US climate envoy John Kerry outlines new principles for accelerating private capital needed for the energy transition

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John Kerry
Special Presidential Envoy for Climate, US Department of State

Andrew Steer
President and CEO, Bezos Earth Fund

Elizabeth Yee
Executive Vice President of Programs, The Rockefeller Foundation


Frederick Kempe
President and CEO, Atlantic Council

FREDERICK KEMPE: So during the UN climate conference in Egypt this past November, COP27, your three organizations—so the US government, Rockefeller Foundation, Bezos Earth Fund—announced the establishment of a new tool in the global effort to keep [the] 1.5 [degree limit] alive, the Energy Transition Accelerator. Now, there’s no doubt about the scale of the challenge to limit global warming to 1.5 degrees. There’s no doubt that that challenge is immense. And as we’ve witnessed the effects of climate change permeating, a constant drumbeat of other challenges elbows out this with—when world leaders have to give more attention to the coronavirus pandemic, Putin’s criminal war in Ukraine, you know, recession, inflation.

Inaction, however, is not an option. That’s what makes the launch of the Energy Transition Accelerator at COP27 so exciting. That’s the reason we wanted to have a panel dedicated to that here at our seventh Atlantic Council Global Energy Forum. This new policy platform—which was announced as a collaboration among the US government, Rockefeller Foundation, and Bezos Earth Fund—aims to overcome one of the largest, if not THE largest, inhibitors to meeting global net-zero targets, and that’s access to finance and particularly in emerging markets.

So at the Atlantic Council, we pride ourselves on having tough, but necessary conversations—you heard that yesterday, as well—which enable us to resolve the globe’s most fundamental challenges. And the question of how to unlock that funding certainly ranks among them. So for that reason, I hope our conversation today with these distinguished individuals will illuminate a path forward and provide us with their vision for removing the barriers.

So I’ve known Secretary Kerry as Senator Kerry, now Special Envoy Kerry, but you’ll be Secretary Kerry because I—this will—this is the title that I like to connect with you most. You’ve been such a leader in all three of those realms. Everything you touch you take enormously seriously, and that’s the kickoff for this question.

When you and your partners introduced the idea of the Energy Transition Accelerator at COP27—and it might even be interesting to know how it came about—you said your aim was to put the carbon market to work to deploy capital to speed the transition from dirty to clean power. So how did this come about? Why do you feel—why did you feel that such an initiative like this one is so vital? And then maybe you can put it a little bit into the context of the COP28 we have coming at us. You heard Dr. Sultan tomorrow morning—yesterday morning. By the way, thank you for being there, Mr. Secretary. So let me turn to you to kick off this discussion.

JOHN KERRY: Well, Fred, thank you very, very much. And thanks for the Atlantic Council’s leadership and your leadership personally for a long period of time. You and I have known each other for many, many years now. And I’m delighted to be here with Elizabeth and with Andrew, and I thank them—both of them and Raj Shah in absentia—for the Rockefeller Foundation and Bezos Earth Fund daring and willingness to push the curve here, which is what we need to do.

You’re all leaders of either a business or a nongovernmental organization or some interest in this issue, and in that capacity there isn’t one of you who doesn’t have the skillset of standing back and looking at a problem when you see it and say, OK, how are we going to solve this. We are—we are here because we are problem-solvers and people who want to get things done. And I am particularly disposed to avoid situations where you’re just spinning wheels and pretending, and there’s an awful lot of pretense around this particular issue in many quarters.

We have to be more than deadly serious. I think all of you know that. This is life and death. It is existential. We have folks around the world, some of whom think they can be indifferent to it. But we’re seeing the consequences of that indifference. And if you’re content in your business or otherwise to spend literally billions of dollars, hundreds of billions of dollars to clean up after storms or to, you know, build a dike after the flood has come or whatever it is, you’re on the wrong side of this issue if that’s where you are.

You know, we have a lot of challenges around the world right now. The world is surprisingly discordant and at odds with itself in too many places, and that’s a tragedy. But it’s human-induced and it is human-solvable, and what we need to do is be more focused on the ways in which we’re going to address these kinds of issues, and none more so than on the climate crisis.

