In this episode of Planet A, Dan Jørgensen engages in a conversation with the President of the World Bank Group, Ajay Banga. With a career spanning prestigious roles, including President and CEO of Mastercard, Ajay Banga now steers one of the leading institutions in the global fight against climate change and poverty.
The episode delves into the multifaceted role of the World Bank, revealing its structure and mechanisms for supporting global development. Ajay Banga explains the World Bank’s approach to providing financial assistance and expertise to the poorest countries for fighting both poverty and climate change.
Listen in to learn more about Ajay Banga’s visions for the World Bank.
In this episode of Planet A, Dan Jørgensen engages in a conversation with the President of the World Bank Group, Ajay Banga. With a career spanning prestigious roles, including President and CEO of Mastercard, Ajay Banga now steers one of the leading institutions in the global fight against climate change and poverty.
The episode delves into the multifaceted role of the World Bank, revealing its structure and mechanisms for supporting global development. Ajay Banga explains the World Bank’s approach to providing financial assistance and expertise to the poorest countries for fighting both poverty and climate change.
Listen in to learn more about Ajay Banga’s visions for the World Bank.
Speaker A
Take young people and take them not to Washington, D.C., but take them to countries where the Danish taxpayers' money is being put to use.
Let them see what difference it makes. Let them feel the power and the pleasure of changing lives through education, through health care, through adaptation, through mitigation.
Let them see that. Because when they see it, we will have an educated and empowered next generation.
Speaker B
How can the World Bank help developing countries fight climate change and adapt to the consequences of a changing climate?
Today, I speak to the president of the World Bank Group, A.J. Banga. Welcome to Planet A, a podcast on climate change. My name is Dan Jørgensen.
I'm Minister for Development Corporation and Globalization. I'm a professor of global climate policy in Denmark. In a series of conversations, I ask some of the world's leading experts, policymakers, authors and activists how to stem climate change.
Speaker A
We, the human species, are confronting a planetary emergency. For more than 30 years, the science has been crystal clear.
The reason I believe we need to act now is because the facts are staring us in the face. The time to answer humankind's greatest challenge is now.
Other speaker
The Paris Agreement.
Speaker A
So this gives us the best possible shot to save the one planet we've got.
Speaker B
There is no Planet B because we do not have Planet B. Welcome to Planet A, the podcast in which we look at the pressing issues of climate change and sustainable development.
Today, we are privileged to welcome a very special guest, the president of the World Bank Group, A.J. Banga. Banga's career has spanned several key roles.
Including president and CEO of Mastercard from 2010 to 2020.
In his current capacity as president of the World Bank, he leads one of the most critical institutions in the global effort to combat climate change and fight poverty.
His role involves directing significant resources towards both climate change mitigation and adaptation, as well as development in countries that need it. It's a true pleasure to be here.
I'm very pleased to welcome you here today, A.J. Banga. I've been looking forward to having you in my podcast.
Speaker A
It's a pleasure. Thank you very much for having me.
Speaker B
So maybe you should start by explaining to our listeners. I'm not sure all of them would actually know exactly what does the World Bank do.
Speaker A
Yeah, I think that's a great starting point. So the World Bank, you know, has basically got four or five, actually five units in it.
One which aims to give grants and very concessional money to the poorest countries for basic development needs. That's called the International Development Agency.
It probably is the most well-known part of the bank in the developing world. The second goes to slightly better off countries when they start graduating from this level of being the poorest.
They become lower middle income or middle income. And that's the International Bank for Reconstruction and Development. Which really gives money at a little below market rates, longer tenor.
But it's patient money that can be invested in the right kind of projects for a country at that stage of development.
So think skilling institutes and, you know, renewable energy projects and things of that nature with agriculture, with food supply. It's that next level of growth for a country.
Then there's the International Finance Corporation that works with the private sector.
And their task is to bring more private sector dollars in to work in an economy such that it can multiply the development impact many times over.
So their job is to help reduce some of the barriers to entry for these private sector investors in these countries.
Again, while they can work with poorer countries, obviously there's more opportunity for them with lower middle income and middle income countries. Then there's the fourth part, which is MIGA.
The Multilateral Insurance Guarantee Agency. And what that does is it allows private sector organizations to buy political risk insurance when they're thinking of investing in a country.
So they may have commitments from a country that tells them, this is what we'll pay you as electricity tariffs.
