Sagatom Saha [00:00:03] Taken together these climate pledges, that puts us on track for 9% increase in global emissions by 2030. That is still an improvement from where we’d been last year. We are tracking 11% in Glasgow. We we’re tracking 14%. But what we need is a 43% reduction. So we’re increasing more slowly but still moving in the wrong direction.
Bill Loveless [00:00:22] This week, climate leaders, scholars and activists from around the world will travel to the United Arab Emirates for an annual United Nations sponsored conference known as Cop 28. Many highly debated topics will take center stage at this year’s meeting, such as the role of fossil fuels and meeting future global energy demands. The follow through on loss and damage commitments from last year’s meeting and rising international trade tensions over clean energy economics. Even the location of the meeting has sparked an intensive dialog. The UAE is a major oil exporting country and the CEO of its national oil company, Sultan Al Jaber, is this year’s president. So how will world leaders address some of these major topics and what could be the outcome of this year’s meeting? This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Bill Loveless. Today on the show, David Sandalow and Sagatom Saha. David is the Director of the Energy and Environment Concentration at the School of International and Public Affairs at Columbia University. He Is also the Inaugural Fellow at the Center on Global Energy Policy and founded and directs the center’s US-China program. Before joining Columbia, David served in senior positions at the White House and at the U.S. State and Energy Departments. Sagatom Saha is a Senior Associate in the Energy Transition Practice at Macro Advisory Partners, as well as an Adjunct Research Scholar at the Center on Global Energy Policy. He studies the geopolitics of the global energy transition and U.S. competitiveness in clean energy technologies. Sagatom previously worked on clean tech competitiveness at the International Trade Administration in the U.S. Department of Commerce and served as a Special Advisor to the Office of the US Special Presidential Envoy, John Kerry. I spoke with David and Sagatom about their outlook for COP28. We discussed how recent events on the world stage will influence talks like the Israel-Hamas war and the US-China Climate Cooperation Agreement. We also covered financing the energy transition and why creating a loss and damage fund is proving to be difficult. I hope you enjoy our conversation. David Sandalow, Sagatom Saha, welcome back to Columbia Energy Exchange.
David Sandalow [00:02:59] Bill Great to be here.
Sagatom Saha [00:03:00] Thank you for having us.
Bill Loveless [00:03:01] Well, it’s great to have each of you here as well with this big meeting coming up and to tap into your experience on the issues that will be associated with that meeting as well as your own experience with these events over the years. But, you know, first, this COP 28 comes as there are many things dividing the world, most prominently the Ukraine and Israel-Hamas wars. At the same time, the world is setting record high temperatures. So, David, amid this turmoil, can countries unite on climate and deliver a clear message of hope, solidarity, stability, prosperity? And if so, why?
David Sandalow [00:03:45] Bill, I hope so. As you point out, this meeting is happening at a difficult time, but also an important time in the fight against climate change. First, in recent months, we’ve seen record temperatures. July 6th, 2023, was the warmest day ever recorded globally. July 20th, 2023 was the warmest month ever recorded globally. September 20th, 2023 was the warmest September by an extraordinary margin in the warmest nine years in history have been the past nine years. And the impacts we’ve seen from climate change injustice here have been extraordinary. As well as many listeners in the New York City area will remember for several days this summer in New York City had the dirtiest air of any major city in the world as a result of Canadian wildfires hundreds of miles away. And we saw a tragic wildfires increase. We saw flooding in Beijing. The Antarctic sea ice is at its lowest extent ever. So we’re living with the climate crisis every day, often with tragic consequences. But at the same time, as you pointed out, we have other tragic conflicts that are that are capturing the attention of world leaders. Very importantly, I think the conflict in Israel, the conflict in Ukraine, US-China tensions are at their highest level in half a century. And so in that type of environment, I think it is harder to reach agreement. Just one other point about the context today I think is going to be important for COP 28. We’ve had high inflation and persistent slow economic growth in many countries around the world, and that has been a significant contributor to some backwards motion on climate action around the world. You know, in the United Kingdom, Rishi Sunak walked back his country’s climate commitments and in the Netherlands farmers protested against climate change measures. In the past year in Germany, restrictions on gas boilers had to be walked back in. Just several days ago In Argentina, the voters overwhelmingly supported a candidate who calls climate change to lie. So so I think there’s good news on this fight. We have declining prices for renewables, but at the same time, emissions keep rising. We’re in a moment that demands action on climate change, but there’s not going to be anything easy about that at COP 28.
Bill Loveless [00:05:56] Sagatom, how do you view this meeting amidst all these developments?
Sagatom Saha [00:06:00] I was expecting David to have maybe a slightly more optimistic take because mine is also, unfortunately glass half empty. I mean, David, so all those statistics that you cited, that’s true so far. What the science tells us is that it only get warmer from there, even if we quickly move to abate emissions, which we’ll see how much we make movement toward that at this COP and subsequent COPs. Additionally, the broader geopolitical conflict makes none of that easier. You tick through some of the issues. Russia, Ukraine is heavily bleeding into the current meeting. We already know or we don’t know who is hosting the next COP specifically because Russia is blocking who is the next host. These are kind of having direct implications. It seems that the ongoing war between Israel and Hamas will play out in the meeting one way or another, whether it’s world leaders not traveling or having their attention divided elsewhere. It’s just very clear that there’s a lot of work to do and the geopolitical environment is not highly conducive to getting to a very, very strong agreement, I would say.