So this really came about because of reality. I was traveling last year around the world and having many, many different meetings to try to gin up ambition, which we did, by the way. We succeeded in ginning up ambition significantly in Glasgow, building on what we did in Paris, and we are now—and we have built up some ambition out of Sharm El Sheikh and now we need to meet the reality that this is the year of a stock take in which everybody’s going to be looked at pretty carefully and it is the year also during which we have coming at us the question of loss and damage and how do you begin to manage that more effectively, and so there’s a lot at stake.

So what I found in my travels everywhere, [universally], around the planet, is not enough money is being put on the table to solve this problem. We’re either not trying to do it or we’re trying to do it on the cheap, and the result is that we’re not doing it. We’ve never had the full measure of the one hundred billion [dollars] that was promised in Paris and I—you know, I’m sorry that our political process is such that that hasn’t been possible.

But we’ve put a lot of money on the table. We put $94 billion last year out of the Pittsburgh energy meeting—$94 billion mobilized within three weeks put on the table as real money to go to less developed country initiatives. We don’t get credit for that, no credit in our system which says you’ve got to put a hundred billion [dollars]. So we have 94 billion [dollars] but it doesn’t count towards a hundred [billion dollars.]

So what I’m trying to say is, folks, the system is broken in terms of how we’re trying to fix this and we need to respond more effectively. When I met with Macky Sall, the president of Senegal, or I met with Tshishekedi, the president of DRC, and I met with President Buhari in Nigeria, to a person they said, you know, we’d love to be able to not have to exploit our gas. We understand the challenge. But I’ve got people who don’t have electricity. I need to be able to grow my economy. I need to be able to have my country share in what the rest of the world has and to build out community and to build out capacity. And that was to a person, and they would say, you know, can you help us with the build-out of our renewable energy structure or new grid or whatever it is.

The answer is no, we can’t, because we don’t have the money. Very few people—no government in the world has enough money to deal with what everybody is telling us we must do in order to deal with this crisis. What is that?

Well, the UN finance report, the other individual finance reports, all say that to have this transition effected adequately to meet the challenge of keeping 1.5 degrees as the limit of warming on the planet we’re going to have to invest a minimum of about four trillion dollars a year for the next thirty years in order to build out the grids, deploy the renewables, transition from gas turbine, whatever it is, and be virtuous in the way we are providing power to our businesses and homes, in the way that we are propelling our vehicles, et cetera.

Energy. Energy is the single, you know, summary of how you cure this problem. Why? What is the problem? The problem is emissions—methane emissions, [carbon dioxide] emissions, the other greenhouse gas emissions. Emissions. Emissions is pollution, and for some reason we’ve kind of turned our backs on the responsibility that we fought for in the 1970s and 1960s to hold people accountable for pollution.

So the science is clear on this. There’s no debate. I don’t care where you come from in the political spectrum. There is no debate that emissions that come from the way we power our societies and propel our societies, those emissions are damaging and we do not cure this problem if we do not meet what the scientists have said, which is reduce the emissions at a rate that allows us to minimize the damage.

And the science said that—in 2018, the scientists said to us not that we could eliminate the crisis but that by moving to hold 1.5 degrees we can avoid the worst consequences of the crisis. Read it carefully. The worst consequences, not the crisis completely.

So how do we do that? Well, if we don’t have money, we’re not willing to invest, we don’t do it. It’s that simple.

So the money part we’ve been working on with Rockefeller and Bezos Fund to figure out how could we de-risk the deals that are out there to provide energy, to deploy renewables, to do this transition. But how do we de-risk it and create bankable deals? Because the trillions that are in the background waiting to be invested by the largest financial institutions—in fact, all financial institutions in the world—would love to be able to invest. But there are hurdles—political hurdles, currency hurdles, various natural disaster hurdles, and risks. We have to eliminate those.

So what we did was sit there and say, OK, how are we going to get the cash to be able to grease the skids to make the bankable deal come together so we can get a [[power purchase agreement (PPA)]. That’s a twenty-five-, thirty-year PPA, and you can actually go to the market and finance what you’re trying to do. That’s the key.

And what I landed on with the encouragement of a number of people, one of them, many of you know, is Anne Finucane, who wrote about this two or three years ago, talking about how there is a distinction between some of the exploited credits or offsets that have existed versus virtuous ones.

And what we’ve done is sit down and put together a set of guiding principles, which we’re releasing today, and we’re pulling together a group of people, some of which are announced today but it’s not a complete list—there are more people that are going to be added to that—to have a broad cross-section of input so that we are putting together, according to our principles, a mechanism that can attract some cash that will be used for limited purposes, and I will come to that in a moment.

