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[Episode #220] – Climate Capitalism

Mar 20 2024

What is the recipe for an energy transition at the scale needed to limit global warming below the crucial 2°C threshold?

Bloomberg journalist Akshat Rathi has identified some of the key ingredients, based on his interviews with ten of the world’s most influential personalities working on climate solutions. In his new book, Climate Capitalism, Akshat recounts their stories and makes a case for how capitalism and the dynamism of the private sector are essential components of the global race to zero emissions.

We take a deep dive into Rathi’s work, confronting the criticisms of capitalism, examining how its varied implementations around the world produce different results, and exploring potential reforms for improvement. We conclude by weaving in some ideas drawn from topics discussed previously on the show, including “command capitalism,” how the energy transition requires long-term planning with a system thinking perspective, and the tension between forces driving for international cooperation versus competition.

It's a thoughtful look at the state of the global energy transition from someone with a front-row seat to the investment flows around the world, and we know you’ll find it an illuminating and inspiring discussion.

Guest:

Akshat Rathi is a senior climate reporter for Bloomberg News and is the host of Zero, a weekly climate podcast for Bloomberg Green.

He has a PhD in chemistry from the University of Oxford, and a BTech in chemical engineering from the Institute of Chemical Technology in Mumbai. He has written for Quartz and The Economist, and his work has been cited in global publications including New York Times, Washington Post, New Yorker, The Guardian, Wall Street Journal and Financial Times.

On Twitter: @AkshatRathi

On LinkedIn: AkshatRathi

On the Web: https://akshatrathi.com/

Geek rating: 4

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[Episode #215] – IEA’s New Oil & Gas Outlook

Jan 10 2024

Mini Episode

In December 2023, a landmark declaration emerged from the COP28 climate conference: For the first time, the world’s climate delegates agreed that a global "transition away" from fossil fuels is essential. This historic pronouncement marked a significant shift in tone from previous climate conferences and formalized the energy transition as a global priority, underscoring the urgency of the climate crisis.

But what are the implications for the oil and gas industry? To address this question we turn to the latest analysis from the International Energy Agency (IEA), which has some clear guidance about what must be done to prevent global warming from exceeding 1.5°C above pre-industrial temperatures.

In November 2023, Chris traveled to the IEA’s headquarters in Paris, France to discuss their perspectives with two of their lead modelers: Tim Gould, the co-head of the IEA’s World Energy Outlook reports who you’ll remember from Episodes #148 and #171, and Christophe McGlade, the Head of the IEA’s Energy Supply Unit who you’ll remember from Episode #166.

In this 98-minute conversation, we focus on the IEA’s updated outlook for oil and gas, drawing on findings from their World Energy Outlook 2023, their November 2023 oil market report, their updated Net Zero Roadmap, and a new groundbreaking report, The Oil and Gas Industry in Net Zero Transitions. We explore how the energy transition is cutting into demand for oil and gas, and the serious implications for producers. We also show why the industry must pivot to working on energy transition solutions, or prepare for their own obsolescence.

Geek rating: 8

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[Episode #190] – Financing Utility Scale RE in Developing Countries

Jan 25 2023

Mini Episode

Multilateral development banks (MDBs) like the World Bank are increasingly under pressure to invest more in renewable energy projects in emerging markets. The lack of financing for such projects is a problem at the small, distributed scale as we discussed in Episode #189, and it’s also a problem for utility-scale projects as we discuss in this episode.

In this conversation, Brad Handler, a Program Manager and Researcher at the Sustainable Finance Lab of the Payne Institute at the Colorado School of Mines who tracks various such projects and initiatives, walks us through some recent Energy Transition Mechanisms (or ETMs) and Just Energy Transition (or JET) refinancing projects that aim to close coal plants in the developing world long before the end of their expected lifespans, and replace their generation with renewable power. A former Wall Street Equity Research Analyst with 20 years of experience covering the oil sector, Brad has a deep understanding of how finance in the traditional energy sector works, giving him an excellent perspective on how energy transition financing could work. He does a wonderful job of explaining the oftentimes opaque and complex world of sustainable finance so that it’s comprehensible.