Bill Loveless [00:07:03] Yeah, there’s so much to talk about there. You know, before we do, though, let’s take a step back from this meeting itself and talk a bit about your experience with climate summits. David You’ve been attending them since their inception in the 1990s. How does that experience shape the perception, your perception of this latest gathering?
David Sandalow [00:07:24] Thanks, Bill. So just to date myself, I was a member of the National Security Council staff and the and the U.S. delegation at COP 1 back in 1995. And the meeting was held in Berlin. And by the way, it was chaired by a very young and talented environment minister of Germany whose name was Angela Merkel. And that meeting was so different than the COP that we’re about to attend. The COP we’re about to attend is going to have scores of heads of state. Recent COPs have had more than 100 heads of state. I’ve seen estimates that 70,000 businesspeople or 70,000 delegates and including many business people, are going to attend in Dubai. At COP 1, it was mainly it was almost exclusively government negotiators, some outside participants, but didn’t have anywhere near the high level attention that the issue the meeting has. And these meetings that really evolved over the years. But one takeaway that I have from having been attending these COPs for many years is that by their nature, they are very slow in making progress. These are meetings that get almost 200 countries from around the world together. And they have a so-called consensus requirement that is essentially everybody has to agree before the world moves forward. And that’s very difficult. You’ve got very different countries with different interests. And so these meetings are, by nature, very slow. Just one other quick point, I think what we’ve seen is, is in recent years, COPs have really become two meetings. There’s the official governmental meetings, but then there’s also everyone else who comes to the COP, which is some combination of a trade fair and series of conferences and opportunities for people to meet with colleagues from all around the world. An enormous amount gets done at COP outside of the official meetings.
Bill Loveless [00:09:31] Yeah. And that’s the sort of thing that you and Sagatom and others from the Center, for example, will be engaged in, as well as from hundreds of organizations from around the world. Sagatom, your experience attending them is more recent. How do you approach this one?
Sagatom Saha [00:09:48] Absolutely, and to age myself in the other direction, I was not working age that first COP so I’ll perhaps.
David Sandalow [00:09:54] Were you born, Sagatom?
Sagatom Saha [00:09:58] I think I was just barely, I’d have to check the math. But I’ll take the other end where I was a special advisor in the office of the Special Presidential Envoy for Climate, essentialy John Kerry’s office in his new role as the Presidential Climate Envoy with him in Glasgow. And I think what we’re going to see is markedly different than that moment, or we had this nervous sense in result of renewal and that we were barely keeping our climate goals alive. But we definitely created this space to do so. We enshrined 1.5 degrees as the goal. We finally reached an agreement to include coal phase down. A slew of new NDCs were updated leading into that meeting, including the United States for that matter. We had skipped the previous COP because of Covid. There was nervous excitement and it felt like we were able to deliver something. And in comparison last COP, loss and damage. I’m sure we’re going to talk about it. Very contentious that moved the ball on that issue and then move the ball on climate finance. But we didn’t really see anything on ambition in emissions mitigation in Sharm el Sheikh last year, and I don’t think the expectation is that we maybe see much this year either. And David is right. Not every COP is a big, momentous COP that produces something like the Paris Agreement, but that’s against the backdrop of 2030 is not that far away. And we don’t have that much time to stay below 1.5.
Bill Loveless [00:11:23] You know, the location of this meeting, as well as the man who will be heading it up has been an issue as well. You know, the selection of a major oil exporting country as the host of COP 28 and the appointment of the CEO of a national oil company Sultan Al Jaber as president of the meeting has raised concerns. David, are they legitimate concerns or do you think it’s overblown?
David Sandalow [00:11:46] Bill, I’ve known and worked with Sultan Al Jaber for more than 15 years. His expertise on clean energy is deep, his commitment to the energy transition is longstanding. I’ve heard the very vigorous dialog on this topic for the past six months. I respect Sultan Al Jaber a lot, I do not share the views of those who criticized his appointment. And by way of background, my very first book was called Freedom from Oil. The argument of that book was that the world needs to reduce its dependance on oil and do so quickly. And that is more true today than it was when I wrote that book. But I believe that oil companies need to be part of the solution to the problem. Oil companies have tremendous technical capability. Oil companies have tremendous logistical skills and and have the ability to do things like help with geothermal and offshore wind and then it’s hugely important that they control emissions from their operations, which I think something we’re going to be seeing discussed in Dubai. So, I think having somebody like Sultan Al Jaber who both has a deep, longstanding commitment to the energy transition and knows that the oil sector is actually a good thing, not a bad thing. One thing, though, I think expectations are high. And it’s important to emphasize that the president of a COP has limited authority. A president of a COP can set the agenda. The president of a COP can try to forge deals. But at the end of the day, the president of the COP can’t make countries do what they don’t want to do.