But what this is trying to do is make sure that we do this in the near term, we do it in an inclusive way, which is, you know, high—that we’re delivering on the broader sustainable development goals, that we’re including people who are affected, sometimes left behind in this process, that we’re protecting their interests, that it’s comprehensive, that we are supporting ambitious power sector-wide transition, that it has high integrity.

Some offsets and some credits were not high integrity and they’ve given a bad name to the idea that there might be a way in which you can attract some capital and still reduce emissions and avoid the worst of, you know, some avaricious practices out there.

And we also want this to be supplemental. This is not in place of any obligation to put public money or fulfill the commitments that we have asked for, and it is to be transitional, meaning it’s not forever. It’s not a fifteen-, twenty-year bonanza that somebody’s going to say, well, I can buy a credit and then I don’t have to do X, Y, and Z. No. Sorry, that’s not the way it is.

Everybody is going to be responsible for living up to net zero and meeting the measurements. But we believe you can have high integrity, accountable transparent credit, which will help us to be able to put some money on the table and the money is used in the following way.

When we put together the deal with Indonesia, which we negotiated for a year and a half or so, we had to figure out how do we close some coal plants, how do we now accelerate the transition to the renewables that we want deployed, and how do we do this in a way that’s transparent and virtuous and so forth.

Well, we found that way and we made an agreement with X amount of renewables that are going to be deployed with the pace of closing of coal and transitioning, and not just closing excess capacity but really getting at the problem of emissions.

And that’s our goal here, folks, and I’m convinced for the following reason. It is accountable to the naked eye. There are only two purposes for which we will allow someone to be able to buy a credit: one, to be closing down or transitioning existing fossil fuel facility that is providing power, and two, for the actual deployment of renewables that will replace current dirty sourcing.

That’s it. So you can see it built. You can see it coming online. You can measure what is happening here. And if you do this correctly, which we are determined to do, we can get a certain amount of cash now because some companies have tried hard—not enough yet—to begin to implement their programs for net zero by 2050, correct? And so you may have a company—a large tech company or somebody—that has gotten to 80 percent of their scope-one reductions, but then they get stuck. Why are they stuck? Not their fault; they’re stuck because there aren’t enough electric vehicles to be able to buy to get your fleet to be electric so you’re reducing emissions and living up to your goal, or because they’re—you know, there isn’t a grid, you don’t have a smart grid and you can’t tap into the smart grid, therefore you don’t have a physical way of using your power the way that meets the standard.

So we have to be smart. We can’t sit there and say, well, tough, you know we’re going to hold you accountable anyway. Nobody is living by a law to reduce—to hit 2050 net zero. There’s no law. People are doing it because they’re exercising a sense of public responsibility. And if we turn around and say to them we’re not going to listen to your problem or we’re not going to try to address your problem or we’re not going to give you an opportunity to be able to get where you’re trying to go, they’re going to say: Well, the hell with you. Why the hell do I try to do this? It’s easier for me to avoid the crisis of an NGO criticizing me because they say what I’m doing is violative of green principles when I’m trying to be a good citizen. I might as well opt out, and I don’t get my board of directors all wound up in what’s going on.

So, long story short here, folks—sorry about this—but we need to find a virtuous way of getting money into the system so that we can transition faster. That is exactly what this is for. And if we can get—and here’s why. In Egypt, we cut a deal with the Egyptians called—it’s the NWFE program, where they are going to shut down five gigawatts of gas-provided power, transition that gas to Europe to help them in the context of Ukraine and the problem they have, but they’re going to shut down eleven gas turbines that are polluting and deploy ten gigawatts of renewables. Wow, fifteen net transition of power and emissions. And the way we made it happen was we put up money. We did find some concessionary funding. Very hard. It was very hard, but we got about 500 million total in the end. We put thirty-five million in cash, some lending. The EBRD put in some money from a trust fund. We got money from Germany. Germany really stepped up—thank you, Germany—and put major funding on the line in terms of a very concessional loan. And so, in the end, that money facilitated the de-risking and allowed us to be able to get the deal, which is a ten-billion-dollar expenditure to be able to deploy new energy.