But if that country reneges on that commitment, who does that company go to to recover some of its investment? It's through the insurance market. People like us provide those guarantees.
And then the final part. Is what's called ICSID, which is the whole investment dispute settlement mechanism, which allows a private company to take on a dispute with a sovereign.
So think of these five institutions together. They put about 100, 120 billion to work every year across the world.
The largest part of this is the first one, the International Development Agency that works with the poorest countries with grants and very concessional money. And then overall, beyond this, think of the bank as being two parts.
A money bank. That's what we're discussing. And a knowledge bank, which we're sure we will discuss, which has subject matter experts in the fields that matter for development in a country. That's the group.
It's 30,000, 40,000 people. They love what they do. And it's global. It operates in almost every country in the world. 189 countries are members of the World Bank.
And it's got an old history going back to 80 years. But it's evolving for the future.
Speaker B
That was an excellent and very concise explanation. And I think that's a very good explanation of what it is that you do. Thank you for that.
Now, obviously, the focus of our talk here today will be on the fight against climate change, both with regards to mitigation, but also adaptation efforts.
I'd like to start, though, by asking you a question relating to the original purpose of the bank, which has always been to eradicate poverty and which is still, of course, at the center of everything you do.
How is that aligned with your mission to also fight climate change?
Speaker A
Great question, Dan.
The reality is that when I was a nominee and traveling around the world, I learned very quickly from people in the global south particularly, but even in the developed world and even from civil society, that the idea of separating the fight against poverty from the challenges of pandemics, climate change, and the
food insecurity, fragility, these were not easily separable. And, in fact, I heard a great example while traveling.
In Kenya, which is now in its fifth year of drought, at that time in its fourth year, you know, the president, who is very thoughtful, William Ruto, explained something to me.
And he said, Ajai, when we go to drought, a farmer who used to have two or three crops a year and therefore could afford labor and other jobs, what does that mean for the country right now.
on his property and also afford to keep cattle to diversify his income, when he doesn't have rainfall, his two or three crops become one. He can no longer afford the cattle. When he cannot
afford the cattle, he loses dairy income. Now he can't afford the laborer. When he cannot afford the laborer, he takes his children out of school and puts them back to work on the farm. Now,
the whole goal of poverty eradication was to get those children away from work to get to education.
So, in education was their future. That turned around in four years of no rainfall. So, trying to
somehow understand that you cannot separate these causes. We saw it in the COVID pandemic. The pandemic turned the tide on the progress the world was making on poverty eradication.
Those kinds of things show you that we are in a world of intertwined challenges, and we have to find a way to fight these together.
And that's why the bank expanded its mission to say, of course, we're in the business of eradicating
poverty. It's the most important thing, but on a livable planet. And the livable planet allows us
to look and care about the intertwined challenges of pandemics and fragility and climate change. And
that's how I think about the continuum here and about focusing on the nature by which these things are connected.
Speaker B
That analysis and also the work that you've done in the bank to deploy this holistic approach, you probably will not be surprised that I'm saying that since my title as a minister is
Minister for Development, Cooperation and Global Climate Policy, which is the testament to the fact that the Danish government also sees these things as being interlinked. And I will also add to your
good examples on the many, many travels that I've also had in this capacity as Minister with this portfolio. I've not yet visited the Danish government. I'm not in the Danish government. I work in the Danish
developing country where climate change did not worsen and accelerate the challenges that they were facing. It's so important that we acknowledge this. Now, pertaining to the efforts that we then
can do, I think it's fair to say that analytically it makes sense to divide the different efforts
into adaptation efforts and mitigation efforts. But even when we do that, because it makes sense sometimes, it can also become a little bit of an artificial discussion because some of the best
projects that, for instance, the World Bank does are actually both. They are both mitigating climate change and helping countries to become more resilient. But maybe you can elaborate a little
bit how the World Bank looks at these challenges and what types of projects it is that you are
Speaker A
financing. That's a great point. So, Dan, as you know well, mitigation is used to basically
talk about energy emissions and the management of the curve of future growth of energy emissions
because we clearly cannot afford a future where this intensive use of energy with the emissions
that come with the current way that energy is produced in the majority of nations, that leads to