Closing coal plants remains the number-one priority globally for reducing carbon emissions. So although these are still very early days for refinancing projects, it’s worthwhile to examine how and where development banks are finally taking some real steps to accelerate the energy transition in emerging economies, derisking the sector and motivating much more conventional private sector capital to participate.

Geek rating: 5

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[Episode #189] – Financing the Transition

Jan 4 2023

Mini Episode

According to the International Energy Agency (IEA), almost all of the growth in global clean energy spending is happening in advanced economies and China, while the two-thirds of the global population that live in emerging market and developing economies are receiving less than one-fifth of the total. The reason? The high cost of capital.

But why is the cost of capital so much higher in emerging economies than in advanced economies? Why is it still so much harder and more expensive to finance clean energy projects than it is to finance fossil fuel projects in those countries? And what can be done about it?

In this episode, we speak with a solar project developer working in Costa Rica to try to answer these questions. Building on our previous discussion from Episode #21, we try to explain why so little progress has been made, especially by the multilateral development banks (like the World Bank), in reducing the cost of financing for renewable energy projects in emerging economies. We review the different roles that various financial institutions play in financing the energy transition, and we ask what needs to change to unlock the flow of capital into energy transition solutions (especially distributed solar). We also put the risk and reward of investing in those projects in a fresh context, and call upon banks of all kinds to start acting in more creative and ambitious ways to take bolder action and get capital deployed where it is most needed, and where it can do the most good.

Geek rating: 6

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[Episode #171] – Rejecting Russia

Apr 27 2022

Mini Episode

Ever since Russia invaded Ukraine, policymakers and energy professionals alike have been challenged to figure out how Western countries could stop funding Russia’s war machine by halting imports of their fossil fuels. But, considering that Russia is the world’s largest exporter of oil, halting imports is simply not something that can be done quickly.

It is, however, something that must be done as quickly as possible. Numerous proposals and plans have been put forward to outline how various countries could displace the need for Russian energy exports. And generally, those proposals amount to accelerating the energy transition.

In this episode, we delve into some of those proposals and try to understand how much of a role they could play in displacing Russian fossil fuel exports, how long these measures will take, and how the entire global arrangement of trade and political alliances may have to be rearranged to accommodate them.

We tackle this huge topic in a two-hour conversation with three experts. To represent how Europe could proceed, we welcome back to the show Tim Gould of the International Energy Agency (IEA). To represent the UK perspective, we welcome back to the show Simon Evans of Carbon Brief. And to represent the US perspective, we welcome to the show Rachael Grace, Senior Director of Policy at Rewiring America.

Geek rating: 7

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[Episode #166] – IEA’s Climate Scenarios

Feb 15 2022

Mini Episode

As the energy transition continues to accelerate, it’s more important than ever that we update our models—both our empirical and mental models—of where we’re heading. Things that we used to take for granted, like oil and gas demand increasing every year, are no longer assured. And governments the world over are gradually tightening their restrictions on fossil fuel use and emissions, so it’s important to keep our data on climate policies and pledges current.

In this episode, we are joined by Christophe McGlade, Head of the Energy Supply Unit at IEA, to discuss the latest updates to the IEA’s Announced Pledges Scenario in light of the pledges announced at the COP26 conference in November 2021. We also revisit IEA’s other main scenarios, and review what the world needs to do to put us on a trajectory to limit global warming to 1.5 degrees. Other topics covered in this interview include an exploration into the gap between what emissions scenarios imply about stranded fossil fuel assets and how the oil and gas industry is actually proceeding with the blessing of governments; the role of the oil and gas industry in the energy transition; the role of negative emissions technologies in the IEA’s scenarios; and the IEA’s plan to make more of its data available for free.