Now, we can’t take a year and a half to do this one by one by one. So what we want is to create a means by which we’re attracting capital to the table which will be concessionary. They’re buying the credit. They get a certain period of time where that credit is going to help them meet their goal, but it helps us meet our goal. It actually results in a reduction of emissions. And I don’t see how anybody can be critical of real reductions in emissions because that is our challenge right now. That’s how we win this battle.

So as I say, it’s temporary. We don’t know yet this consultative group which is going to be coming together, and some were announced today. More will be announced in the next days. But it’s going to be broad-based, jurisdictional, and help us to be able to put this together in a way that has true environmental integrity but works. So SBTi, VCMI, these different players will be at the table, but so will business. So will other people who need to make it work.

So thank you. I know I went on a little long, but I—

FREDERICK KEMPE: Mr. Secretary, I’m just so glad this audience got to hear that. Ladies and gentlemen, excellencies, you just heard one of the most powerful advocates and executors for creating a better world. So thank you so much for that opening statement laying out this really, really exciting plan.

Let me—and you know, four-trillion-dollar need next thirty years. Question of how to de-risk, how to create bankable deals. You laid out some of the guiding principles. We’re going to be looking forward to seeing the rest and the people who are engaged.

Let me turn to Liz. So, as all things, these things become acronyms, so it’s already become ETA, so the Energy Transition Accelerator. How can it be designed to promote a just transition from fossil fuels to clean energy? And so that’s, ultimately, the goal. And then so that fossil fuel workers and vulnerable communities are protected.

Also, just listening to Secretary Kerry, you know, Sharm El Sheikh wasn’t that long ago. You know, it seems like you’ve made quite a bit of progress. Can you talk about the progress you’ve made since then and the progress you want to make, like, going up to COP28 as well? Yeah.

JOHN KERRY: Liz, why don’t you talk about it a bit and then I’ll add.

FREDERICK KEMPE: Yeah. Yeah. Yeah.

ELIZABETH YEE: So I think, you know, what—and thank you for those inspiring and good, excellent framing comments. I mean, I think from a foundation perspective we draw a lot of inspiration and leadership from your vision, and are very, very supportive of it because—you know, I mentioned this yesterday in my remarks—I think for the foundation one of the things that we care so much about is making sure that we put humanity at the center of all of our efforts. That is the core business that we are in. And this, to me, when we were looking at this opportunity with you, enabled us to do that because it enabled us to solve the challenge that we saw around project development, a critical need on decommissioning and reducing emissions, as well as putting people at the center of what we need to do.

And as we work on this together, I think we really want to make sure that the ETA does three things. And I just wanted to share that.

So, first, the first order of work is really around how we actually do these country-driven energy-transition strategies and making sure that we do it in a very high-integrity, jurisdictional way. And I mentioned those critical words because I think that is also a key differentiator in what other frameworks have been out there. And so, for us, what we’re trying to do is just make sure that we design a really good high-integrity process and make sure that we actually put the guardrails in place to make sure that workers, in particular, are front and center in the design of it.

And we can do a lot by looking at existing projects and programs that have done this. You know, one of the things that I know we’ve been working on with the Global Energy Alliance for People and Planet, which includes Andrew and the IKEA Foundation—and Joseph is here, as well, today—is working on the Komati power plant in South Africa. And one of the things that GEAPP and the foundations and we have done is work with them—the local electric utility, the local university there—to provide training and upscaling of existing workers that are at that plant, but also communities so that we’re building capacity around new green jobs for those communities. And that is a critical part. I think Her Excellency and Damilola and several people on the prior panel mentioned that, and that is a key part of the energy transition and it will be a key part of the ETA.

I’d say second is just making sure that we allocate a certain percentage of the carbon credit towards adaptation purposes. Not enough money goes to adaptation. That is a critical area that we know needs to happen. And we’ve seen that as an effective mechanism in other similar programs.

And then the last—and to your point, Secretary Kerry—is that we have a process that’s transparent and, most importantly, inclusive. And so that is why I think—and if you’d like to speak about it more, perhaps we can talk about the high-level group that we’ve pulled together to make sure that we’re getting a cross-section of people from around the planet—the best minds private sector, government, public sector—to help us develop and design this in a way that has the integrity that we are seeking to be able to deliver.

FREDERICK KEMPE: So let me come back to you in a minute, Secretary Kerry, on that question of how much has been achieved and what should be achieved. Let me go to Andrew first for the point of view from the Earth Fund—the Bezos Earth Fund.

