Decarbonize: The Clean Energy Podcast
Decarbonize: The Clean Energy Podcast
Unpacking climate finance—Fresh Energy at COP27 in Egypt
What is climate finance and its related areas of climate mitigation and adaptation? How is Fresh Energy involved in driving progress on climate finance at COP27, the United Nations (U.N.) Climate Change Conference?
In this discussion, Fresh Energy’s J. Drake Hamilton and Bri Kerber sit down to talk through J.’s seven-year legacy at the global climate change convening, the importance of climate finance, and how Minnesotans can support this critical progress on climate and clean energy.
Plus, send your COP27 questions to J.! J. will answer most of your questions about COP27—from her travels before, during, and after, to the members of the U.S. climate delegation she gets to meet, to her favorite moments interacting with members of Minnesota’s own COP27 delegation—with everyone at a special post-COP27 live, virtual webinar event happening after she returns to Minnesota from Egypt toward the end of November. Submit your questions to J. via email at hamilton@fresh-energy.org.
Hello and welcome to Decarbonize: the Clean Fresh Energy is a Minnesota nonprofit working to speed our state's transition to a clean energy economy. My name is Briana Kerber. My friends and colleagues call me Bri. I use she/her pronouns, and I am Fresh Energy's policy communications associate. We have an extra fun topic to cover today, Fresh Energy's participation at COP27, the United Nations Climate Change Conference. So in this podcast, I'll be joined by longtime climate change conference participant Fresh Energy's own Senior Director of Science Policy, J. Drake Hamilton. J. Has attended the UN's global climate change convening for the past six years, if you can believe it, from 2005 through 2021. And she is continuing the tradition again this year. This year, the conference is being held in Egypt's Sinai Peninsula in a city called Sharm el-Sheikh. And so for some context, Sharm el-Sheikh is located on the western coast of the Red Sea, which separates the easternmost part of the African continent from West Asia, specifically from the countries of Israel, Jordan, Saudi Arabia, and Yemen. So that's some regional positioning to get us started. J., how are you doing today? Are you getting excited to be heading to Egypt soon?
J. Drake Hamilton, Fresh Energy:Hello, Bri. Hello, everyone. I'm very excited. When I'm in Sharm el-Sheikh, it will be at least 35,000 people there from 197 nations. What I'm really thrilled about is the Biden Administration just delivered the biggest climate victory in history to the United States. And I'm going to call out two very important points that will allow President Biden to be there with his head up high as a very deliberate leader. One, in late September, the US was the 138th country to sign and ratify the Kigali Agreement, which works to phase down the production and use of hydrofluorocarbons, known as HFCS. These are super pollutants one thousand times more powerful than warming from CO2. A brief history - Some people will remember, as I remember from when I was babysitting at age 12, learning about how CFCs cause the ozone hole and the US and many other countries immediately took action. They replaced CFCs first with hydrochlorofluorocarbons and then with HFCS, which caused no ozone effect. So that was a very exciting thing. But we now have cheaper substitutes for HFCS that can be made in America, and this has bipartisan support in the US and even the first bill I've ever seen move through the US Congress that was also supported and is a climate bill supported by the US Chamber of Commerce. And recently the Kigali Agreement was voted on by the US Senate and it passed by 69 votes to 27 votes. So this is a historic bipartisan win for American workers and industries, manufacturing technologies here in America. 33,000 manufacturing jobs coming soon to the US. The US, therefore, is back at the climate table leading the fight against climate change. The second thing is that the Kigali Agreement, along with the Inflation Reduction Act, the IRA, passed the Congress and they had a very powerful one-two punch to revolutionize other countries who will be with us at COP27 to rise to meet our climate challenge. Just to remind you, if you haven't read about it, the IRA will mean $369 billion plus investment in climate and energy investment in the United States, and a requirement that at least 40% of this money needs to go to underserved environmental justice communities. And another reason for my special Minnesotan guests to be proud. This work was largely led by our US Senator Tina Smith, and she worked for more than a year and a half on this, and she wound up with this bill, the IRA, which she credits as being the work of what she calls her "never give up caucus." So always keep that in mind. Never give up -- our three words that are very important in climate negotiations.