the debilitating effect that is causing these climate issues for the developing world. And in the middle-income countries, we have a lot of energy emissions that are being used to create
a lot of growth in the middle-income countries. So, I think we are in a situation where a lot of growth is expected as it should be. As they grow, their consumption of energy will also increase. And if they end up consuming the same
emission-heavy energy that we in the Western world have used during our growth, then we end up with a very difficult situation where even the improvements that happen in the developed world on energy
emissions will get consumed and surpassed many times over by the growth of the middle-income countries. So, I think we are in a very quietgin, very
operate, tryin odd position we have to find where we have to find a way to bend that curve of future energy UN T dominates that's where the mitigation conversation tends to be. And that's why over and that's right the focus
on renewable energy or geothermal, wind solar for hydro. Some are now rediscussing nuclear as well in that context. The idea in being to bring down
the consumption of fossil fuel-based energy within that of course, coal or aluminium. So, I think oil are the worst polluters, natural gas is much better and is very often a useful way to transition
out while getting a base load of energy in a country. Now, what does this have to do with adaptation and resilience? The reality is that if you don't tackle the renewable energy task,
if you don't tackle the task of emissions of methane from agriculture, of the challenges of heavy transportation and construction material, that actually it gets even worse for these
countries in their future because the air is fungible. We live on one planet. We share our air. We share our water in many ways. We share our environment. And therefore, the impact on forestry
and deforestation and lack of biodiversity in one country directly impacts people in other parts of the world. So science has shown that we have to share.
This earth in a way that creates a responsible interaction between energy emissions and the
quality of life in a way that allows people to have their aspirations met and yet allow our children and our grandchildren to have clean air and clean water to breathe. So I think that's kind
of where this issue matters. What I'm trying to do at the bank, and we just announced this at COP28 in Dubai with a lot of encouragement from our government, and I think it's a very important
thing to do. And I want to thank you for that. You're a governor and your encouragement is a key part of it. And so are your colleagues in the other countries, both in the global north and
the global south. We've announced four or five big programs. The first one is that by 2025,
which is next year, not 10 years out, next year, the bank would put 45% of its financing to climate.
Now, that's IBRD and IDA. You know, the development arms have put 45% of their financing to climate. So with that 45%, I've said it'll be roughly half for mitigation, half for adaptation,
because I believe we cannot only focus on energy emissions, because that has a longer time cycle to convert. We need to worry about the impact today on soil degradation,
on lack of biodiversity, on forestry loss, on the challenge of hurricanes and catastrophes, on lack of irrigation and rainwater and recycling water. These are today's issues.
It cannot be put off for 10 years more. So half-half on mitigation and adaptation. Second, we believe that connecting Africa and Africans to electricity is a basic human right.
So we have said we will connect 100 million Africans in one part of Africa to renewable energy by 2030. And we are now presenting to our board and hopefully with the support of our board
and governors like you, we will get the next 100 million approved in the other part of Africa, so that we will be at 200 million by 2030 out of the 600 million people in Africa who today do not
have access to electricity. And renewable is what we will do with them. Third, we are focusing on methane emissions. Methane is 80 times more dangerous than carbon
dioxide, but it gets only 2% of climate financing today. We have to change this. And methane is tackleable, not just in the flaring.
When gas is produced or the leaks from gas pipelines, that's very important. And there is a whole effort underway on that front, but also on the cultivation of rice paddy,
on how you manage dairy and cattle, and on how you manage waste. The bank has real expertise in these areas, proven expertise with projects on the ground in everywhere from Vietnam to India to
Brazil to reduce the emissions from waste management, from dairy. And from rice paddy cultivation, substantially. If we can do that, we believe we can sign up
countries over the next few months, 18 months or so, and over five years, take out 10 million tons of methane from the atmosphere. To give you context, 65 million tons is what we need to take
out from the atmosphere. If we can take out 10 with work like this, that's a really good start. Then one more thing to tell you about, two more actually. One is on the smaller countries in the
world. 47 small states, we have said we will put in new clauses called climate resilient debt clauses, meaning if they get hit by a catastrophe, even if they're middle-income countries, they
could lose, Dan, as much as double digits of their GDP in five hours. So what we're going to do is to
waive their debt payments and their interest repayments for two years so that they can focus on putting their money and their energy to look at the future.
