

38:56

are you worried there are cases where

38:58

that's headed in the other direction where

39:01

voters are starting to perceive in either

39:03

reality or perception that some

39:05

of these clean energy solutions like heat pumps,

39:08

they may see as more expensive. We saw the

39:11

UK government pull back on some of its heat

39:13

pumps goals recently. Where

39:16

is the state of the conversation? Or Keir

39:19

Starmer as he tries to get ready to

39:21

win election. I see signals that

39:23

people are being a little more cautious about leading

39:25

into some of these goals because of the concerns

39:28

that voters may perceive the

39:30

cost of the transition as being

39:33

higher than maybe the

39:35

case. Yeah, this is where

39:37

the sort of political economy is really important.

39:40

I think that conversation seems to be happening

39:42

at two levels. One, a sort

39:44

of distributional impact. Like

39:46

is this going to be more, is this going

39:49

to make life more expensive for lower income households?

39:52

So and you see some of

39:54

the Rishi Sunak move, which

39:56

have actually been universally unhelpful from the point of view

39:58

of the transition. of industry because

40:01

they just confuse people. But

40:03

he kind of over indexed on a

40:05

by-election which the Tories just hung on

40:07

to, where there was some concerns

40:09

about the mayor of London accelerating

40:13

the implementation of very

40:15

low emission zones, which would mean that if you had an

40:18

old dirty car, you have to pay to go into London,

40:20

only applied to very small percentage of the cars and there was

40:22

a scrappy scheme to help with that. Nevertheless,

40:25

that was essentially some

40:27

people were concerned about that and it was

40:29

one of the factors in the Tories hanging on to that

40:31

seat where they've lost pretty much every other by-election that was

40:34

happening in the last year. And

40:37

so I think this is one of the

40:40

issues when a populist argument

40:43

can beat a more

40:45

rational argument because you can just play to

40:47

people's fears. I mean, everybody's very

40:50

confident that every type of vehicle will

40:52

be cheaper to buy than the combustion

40:54

engine equivalent by 2030. And

40:57

so yes, there's a cost issue now,

41:00

like not all the – for not

41:02

all segments of the market are electric

41:04

vehicles cheaper. So if you made the

41:06

switch over now, you'd be

41:09

forcing people to buy more expensive cars. But

41:11

if you make it in between now and 2030, you're

41:13

not going to force anyone to buy more expensive cars. It's

41:15

creating the conditions for everyone to have a cheaper personal

41:18

transport. And of course, that applies to public transport

41:20

because buses will all be electrified as well and

41:23

delivery will all be electrified as well. So

41:26

yes, it's a concern, but

41:28

it's addressable if you explain

41:30

the transition. And

41:33

I think maybe he could have achieved the same by saying,

41:35

I know everyone's concerned. We're very

41:37

confident. We'll put in a breakpoint

41:39

in our policy where we'll review it in three

41:41

years' time because it's based on the

41:44

evidence that we've been presented to in which we

41:46

believe that this will save money for everybody. Excuse

41:49

me, the macroeconomic evidence in the climate change committee

41:52

is that an earlier transition

41:55

saves the country a lot of money. So

41:57

it's good for the national community. I

42:01

think it's also important

42:03

to remember that this is wearing

42:05

our populist and in this sense, I'm always calling

42:07

it populist, in this sense, which is soon behaved

42:10

in a very populist way. He

42:12

makes an assertion which was just lies and

42:16

misled people. He said, we're

42:19

not going to have any more arbitrarily imposed transition

42:22

dates, implying that

42:24

the accusing the current

42:26

transition dates of being arbitrary, the

42:29

conservative government went through a

42:31

very big consultation on whether to bring

42:33

the phase updates forward from

42:35

2042 to 2035 and in fact,

42:39

the very central census from the business committee was to do

42:41

it by 2030. He's then arbitrarily overturned

42:43

out of that consultation even with some of his

42:45

own ministers. It's frustrating, it

42:48

just confuses the market is the worst

42:50

thing. We see the evidence now that it's

42:55

putting people off investing in the UK because of that.

42:57

Well, we thought you were committed, but now we're not

42:59

so sure. So maybe we'll go somewhere that we have

43:01

more confidence. John Greenewald Just to conclude, I know we

43:04

need to let you go. Just, I was wondering if

43:06

you could tell everyone what you're doing now and what

43:08

are the most important things one

43:10

should be focused on to overcome

43:13

some of the challenges that we've talked about in

43:16

this conversation to try to make sure that the

43:18

private sector continues to move forward even faster, despite

43:21

some of the headwinds that we've had a conversation about in

43:23

the last 45 minutes. Well,

43:25

I've just launched a new NGO called Ambition

43:27

Loop with my colleague, Gonzalo Munoz, who is

43:29

the Chilean champion, because we keep being asked

43:31

to and we feel that we've got something

43:34

to offer in leaning into this space

43:36

between the public and the private, so

43:38

that the evidence of momentum in the private

43:41

can embolden public policymakers and

43:43

their policies can embolden the private sector

43:45

and that fly will continue faster and

43:48

faster. And the two things

43:50

that I'm particularly focusing on are

43:52

the accelerated technological breakthroughs in

43:54

industry and energy and both

43:57

making the case that these are can

44:00

happen faster than many people think and they're

44:02

working for example with the Breakthrough Agenda which

44:04

is 57 countries advising that

44:07

initiative which is launched in Glasgow on how

44:10

the international collaboration could create the conditions. So

44:12

things like collect green public procurement or standards

44:15

when done collaboratively across countries can help drive the

44:17

cost down faster. And then

44:20

I launched an initiative

44:22

which we call the Climate Capital

44:24

Mobilization Accelerator which is working with

44:27

what I call impatient pragmatic

44:30

problem solvers involved in allocating companies through

44:32

climate solutions in the global south because

44:34

this is the area with the 4

44:36

or 5x. And it

44:39

is complicated but I think there's more and more good

44:41

people working to innovate. And as

44:44

I said earlier if we don't get that right my

44:46

concern there is that it creates the

44:48

upholstics which are then negative in

44:51

many other ways. And you'll be spending time with us

44:53

here at Columbia as a distinguished visiting fellow most importantly

44:55

so great to have you with us. Well and the

44:58

thing I'm going to be working on with

45:00

Columbia and RGP is the nexus of those two issues

45:02

which is how does policy

45:04

makers particularly American policy makers think about how

45:06

to optimize the opportunity for

45:08

American industry and American capital in

45:11

leaning into the investment

45:13

in the transition all over the world.

45:17

So that's the sweet spot that I'm really excited

45:19

about and exploring with you. As

45:21

are we and looking forward to continuing

45:23

to collaborate this year and beyond. So

45:27

Nigel thanks for all the work

45:29

you're doing and you did in

45:31

COP26 and many other ways and

45:33

thanks for being so generous with your time to join us

45:35

today to talk about it all. Appreciate it. It's a pleasure.

45:37

Thank you very much. Thank you. Thank

45:44

you again Nigel Toppings and thank you for

45:46

listening to this week's episode of Columbia Energy

45:48

Exchange. The show is brought to

45:50

you by the Center on Global Energy Policy at

45:53

Columbia University's School of International and Public Affairs. The

45:55

show is hosted by me Jason Bordoff and by

45:57

Bill Loveless. The show is produced by Aaron Hardick

45:59

from the Latitude Studios. Additional

46:02

support from Lily Lee, Caroline Pittman,

46:04

Victoria Prado, Martina Chow, Sagatam Saha,

46:06

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46:09

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46:11

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46:14

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46:16

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46:32

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