Briana Kerber, Fresh Energy:Yes. Yes, absolutely, J. And thanks for that kind of view of where the U.S. is at and what we're bringing to the table. I know a lot of people are really interested in hearing more about that. And, of course, we're so, so thankful for all of the climate leaders and clean energy leaders who are really driving this progress for us here at home in Minnesota, but also across the country and across the world. So, J., this, as we mentioned, is your seventh time attending the conference, which is really an incredible accomplishment and impressive legacy and I know something that was a big priority for you last year that remains a huge priority for you and for everybody attending COP27 this year is the area of climate finance. So I'm really excited to dive into more of that topic today. It sounds like this year's conference is kicking off with an event, the World Leadership Summit, which is specifically dedicated to finance this year. So I'd love for you to start us off by explaining what climate finance is and why it's such a critical area to address when we're talking about global climate and clean energy solutions.
J. Drake Hamilton, Fresh Energy:When it comes to climate finance, the United especially between nations financing that is drawn from both the public sector and the private sources. These climate funds from governments and multinational development banks, finance from the private sector and more are intended to support two other critical UN priorities: mitigation and adaptation. Climate change mitigation refers to efforts to reduce or prevent greenhouse gas emissions. This can happen via a variety of methods, such as installing new clean energy technologies as well as bedrock solutions like wind farms or solar panels to reduce fossil fuel use, improving older equipment to make it more efficient, or changing management practices and changing consumer behaviors. Similarly, climate change adaptation is the process of strengthening the global response to climate change by increasing the ability of all to adapt to our changing world, build resilience to climate change induced changes in local, regional and national environments, and reduce vulnerability of the communities and areas most likely to be affected by climate change. This could look like strengthening flood defenses or providing sunlight reflecting cool roofs for households. The most important thing to remember if you don't end up remembering what exactly these things are, is finance is the cornerstone of implementing climate action and scaling up our ambition. Hence, it has been the heart of the United Nations Framework Convention on Climate Change process for now, these 27 years, and it has been the heart of the Paris Agreement negotiations. Last year in Glasgow, all parties passed the Glasgow Climate pact with outcomes that have also reiterated the centrality of finance as a catalyst for progress on all aspects of the global climate agenda. And many parties, which are just countries, demonstrated the political will to deliver on finance commitments.
Briana Kerber, Fresh Energy:Yes, thanks for explaining that. J. So it's clear that given the pace and scale at which climate change is affecting people and affecting communities across the world, this finance to power mitigation and adaptation, the two terms that you defined, will need to take place on a global scale, right?
J. Drake Hamilton, Fresh Energy:Absolutely. And we are moving too slowly on It will require urgent action by everyone at COP27 and many other people from every sector all over the world. As of the time of this recording, only 23 countries have submitted to the UN their updated, bolder, and more ambitious, nationally determined contributions, which are just known as their NDCs - and NDCs are essentially a climate action plan to cut emissions and adapt to climate impacts. They are particular to every country, each party to the Paris Agreement. Each group involved in these ongoing global talks and solutions is required to establish an NDC and update it every five years.
Briana Kerber, Fresh Energy:Gotcha. Okay. I see. So, J. When we think about the fact that whole economies, whole societies, whole governments will really need to get their finances flowing to help build or adapt things like, for example, roads and bridges to withstand higher temperatures and more powerful storms, it seems obvious that there's really going to be a lot of investment involved in this. And when I was preparing for our conversation, I read a somewhat staggering statistic that I'd like to repeat here, and that is that making a $1.8 trillion global investment now in early warning systems, climate resilient infrastructure, improved agriculture, coastal protection initiatives and resilient water resources could actually generate $7.1 trillion through a combination of avoided costs, but also a variety of social and environmental benefits, like the growth of family-sustaining clean energy jobs, increased positive health outcomes, and greater global agricultural yields, which I read is a critical part of sustaining the world's food sources. So when it comes to the sheer amount of funding that the global community will need to provide to make these types of things happen, what can you tell us about the kind of numbers that we're looking at - and how did we get here? How has the US pledged to be involved and what's maybe the status of some of those commitments?