Bill Loveless [00:13:22] Yeah. Let’s take a timeout. The president of a COP can be rather influential as well, right?
Sagatom Saha [00:13:27] Yeah, as David described, they lead the meeting, they can draft decision text, but they can’t make a country agree to something they don’t want to agree to. They can kind of shape the conversation. And then to David’s point earlier that not everything is in official negotiations. There’s also a bit of a government component in that negotiating side deals. We’re seeing bits around tripling of renewables. We’re seeing that the Emiratis may, as David alluded to, have some sort of oil and gas decarbonization initiative and probably something around clean energy finance and developing countries. Taking the broad question, I agree that we shouldn’t prejudge the outcome of the COP based on who’s hosting it, and I’m withholding my personal judgment until we see what is delivered. But in a way, I would argue that what I think doesn’t matter and what we think doesn’t matter. What does the broader community and the climate activist community, what do they think? The outcome I worry about, especially from the oil and gas decarbonization bid, is that we’ll see oil and gas companies really produce something for the first time in a COP setting, perhaps go a little outside their comfort zone. And that’s just not going to be perceived as enough by the broader climate community and the activist community. And there’s going to be a strong mismatch of expectations in what is delivered and it creates a narrative that is unfavorable to continuing that conversation forward to subsequent COPs and keeping oil and gas decarbonization part of this framework.
Bill Loveless [00:14:52] Well, we can break that down a little bit more because as you say, there will be a lot of discussion of fossil fuels and whether or not there’s further discussion of phasing down, phasing out unabated, all of that stuff going forward. You know, just maybe to put things in some order here. I mean, what what do you think, Sagatom, will be the single most important thing, or at least some of the single most important things to watch for at this meeting.
Sagatom Saha [00:15:19] I have a whole list. So I think the things that are on the table and I think you need some combination of most, if not all of them or a successful COP. There is this kind of deal on the table to triple renewable energy capacity by 2030. That is math from the International Energy Agency. That is essentially a 1.5 net zero compliant. If we’re able to do that, that looks fairly promising because the G20 already agreed to it, and that’s a pretty diverse set of countries. The Saudis earlier in the G20 at an earlier meeting over the summer blocked it. But at the last meeting, you know, it went through. So I think that’s fairly promising. There will be some conversation around whether the $100 billion climate finance goal has been met. I worry that perhaps there’s a divide between developed countries saying it has been met and developing countries saying, no, it has not yet been met. The OECD recently said we actually have made it this year. Lost and damage, I think we should come back to. The Bridgetown Initiative, which broadly, is a proposal for multilateral development bank reform. We saw a financing summit in Paris over the summer in July, where the World Bank adopted some of that plan, notably debt suspension clauses in the event of climate disasters on newly issued debt. I think you see more institutions adopting more of that, perhaps the World Bank adopting more of the proposal. I don’t think you see the fossil fuel phase down the G-20 summit similarly keyed that up for decision and did not agree to it. And I think you kind of alluded to this within the tripling of renewables, goal, there’s a conversation about the equivalence of abated fossil fuels. There is a large degree of nuance there that we can go into. And then I think I also slyly mentioned there are two things that we know the UAE is working on, on finance in emerging market in developing countries around clean energy and getting oil and gas as an industry to decarbonize. So that’s scope one and two emissions for them.
Bill Loveless [00:17:10] Right? But not scope three.
Sagatom Saha [00:17:12] Not scope three, which would be highly difficult, to be fair.
Bill Loveless [00:17:16] It’s a long list, but it’s an important one. David, how does your list shape up?
David Sandalow [00:17:22] I think Sagatom’s list is a great list and one thing it underscores is the complexity of these COPs and the number of issues that are engaged in all these COPs. And at a higher level, I think it’s important to hold two ideas at the same time. One of them is that we are in a climate crisis. It’s a five alarm fire. This is an urgent issue that demands immediate attention globally from all different players. And at the same time, no single meeting can solve the problem. And sometimes I worry, as Sagatom was pointing to, that people will come out of the meeting saying disappointed about what’s happened. And if the standard is “does the meeting solve the problem?” We’re always going to be disappointed. If the standard is “does the meeting move us forward on some important issues?” Then, you know, some success is possible. And I think we we need to both push as hard as possible for dramatic movement because it’s so essential, but also be realistic about what’s possible.
Sagatom Saha [00:18:27] Two other things just to jump in. What we both forgot to mention, the Global Stocktake, which is a novel feature of this COP, and it’s not going to tell us anything we don’t know. It’s that the math doesn’t quite compute yet in terms of staying below 1.5. Another thing I’d raise to David’s excellent point is there should be an assessment of not this meeting, but what do we expect from this series of meetings to actually do? Because it can’t solve everything. We’re not going to solve climate change through the Paris Agreement alone or COPs alone. There are various parts of national action, the private sector naturally, and we’re seeing–and I wrote this in a blog post for the center– what was in the driver’s seat for the last year wasn’t outcomes from Sharm el Sheikh. It was things like carbon border adjustment and the Inflation Reduction Act actually being implemented. That has moved the needle and probably will continue to do so. And what is the interplay between what’s happening over here and then what’s happening in Dubai?