Look after their people and rebuild. And we will get back our money two years later. That's fine. And we will pay for that cost from our own funding or our own philanthropy from nations like yours
who are generous in contributing to the causes like this. And then the last part is voluntary carbon markets. It is my belief that to really get money to move from the developed world to
the developing world, to help with adaptation, to help with new energy sources, we have to find a way that we can get money to move from the developed world to the developing world. That makes it happen through voluntary means. And one of the things the bank is doing is that
forestry projects where we are involved for some time, we're able to do a jurisdictional audit to ensure that the quality of the environmental credit that is generated from that forestry
project is good, meaning you're not cutting down trees here while planting them there. That kind of credit. And second, that the money that comes, the social quality of that credit
is also very good, meaning the money that is generated from that forestry project is good. And third, that the money that is earned from those credits when they're sold goes to the community so that the community is incented to not cut down the trees when you turn your back.
And they get a real opportunity for their own community to grow with that money. I've seen this at work in Indonesia with mangroves, in Guatemala with forests, in Vietnam, in Indonesia,
and all kinds of places around the world. The idea is to get a few of these countries signed up where we know the project we are doing, put those higher quality credits on the market, and then we
hopefully get a better price than today's voluntary carbon market is giving for credits. And if we can start moving, we think we can generate 100 to 120 million credits from these
few countries over the next few years. If we can move at $20 a credit, forget about 100, forget about $80, let's take a $20 per ton price. We could move a couple of billion dollars to
these countries to help their communities and to show them that there is reward for the effort they are making. And that's what we're doing. And that's what we're doing. And that's what we're doing to preserve our shared environment. So those are the kinds of things we are talking about.
Everything from putting our money to work at 45% of it within the next two years, and half in adaptation, half in mitigation, to climate resilient debt clauses, to connecting Africa to
renewable power, to the idea of fighting methane, and then finally to these voluntary carbon markets. Those are the kinds of things we're working on. Well, thank you for that. And those efforts are
Speaker B
just so extremely important. And I really thank you for your leadership on these issues. And I want
to ask you about the paradox that is out there in the global markets, which is that there's a lot of
investors out there, private investors also, with money that they actually want to invest in both
adaptation and mitigation efforts. But at the same time, we find it very often difficult. That goes for the bank, your bank.
It goes for the World Bank, but also for other multilateral development banks, and certainly also for states like my own. Difficult to help mobilize those investments. And what is most
usually used as an argument when I, for instance, talk to some of these investors is that, hmm, we want to make the investments, but the enabling environments in the countries in question are not
there. What does that mean? Well, it's different from country to country, but often it's that the political systems are not, well, maybe there's problems with corruption. Maybe they don't have
the capacity to actually implement the policies necessary. Maybe they want renewables, but don't have the grit to introduce it into their energy systems and so forth. I know that this is one of
the issues that you're also working very hard to remedy. Can you elaborate a little bit on that?
Speaker A
So I think what we did was I tried to set up a private sector lab. And what I meant by that was we recruited 15 of the world's most important investors. And we set up a private sector lab
in the world's leading CEOs who are operators of renewable energy. I'm focusing on renewable energy right now in this conversation. But they're operators like the Tata Group in India,
but they're also investors like BlackRock. And of course, commercial banks like HSBC
and Standard Chartered, and then private funds like 91 in Africa or the Temasek Sovereign Wealth Fund from Singapore. So there's a range of such CEOs.
And what they're trying to help educate us about, and this is led by Mark Carney and Shriti Vadhera, and they're trying to educate the bank of what is it that holds them back exactly as you were
describing. What is it that holds them back from putting their balance sheet and their pocket to
work in emerging markets in particular to help turn the tide on energy emissions in the future? The big change over the last five years is that we've been able to turn the tide on energy emissions
in the future. And what we've seen over the last five or eight years is that now there is a proven business model for solar and wind because the energy produced per unit from these is now cheaper
than the energy produced from fossil fuel, thanks to all the technology and scale that has been
developed over the last couple of decades. And so it's a sea change in terms of the business case on a spreadsheet for these projects. They have higher,
capital costs sometimes. They have longer gestation periods. But once they are producing,
their unit cost per output is lower than that of fossil fuel. So why is it then that capital
and ingenuity and technology and the innovation of the private sector is not flowing into, let's just discuss the middle income countries for investing in these projects? And it turns out
that three big issues seem to come. And you alluded to a number of them, in the manner in which you asked the question. The first one has to do with some
feeling of reassurance of government commitment, of government commitment to where that country is going. So I give the example of India in this context. And Prime Minister Modi announced
in the early part of his first term, and he's now coming to the end of his second term, and he probably will be there again. But he announced that gives him a few years to work this.
