Episode Info
- Season20
Hosted by Christina Ruffini and Sir Richard Dearlove
Guests
Damian Carrington
Damian Carrington is The Guardian's Environmental Editor.
Zack Colman
Zack Colman is a climate reporter for POLITICO.
Amy Harder
Amy Harder is the Executive Editor for Cipher News.
Episode Summary
The team behind the top global affairs podcast, One Decision, introduces "Power Decisions," a new energy series that explores the world's energy sources and the politics and power behind the clean transition. This debut episode hosted by CNBC's Mandy Drury examines the globe's next energy conference—COP28 which has been plagued by controversy surrounding the appointment of UAE oil executive Sultan Ahmed Al-Jaber to lead the summit and the conference leadership's attempts to sweep undesirable narratives under the carpet including accusations of greenwashing Al Jaber's image and record through Wikipedia and hundreds of fake social media accounts. Drury is joined by journalists Damian Carrington, Environmental Editor for The Guardian, Zack Colman, Climate reporter for POLITICO and Amy Harder, Executive Editor for Cipher News, a publication supported by Breakthrough Energy to discuss what to expect, whether the summit can succeed as a forum to effectively address climate change and if an oil-rich nation should lead the climate change fight.
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Transcript
INTRODUCTION
Drury: I am anchor and journalist Mandy Drury, and today we are introducing a new energy series that explores the world's energy sources and the politics and power behind the clean transition. We're starting this year by looking at the globe's next energy conference, the annual United Nations Climate Change Conference or Conference of the Parties of the UNFCCC, less formally referred to as COP28. The conference begins next month in the United Arab Emirate of Dubai and there is controversy surrounding the appointment of UAE oil executive Sultan Ahmed Al Jaber to lead the summit. NEWS CLIP [0:37] Climate change campaigners have expressed outrage at the appointment of the head of one of the world's biggest oil companies as president of this year's UN climate summit in the United Arab Emirates. This has raised questions about whether the UAE's role as an oil producer,
Drury: the eighth largest in the world, impacts the motivation for nations to responsibly pursue their own energy transitions to meet global climate objectives like the Paris Agreement. And the lead up to COP and the UAE's desire to boost public perception of their stewardship of a climate summit have been plagued by controversy and leaks showcasing the conference leadership's attempts to sweep undesirable narratives under the carpet. For example, accusations of greenwashing Al Jaber's image and record through Wikipedia and hundreds of fake social media accounts. More broadly, most nations around the globe are struggling to keep on track towards goals such as net zero emissions by 2050 and the Paris Agreement's target of keeping a global temperature rise this century below two degrees Celsius above pre-industrial levels and to limiting the temperature increase even further to 1.5 degrees Celsius. All which raise questions about whether COP can succeed as a forum to effectively address climate change and whether an oil rich nation should lead the climate change fight. This is Sultan Al Jaber speaking earlier this month at the Middle East and North Africa Climate Week in Riyadh. AL JABER [2:16] I have no doubt. With your help and support, COP28 will deliver transformational outcomes for this region and for the entire world.
Drury: To discuss these issues, we have brought together some of the brightest minds in the journalism world covering the environment. Amy Harder, executive editor for Cipher News, a publication supported by Breakthrough Energy. Damian Carrington, environmental editor for The Guardian. And Zack Coleman, climate reporter for Politico. Thanks so much for joining us today. Let's talk about the controversy surrounding the conference, Damian. This is obviously with regards to the CEO of ADNOC, the Abu Dhabi National Oil Company, Sultan Ahmed Al Jaber, his appointment as the head of COP28. Do you think this hurts the credibility of the UN's climate conference? And is the presidency sufficiently independent of the oil company?
THE CONTROVERSY OVER COP28'S LEADERSHIP
Carrington: You know, UAE is a petrostate. It's a major oil and gas producer. I reported to The Guardian earlier this year that it has the third biggest production expansion plans in the world in terms of busting net zero goals. I even found out that for a long time the ADNOC, which is the national oil company of UAE, was sharing email servers with the COP28 office so could see everything that was going in. But I think COP28 if nothing else will be a very interesting moment of truth. I think either the oil and gas industry and coal as Zack mentioned really get on board with this or otherwise people will conclude once and for all that they're never going to get with the program and actually we need to kind of move on without them.
Drury: Picking up on what you were saying, Damian, about the UAE's plans for oil and gas field expansions, which would seemingly be incompatible with the Paris Agreement. Would it have helped if Sultan Al Jaber stepped down from his roles at ADNOC even if just temporarily? Or do the same concerns remain?