David Sandalow [00:19:23] I’m glad Sagatom raised the Global Stocktake. That’s going to be a very important part of this meeting. And this is a core part of the Paris Agreement process where countries take stock of their progress every five years and then send a message to countries that they develop their next round of nationally determined contributions or their next round of climate action plans. And to your question, Bill, about what to keep an eye on, I think this is one thing to keep an eye on in this meeting is what’s the direction to countries coming out of the Global Stocktake process? Because every country in the world, it’s part of the Paris Agreement, is it going to be developing climate action plans in the next couple of years and registering them with the with the UN FrameworkConvention on Climate Change.
Bill Loveless [00:20:03] Yeah, David, it seems that that Global Socktake, it is a rather pivotal moment for this meeting and for the implementation of the Paris Agreement. And my understanding is that generally the expectation is that it will yield few surprises and confirm that the world remains far off track in meeting its Paris Agreement goals. I mean, is that a fair assessment?
David Sandalow [00:20:28] Absolutely. And what happens at COP28 is going to be the culmination of a several year process that’s already produced a lot of technical information and then a technical synthesis report that was released several months ago. And this will then be the political dialogue about what what to do with that information. I think it’s important to say that the global stocktake involves not just climate mitigation, the reduction in greenhouse gases, but also adaptation and finance as critical elements. And we haven’t talked about adaptation yet, you know, in this dialogue, but hugely important element of the discussion at COP 28 for the loss and damage fund. But but more broadly, the world is paying more and more attention to the topic of adaptation, which is essential because we’re going to need to be making adaptation investments in the years and decades ahead. And that dialogue isn’t nearly as mature in many ways, I think, as a dialogue around mitigation.
Bill Loveless [00:21:22] On that Global Stocktake, Sagatom: some additional work has been done recently. A report published in September offers a look at current global efforts to confront climate change. But, just as importantly, it offers a blueprint for how governments can and should move forward, right?
Sagatom Saha [00:21:46] So to put a point on what David said that I usually share is that all the NDC’s taken together–and this is from the synthesis report I believe is that we’re on track for 9–
Bill Loveless [00:21:55] But by the way, the NDCs, are –
David Sandalow [00:21:58] Nationally determined contributions.
Sagatom Saha [00:22:00] They’re countries national climate plans that they’ve submitted formally under the UN framework. Right. Which generally I mean there’s a nuanced conversation about this for some countries represents like fairly maximal ambition. China, for example, I think they, they tend to under promise and over deliver. But taking together these climate pledges. That puts us on track for 9% increase in global emissions by 2030. That is still an improvement from where were. Last year we were tracking 11%. In Glasgow, we were tracking 14%. But what we need is a 43% reduction. So we’re increasing more slowly but still moving in the wrong direction. It’s not particularly complex. I mean, it is how we get to where we need to go. And that’s where a lot of these sub goals come from. You need more renewables. It seems that we have aligned around the trippling number and you do need to quickly phase out fossil fuels. Energy needs are continuing to grow. You need to accelerate renewables far more quickly than you phase out fossil fuels. In some ways, the math is relatively clear. The processes by which you do so are very national and bespoke and complicated across geographies. And to David’s point, perhaps we should just go straight into it. Require a lot of money and different flavors of money. And specifically, developed countries can only mobilize so much and the need is several times more than that. We’re talking about about $100 billion goal and compared to a $4 trillion need.
Bill Loveless [00:23:35] I want to get into the financing more. But you bring up fossil fuels again, and fundamentally, the role of fossil fuels in the climate crisis will take center stage at COP 28. As it has in the past meetings. You know, two years ago at COP 26 in Glasgow, where you were there Sagatom, the final outcome included a call to phase down unabated coal power last year in Sharm el-Sheikh. More than 80 countries indicated support to phase down all fossil fuels, though ultimately this proposal was not included in the final COP 27 outcome. So this year, there are likely to be discussions on whether to adopt language to phase out, phase down fossil fuels and if countries will commit to scaling back use of all fossil fuels or just unabated fossil fuels, which of course is when technologies to capture carbon capture pollution aren’t used. What should we expect in those discussions, David?
David Sandalow [00:24:36] On this issue of phase down and phase out, the positions of major delegations are already quite clear. The Chinese minister who heads the delegation for the largest emitter in the world that said the phasing out of fossil fuels is unrealistic and I think it’s unlikely he’s going to change that view. As I understand, the African negotiating bloc has come out against phase out language, so I would be surprised if phase out language makes it into the final agreement, given the deep opposition of some very important players in the negotiations. And in my view, the debate about unabated versus all fossil fuel phaseout is an unfortunate one because what we’re going to need abatement of fossil fuel emissions with carbon capture in order to in order to solve the climate crisis. And the IPCC has essentially said as much. And so I think there will be a debate about that. I think some delegations, including the U.S. delegation and others, have very strong views on that. And I don’t see an agreement of all fossil fuels instead of unabated fossil fuels. Not would that be helpful, especially in terms of the fight against climate change.