Geek rating: 7

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[Episode #159] – The Cost of Decarbonization

Nov 10 2021

Mini Episode

Why do the major groups publishing energy forecasts consistently undershoot the progress of energy transition? For decades, public sector agencies, oil industry groups, energy industry consultancies, and even environmental nonprofits have been consistently too pessimistic in their outlooks. So why is it that standard energy forecasting models keep getting transition wrong?

A group of researchers at Oxford University may have an answer to that question with a study they recently published on the future trajectory of the energy transition. The problem, they say, is that standard models don't realistically account for learning curves in manufacturing, and exponential growth in deployment as it relates to transition. Their new approach shows that future cost and deployment curves can be predicted quite accurately for energy transition solutions like solar panels, wind turbines, batteries and hydrogen electrolyzers.

What makes their demonstration particularly exciting isn’t just that they’ve found a better approach to modeling energy transition learning curves; it’s what their model shows: that a rapid energy transition is actually as much as $14 trillion cheaper than not transitioning over the coming decades. In short, these researchers suggest there is no net cost to a sustainable energy transition, and that on the economic merits at least, it’s basically inevitable.

Join us in this episode for a discussion with one of the researchers on the Oxford team, Dr. Matthew Ives. He is an economist and complex systems modeler at Oxford University who is currently researching sensitive intervention points for accelerating progress towards the post-carbon transition. We explore exactly how their modeling was done, exactly where traditional modeling has gone wrong, and what it all means for the energy transition.

Geek rating: 5

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[Episode #93] – Energy Transition in India and Southeast Asia, Part 2

Apr 17 2019

Mini Episode

This is Part 2 of our two-and-a-half hour interview with Tim Buckley, of the Institute of Energy Economics and Financial Analysis, based in Australia. We featured Part 1 in Episode 91, in which we primarily discussed the future of coal fired power in India. In this second part, we expand on the India story and look more broadly at energy transition across Southeast Asia, and consider the outlook for coal, renewables, and nuclear power in China, Japan, Bangladesh, Pakistan, and Malaysia, among others. As he did in Part 1, Tim shares with us in this episode a fascinating set of data on the future of energy in Southeast Asia that is oftentimes at sharp variance with the projections that we hear from energy watchdogs like the International Energy Agency. Tim tells a much more hopeful story about energy transition in the developing world. For example: If you think that China’s building more coal plants means that its coal consumption is going to go up, think again! Energy transition is moving ahead, and will move ahead, much more quickly in Southeast Asia than any of our major agencies project, and that is great news for the climate.

Geek rating: 4

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[Episode #91] – Energy Transition in India and Southeast Asia, Part 1

Mar 20 2019

Mini Episode

It has long been assumed that India, China, and other developing countries of Southeast Asia would power their vigorous economic growth for decades to come with coal. We heard over and over that China is building a new coal-fired power plant every three days, and about plans for multi-gigawatt sized coal-fired power plants in India. As long as coal was the cheapest form of power, addressing our climate emergency seemed like a lost hope.

But that nightmare is now evaporating thanks to the continuously declining costs for solar, wind, and battery storage. Although there are far too few policymakers (not to mention the major energy agencies, like EIA and IEA) who appear to be aware of it, the future of coal is fading by the day, as solar and wind take the lead as the lowest cost forms of power. And nowhere is this new reality more starkly evident than in India, where a remarkable pivot away from coal has been under way for about five years now, radically reshaping the outlook for India’s energy consumption, and stranding billions of dollars in investments in coal plants that will not be used as expected. At the same time, India is busily electrifying 18,000 villages, pushing forward on the electrification of transportation, and developing demand-side technologies that together are more likely to make India one of the world’s great success stories in energy transition than one of the world’s largest upcoming carbon emitters.

Our guest in this episode has been closely watching these markets for three decades, and is one of the sharpest observers of what’s happening in India and Southeast Asia. This episode is Part One of our two-and-a-half hour conversation with him, which mostly covers India and coal. Part Two of this interview will be featured in Episode 93.

Geek rating: 4

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