Carrington: I think that would have gone a big way to assuaging some people's concerns about it and certainly a lot of the noise has come from campaign groups which you'd expect in terms of his unsuitability. People say it's like putting a tobacco executive in charge of a sort of anti-smoking conference, but certainly behind the scenes you know people really involved in this process at the policy level, in terms of diplomatic level for many years have also told me that they were unhappy about it but a lot of them have kept their sentiments private because they have to work with this guy and whatever happens this is another really important conference. It's the twenty-eighth conference that we've had and CO2 emissions are still going up. You know, every COP is a really important moment.
Drury: There have been a lot of accusations, right Zack, with regards to the massive PR campaign that the UAE has been engaged in to try to boost their public perception ahead of essentially an oil country hosting a climate conference. How successful do you think that PR campaign has been?
Coleman: Well, yes. My colleague Corbin Hiar and I reported on this, how the UAE COP28 team has been going through quite a bit of PR firms trying to land the proper message, and there really does seem to be a focus on the Western media and on the Western audience basically burnishing its image. You can see the value proposition that they want to put out there, that if your theory of change is you can work within institutions and you have to understand them to get them to move, then Sultan Al Jaber and the UAE are the perfect messengers for getting the oil and gas industry off of fossil fuels. The UAE, ADNOC have committed to methane emissions targets. They have championed themselves as a little bit more progressive in the region, certainly within the OPEC group of countries and producers. But at the same time, these are things that you can say publicly, and there's not a whole lot of transparency either about what the UAE is doing, about what their partners in the region are doing. I think that they have expended a lot of energy, time, and money on PR and trying to win over audiences, but like Damian was saying, campaigners are rightly skeptical, and there's this whole bilateral process with the UAE and all the countries they're talking to that us is going to have a hard time getting into that room. We don't really know what they're saying to everyone else behind closed doors, so the proof will be in the pudding into how they manage these negotiations and the actual final text will be really telling us where they really lie with all their sympathies on oil and gas.
Drury: Amy, you spoke to the Norwegian Prime Minister about this and what he said was very interesting. Essentially, he was saying that he was dismissing the controversy surrounding the UAE hosting COP28 and the broader role of oil and gas companies saying, I would rather have the Emiratis and the Saudis take responsibility because they will be watched by the entire world community and we have to have them along for the ride.
THEORIES OF CHANGE AND THE FOSSIL FUEL INDUSTRY
Harder: Yeah. And I think I certainly agree on face value with that statement, and he makes a lot of good points. But to Zack's comment about your theory of change, how do you think change will occur? One could argue that for the last twenty-seven COPs, we've mostly been trying to change things from the outside. And by that, I mean outside of the fossil fuel industry. The fossil fuel industry is the main reason, not the only reason, agriculture, land use, but the primary reason we have climate change at all. And for most of the last 27 COPs, it's been the outsiders trying to sort of force change despite opposition and to Damian's point, sometimes outright efforts to muddy the science and other aspects of this debate for twenty-seven years. And so now I think, you know, whether by design or just by the way the UN process works for where these COPs are hosted, we're now going inside to try to create change. And I understand the tobacco analogy. I think it holds water in some ways, but in some ways it doesn't. I mean, fossil fuels are, whether we like it or not, essential to our economy in a way that tobacco never was. And so I think for that reason, going inside might prove to be inevitable but uncomfortable way to get to better outcomes. But at the same time, you know, we're seeing a lot of rhetoric and then we're seeing a lot of action that doesn't match up with the rhetoric for not just ADNOC increasing production, but here in the United States. Just in the last couple of weeks, we've seen ExxonMobil buy Pioneer Natural Resources. We saw Chevron buy Hess Corporation, mega oil deals here in US and read what you will out of that. Everybody can take their perspective. But I think one common one is that these oil companies are seeing enduring oil demand. I would argue that, yes, that's true. But, you know, I've coined this term crude musical chairs to mean the world is using less oil in the future, right? It's just a matter of how fast. And so as the amount of oil that we use goes down, there will be fewer companies producing that oil. And ExxonMobil thinks it will be one of the last companies playing the game of crude musical chairs, and they're probably right. And so although ultimately these companies are seeing a lot more demand for oil in the longer term, it's also an inevitable part of our transition away from these fuels.