Sagatom Saha [00:25:53] I’m certainly inclined to agree, but I think there’s a little nuance there. In COPs, often what you do is negotiate language that everyone feels like they can take away what they want from it. What unabated means, I think, is probably highly different compared to every country, whether it’s a 90% abatement or like a 70 or 50% abatement. Perhaps it’s useful for in a COP negotiation context that you don’t actually hash out what that means. But it does matter from an emissions standpoint. And we 100% all the math tells us we’ll need strong carbon capture technology in deployment to achieve our climate goals into 2050. For what purposes and what sectors and industries it’s a bit nuanced as well. Well, we the United States, will we need it for power? Probably not. Well, other countries, some will. Everyone will probably absolutely need it for industrial processes. But there’s a lot of different views. Country by country negotiating delegation on how differently they view that topic.
Bill Loveless [00:26:49] Perhaps more significantly, there’s an expectation that there’ll be something on the table from Sultan Al Jaber regarding national oil companies. You know, they represent more than half of the world’s oil production. The expectation is we look to him to be tasked with shepherding these companies to a major climate commitment. What might we expect to see there, David?
David Sandalow [00:27:18] This meeting is bringing the role of national oil companies into focus in a way that hasn’t before. And that’s important, as you just said, Bill. And that’s why companies are hugely significant in this in this issue. And much of the activists focus has been on the independent oil companies, which actually have a much smaller percentage of overall production, the national oil companies. And national oil companies range from those with tremendous resources to those that are actually, under-resourced and do not have a lot of technical capacity. And so bringing in a particularly developing country, national oil companies and emerging market developing countries into the dialog and into the fight against climate change is hugely important. And I think it’s a real contribution that the UAE and Dr. Al Jaber can make. And I hope we’re going to see some real steps forward in this meeting on that.
Bill Loveless [00:28:10] Yeah, it could involve getting the national oil companies, of course, but as well as investor owned oil and gas companies talk of their reducing methane leakage and reaching net zero emissions by 2050, but only for their own operations and not for the fuel they sell, the so-called scope three emissions. Probably some details to be worked out here, maybe quite a bit in the way of detail to be worked out here. But that seems to be, again, one of the key issues that will be taken up, especially when it comes to fossil fuels.
Sagatom Saha [00:28:42] If I had to make a prediction, which I shouldn’t do, because that will almost certainly mean I’m wrong, I think what we’ll say–and David, I’d love your thoughts– there is some sort of commitment around having scope one and two emissions from operations by 2030 and zeroing out fugitive methane emissions. I think that’s kind of what’s on the table. And I worry and I kind of danced around this before. That’s quite a lot for from a climate perspective. Oil and gas operation emissions is something like several percentage points of global emissions. That’s meaningful. So it’s meaningful to climate, meaningful action from the companies and then being visible in a way they haven’t in this setting before, but not enough for the general crowd. And they’ll be disappointed. And I worry that the second narrative perhaps wins out and there’s not sort of consensus on, “All right, this is a starting point and we keep moving from there.” And this is a base because correctly, there is this other side of this of “where have you been? We have seven years or six years at this point.” It’s almost the end of this year. And additionally, I think the expectation t,o David’s point, is that you should also be investing in these clean energy technologies, geothermal, offshore wind, hydrogen, for example, adjacent to their current operational experience. And we haven’t seen that as strongly quite yet.
David Sandalow [00:30:00] David?
David Sandalow [00:30:00] Agree with everything Sagatom just said. I’ve seen reasons for optimism when it comes to commitments to reduce scope one and two emissions. I think a number of the major players appear like they’re ready to make some commitments on methane emissions in particular. And that’s the kind of said that’s that’s important. Butwe really need these companies to be investing capital and expertise in clean energy technologies in ways that they’re not they haven’t done yet. And finding ways to make that happen is going to be very important for the energy transition.
Bill Loveless [00:30:40] Loss and damage. Of course, as you note, is going to be huge. COP 27 broke new ground by announcing a loss and damage fund to reimburse low income countries for damages associated with climate change. And talks in Abu Dhabi recently resulted in basic architecture, but key details are unresolved and negotiators at COP 28 need to formally adopt the structure agree on a funding level. This is a test of the international community to deliver for climate change. But there’s a lot to be done, Sagatom. Can we expect much in the way of results?
Sagatom Saha [00:31:17] I don’t know. And this is where I will not look into my crystal ball, but this is where I have an immense amount of worry. Another item I was dancing around and I think we are a bit underpricing how much that risk could derail the whole conference if things go sideways. I don’t think it’s overwhelmingly likely, but it’s perhaps low probability, high impact. And I’ll go through where this currently is. Essentially countries agreed to. This landmark is an agreement to set up a loss and damage fund last year. All details to be filled in over the course of this past year. There was a transitional committee that was set up, I believe it was 24 countries divided across developing and developed countries, including the United States. I want to say about three weeks ago, but sometime somewhat recently, that committee finally hammered out the text and the contours of the fund that is now up for decision for the wider set of all countries, which, as you had mentioned, all of them have veto power to some extent. As that agreement was finalized, as it was gaveled in, the United States objected. No one felt that meeting of all the 24 countries feeling particularly good about what they produced. So now it’s a question of and I’ll go into some of what it says.