You know, this is an interesting three groups to come together. So why did you decide to join this initiative? Why do you see it as vital? And how do you actually make sure that the ETA delivers the high-quality emission reductions, and that they contribute rather than distract companies from genuine climate action if that’s a danger at all?

ANDREW STEER: Well, look, first, Fred, thank you so much for this event. I think the Atlantic Council’s Global Energy Forum each year has become a really central driving, agenda-setting place to come. So thank you very much.

Why did we join? Well, when Secretary Kerry gives you a call and says, for heaven’s sake let’s get on with it, you don’t say, well, let me think about it. You say, absolutely we are going to jump right in.

We’ve all seen the—and thank you for your inspiring words, Secretary Kerry. I can be brief because I think you’ve said it so much better than we would.

We’ve all seen the numbers: 4.2 trillion per year has to be spent on the future of energy, so to speak. That’s a tripling of what we need. We’re incredibly excited when we see coal-powered electricity-generating plants closing, aren’t we, because that’s going to be necessary. We need to see 925 closing every single year. So when you hear, oh, here’s one, yeah, now you’ve got another 924 to do each year between now and 2030.

Now, some people would say: Well, why do you need—why do you need carbon credits? I mean, isn’t it attractive already to invest in renewable energy? Well, yes, it is. Plain fact of the matter is it’s not happening at anywhere near the pace that’s required. And if you’re a country that’s really willing to show leadership—as South Africa has, Indonesia has, Vietnam is, various other ones—you actually need some help. And Secretary Kerry and other political leaders have played an amazing role with the leaders of these countries actually taking bold measures. Now we need to, if you like, empower those bold measures. And so you do need carbon markets.

Now, why [are] carbon credit markets not working at the moment for energy? Because there’s something puzzling going on because there’s been far more work done on the nature side of carbon markets with regard to developing/emerging countries than energy. And actually, energy is more intuitive, isn’t it, because actually doing forest protection and restoration is actually more complicated. But far more work has been done on that. Far more money is flowing on that than to energy. So we’ve got to address that, and that’s what this is all about.

Why are private companies not investing at the moment? It’s because it’s too complicated and they say: Look, there are so many pitfalls. Quite frankly, we put some money in, someone’s going to grumble there’s leakage or it’s low quality. What’s the point? We’ll be accused of greenwashing. And what we’re trying to do is say: Actually, there is a sensible path forward. There is that sweet spot between, you know, on the one hand, you know, making sure you get the standards right; on the other hand, making sure you get the volumes of money right.

And so what we’re trying to do is, I think, terribly exciting. This is not just us working on our own; this is bringing in the entire global architecture, if you like.

At the moment, as you know, greenhouse-gas protocol; that’s how you measure greenhouse gases. Then there is CDP; that’s where you register what your greenhouse gases are. Then there’s SBTi, Science Based Targets Initiative; that’s how you set your targets. Then there are various standards-setting—like, you mentioned it yourself, Secretary Kerry—VCMI. That’s looking at the demand side. That basically says: If you’re a private company and you want to get credit, you’ve got to be already on a good downward path. You’ve got to be signed up to science-based targets.

Then there’s something called ICVCM. I hope you’re keeping up with all of this. That’s on the supply side. And that basically says: Look, if you’re going to invest in an investment that’s going to actually have some credibility, it better be high quality. And Liz mentioned the issue of what’s called the jurisdictional approach, which is very big on the—on the nature side. That means you can’t just do a little project here because someone might cut down the forest there; you’ve got to look at the whole jurisdiction. Same thing applies [to] energy. No point decommissioning one coal plant and investing in renewable energy if someone else builds another coal plant over here. So governments need to be part of it. We need a jurisdictional approach.

So what we’re going to do, every single one of those alphabet soups I just mentioned, every single one of them is on the advisory council, the consultative group, together with many more—the sort of Brian Moynihans, head of Bank of America; Catherine McKenna, who wrote the report, you know, for the secretary-general; many leaders from the developing world are on that. At 9:15 this morning our time, a press release came out with some of those names already. Do look at it.

It’s great to see Fred Krupp in the audience here because he’s the president of EDF, the Environmental Defense Fund. They, together with the Center for Energy—Center for Climate and Energy Solutions, will be providing, if you like, the intellectual driving force and managing this.

So this is an incredibly exciting venture. We would urge you to sort of join with us. Particularly if you’re on the investment side; particularly if you’re a company that’s thinking, my goodness me, I wouldn’t—I would really like to get engaged in this; we’d love to talk to you.