Carrington: Great points, Amy. Worth pointing out, of course, that Norway is a major fossil fuel producer in and of its own right despite its green image. The fireworks are gonna be around fossil fuels about the statement in the final declaration. I mean, I was there in Glasgow and I saw Alok Sharma, the COP president, cry when he hadn't got a stronger statement in as he wanted to because of the intense pressure and frankly the fact he hadn't slept for seventy-two hours, I think. But, yeah, I mean, it's a real kind of moment of truth, I think. And I like your musical chairs phrase. The other way I heard it described is look, everybody's on the train that's heading towards the broken bridge and they're all saying, yeah, we'll be the last ones off, don't you worry about it, and then when they get really close to the bridge they're all going to get stuck in the exit, right? So just parallel to that, if people are interested there's a thing called the fossil fuel non-proliferation treaty which is a mouthful but it is an idea, it's putting a little traction at the moment, which tries to solve this problem of if we have to start keeping oil and gas in the ground as is absolutely clear from the science, how do you start sharing that out? How do you say, you know, okay we're going to keep this one here, this field here, that field there in the ground? The British government is just the same, you know, it's just announced more exploration for oil and gas which we absolutely do not need and the climate cannot withstand.
Coleman: Damian, you brought up Glasgow. I mean, it's crazy that we're having this conversation because back then, it seemed as if the North Star was very clearly net zero. Everyone was talking about it. All of the oil and gas companies were on board. Well, not all of them were on board, but there was at least BP and Shell coming up with more aggressive commitments, and then you have Russia invade Ukraine, and things have changed dramatically. Now we're talking about, well, are these companies even really serious about those commitments they made two years ago? Not to even think about the decades out problem that 2050 is. I mean, I hear John Kerry talk about this quite a bit, being close here in DC, I have to follow him around a lot of places, and he talks about you need the oil and gas companies to be part of this solution if we're going to do anything about climate change. There is, of course, the theory of change question here, which I think he's embraced in what Sultan Al Jaber is putting out there, which is basically, these are the companies with the enormous investments, they have the technical know-how, and they have skin in the game right now. You actually have to get them to go along with this greener vision. I don't know if that's really going to be the way you solve climate change, by getting them to see that there's a better revenue stream by going green. I don't know. It might be that regulation is the way and the only way to do it, but this is the theory of change that they're putting out there right now at this COP, and I think it's going to be an interesting thread to follow.
Carrington: I think it's a really good way of putting it. This COP is a test of that theory of change, right? Because we've had a lot of years when that theory of change has been completely hopeless. It hasn't provided any progress whatsoever. The fact is one of the things that changed when Russia invaded Ukraine was the oil price went through the roof and these companies made even more money than ever. So oil and gas companies have made a trillion dollars in pure profit for the last fifty years. Okay? It's an incredibly wealthy business, and that's doubled or or perhaps trebled since Ukraine. So there's so much money lying on the table there. Are they really gonna work away from that? We will see.
Harder: Well, not only is the oil and gas industry making more money than ever, but the renewable energy industry and other clean energy technologies are facing a host of challenges. With interest rates going up, the financing on offshore wind in particular is extremely difficult. And so not only is the fossil fuel industry doing really well economically, but the clean side of the equation isn't. And so us climate reporters, sometimes get really focused on our beat. But of course, none of this happens in a vacuum. And the supply chain crises and the interest rates and, of course, Russia's invasion of Ukraine and now the unrest in Israel and Hamas, all of this is contributing to challenges to make progress on this. And so I think the economic headwinds in particular are very challenging for the renewable energy industry. And I think it's you can't argue right now that renewable energy is a good economic business because of those challenges. So that's something that I'll be watching in addition to the profits coming into the oil and gas industry.
Drury: Amy, picking up on what you're saying about the cheap and consistent, reliable alternatives out there, I'm sure a lot of the fossil fuel suppliers are saying, look, we're not the only problem. The problem is also the customer because the supplier is obviously responding to the demand from the customer. And until we can come up with an alternative that is cheap, that is well financed, it's available, safe, etcetera, essentially, we're still going to be dependent on fossil fuels.
Harder: Yes, definitely. And this is something I've noticed a change in rhetoric from the oil industry in the last couple of years. And there really has been a shocking amount of change in the world in general since 2021, which, of course, you know, the pandemic was already well underway then. So it's really shocking just looking at the latest International Energy Agency outlook that has just come out in the last week. It is shocking to see that their forecasts have changed so dramatically in just the past two years. And it's a cognitive dissonance type of change because on the one hand, you know, oil demand is very persistent and the oil industry is finding it relatively easy to say, and I remember the Shell CEO was quoted saying this, we're going to provide oil for as long as consumers demand it. But it's sort of chicken and the egg. You know, there has to be this balance of we need to lessen the production of oil while at the same time moving forward with policies that reduce demand for oil such as electric cars. And so I think this balance of demand and supply is really important. The IEA call it a disorderly transition, that we can't suddenly stop producing oil. And then if we keep consuming oil, there's going to be a massive mismatch and prices will go all over the place. On the other hand, you know, we can't produce a bunch of oil and then our demand goes down and then you have a bunch of stranded assets. You really have to sort of do this dance in step with supply and demand for the next fifty years.