J. Drake Hamilton, Fresh Energy:These efforts do have a big price tag. It's true. But the reality is that protecting people now saves more lives and reduces risks for the future, and it actually makes more financial sense, as you mentioned, to act now than to react later. The longer we wait, the greater the cost will grow to implement changes and support the communities most impacted by climate change. Here's a statement I really believe, that COP27 progress will be deadlocked if the funding promise for adaptation is broken. And here's why. At COP26 in Glasgow, Scotland, ended last November with a historic commitment by richer nations to provide what are called low and middle income countries, also called LMICs, to provide them with $40 billion in US dollars annually in adaptation and finance beginning in 2025. The funds are intended to help communities to protect themselves against the impacts of climate change, such as the loss of lives and destruction of homes and farmland as seen recently in Pakistan's devastating floods. That COP26 achievement was hard won. It builds on $100 billion US dollars annual climate commitment made back in COP15 in Copenhagen in 2009. And most of this finance, around $83 billion annually, comes in the form of loans for mitigation projects to help stave off the worst impacts of climate change. For example, by installing solar panels or wind farms to reduce fossil fuel use, p rojects from which funders can expect a rate of return. By contrast, a lot of adaptation schemes like strengthening flood defenses, for example, are best done by the public sector. This is why a popular line of thought among the global community is that adaptation finances are best given as grants because they will likely not be making a profit. But of course, because of that simple fact, grants are harder to fund than loans because loans turn a profit for lenders. And US climate leaders like the US Special Envoy for Climate, the leader of the US delegation, John Kerry, know this. John Kerry himself is working on a new approach to try to attract major capital to this task, and in the process he is really putting the pedal to the metal to find greater support for these funding needs. Now, although banks and asset managers represent some dramatic $130 trillion of assets, they have pledged to meet Paris Agreement climate targets. Too much of this capital is still on the sidelines, has not been seen yet for green finance and compensation for climate related disasters threatens to complicate our November 2022 negotiations. For example, we greatly need to scale up funding for climate mitigation. John Kerry made the case to me and others in Glasgow that trillions of dollars each year will be needed to meet the Paris Agreement stretch goal of keeping climate change to no more than 1.5 degrees Celsius. That is why he is urging Wall Street now. And while Kerry and other climate leaders are working hard to ramp up support of these funding initiatives, it's also true that the US and other rich nations responsible for much of the Earth's greenhouse gas emissions pledged way back in 2009 that by 2020 they'd collectively devote 100 billion USD annually to climate finance. The rich nations, especially the G7, have not yet achieved the $100 billion promise parties need to show progress, firm commitment and especially delivery of money.$100 billion is not enough. We have fallen short and must increase. Under discussion this month in October with the UN is to deliver much more, for instance,$600 billion a year by 2025. At COP27, we need to set a goal of a financial transition tied to not exceeding 1.5 degrees C. Finance is considered a glue for winning the trust of all countries in the world, and it is abundantly clear that financing is not now reaching all the nations that need it. And I haven't yet talked about the lack of trust among the group of 77, that's at the UN, the coalition of 134 lowest income developing nations at every COP I participated in. These very nations demand very loudly payment from rich nations for what is called loss and damage that their economies now suffer from - that is the loss of human lives, loss of ecosystems damaged permanently by emissions from rich countries. In Glasgow, they insisted that the UN create a loss and damage bank or some other official structure for getting money out from rich countries to poorer countries for that loss and damage. But the rich countries are falling short with the US especially far behind. President Biden made a vow last year that the US will provide $11.4 billion USD every year starting in 2024, and the approval for that number faces a very uncertain future in the US Congress because lawmakers devoted just $1 billion, not $11.4 billion to the effort in the current fiscal year. So they have to do much better to make up that shortfall. John Kerry has suggested private capital could help fill some of the gap as governments help de-risk climate investments. So John Kerry is courting Wall Street in a bid to drive billions of dollars into clean energy initiatives around the goal around the globe. Again, the idea is that by having government buy in into these funding initiatives, the risk will decrease for private financiers who might want to lend funds, and that helps private sector finance feel a little more comfortable helping them feel supportive enough to pull the trigger and make these much needed critical investments.
Briana Kerber, Fresh Energy:Right. Thanks so much for explaining that, J. I think we all need to know so much more about this. And I think we often forget just how significant private sector investment is in some of these wide reaching, globally impactful issues that our society is facing. And I think there's something else that that you and I would both say is really important to consider when we're having this conversation, all of us in the global community. The case for climate mitigation and adaptation for funding these things is really clear. We know we need to do these things and the people experiencing the brunt of climate change fueled extreme weather events, like you referenced Pakistan, they know this better than any of the rest of us. But at the same time, I think we often expect those poorer countries that are facing more of these extreme weather events to somehow manage to mount a massive financial response to climate change that for various reasons, they're simply not capable of. Often it's those countries that are struggling to find the financial resources to adequately cover basic needs, like food stability and security, health care, education for for many in their populations. And I know that I'm not the only one saying that. It's a well known fact by people who study climate change - global bodies like the Intergovernmental Panel on Climate Change, the IPCC, which I know you follow closely their reports on the state and scale of climate change across the world. Global bodies like the IPCC have identified that this dynamic is in large part due to decades of historical and ongoing colonialism that has led to overrun natural environments, natural resource depletion and as you mentioned, increasing greenhouse gas emissions in places that are simply not capable of reversing those effects for a number of reasons. And it seems like this reality is especially stark considering that COP27 is is taking place on the African continent, a continent that is already experiencing some of the worst impacts of climate change, that it played very little, if any, role in causing.