So we’re going to be very tough on the—if you like, the standards side. We’ve got best nongovernmental organizations in the world, best developing-country leaders that are demanding all of the kinds of safeguards that Liz talked about. But at the same time, we need ambitious providers of funding that are not going to be providing the funding through this as an alternative to doing what they need to do in their own scope one, two, and three, but as a complement to that. Because even if you’re on that wonderful trajectory coming down to net zero in your own company, you’re still emitting in the meantime some carbon, and this can actually help compensate for that.

FREDERICK KEMPE: Thank you for that, Andrew.

And, Mr. Secretary, what’s very exciting about this, obviously, is what you’ve underscored, which is the measurable results side of it. So let me go back to the question that I posed to Liz about it’s been a short time since Sharm, what have you achieved? It’s not that long of a time before COP28. What do you want to achieve by then?

And I guess there’s a third question within that, which is this is a really promising strategy to scale climate finance, but 4.2 trillion, how much of it do you want to do there? So in other words, what are the—how does this fit into other promising strategies?

JOHN KERRY: Well, it’s an integral part of it, Fred. And let me describe part of the challenge here, folks, because it’s not simple.

We’ve been wrestling with development, I mean, for as long as all of us have been alive, and there are special challenges in development. I mean, when you go to an African country where only 17 percent of the nation has power, you don’t have a particularly large pool of paying customers to be able to support a long-term PPA at market rates. I mean, it just doesn’t work because you don’t have enough—in some places, they don’t even collect revenue for the electricity that’s being used. And so you have to build structure in certain places.

Now, that’s not our central problem. That’s a moral and political challenge in the sense that, you know, you can’t be asking these countries to defer their future completely. They want to [be] able to develop. They have a right to be able to develop. We need them to develop. It’s important [for] stability on the planet, relationships, and so forth. But we’re going to have to be able to provide a concessionary structure for a period of time so that you can then get enough of a revenue stream that you’re able to support something in the marketplace. That’s one grouping.

Fortunately, that is not the grouping that is most important to the solving of the climate crisis. Why? Because they are an infinitesimal amount of the problem currently. What we want to do is avoid them becoming more of a part of the problem, because if you add up all the developing world and it goes crazy on gas, for instance, in the next ten years, we’re in trouble. We’re just negating everything else we’re doing out there.

So the way we’re looking at it is—and I’ve said this many times; many of you may get tired of me saying it, but to me, it’s the fundamental organizational principle. It’s the reality around which we have to organize ourselves, as I said earlier. That is, twenty countries, twenty economies, equal 80 percent of all the emissions. If those twenty countries will get their act together, we win the battle. We can win the battle. And that’s why we focused on Indonesia, because it’s one of those twenty. That’s why we’re focusing on Brazil, one of the twenty. That’s why we—Vietnam’s not yet one of the twenty, but it’s in the next ten, so we’re focused on Vietnam because there’s too much coal and we’ve got to begin to transition them.

And in each of those cases—and we focused on Mexico, which is in those twenty. And President AMLO, thanks to, I think, the good meetings we had over the last year and a half, has really changed and come around and said we’re going to deploy renewables. It wasn’t in their lexicon a year-and-a-half ago, and now they’re talking about thirty gigawatts of renewables deployed, increased hydro, and for the first time really beginning to try to exploit their geothermal—which, by the way, they have active volcanoes. This is a place that has extraordinary capacity in geothermal. So there’s money on the—you know, being left off the table here—left on the table—that people could make if you would begin to get all of that moving in the right direction.

So that’s what we’re trying to do now, is get the larger economies in a place where they are actually reducing emissions. And as I said earlier, folks, this is not a forever program. This is not a sort of you can buy your way out for the long term. This is sort of a delay—ten years, wherever we land. This is the kind of decision that this consultative group has to help us make. Is it—is it till 2030 or is it till 2035 or something? But you’re still going to have to be responsible to meet net zero by 2050, and that’s going to require every company to still do scope one, scope two, scope three, et cetera. So what we’re trying to do is get as far as we can, Fred, in the next few months so that, hopefully, we could have a few pilot efforts that are actually out there working—we’ve arrived at pricing and at the mechanism and so forth—and we could come to the UAE at COP28 and have an implementable program that goes forward.