He announced in the first part of his term that India would reach 30% of its capacity
through renewable energy by 2030. Now, what that did was it energized the private sector to say, oh, my God, he's got a North Star. And then he put in place a number of policies to help
show that he was serious. Now, he didn't do everything the private sector wants. That's never the case. You're a government minister. You cannot always do everything because you're
a government minister. You have to make choices, and you have to make tradeoffs that only someone in your position can make. And we in the private sector, in my old job, we have to be respectful
of your decisions because you are balancing many competing needs. In the same way, he made some changes, but not all. Guess what? They are now at 42% of their capacity coming
from renewables. They're not yet at 2030. They haven't yet got to 30% of their generation coming from there. They will because the grids have to be linked and the
right technology has to be put in place to switch back and forth from baseload to renewable and back. You understand all that. But he's got six years more to get it done. I think
he will do it because he had a clear vision. The bank can be very helpful to the private
sector in working with countries to help clarity of government vision and government policy. And I think that's a big role we must play more of. That requires IFC.
Which is our private sector outreach arm to work much better even inside the bank with IDA and IVRD, which are the parts of the arm that has the biggest contact with governments
locally and can influence how they think on policy to work really well together. And as you told me early in my joining the bank, one of the things I must do well is to help
to create the different parts of the bank to work better together so that in their combination, one plus one becomes three. So that's one of the biggest things we are getting. The second is
more to do with money. And that is to do with political risk. Even after you get clarity, you could get, as we were discussing early in the program, political risk from the non-living up to
those commitments made by a government. Most private investors who have shareholders need to be able to lay off that risk. We can provide the right insurance for that kind of risk,
we today provide it. We do six odd billion dollars of guarantees in a year. We are putting together a very ambitious plan to reach 23 times the amount in the coming three years.
So the idea is to go from where we are today to a much larger commitment on these risk guarantees so we can help the private sector get over the hump on that concern. Many things
are happening to make that happen. Putting together the guarantee platforms across the bank, creating a simple menu of guarantees that can be sold, training our people, looking at our
risk appetite, first loss. There's a lot of work, a lot of detail behind what I'm telling you. But the idea is to expand guarantees, to treble the amount over the next few years. The third big
item that's coming up is foreign exchange. So if you're an investor and you're bringing in euros or kronas or dollars or yen, and you are getting repaid by the local utility,
in local currency, in rupiahs or rupees or in whatever local currency is applicable, then in theory you have an unedged exposure. And these markets don't have the depth and width of
hedging that allows you to buy 10 and 20 year hedges for currency, which is kind of what you need with the gestation period and payback period of these kinds of investments. So what is it that
we can do as multilateral banks and as other institutions and governments to help reduce some of that risk? I think that's a really important question. I think that's a really important risk that investors cannot understand. So there are different ideas there. They range from,
of course, the best idea is the longer term development of local currency markets. But you know, local currency markets don't develop in two years. They take 10 years to develop and
become deep and wide. What do we do in the meantime? One of those is a multi-layered risk approach. Can the investor absorb the first 10% of devaluation? Because they know that that is roughly the rate at which the currency is going to devalue. So they can develop and become deep
and wide on the currency devalues over the last 10, 20 years. They should build that into their risk reward equation. Beyond that, can the local government absorb some? And then beyond that,
for the really unforeseen tail risk, can the multilateral banking system step in so that we can all find a way to share this risk in a way that is linked to who makes the returns. The
private sector let them absorb more of the risk. Government takes some and the multilateral bank takes the unforced. I think if the private sector, the government, takes some, then the multilateral seen tail risk. Now, that's one way. Other ways exist. Synthetic risk methods. There's different
ways to do this. And of course, ultimately, as I said, developing more local currency lending is the right way. So we are working our way through this with the lab, all the way from how we can
help on regulatory clarity, governance clarity, to political risk guarantees, to foreign exchange
risk reduction, not removal reduction, because the investor must take risk first. That kind of
thinking. And then eventually, the real price is the fourth item, which is can we develop this
investing in renewable energy, in water, these kinds of investments, can we develop them into
an asset class where we can begin to originate, to distribute, so that we don't load our balance sheet and use up our capacity.