J. Drake Hamilton, Fresh Energy:That's exactly right. And remember that we'll be in Africa. It'll be an African COP. And African countries are considered risky investments, so they pay the highest interest rates to repay loans. We need to find a way to break that cycle. And parties who attend COP each year are well aware of this, and they're very vocal at every call. That's why last year's COP ended with that historic commitment by richer nations to provide low and middle middle income countries with $40 billion annually in adaptation finance beginning in 2025. These are critical funds that will be used to help communities protect themselves against things like loss of life and destruction of homes and farmland. But as it currently stands, that commitment must yet result in clear action. Money moving to poorer countries. Right now, global climate pledges to these LMICs for adaptation are sitting at a projected total annually of $21.8 billion. That's just over half of the $40 billion 2025 target. So $21.8 billion annually is projected. 40 billion is needed. That means it is absolutely critical that governments, private sector financiers and everyone in between attending COP27 is aligned in global solidarity to face the challenge of climate change with the funding that vulnerable countries and communities desperately need. I'm ready to get to work to ensure Fresh Energy uses its connections with partners, supporters, activists, and leaders from around the world to continue driving climate and energy progress and, it's why I'm so happy that I now have six years of international experience [at this conference].
Briana Kerber, Fresh Energy:Yes, definitely, J. And, you know, I think that brings me to another question. A lot of these issues that involve the global community and these big, somewhat elusive institutions like the United Nations, they often feel so far away in a way to many people, including I know, lots of Minnesotans that Fresh Energy works alongside. So thank you for describing some of the terms that we need to know. But I'd also love if you could give us a couple of examples of how you are representing or showcasing Minnesota on the global stage in Egypt this November.
J. Drake Hamilton, Fresh Energy:Yes, thanks for that opportunity. The first global Global Climate forum I have is called the Decarbonization Business Roundtable at the pavilion that's run by America is All In. America Is All In is, as the name says, is the America's biggest coalition ever to fight climate change. And and then secondly and by the way, America is All In is working to advance a whole of society approach to climate change. So at our roundtable, we'll be asking for specific examples of how to make this a whole of society approach all around the US. So look forward to that. And that will be held sometime between November 11th and 15th. We'll know the exact date and time soon and we'll record it and make it available. The second opportunity I have is there is a two day conference within COP27, which is
deliberately focused on two things:Ukraine is reshaping the global energy landscape. And how will that make a difference in this COP? And second, spending even more time talking about who should pay for climate loss and damage. Now we know we have had years of dragging negotiations and we need to determine what is the best path forward. So I'll be listening for the really smart people there, including, I think, John Kerry. And I'll have the chance to ask questions and I'll get back to you with the answers I get.
Briana Kerber, Fresh Energy:Awesome. Well, it's exciting to know that you really looking forward to hearing more about how we can tune in. You know, I'd also love to know, I think sometimes in addition to these things feeling far away, we want to know how we can help. So in your in your perspective, J., what are some of the ways that people across our state, across Minnesota, across the Midwest and even around the country can get involved in this really important climate and clean energy action?
J. Drake Hamilton, Fresh Energy:Well, there are great suggestions. First is Fresh Energy's website is fresh-energy.org. And it always has very prominently a Take Action section. Makes it easy for you to take action at your state level or at the national level with particular ideas about decisions that will be made this month and what you can do to help us move that ball along. But even more important, this is a conference about global action. But equally embedded in that, very much embedded in the global action, is local action on climate and Minnesota climate action to accelerate the national action because the governor, the government and the best scientific institutions around the US have determined that the IRA would lead to by 2030 a 40% emissions reductions. But you remember when I was talking about this last year, before I went to Glasgow, that what President Biden brought to there, he said the United States is committing to at least 50% reductions across the economy by 2030 and then onward. So to get from 40% reductions to this now waning decade has to increase to 50%. So that means states like Minnesota and local communities, cities, and counties have to step up. And we at Fresh Energy are happy to talk to any collaborations who want ideas for how to help take action. And we will come to your community and talk to you about what we know or we'll talk to you by webinar. So reach out to us and we will help you be successful.