Carrington: Amy, I completely agree with you. I just want to be really clear here that for the listeners in particular that, you know, renewable energy, wind and solar is by far the cheapest power in the world in almost every country. In a lot of countries it's cheaper to build new wind and power than to actually run a coal fired power station because of the fuel costs along with electric cars as well. Those technologies are going to win, right, because they're cheaper, they're cleaner, they're better in every way. The question is the pace and again Amy you raised the super important point which is about cost of capital, right. All the green technologies require upfront investment, then you've got free fuel you know for the rest of its life and that's its disadvantage against fossil fuels. You know you can sell someone a car and then they're buying petrol or gas for the, you know, the rest of their life. So that's the tricky bit, in terms of managing this transition, I think. You know, it will win, the green technologies, but the question's the pace.
Drury: Amy mentioned the IEA report and they basically said that world fossil fuel demand is set to peak by 2030. You know, lots of reasons, more EVs hitting the road, China transitioning into cleaner tech, etcetera. But this is in sharp contrast to the OPEC forecasts which see oil demand rising long after 2030 and they're calling for trillions of dollars of extra investments into the oil sector. So the UAE has also come out with their clean energy commitments ahead of COP28. And what do you think of these commitments? And does it also ring a little hollow given that the UAE is also a member of OPEC?
PEAK DEMAND, DEVELOPING NATIONS, AND OPEC
Coleman: Well, I think one thing to keep in mind about the IEA peaking number is they said that fossil fuel use would peak in 2030, sure, but it's still going to be 73% of the energy related mix. This is still going to be a substantial portion of our economy worldwide, and that is a problem for meeting climate targets. The IEA is also very clear-eyed about that peak is nothing to celebrate if you're still trying to save the planet. You still need to implement more policies to sharply reduce and move away from, at the very least, the emissions of fossil fuels, and even then, we're not entirely sure that the technologies to prevent the emissions from affecting the planet will even work. Really, your best course of action is to get beyond fossil fuels, you want to be absolutely certain. But these are political questions too, as you note with the UAE. I mean, they are part of OPEC. Their economy depends on oil and gas. 30% of their GDP is oil and gas. Now, that's a much more diversified economy than a lot of their neighbors, and they are, based on their public statements, moving beyond that. They're trying to be a global citizen. They're hosting conferences. They're trying to become a tourism hub for the region. There are all these ways in which you can really see that they are trying to move beyond oil and gas, but at the same time, they're not planning for the end of oil and gas. They're planning for less of it, but not for the end of it. It is true that the world is going to grow by 1,700,000,000 people in the next two decades, two plus decades. That's what the IEA said in their report as well. A lot of that is going to come in Asia and Africa, especially in urban centers. When you talk about rapidly developing countries, how are you going to supply their energy needs? There's a lot of strong sense to be made of don't repeat the mistakes of the past that are so capital intensive. Do some microgrids. Do some distributed renewable energy. Build electric charging stations for vehicles instead of gas stations. All of these things do make sense. However, they are challenging, and again, that comes back to the cost of capital issue that Amy and Damian have brought up. I can see why OPEC is a little more bullish on the future of oil and gas because there are a lot of headwinds. However, there are innovative financing ideas out there, and they're being talked about in a way that they had never been before. There's really a lot of steam picking up on this conversation of how do we improve access to finance. It's permeating the COP in ways that it wasn't just a few years ago, and you're really starting to see this barrier between institutions that exist outside the UN process, and then the UN process itself dissipate. There's a lot more cross talk about how do we get this all to work together.
Carrington: Couple of points to make about Saudi Arabia. So the first is that in the COP process, they are relentlessly year on year, the biggest delayers, disruptors, you know, the naysayers behind the scenes. We know that from examination of the negotiations afterwards. And that of course is not unrelated to the fact that they're one of the biggest oil producers in the world. The second thing is, as we were talking about earlier, you know, this idea of musical chairs or the last people off the train. The Saudis want to be the last people off the train and they've got a pretty good shot at doing it because they pump the cheapest oil along with a couple of other countries in the world. So you know the fact that OPEC, which they dominate with Russia, you know is saying we're going to produce oil forever and ever and it's going to be great completely unsurprising, but very self serving, I think.