Bill Loveless [00:32:28] Why did the U.S. object?
Sagatom Saha [00:32:32] Hard to go into. Very nuanced, but it’s, I think, around liability and mandatory funding. The clarity around. Whoever pays into the fund, it is not mandatory to pay into it and it does not imply liability. But I’ll tick through that again. But largely what the agreement says and it’s a true sign of compromise that no one particularly likes what they have arrived at. Funding is not mandatory into the fund, which would, if it were to probably reopen the whole Paris Aagreement, which is voluntary by nature. But it urges developed nations to pay in the fund by false choice of mandating contributions. There was a huge kerfuffle over where is the fund housed? Legitimate arguments on both sides. The US and EU primarily argued How is it under the World Bank? Because it’s very hard to start a new institution and get it off the ground and have it running effectively dispersing funds very quickly. There’s problems with overhead and access for some countries at the World Bank, but it landed as World Bank on a four year interim basis. And then the future board will develop a long term proposal and then contributions do not imply liability.
Bill Loveless [00:33:39] And the initial target size for the fund, as I understand, is expected to be $500 million.
Sagatom Saha [00:33:46] That’s what I’ve heard. Seems highly unlikely–David can dispute me– but that’s a huge number for what I think we expect to see at this COP. Some European countries saying $10 million, $15 million here and there. And the last bit is that other entities can contribute. It’s not just developed country governments, it’s private sectors, NGOs, which you would largely think would be welcome. It’s a wider pot of money, but there’s this nuanced distinction between the liability there and is it just the specific countries listed in the annex as not liable per se? David can explain this better than I can, developed, so they should pay. So that’s where we are now. That actually seems like it landed quite well. Maybe to an outside observer, depending on where you stand. But this could get totally reopened. And I worry about two scenarios. One, it gets reopened and then blows up. You have a larger set of countries and none of them will agree. But then it’s just kind of localized to that one issue or perhaps other parts of climate finance and everything else, the tripling of renewables. Other tracks continue or this is so fractious and contentious and there’s so many red lines and animosity at this point that developing countries, but it could go either way, pick up and walk away from the negotiating table for everything because it’s not worth it if they can’t secure funding for loss and damage in the specific manner that they expect and from their point of view, need it. That’s high risk. That’s extremely high risk.
Bill Loveless [00:35:15] There’s a lot there, David.
David Sandalow [00:35:16] Sagatom summarizes it extremely well and reminds me of a conversation I once had with an African diplomat who said, you know, this climate change problem is like the problem of secondhand smoke. We don’t smoke, but you guys do. And your smoke just washed over us and causes us all kinds of problems. And that perspective is is exactly correct. And it’s at a high level what’s driving these loss and damage discussions. But at the same time, on the other hand, imagine going to a struggling worker in, you know, a coal town in Poland or Germany or West Virginia or other places and saying, we’ve got an idea. We’re going to take some of your tax dollars and we’re going to send them to people in poor developing countries because they’re really suffering. AndI think bridging that gap is more than a little challenging. To climate change, it’s been called could be called a super wicked problem. And this is one reason. It’s these incredibly different perspectives that must be brought to bear in these conversations. That said, I think we do have some reasons for optimism looking at COP 28, and I think it’s worth touching on those. First, it is just remarkable the level of prices that we’re seeing right now with renewable energy and how much they’ve come down in recent decades. The technical advances are extraordinary and bringing down prices in incredible ways. That’s leading to record breaking deployment of renewable power around the world, which is exactly what we need to do to help solve this problem. And that’s reflected in the tripling of renewables goal that I think we’re going to see at this meeting. But it’s incredibly promising. I think the incredible attention we’re seeing to this issue around the world is exactly what’s needed to help solve it. And then one piece that came as a bit of a surprise is amidst these incredible tensions between the US and China on a wide range of issues, the US and China actually reached an agreement on this topic a couple of weeks ago and they did it in a somewhat historic place. They did it in a place in California called Sunnylands, which is where the U.S. and China reached an agreement ten years ago on climate change. And there’s a great history here. After the Sunnylands agreement in 2013, which was on a small piece of the climate change issue between President Obama and President Xi Jinping, the US and China in 2014 agreed to a major accord on climate change, which provided an absolutely essential foundation for the Paris Agreement a year later. So it’s kind of the history here that suggests when the world’s two largest emitters of U.S. and China get together, that good things could happen. And so, this has been a somewhat, you know, pessimistic conversation. But I think there’s real reasons for optimism, for isome of the reasons I was just saying, the technical and even geopolitical.
