Letter from Jason Bordoff
I have just returned to New York from #COP27 in Sharm el-Sheikh, Egypt, where leaders from around the world met to chart a collective path forward on climate. Among the many issues prominent on the agenda, three key issues dominated both the conference in the first week and the engagement of the Center on Global Energy Policy (CGEP) on the ground: (1) meeting the developing world’s energy needs while maintaining our climate goals; (2) the impact of today’s energy crisis on the clean energy transition; and (3) closing the gap between ambition and reality through the implementation of pledges and targets, for both governments and the private sector.
I was proud that CGEP brought our research on these issues to many public events, private workshops, and policy briefings on the ground at COP27. Seeing public and private sector leaders draw value from our insights and convening power reinforced the value of CGEP’s work, relevance and impact at a global forum like COP.
Billed as “Africa’s COP,” the growing anger and sense of hypocrisy among developing countries was on full display in Sharm el-Sheikh. Wealthy nations have failed to fulfill their promises to provide climate finance to the poorest countries. Poorer countries are also increasingly resentful as western nations respond to today’s energy crisis with investments in hydrocarbons yet often oppose such projects in the developing world. Today’s energy crisis is pushing up prices globally, causing energy shortfalls and blackouts in emerging market countries, many of which are facing some of the worst impacts of climate change, as seen in Pakistan’s recent flooding. The new IEA outlook estimates nearly 75 million people have lost the ability to pay for electricity services as a result of the energy crisis and pandemic, reversing a decade of progress in reducing the number of people without energy access.
Along with calls for international climate finance, the issue of “loss and damage”–compensation for harms from climate change from rich to poor countries–is on the agenda at COP27 and a key source of contention in the negotiations. While President Joe Biden visited Egypt to tout the landmark US climate law that will invest nearly $400 billion in clean energy, the president was met with criticism by many attendees at COP27 for failing to deliver assistance to poorer nations. While the Inflation Reduction Act is a historic climate investment in the US, America and other developed countries have consistently come up short on their pledges to mobilize financial assistance for both mitigation and adaptation. The ability for the US to deliver more on international climate finance will likely become even harder with the new Congress. Still, loss and damage has gained more traction at this COP than any before it as climate damage in developing countries mounts and becomes more visible.
Reaffirming the focus of COP27 on developing and emerging economies, I was excited to announce the launch of a new CGEP initiative, the Energy Opportunity Lab. This program, made possible by a generous $5 million donation from our board chair Matt Harris, will work with communities around the world and in the US to improve opportunities for sustainable energy inclusion, innovation, and growth while supporting progress toward the overall goal of a clean energy transition. The announcement attracted a great deal of interest from key leaders at COP27 in our various bilateral meetings with policy officials and funders, and we will be sharing more details about the program in the months ahead. You can view the full announcement here.
COP27 was also an opportunity to discuss our partnership with the World Economic Forum and the The World Bank on a currency exchange rate coverage facility that would lower a major barrier to foreign investment in energy projects in developing countries. This program likewise generated a great deal of excitement, and we look forward to expanding on it in the months ahead.
We announced both these efforts at our first CGEP-hosted COP event, a public panel on November 8 to explore ways to scale capital for clean energy in emerging markets. Among the exceptional group of panelists was our newest board member, Tariye Gbadegesin, Chief Executive Officer of ARM-Harith Infrastructure Investment, a leading Pan-African infrastructure fund. Tariye was an ever-present voice on financing clean energy in Africa, serving on panels, including with US Special Presidential Envoy for Climate John Kerry, hosted by Patch, FSD Africa, and CGEP.
We also hosted a private roundtable with the Development Finance Corporation and Mo Ibrahim Foundation, which convened US, European and African leaders from the public, private, and nonprofit sectors to identify collaborative solutions that would accelerate clean energy financing in developing economies.
Another major issue on the agenda was how the current energy crisis and energy security concerns will affect the energy transition. We also held a public panel on November 10 on this topic, which addressed opportunities to turn the ongoing energy affordability crisis into a driver of climate action. As the recent World Energy Outlook found, the current crisis is catalyzing efforts to move faster to deploy renewable energy and other alternatives to hydrocarbons, which are globally traded and inevitably exposed to geopolitical risk, but also causing short-term moves to find alternative sources of oil and gas. This COP had a more prominent presence for both oil and gas companies and also energy-producing countries, with a large center hosted by Saudi Arabia and a large presence by delegates from the UAE, which hosts next year’s COP in Dubai. The tension between how to meet today’s energy needs affordably and reliably in a global system still heavily dependent on oil and gas without undermining, and ideally accelerating, the transition to lower-carbon energy is a core focus of our work at CGEP.
Finally, there is a major focus at COP on implementation–how to close the gap between ambition and reality and hold governments and companies to account for net-zero pledges and targets. CGEP distinguished visiting fellows Catherine McKenna and Mary Nichols were both in Egypt to announce the release of “Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities and Regions.” The report, published by the UN High-Level Expert Group on the Net Zero Commitments of Non-State Actors, of which Catherine is the chair, outlines a clear framework for assessing net-zero pledges–a key ingredient in holding organizations accountable to their climate commitments. Governments increasingly recognize the role of their private-sector counterparts on this front. Secretary Kerry regularly acknowledged that government funding alone cannot provide what developing countries need, and proposed a plan to sell carbon credits to companies if they fund fossil fuel cuts in developing countries.