Harder: I did an article a few years ago, but the comment is still very relevant. This was in 2019, so, you know, before the world changed completely. But a Saudi negotiator at a recent climate conference back then actually argued that, and this is a quote, as a matter of fact, we are impacted by climate change perhaps more than anybody else. We are a desert country that heavily relies on this single source of income being oil. We have such a vulnerable economy, fragile economy. And with oil, we eat, we feed, we travel, we educated our people. And I'm not saying I agree with this, but I'm just sharing this perspective that the Saudis not only have an, and not just the Saudis, but all countries in the Middle East, they're both impacted by the impacts of climate change. But also, to the degree we move away from oil, their economies could crumble if it's not done well. So I just think that's just an interesting dynamic to add that this is a very complicated thing. And the Saudis might argue, as they did in 2019, that they're uniquely impacted. Now I think that would be a real difficult pill to swallow if you're a, you know, low lying nation that might be gone in twenty years. So I'm not saying I agree with that, but I think it's an important point.
Drury: I think, Amy, you raise an excellent point with regards to many countries such as Saudi Arabia do have an economic imperative to keep on pumping out oil because it's absolutely essential to fuel their social programs and fund their fiscal programs amongst other reasons. But you spoke to John Podesta who is actually leading the rollout of the US's largest climate law in US history, the Inflation Reduction Act. And do you feel that they're getting the mix right in terms of that economic imperative to keep the lights on if you like and avoid massive job losses, but also to show a practical path towards net zero?
US POLICY, CARROTS AND STICKS
Harder: Yeah. I think the United States, you know, for so many decades has really been a laggard on climate policy. And then suddenly, to the surprise of probably most of us, in the summer of 2022, the Inflation Reduction Act passed and injected at least $369,000,000,000 but probably a lot more over the next decade to a whole host of technologies. And suddenly, people went from criticizing the US for not acting to criticizing the US for being too protectionist. So, you know, we're now squarely in this area of a clean tech competition. China is still winning that race by a long shot. But I think this is the place where the world probably needs to be considering we live in a capitalistic society, whether you like that or not. And so that's where we need to be to really address this problem in earnest. Now there's still a lot that remains undone or yet to do in the United States, but it certainly makes the 2009 Recovery Act, which injected $90,000,000,000 into the cleantech space. And back then, that was considered huge. And so looking at the numbers today, it's really quite shocking to see where we were and where we've gone. And so it'll be interesting to me, you know, that's a lot of carrots. But I think we're going to need sticks, especially given all the economic headwinds that we've talked about. And by sticks, I mean regulations and standards and mandates. And we saw the United Kingdom, for example, actually pull back on one of their mandates in terms of banning internal combustion engine cars. And so we might see more of that. And maybe people can argue that's pragmatic, and maybe it is. I think electric cars still remain more expensive than their hybrid or traditional engine cars. But, you know, over time, we're going to need some sticks as well.
Carrington: In the UK, they did wrote back and pushed back that date for the ban and sale of internal combustion engine cars. I mean, really, though, I think you have to see that in the kind of context of a looming election and a culture war that's going on here. You know it wasn't based on any kind of serious policy analysis. I mean as it happens, electric cars have been cheaper to run and own when you can consider the combined cost of ownership over about four years, probably for the last five years and they'll only get better. And when the bumper price drops below their equivalent petrol cars probably in the next couple of years, I think we'll sort of take off like we've seen in Norway actually.
Drury: So we have lots of different forecasts out there. We have countries, some of them dragging their feet on moving towards targets. And I wonder whether, Zack, essentially the problem is that COP28 has an accountability problem. It has an enforceability problem. And ahead of this meeting, the EU couldn't even agree on a deadline to phase out fossil fuel subsidies. I think the term that was used was as soon as possible.
ACCOUNTABILITY AND ENFORCEMENT
Coleman: As soon as possible. I mean, what's that? Yeah. That's the issue with COP, and really with most UN agreements. I mean, there is no international police holding countries accountable to the things that they say in these fora. The Paris Climate Agreement was designed on a name and shame sort of regime, which is you make this commitment, you made it in front of all your friends and all the people who depend on you to live up to it, and if you don't do it, you're going to come back here every year and you're going to have to explain yourself. Now, that has worked to some degree, but then you get someone like President Donald Trump, and then it doesn't work anymore. It's only up to the international community to make this work. The biggest thing, though, that has allowed this process to work is the economics, broadly speaking, of clean energy. I mean, it just has gotten cheaper to go greener. Of course, there's headwinds right now. We talk about interest rates, but the cost of solar and wind, this has really plummeted even since the Paris Climate Agreement. Yes, there is this whole protectionist swing now in the world on promoting your own clean manufacturing, but you wouldn't make those choices if the public opinion wasn't there to support it. I think you see the animosity from Europe about the US's policies, about the IRA, because they don't have the bank to back that up the way that the US does. I mean, the US has the world's largest economy, and they can go toe to toe with anyone on subsidizing their industries, anyone except maybe China, but they're still trying to go toe to toe with China, and that's what this whole policy is. This is what you're seeing now. You're seeing a lot of carrots. I think there's a lot of countries that would pursue that in the same way, and that is sort of irrespective of the UN process here, which again, like you mentioned, suffers from this enforcement mechanism. It doesn't have one, but the public pressure and then the economics undergirding it all is really what's driving policies and green forward.