Bill Loveless [00:38:25] Finance, financing, adaptation, mitigation is so important. And often I think the discussions over loss and damage and financing, adaptation and mitigation kind of get blurry. And at least in my mind, you’ve talked a bit about what’s on the table or what may be on the table for loss and damage Sagatom. But the COP 28 president’s agenda also calls on all countries to commit to tripling global renewable energy capacity by 2030. As you and David noted, earlier this year, the G20 agreed to triple renewable energy capacity and double the rate of energy efficiency and costs. The US and China reiterated that pledge to renewable energy following the Biden Xi meeting. So once again, financing is a major consideration. Are we likely to see more options on the table even as parties and countries discuss the loss and damage for past damages that have been done to countries because of climate change?
Sagatom Saha [00:39:23] I think more options is exactly how I would frame it. And maybe to say one more sentence on loss and damage, I think there is a bit of a fuss, even though it’s needed in the United States, as acknowledged in all developed countries, by agreeing and acknowledged it, it doesn’t lower emissions. So there’s a sense and this is inclusive of the adaptation conversation as well, even though it’s evolved, that we need to spend money on tackling the problem and then the effects are here. But we also need to address the problem. But going back to your direct question, more options is exactly the way I think the United States government, at least when I was there and I believe still so is thinking about it. And the framing is just we have a limited ability to spend in this country, especially on foreign assistance. We have limited tools. We have the Development Finance Corporation, but billions of dollars still is pales in comparison to a trillion, $7 trillion problem. So there is this thinking that I would kind of summarize is how does every dollar that we spend catalyze additional private sector dollars or other flavors of money around the world? So it just is catalytic. And to some extent the Inflation Reduction Act of reason by analogy does exactly that. Every federal dollar catalyzed it a bunch of private sector dollars because they’re tax credits. We just don’t really have a similar mechanism in our foreign assistance. But we’re trying to approximate that in different ways and look at different sources of capital. I think there’s some new smart thinking on how to take the Inflation Reduction Act abroad that various folks coming out of administration recently are thinking about. How does that work? What I think you’ll see at this COP is the Bridgetown Initiative. So we have our own direct bilateral assistance assistance under UNCCC and other relevant funds. We also have contributions at the World Bank. The World Bank is now acknowledging and the new president, Ajay Banga, is looking at how do we do more? And they’re also thinking along the same lines of how do we catalyze more private sector investment. Mark Carney is setting up an outfit within the World Bank to think how to do that, and that applies broadly to many other multilateral developing banks.
Bill Loveless [00:41:21] You mentioned the Alliance of Small Island States. The Bridgetown Initiative. Explain for listeners who may not be familiar with it, what that entails.
Sagatom Saha [00:41:32] Are many things, and it’s a bit of a moving target, as I understand it. But it’s a proposal to remake or perhaps update the global financial system and the global multilateral development bank system for todays climate needs. So it involves a grab bag of very smart and some risky, more controversial proposals. One of them we mentioned was if there is a climate disaster, we should probably suspend debt to those countries. One of the important things I think we are focusing more on now is not just getting money to countries, but also making sure they have healthy levels of debt so that they can respond to climate disasters and then also have the fiscal space to spend themselves. That seems like a smart change. The World Bank already did it. I think we’ll see others. There is also some other smart things that I think we might see that I don’t have a strong line of sight of. Exchange rate risk is pretty strong. There’s a few scholars at the center working on this. There’s a risk to foreign direct investment in projects in emerging markets, developing countries, mitigation projects, either facilities you could set up to reduce exchange rate risk. But then their proposal, they have their own proposal for loss and damage. How that’s funded taxes on things like aviation, perhaps. How do you use as enhancing concessionality is probably a big one to cover a wider set of countries that might not otherwise be eligible for multilateral development assistance. But they’re kind of vulnerable but richer than the category necessary. That I think is fairly controversial.
Bill Loveless [00:42:59] Yet, David among options is one where we where we might see U.S. and other G7 countries calling on Gulf states and others with large state owned enterprises and sovereign wealth funds to compliment their efforts to raise capital for clean energy in emerging and developing countries.
David Sandalow [00:43:20] I hope we’re going to see that. I think those countries have the capacity to contribute financially to the solution of this problem and a lot of those resources come from the sale of fossil fuels and they should absolutely be contributing to these funds more. This reminds me, Bill, of an interesting article I read. It’s somewhat related, which by the energy historian Vaclav Simil, who I recommend. Everything he writes is worth reading. But it’s a short article that made the following point. It says, “Some people say, we went to the moon. Why can’t we solve climate change?” And that is something I’ve heard. And in this article he says, he dug out the historical records and the total cost of the Apollo program that sent men to the moon 50 years ago was about $220 billion in current money, in current dollars. And the climate change problem, in contrast, according to most estimates, is going to about $2 trillion or $3 trillion of expenditure over several decades. So it’s really a different order of magnitude and different type of problem and much, much harder than sending people to the moon.
Bill Loveless [00:44:32] You know, you mentioned trade a minute ago, Sagatom, and this meeting comes amid tensions over trade because of protectionist risks arising from domestic content requirements and carbon border adjustments, risks that could hamper the spread of clean energy options throughout the world. You recently wrote a piece in the publication The Conversation with some colleagues from the Center on Global Energy Policy on the global trade system, which you said “Today’s trade rules are ill suited for the climate crisis.” What did you mean by that?