The world will need to close this ambition-reality gap while still ratcheting ambition, which itself remains insufficient to meet global climate goals. Only a handful of countries will have updated their Nationally Determined Contributions, or NDCs, once the negotiators depart from Sharm el-Sheikh—a sharp contrast from COP26 in Glasgow. The restart of US-China talks, announced after Biden and Xi met in Bali for the G20 meeting, may spark progress on the road to COP28 in Dubai.
I was pleased to represent CGEP as a speaker at several prominent events, including panel discussions with the New York Times, United Nations’ Sustainable Energy for All, and McKinsey & Co. Lastly, I joined the Munich Security Conference (MSC) for several conversations about climate change, energy security and geopolitics. We are proud to have MSC as a strategic partner of the Center on projects at the intersection of these issues–more exciting things to come on that front in early 2023.
The New York Times event on the linkages between climate change and political freedom was particularly meaningful to me. Asked about the concerns over Egypt’s human rights record, it offered me an unusually personal opportunity to reflect on my own family’s journey, with my mother and her family fleeing religious persecution in Egypt when she was a teenager in search of freedom and opportunity in the US. From an early age, my interest in public service and policy was motivated by seeing first-hand how public policy, from immigration to public education, allowed my family to rebuild their lives. I reflected on my family’s story in this Twitter thread.
Several scholars on our team remain in Sharm el-Sheikh or will arrive this week as negotiations carry on. A much broader group of faculty from Columbia’s Climate School and Columbia University is there as well. The demand for our insights and the impact of our work in Egypt was a reminder of the importance of our mission at the Center. Policymakers worldwide are grasping for solutions to simultaneous energy and climate crises, and CGEP’s evidence-based and action-oriented policy analysis has proven to be a crucial resource for their decision-making processes. See below some more photos and captions to give you an idea of what we were up to this past week at COP27.
On November 8, I moderated a panel with (left to right) Jake Levine, the Chief Climate Office of the US International Development Finance Corporation; Tariye Gbadegesin, the Managing Director and CEO of ARM Harith and CGEP Advisory Board member; Nathalie Delapalme, the Executive Director of the Mo Ibrahim Foundation; and Andrew Kamau, the Principal Secretary of Kenya’s State Department of Petroleum. I announced the launch of the Energy Opportunity Lab and the currency exchange risk coverage proposal, and our panelists dove into the challenges facing project developers in emerging markets.
On November 8, I joined Declan Walsh, Chief Africa Correspondent for the New York Times, and Susana Muhamad, a climate activist from the Philippines, (with Nazanine Mohiri, Senior Analyst at the International Crisis Group, joining virtually) at a New York Times panel to discuss whether there can be climate progress without political freedom.
On November 8, I joined (left to right), Gwenaelle Avice-Huet, Chief Strategy and Sustainability Officer at Schneider Electric; Harry Boyd-Carpenter, Managing Director for Green Economy and Climate Action at the European Bank for Reconstruction and Development; Kassia Yanosek, Partner at McKinsey; and Jukka Maksimainen, Senior Partner at McKinsey, to untangle the tension in what they termed the “dual challenge”—the twin challenges of energy supply and decarbonization.
On November 10, Vijay V. Vaitheeswaran, Global Energy and Climate Innovation Editor for The Economist, moderated a panel with (left to right) Carlos Pascual, Senior Vice President for Geopolitics and International Affairs at S&P Global Commodity Insights; me; Dr. Katharine Hayhoe, Chief Scientist, The Nature Conservancy and Professor of Public Policy at Texas Tech University; and Ann Mettler, Vice President for Europe at Breakthrough Energy , on turning the global energy crisis into a climate opportunity.
I joined a lunch conversation with our strategic partner at the Munich Security Conference. There, I explained that energy security needs to be redefined for the era of transition. We discussed how to navigate the changing geopolitical landscape to accelerate clean energy and decarbonization.
Our strategic roundtable on mobilizing capital for clean energy in emerging markets brought together around 30 high-level representatives from government, nonprofits, and the private sector to explore new partnerships to accelerate the flow of investment. Top officials joined, including Scott Nathan, CEO of the US International Development Finance Corporation (DFC); and Ali Zaidi, White House National Climate Advisor.
I joined Kandeh Yumkella, Member of Parliament in Sierra Leone; Bernerd Da Santos, Executive Vice President and COO at the AES Corporation; and Varun Sivaram, Managing Director for Clean Energy and Innovation for the US Special Presidential Envoy for Climate, at an event hosted by SEforAll. We discussed the equity concerns of a bumpy energy transition and how to ensure energy supplies for the Global South in a time of geopolitical turmoil.
My friend Dr. Katharine Hayhoe joined me for our panel on “Turning an Energy Crisis into a Climate Opportunity.” She spoke–eloquently as ever–on the need to accelerate the energy transition, along with the employment and fiscal concerns that fossil-fuel-dependent communities face in the process.
I met up with Tariye Gbadegesin, the newest member of CGEP’s advisory board. Her expertise on financing clean energy projects in emerging markets was in high demand across the conference, and we were lucky to have her share it in both our public event on “Mobilizing Capital for Clean Energy in Emerging Markets” and also our roundtable on the same topic.
We capped the week off by getting the CGEP team (and friends) together for a dinner overlooking the Red Sea.