Drury: Zack, what do you think then about the UAE's multibillion dollar proposal to set up an investment fund that could be announced at COP28? I know there are a lot of details that haven't yet been worked out. We're not sure, for example, how many nations would sign up. But I do think one of the thorniest issues might be whether it's on commercial terms. And that would not sit well with a lot of the developing nations that really do rely on concessional terms to be able to fund their transition.
CLIMATE FINANCE
Coleman: My colleague Karl Mathiesen and I were able to break this story a couple months ago that the UAE is considering a multi-billion dollar climate finance package to announce at the COP. But the number we kept hearing thrown around was 25,000,000,000, but no one was able to confirm that. A lot of the details are not confirmed, but one of the biggest sticking points is yes. Will this be concessional finance? Concessional finance would be something essentially below market rate terms that would allow developing countries, the ones that really need to make this transition, where the emissions are projected to spike over the next couple of decades, where the people are most vulnerable to the shocks of climate change, will they be able to access cheap finance? If you can't, then what are you really solving? Is this just another investment by other means? I think that there's this understanding that there could be different ways to make it easier on the debtors to stomach these loans, but they're going to be loans in the end. What developing countries, and especially the most climate vulnerable ones, say is, we need grants, not loans. This is not a business here. We are talking about survival of not just us, but eventually everybody if we can't get on top of this issue. So that's one of the biggest things that's hanging over this COP as well.
Harder: Yeah. And, you know, with any COP, there's a tendency for, you know, certainly the host, and Zack, that was a great story that you guys had. There's such a tendency to want to announce new things. Oh, let's do this new thing, which is going to solve all of our problems. But in fact, a lot of these types of things already exist, and they're not going so well. And specifically, what I'm referring to are the Just Energy Transition Partnerships, which were actually established in Glasgow, the COP in Glasgow. And the first one was South Africa, and there's been a lot of challenges on that. And Cipher just had a story about this and sort of how the outside forces are really making it hard for South Africa to really follow through with its JETP is what it's called. And basically, those are where richer countries help provide additional concessionary financing to help these coal dependent countries get off coal. And in South Africa, it's not going so well there. The other ones under consideration, Indonesia has also delayed some actions on its front, Vietnam is another one, Senegal. And all of these, there's been hurdles. And so although this is a great thing that UAE is doing, maybe we should also make sure the things already underway are getting some attention and solving the things that already exist.
Drury: I wonder whether some of those things that you talk about, Amy, that are already underway, some of the traditional sources of finance, whether it's concessional or otherwise, you know, you've got the green climate fund that needs replenishing. There's the new loss and damage fund that's going to have to be seeded as well with funding. So I wonder whether Damian essentially we're running out of options in terms of the chronic lack of accessible and cheap finance particularly for these developing nations.
Carrington: Yeah. It's absolutely the flashpoint to every COP. Right? Finance is where the rubber hits the road. You've got, you know, 80% of the world's population living in low or poor income countries suffering the impacts of climate change, which they've done nothing to cause. And if you go to these COPs, they're there with a righteous anger. I mean you see it. They're furious, you know, that they're suffering these things. They're often heavily indebted nations, don't have the capacity to take more loans. And so this becomes a really serious issue. And let's be clear, the COPs have a terrible record of delivering finance. They promised a decade ago that they would deliver 100,000,000,000 a year for mitigation that is cutting climate emissions and they haven't really got to it yet. That's 100,000,000,000. We know that this is going to be a drop in the ocean in the future. I wrote recently about how just from extreme weather the costs are $16,000,000 a minute which adds up to a very large amount in a short space of time. And I think where we'll see particular rancor is around loss and damage, which as mentioned before, this was the big win out of the last COP in Egypt, COP27, where finally not just you know, offering money for cutting emissions, not just offering money for adapting to climate change, but actually compensating countries. People talk about reparations. That's a very loaded term. Right? But the countries that are suffering in these places are very clear. They need money just to clear up and move on.
Drury: So Amy, what do you see as the best emerging clean technologies out there to help enable this transition? And importantly, is there the appetite to fund them?