Briana Kerber, Fresh Energy:Absolutely. And I know, J., I think one thing to talk to people, but also answer as many questions as you can about what you're doing at COP. So could you maybe talk about how, how you're hoping to answer those questions since we're doing a pre-COP podcast instead of a webinar this year?
J. Drake Hamilton, Fresh Energy:Yeah, for those people who don't know me, I'm I pride myself on that and I want to make sure no one goes away thinking about COP27 and having their questions unanswered. So it is super important for me to have you make sure to send in your questions. This is a special call out to send me your questions. You can email any questions at all to me about COP27 or what I learned from the leader of our delegation, John Kerry. You can email any questions to me. My email address is hamilton@fresh-energy.org. Again, that's hamilton@fresh-energy.org. I will be answering most of these questions at a special post-COP27 live virtual webinar event that we will hold after I return from Egypt in late November. So send me your questions and we'll get to talk them through soon. In addition to what we talked about regarding climate finance mitigation and adaptation, I'm also really looking forward to progress made about COP, about what the US will lead on, thanks largely to the Inflation Reduction Act and the Kigali Agreement ratified by the US Senate. I'll tell you even more about why I think that this is a powerful one-two punch that will revolutionize more countries to rise to our challenge. So stay tuned for updates on that. And here's why I know that, because I have now been getting since the Kigali Agreement passed and especially after the IRA passed into law, I've had people I know from countries all over the world call me or more regularly email me to tell me that this is really exciting because they know that their country's leaders will have a fire started beneath their feet and they will know they have to be much bolder and much more ambitious as the US is now demonstrating.
Briana Kerber, Fresh Energy:Absolutely, J. And I'm sure you're also very excited to be traveling to Egypt. I'm a little bit jealous.
J. Drake Hamilton, Fresh Energy:Well, I'll be in Egypt for my first time. But I left, I spent four months of my life in Kenya, so I know East Africa very well. And I was living with a very important journalist and I learned a lot about his trade from him then. And I hope I'm going to see some of his daughters at the COP, too. I'm very excited to be able to report back on how beautiful and welcoming the Sharm el-Sheikh resort landscape and community will be. I'll be sure to take lots of photos and share as many of them as possible with you, not just so that you can all get a little bit jealous about me enjoying the sunny seacoast while it only gets colder and gloomier through November here in Minnesota. But because I really take these COPs very seriously and I go and spend the time working to find the highest lever I can move. And I've had good success in the past six years. I always get invited with a small group of no more than a total of 12 Americans who meet directly with the leader of the U.S. delegation. I think that it will be true again this year, and I look forward to telling you what I learned from him and his name this year, for the last time, is John Kerry. I'll be able to tell you in late November or very early December what exactly he told me about the negotiation, what worked, what needs more work and how other countries are moving along. Because John Kerry is certainly a seasoned Democrat and he is popular with all of the leaders and he gets private meetings with them as well as public meetings. And he is also doing his best to reach the highest lever and move it into place so that those leaders successfully agree to taking more bold, more ambitious action.
Briana Kerber, Fresh Energy:Absolutely, J. Yes, we know that just like anybody and everybody who wants to make progress toward our clean energy future. And I'm so glad that you get to connect with good friends from Kenya when you're, when you're there. I think that's going to be an incredible opportunity. And we will hold back our jealousy on all of the pretty photos so that we can get all of these amazing and really important updates from you on this, this critical progress that, that you are helping to contribute to. And we're especially excited, I know, to get all the details from you on your experience at COP when you return to let us know what we accomplish as a global community for climate and clean energy progress, but also, of course, how we can continue to be engaged going forward. And that everybody concludes this episode of Decarbonize. Thank you so much to our listeners and subscribers for your support. A special thank you to J. for sitting down with us to talk through this process, a lot of these terms that are sometimes harder to understand, and how crucial it is for continued climate and clean energy progress at the global scale. As always, if you are hungry for more information or want to get involved in Fresh Energy's work. Please visit that website that J. mentioned a couple of times, fresh-energy.org. You can find both resources and action opportunities on that website. And don't forget to submit your COP27 questions to J. to have most of them answered live on J.'s post-COP27 webinar that we will expect to be happening toward the end of November or maybe early December. We have yet to see exactly when, J.'s got a lot of travel coming up. Again, J.'s email address is hamilton@fresh-energy.org. So stay tuned for details on how to join us at that webinar and thanks again for tuning in.