Sagatom Saha [00:45:10] Many things, but I guess to take a step back, we’re in a new world and this COP is acknowledging that there will be the first ever trade day at this COP. What that logistically, operationally means? Not clear yet. But they’ve invited trade ministers. The World Trade Organization will have a big day and they’ll have announcements of their own. But I think what is concretely happening is that you have policies like the EU carbon border adjustment mechanism, and I would include the various some subsidies with local content requirements in the Inflation Reduction Act. And we used to live in this world where the ethos of the Paris Agreement is that as long as every country maximally tries for their own national ambition and we all do that a rising boat will lift all ties and we’ll have increasing ambition. And that is true. And we know, there’s pretty good Rhodium Group analysis, that the cost reductions driven by the IRA will bleed across countries and will benefit other countries on a long timeline. But we also have a bit of a new world where one country’s national climate policy might actually hurt the ambitions of another. So you the EU will effectively have to tear some other countries as part of their carbon border adjustment. And there is a giant sucking sound of the IRA where now the U.S. is a more attractive investment for hydrogen, perhaps than some other countries. And all of you can argue which and which are not of these policies are compliant with World Trade Organization rules. The IRA arguably is pretty clearly not. That said, we now have to adjust to the reality that you cannot put the genie back in the bottle. The IRA exists, the CBAM exists. Other countries will imitate both of these policies. And we need a World Trade Organization framework that acknowledges that reality and manages competition and puts the card balance on them. I worry about a downward spiral when we need to harness this energy. The intersection of climate trade and green industry policy to move things in a more positive competitive direction. To that point, another thing that will happen a COP is the G-7 launches their Climate Club. That could be a vehicle for a lot of these conversations.
Bill Loveless [00:47:21] Yeah. Is the U.S. in a position to shepherd changes in the international trade system to better address climate change?
Sagatom Saha [00:47:32] It’s a really good question. And the United States has blocked appellate judge appointments. So there is a credibility issue there. But then to me, the question is, if not us, who? It seems like no other country is in a particularly good position to drive that conversation. And so we’ll have to.
Bill Loveless [00:47:50] David, for the United States, who drives the bus on discussions at this meeting coming up.
David Sandalow [00:47:57] The President, largely. President? I think this president’s been very engaged on the climate change issue from what I’ve been able to observe from from outside the administration. He is very close to our special presidential climate envoy, John Kerry. And the climate change issue is deeply integrated into our foreign policy. So I think on the ground, the answer will be our special envoy, John Kerry, but more broadly is the President.
Bill Loveless [00:48:33] Yeah. And of course, the President has a lot on his plate right now.
David Sandalow [00:48:37] That he does.
Bill Loveless [00:48:38] And you’ve each worked with or for John Kerry. Remind us again of his significance in a meeting like this and what we might expect to see from him.
Sagatom Saha [00:48:48] I have a good framework for this. I got it from somebody else, a colleague that I’ll keep anonymous. But Secretary Kerry brings three things to this role that I think you would be lucky to get one out of somebody else. He’s uniquely qualified and it’s the credibility to meet with, if not heads of state, foreign ministers, as a non cabinet confirmed official, but somebody who holds cabinet status credibility on the issue. He was deeply involved in these issues while he was secretary of state and throughout his whole life. And a close relationship with the president. To David’s earlier point, those are three fairly unique attributes to get in one man.
David Sandalow [00:49:23] Completely agree. And I’ll just add something from my kind of old timers experience there. There were climate change meetings in the 1990s that I participated in as a U.S. negotiator that were really obscure. And almost no members of Congress came to those meetings, but John Kerry was there. So John Kerry has been working this issue and has deeply cared about it since the 1990s and has an extraordinary level of expertise on it.
Bill Loveless [00:49:54] This, again, will be a meeting to be closely watched, as have been past U.N. cop meetings, and perhaps maybe we might even see the making of a moonshot of some sort before these discussions are done. Sagatom Saha, David Sandalow, thanks for joining us today on columbia Energy Exchange.
David Sandalow [00:50:16] Thanks, Bill.
Sagatom Saha [00:50:16] Thanks for having us.
Bill Loveless [00:50:21] That’s it for this week’s episode of Columbia Energy Exchange. Thank you again, David Sandalow and Sagatom Saha. And thank you for listening. The show is brought to you by the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs. The show is hosted by Jason Bordoff and me, Bill Loveless. The show is produced by Erin Hardick from Latitude Studios. Additional support from Daniel Propp, Lilly Lee, Natalie Volk and Kyu Lee. Roy Campanella is the sound engineer. For more information about the show or the Center on Global Energy Policy, visit us online at energypolicy.colombia.edu or follow us on social media @ColumbiaUEnergy. And you can rate the show on Apple or Spotify. You can also let us know what you think by leaving a review. And if you really like this episode, share it with a friend or a colleague. It helps us reach more listeners like yourself. We’ll be back next week with another conversation.