With projects, but originate and put them into the private market. And that way, go back to originate more and help to build even more capacity in these countries. So there is a aspect
to this that you mentioned about capacity. The Knowledge Bank, which is what we were discussing at the beginning of this podcast, has people who have amazing knowledge and expertise in different
aspects, including renewable energy and water and soil degradation and biodiversity. But also in other areas, can we use them to help create more bankable projects and more capacity
on the ground in these countries, so that private capital can find a good outlet for their investing
appetite? I think that's also important as a role for the World Bank, to help build capacity on the ground, to enhance the throughput of projects coming through, both in terms of designing the
project, but also in terms of execution. This private sector thing is a large range of things from regulatory policy to guarantees,
to foreign exchange risk mitigation, to the important task of originating, to distribute and creating an asset class over time. And then of course, to the critical enabler of
enhancing capacity on the ground. That's kind of the range of tools that we are discussing.
Speaker B
This is music to my ears. We also have a financial institution that works in very much the same way, but of course in a much smaller scale than...
Than you do. But really, I am so impressed with the reforms that you're going through and the
visions that you've set for the bank. Usually if I'm asked, I have to admit I'm not asked that often, but if I am asked, why is it that Denmark support the World Bank? Many people probably don't
know that we do, but we do. Why do we donate money? Well, we do it exactly because of these issues, because you can really help make a difference at a level that we as a small,
big country would never be able to on our own. So when we donate one Danish kroner to the World Bank, that will actually end up mobilizing five or six kroner is what I usually
say. Is that almost a correct estimate, would you say?
Speaker A
That is correct. So Dan, the leverage capacity of the business model of the bank is quite an interesting topic. Because of the AAA rating that we enjoy, we're able to take one Danish
kroner in Ida and make it... Four and one Danish kroner in IBRD and make it six to eight.
And the reason you can do more in IBRD than Ida is because in Ida, we also grant free money out. When you grant out half the kroner, only the other half is left for leverage.
And so there is a need to balance that appropriately because the poorest countries
deserve the grants that are given to them through the generosity of countries like yours. And so, yes, the leverage capacity of the bank is quite an interesting topic, but it's also an important aspect of the business model of the bank. The leverage model of the bank is a very good way for you to enhance the impact of your
money, which you are choosing to use in this way.
Speaker B
And I think definitely the reform process that you're going through now under your leadership
in the bank will make it easier in the future to also get more money to donate more resources.
Speaker A
Indeed. I think results make a difference. And I think also, Dan, to be completely honest, a lot of the things we are discussing right now are wet paint because I've been in this job seven
months and I get a lot of encouragement from our governors and from our people in the bank to drive this change. But these things take time to cement and really make institutionalized. I have the
patience to push at it, but I also have the sense of urgency that we cannot keep waiting. And finding that right balance, toggling between urgency and patience is, as you know, a very important part of our process.
One of the things I would like to do, and I don't yet know how to get this done, is to help create the
equivalent of a Peace Corps. Meaning take young people from countries like ours, where we are lucky to be
where we are, we are very fortunate. Take them somewhere between their undergrad or after their undergrad and before their post-grad and ask them to come and spend a year or two with us. And take them not to
Washington, D.C. But take them to Washington, D.C. to countries where the Danish taxpayers' money is being put to use. Let them see what difference it
makes. Let them feel the power and the pleasure of changing lives through education, through
healthcare, through adaptation, through mitigation, through economic policy, through domestic resource mobilization efforts, through long-term capital market development, through digitizing and using
digital technology to change people's lives. Let them see that. Because when they see it, we will have an educated and empowered next generation that will care about how they can
change the world for the better. And I think, you know, this doesn't change in a year, but imagine if we took 50 young people like this from across a few countries every year, and we did this for
the next 10 years. We would have 500 young people in the developed world, some of whom will by then be reaching positions of good effort in the private sector, in the
government like you. There may be bureaucrats who work for you. They will have a voice, and they will be able to speak with their experience. And I think we must invest in
Speaker B
that for the next generation. That's a fantastic idea. But I want to ask you about the COP process,
because you were also in Dubai. As you know, I had the privilege of facilitating the negotiations. I was on the global stock take together with my colleague, Barbara Kreises from South Africa.