EMERGING CLEAN TECHNOLOGIES
Harder: Well, I think there's a lot of interest to fund a lot of technologies, which is great. We just a few years ago, pre-pandemic, I don't think any of us wrote a lot about hydrogen. And now suddenly, we're all talking about hydrogen. That was one thing that really emerged in the post-COVID conversation about clean energy. Hydrogen seemed to come out of nowhere. And so I think that's one technology and source that has been held up as a potential Swiss army knife that can do a lot of different things. I mean, I think most experts agree the best applications for hydrogen are where electricity is not as easily applied. So things like cement making and steelmaking and maybe even long duration energy storage. One thing that I'll be watching for in this COP on the technology front in particular is the oil and gas industry. Yes, they've been doubling down on their traditional products, but I'm also noticing a shift and a renewed focus on sort of molecules versus electrons. And so you have electricity, which will be the big focus in a clean energy future. Electricity will do the lion's share of the work. But I think a lot of oil companies see hydrogen and things like sustainable aviation fuel. Other molecules you have to burn is within their wheelhouse of technology expertise, as opposed to doing things like electric vehicle charging, which to be clear, some European oil companies have done that. So that's in particular one thing that I'll be looking at to see, you know, carbon capture. And by that, I mean both point source carbon capture technologies on, say, a coal plant or probably more reasonably an industrial facility. And then direct air capture where you capture carbon after it's been emitted into the air. Those technologies, especially point source carbon capture, have been held up as solutions for a very long time. And I think that's another point of reckoning we'll have with this COP. Will the oil industry really put more of their money where their mouth is on this type of technology?
Drury: I'm glad you've raised carbon capture, Amy, because it does have its detractors. Look. There are those who say it's expensive. This is an advanced technology, but also ultimately it may prolong the use of fossil fuels. What do you say to that? And does that criticism have any merit?
Carrington: So carbon capture and storage should have a small role to play in places where it's very difficult to deliver energy in another way. In fact, launching the International Energy Agency World Outlook, the boss of the IEA, Fatih Birol said that CCS has been really disappointing, right, because it hasn't developed by any stretch of the imagination in the way that people thought. And that was partly because oil companies didn't put the money in. I once asked the CEO of Shell, the former CEO, why haven't you dropped a billion on CCS, you'll do that in the Arctic just on a gamble. He said the shareholders won't wear it because there's no carbon price, right? So I think that CCS should end up being a niche, but we saw the CEO of Occidental quite recently saying the quiet part out loud, which was that this was their kind of way of continuing business for another fifty years. You know? The climate won't stand it. Let's be clear. CCS has to be quite a small part of the solution.
Drury: Right. So, Zack, there are a lot of countries, as we have discussed, that are behind on their green targets. Australia is one of them. A bit of home bias here, but Australia also says, look. Yeah. We may be behind, but we're going to have a large catch up in the second half of this decade as all of these next generation energy sources that we're talking about come online at a faster pace. But do you agree with that, Zack?
Coleman: I think that there is potential for catch up, but no one should ever count on catch up. I'm gonna speak to more of what I know about what John Kerry has said. He has said, we should have these companies prove that these technologies work before throwing in our lot with them. This is someone who's representing the largest oil and gas producer in the world. I mean, the US has contributed more to climate change than any other country, yet we are also subsidizing a lot of these technologies. We also have, in the US, this hope that these technologies will work, because, like Damian said, to some degree, they have to in some places that are very hard to decarbonize, but richer countries like Australia and the US shouldn't have to wait on that. There is enough evidence that these countries need to clean up their acts fast and that they have the ability to, and that I don't buy it that there's not a financial way to do it. It's a political will question in a lot of countries right now.
Drury: Let's finish up with a word on the geopolitical situation. Damian, maybe you'd like to take this one to start with. Naturally, Russia's invasion of Ukraine and now the Hamas and Israel conflict are really putting into very sharp focus our geostrategic and economic vulnerability of being dependent on these fossil fuel producing countries and regions. We're naturally at the whim of the fluctuations of price and supply and if we transition at a faster pace, to what degree does it lessen that vulnerability or is the vulnerability just shifted elsewhere?
GEOPOLITICS AND THE ENERGY TRANSITION
Carrington: No, it absolutely lessens it. The reason the Middle East has been a kind of hotspot of conflict for so many years is because the world has been dependent on it for the lifeblood of their economies and this is why the stakes are so high, you know, the green transition transformed the geopolitical map. You know, most countries in the world have the ability to produce their own renewable energy, so suddenly, you know, kind of big belligerent nations like Russia and other petrostates around the world are suddenly out of the picture and that's why they're fighting so hard for it.