Now, this is not the only thing we’re doing. Of high priority for President Biden is MDB reform, multilateral development bank reform. We must find the way to be interpreting the charters correctly so that we could have a significant amount of additional money that is available for concessionary lending, which would make an enormous difference. And both of you—your foundations, the Rockefeller and the Bezos, are invested and interested in helping to get that kind of reform. And then whatever else we can find as a way of getting into the trillions that need to be deployed.

But those twenty countries do have the ability to provide revenue for these transactions and they can get market-based deals going. I mean, we’re looking at PPAs that can be struck with Indonesia that will help in this transition. And I think that the market is really critical to this, which is why we’re looking at a market-based component of how you’re going to solve this problem.

The trillions of dollars that were assembled—you know, Mark Carney did a lot of really hard work assembling the GFANZ and so forth, but that money is investment money. It’s not giveaway money. And investment money means you’re going to have to be able to get a return on that investment because you’re accountable to clients. You have fiduciary responsibilities and you can’t just ignore them. So we have to harness the combined efforts of the regulatory structures which look at disclosure, for instance. I mean, it’s very hard for me to understand how anybody could be fulfilling their fiduciary responsibility by ignoring [the] climate crisis and allowing your supply chain and your entire business to be disrupted by damage and by future interventions of mother nature. That doesn’t fit, in my judgment.

So I think we’re due for a real reckoning here with how the marketplace is looking at these challenges and this reality. We can’t solve the climate crisis without—and I want to—don’t ever edit me at that word, “we can’t solve the climate crisis”— without being able to marshal these sums of money, and we can marshal them. This is the largest market the world has ever known, folks, the clean-energy market, the transitional market. The building out of smart grids, new transmission lines, putting in place the infrastructure to support electric vehicles, building out the hydrogen network, I mean, all of this is money-making. It’s how we built our nations. It’s how we have employed millions of people. We’re just transitioning again as we transitioned, frankly, in the original industrial revolution.

And we have to be excited about this because it is millions of jobs. Fastest-growing job in the United States of America two years ago, three years ago for several years was wind turbine technician. Second-fastest-growing job was, unfortunately, nurse practitioner because of COVID. Third-fastest-growing job was solar panel installer. There are extraordinary opportunities here if we will get our act together. And many, many, many companies have now come to that conclusion and recognize that, you know, you can marry the future here. You can do this in a way that provides a planet that is cleaner, healthier, and safer.

FREDERICK KEMPE: Thank you, Mr. Secretary.

So, Liz, I’ve got a signal—I’ll get a signal from somebody whether we’re wrapping up. We have some time. But I think I’d like to be able to ask you a quick question and Andrew a quick question, then close out.

But I want to go back to what Secretary Kerry talked about at the very beginning about how to de-risk it and how to create bankable deals. That’s the world you come from Liz. You can share with the audience a little bit what your job was before taking on what you’re doing now because it fits perfectly with this. So how do you design an ETA to ensure de-risking capital flows upfront for the most urgent fossil fuel transition projects in emerging markets, from the banker’s perspective?

ELIZABETH YEE: Thanks, Fred, and just to come clean on that, I think, in my old life before I got a chance to work in philanthropy, I spent about twenty years as a public power infrastructure banker at a firm called Lehman Brothers, which some of you may have known.

But I think one of the—I think that’s what’s really interesting to me in this regard because there is a lot that needs to be done in terms of developing the financial structure, and that is why, as Andrew said, we need people like Anne, like Brian—all of the bright financial minds we’ve got—Chris Leeds on our team, as well—helping us think about how do we actually marry the forces of banking and markets together since that will be such a critical element of the design.

And, you know, I think there is—I’ll just say a couple of things. One is I want to acknowledge that there are a number of other existing structures that people are working on in the market today, so Asian Development Bank has its energy transition mechanism; you know, the Climate Investment Funds has its own fund. So I think we want to learn from what other people have already done and have started doing so that we can build on top of that.

I think we also need to take a look at some of the interesting ways that we can securitize and use that market to be able to look at the forward opportunities there, to basically think about how then we can take those revenues that might come later or those opportunities and financial gains that come later and put them forward because, as the secretary said, we need the resources upfront to developing countries today to be able to both decommission and create the infrastructure asset on the other side that allows them to continue building and growing their economies.

So we’ve got a lot of financial structuring work to do. That is why it’s a critical work stream of the ETA and the path that we are going to take going forward.