And in my opinion, we did manage to get some important progress. On the other hand, there's also much more to be done. And of course, next year in Baku, in Azerbaijan,
we have to decide on a new financing goal. So maybe you can share with us, first of all, your evaluation of the result in Dubai, and then your thoughts on,
where we need to go from here. I think Dubai actually made more
Speaker A
progress than people would have thought possible when we started COP28. There were all the people who said that the UAE is the wrong choice because of their own background in oil. As it turned out,
the UAE was an inspired choice in some ways, because they were able to bring both sides to the party in a way that would not probably have happened without their active involvement.
And I think that you saw that firsthand, because you were a keen, dedicated negotiator, and you stayed up many nights trying to work with Sultan and find your
way through this. And I commend you and your colleagues across the developed world in particular, who also fought hard to bring some reconciliation into the process. I think we made real progress
on many fronts, including a clarity of thinking about the need to eventually migrate away from fossil fuels and the desire to work hard on those steps in between.
Obviously, we would want more. The climate crisis is a crisis of deep impact on society. But the world cannot just move on a dime when we have to reconcile so many different
challenges together. So I think, again, a sense of patience combined with a sense of urgency is the right attribute in negotiators like you. And I commend you for having that.
I think where we need to think about future developments, you know, the loss and damage of bond markets. And I think there's a lot of work to be done. And I think there's a lot of work to be done fund, which got approved at COP28, was a big move because the conversation began in prior
COPs saying, we need a creation of such a fund. Now, the fund has got set up. It needs to get adequate funding. The first $700-$800 million has already been committed.
But in truth, this is going to need many multiples of that. I think, as you know, the World Bank was approved by all of you to be the secretary for the
fund, but the actual funding and the use of the money will depend on the governance structure, which has to be created by both the donors and the recipient countries.
What we are doing at the World Bank is to use our experience in the pandemic fund to help create the governance structure for the loss and damage fund.
But then we're going to need continuing efforts from the generosity of countries like yours and others like you, as well as the recipient countries, to create the right rules of conduct. of governance of how much money comes in and how it's allocated.
I think we must do that before COP29 well, so that we continue to build on the momentum
of the loss and damage fund, and we continue to gain credibility with the receiving countries that we are serious about implementing this the right way. That's one big example.
The methane pledges we made at COP28, I think, were a breakthrough. We had the United States and China standing together.
On stage with the Nigerian president and me making this methane pledge in the first focus was emissions from from oil and gas work, but also from the leakage in pipelines.
But then I talked about the three I spoke about earlier, which is rice paddy, agriculture and dairy and waste management.
I think methane requires all our attention in the coming decade to have something that is 80 times more dangerous than gas.
And I think the fact that we have a carbon dioxide debt, only 2% of the climate financing is not a good place to be. We must change this over the coming period of time. So I think that's another big space.
So loss and damage for the recipient countries, methane, continuing progress on the focus on renewable energy, but then on heavy transport, on construction material.
And I think we need to make progress on carbon capture. Carbon capture tends to be very sort of a challenge. Sort of politically challenging because people feel that if we invest in carbon capture,
we are giving fossil fuel industries a free pass. And I think that's actually not quite the way this should be framed because science
is showing that even if we do all we can with renewable energy and dairy and heavy transport and construction, we're still going to need carbon capture if we are to meet the Paris rules.
So I think we need to find a good way to not allow carbon capture to be. Abused, but also not to be lost. And I think that's going to be the kind of work that must get paid attention to between
now and the COP 29 meeting.
Speaker B
I very much agree with you on everything you said, especially the last point on carbon capture.
I want to emphasize because sometimes it's been put forward as something that will undermine the efforts to fight climate change. And there is of course a danger that that can happen. If you're not doing it right, you're not going to be able to do it.
But if some actors sees it as, okay, so we've got carbon capture so we can just keep investing in fossils. But that of course is not the way to go. The way to go is use it in hard to abate sectors.
In Denmark for instance, we want to use it in our cement factories, in different parts of our industry where you cannot just substitute for renewables.
And by the way, you also will need carbon capture and storage for creating negative emissions which you also need so this is a very very important discussion but AJ
thank you so much for for sharing your precious time with us we will see each other again soon and never hesitate to reach out you've got a friend in Denmark
Speaker A
you know that so thank you so much thank you Dan and good luck and God bless
Speaker B
you've listened to planet a a podcast on climate change and what to do about it