Harder: And in the short term the conflicts you mentioned are distracting and that's problematic because we really need the full attention, I hate to say, to the climate crisis which is going to be the defining battle of the twenty-first century in my view.
Drury: Zack and Amy, do you have any thoughts on regards to the geopolitical dependency and vulnerability?
Harder: I agree with what Damian said. I would also argue that, you know, crises and problems in the world, they can be different in nature and still equally bad. And this is a relatively crude comparison or a metaphor, but let's say, you know, you get into a car crash or you have cancer. Like both of those are very bad. But if you get into a car crash, like that kind of needs your attention more than the cancer in that moment. And so right now we're sort of dealing with a car crash, a geopolitical car crash, again, to be extremely crude. And that you have to be able to understand that that will take some geopolitical attention away from the climate talks. But at the same time, we're dealing with this problem that's not going to go away and will only get worse if we're constantly focused on other things. And so I think that's why politicians are in these tough jobs because they know how to do these different things at the same time. And hopefully, the worst case scenario would be that world leaders and then therefore other business leaders and others in this climate community, they end up not going to Dubai because of any particular reason, whether it's safety or other focuses. That would be the biggest negative impact as opposed to just sort of a general sense of, wow, there's a lot of things going on in the world right now, and it's a little hard to concentrate.
Drury: Yes. I also wonder sometimes with politicians how much of a sense of urgency they have given that a lot of them are in a bubble. They're not exactly facing potentially the catastrophic loss of life and homes themselves from the extreme weather we're experiencing around the globe, mudslides, drought, fire, etcetera. But let's wrap everything up with a nice, neat bow. Zack, would you like to take this one? We've been discussing a lot of the challenges with regards to COP28 and the world meeting its green targets in general. But what are the alternatives? COP may not be perfect, but what is the alternative to it?
IS COP THE BEST WE HAVE?
Coleman: I think if they had an alternative they would have been doing that by now. I think there's a recognition that this forum is what we have. There's always a conversation of what's its purpose anymore. It was about getting a global agreement. We had that in 2015 with the Paris Agreement. Now it's how do you create changes in the real economy? That's why we've seen so many side deals and all these companies coming. This is a very insidery COP, but blue zone versus green zone. The blue zone's where all the action is, and the green zone's kind of the trade show. Well, there's a lot of emphasis on the trade show now. Because we're talking about actually changing economies instead of getting text out there, and that's, I think, the big difference. How do you actually have the facts on the ground and the steel in the ground to move away from fossil fuels and to minimize our emissions?
Carrington: Zack's right. COPs are a terrible way to try and deal with the climate crisis, except that every other possible option's even worse. So where we are with COPs is that, you know, the climate crisis is here, we've seen extreme weather around the world hitting much of it turbocharged by global heating. And what will happen as the COPs go on is that that urgent situation, you know, the kind of car crash that Amy was talking about, will become the climate crisis. We'll be talking about car crash climate catastrophes whilst the COP is taking place. Now that's where we don't want to be. We're trying to anticipate this. We've had thirty, forty years of scientists telling us exactly what's going to happen and they've been right. You know, the challenge for the politicians in particular is to try and kind of get that urgency in just ahead a little bit of time to try and avoid the worst.
Drury: Agree, Amy? Is it a case of better the devil you know?
Harder: Yes. I definitely agree that COP is no ideal forum, but for a problem as omnipresent and ubiquitous and difficult as climate change is probably the best we could come up with. One comment I'd like to just leave listeners with is one thing that can be hard with this topic is any good news, right? And this can be a bit depressing, which can be hard in this world that's filled suddenly with a lot of tragedy. And so one thing that I often think about certainly in the discussion of, oh, are we going to meet 1.5 degrees goal, which is what is in the Paris Climate Agreement, and more and more people are saying that's not possible. And sure, we can have that debate. But for me, we can always make things worse and we can always make things better. It reminds me of the late Humphrey Bogart quote, the actor that said something like, nothing is ever so bad that it can't be made worse. And the same is true of the opposite. Nothing, you know, we can always make something better. So even if we're not gonna make 1.5, let's keep pushing because we can always make things a little bit better and make extreme weather for future generations a little less bad. That's a little perhaps Pollyanna-ish, but it's better than the alternative, which is throwing up our hands and not doing much.
Drury: Absolutely. The real crime would be to do absolutely nothing. I think we all have to leave it there. Thanks again to our panel. Amy Harder of Cipher News, Damian Carrington of The Guardian, and Zack Coleman of Politico. Thanks for listening to this special energy series where we explore the world's energy sources and the politics and power behind the clean transition. We'll drop new episodes here every month. I'm Mandy Drury. See you next time.