So stay tuned, but I think, as Andrew said, you know, this is a whole-of-planet effort. We need your engagement, and we would encourage and welcome it as part of the work going forward, so thanks.

FREDERICK KEMPE: Terrific. Please.

JOHN KERRY: One thing just very quickly. The IRA is going to make an enormous difference in this challenge, and I know some people are reacting, oh, my gosh, there are some provisions in the IRA that are kind of protectionist and maybe get in the way. And I think we’ll be able to resolve and work through those. I really do.

But the bottom line is by putting literally hundreds of billions of dollars on the table for further R&D and development, and deployment of initial startup initiatives, we’re going to help develop supply chains where they don’t exist. And we’re going to help accelerate—I mean, that’s an enormous amount of concessionary funding that is going into—right now in the Department of Energy we have billions of dollars that are going into companies, into projects. It’s going to help close the gap here in terms of what is fundable and financially—you know, can work.

And I think it’s going to change things. We’re going to have—it will help with the deployment of green, or blue, or, you know, turquoise hydrogen and so forth. I think that exciting things are going to be happening.

And rather than having some other entities complain and say, well, you guys have now changed the market and you’re going to shift things, everybody should join and do the same thing. That’s how we accelerate to the four trillion dollars, folks. We shouldn’t be sitting there saying, oh, my god, let’s go backward. Everybody should join up and do the same thing. Put your money into this development. Put your money on the line in terms of research and development, and that’s how we’re going to win this battle, I’m convinced.


FREDERICK KEMPE: Thank you, Mr. Secretary, and the Inflation Reduction Act—I got a good briefing just yesterday on what it does alone for hydrogen, and so that’s pretty exciting.

So finally, Andrew, I think this—we’ll wrap up with this question. When this platform was launched, you stated there were very knotty—meaning K-N-O-T-T—questions that the group would have to grapple with.

What are the knottiest, and how are you—and are you grappling with them?

ANDREW STEER: Well, first, who wants to solve easy problems? These are difficult problems. And that’s why we’re sort of stuck, we’re sort of constipated at the moment. I mean, there is plenty of money out there, but it’s not going to the right place—plenty [of] money in the world, and it’s not going in the right place.

So what are they? There are on the both supply and the demand sides, standards that are honorable, including human standards, environmental, ecological standards, and so on. On the demand side, that’s—you know, a company has to honor its own scope one, two, three emissions. Those are difficult problems.

But there are other difficult problems which we’re going to be grappling with, which is going to be really exciting, you know. How do you set the price? Where does the money go? And this is your point, Liz, about de-risking it—which also Secretary Kerry mentioned. The great thing about voluntary carbon markets is they work for you twice. You put a hundred million dollars into this. That buys renewable energy in and of itself. But in addition to that, it changes the entire calculus for a deal, as Secretary Kerry says. That hundred million dollars can unlock two hundred—several billion dollars if you do it right. But you have to then actually make sure the money is injected in the right way.

So those are some of the knotty problems, but they’re exciting. And, you know, someone—I had the privilege of running one of the best environmental think tanks in the world, the World Resource Institute, and we were leaders in standards. Environment NGOs have done us a huge favor setting high standards, but sometimes in this very, very high-stress, high-pressure, need-for-action-today world, sometimes almost too thoughtful, and sometimes we slow things down too much.

So what we’re trying to do is unlock that, get the standards that are just as high, but actually then unleash, you know, a flow of funds that can make a huge difference.

JOHN KERRY: As a result of Andrew’s alliterative description, we now understand that the ETA is the Colace or Senekot of a movement, right?

FREDERICK KEMPE: That does seem to be a really good place to end this.

So Mr. Secretary, Liz, Andrew—what a wonderful conversation. This could go on a lot longer. I’m sure people in the audience who would like to contribute to this in one way or another will catch you and provide you ideas. And we can help connect you all, as well, with the ETA and with this group.

But thank you so much for being here. Thank you for what you are doing—

JOHN KERRY: Ten seconds?


JOHN KERRY: Everybody here, your organizations, your countries—whoever can speak out—Alexei Navalny’s family has made it clear he is very ill and being held in prison without medical care that he needs. So anybody who could speak out and make it clear that the world believes that even prisoners should be given the medical care that they need—and hopefully we can make a difference.

FREDERICK KEMPE: Thank you for that, thank you for being here.

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