Cleaning Up Episode 118 Edited Highlights - Achim Steiner

This week on Cleaning Up, Michael welcomes Achim Steiner, Administrator of the United Nations Development Programme and co-chair of UN Energy. Michael had questions for Achim on UNDP’s roster of initiatives, balancing climate priorities with development goals, and how to clear a path to financing billions of dollars of clean infrastructure in the midst of a global energy crisis.

Michael Liebreich Achim, why do you consider it a core priority for UNDP to see things through the lens of climate and clean energy?

Achim Steiner I think it’s fairly clear that climate change is a major threat to development, whether development that has already been achieved, or future development. I have tried to bring the climate change challenge into the centre of UNDP's work; not through the narrow lens of carbon emission reductions, but rather on pathways towards access to clean energy that are part of a natural logic of development progress. We still live in a world where one out of ten people don't have access to electricity, so access to clean electricity is part of a development mandate that we take extremely seriously in UNDP. In our current strategic plan, we made a commitment to try and contribute to 500 million people gaining access to clean and affordable electricity, because we understand that the energy systems of the future have to be decarbonized. In some parts of the world, the energy infrastructure will grow exponentially. Take the African continent in the next 20 years: if we don't step up now and find ways to mobilize capital - investment capital, concessional loans, grant financing - then we're essentially condemning many African nations to having to go to the lowest bidder.

ML How do you accelerate development in these countries?

AS It's not just public finance and aid finance, it's the private sector that needs to become a major investor in helping countries to expand energy infrastructure. That means de-risking the investment environment, dealing with postcolonial legislative framework, state monopolies in the electricity sector, and making it more viable to attract private sector investment to pilot the renewable energy solutions. And let's be clear, there are many: there's geothermal, there's solar, there's wind, there's hydrogen. A new program of UNDP is working with mini-grids across 21 African countries that could potentially benefit 265 million people. That's the kind of transformative renewable energy infrastructure that we're working towards.

ML Your Climate Promise Programme, does that operate across mitigation only? Or does that also cover adaptation?

AS UNDP has a 50-50 approach to this portfolio, because in so many developing countries, we are seeing the urgency of having to adapt to climate change. When I was leading UNEP, it was an eye-opener how much money, that countries would normally invest in infrastructure, in modernization, now has to already be diverted to simply deal with adaptation needs. It's an extraordinary tax on development, because for reasons that have largely to do with others' emissions track records, many countries in the developing world now have to invest in simply staying in the same place. That money could go to basic health infrastructure, education, or indeed, investing in energy.

ML We had Alain Ebobissé on the show tell me he wants to see a balanced approach in Africa: to massively invest in renewables, but also look at ways we can support natural gas. And we had also Bill McKibben, who he said, no, that is rich elites wanting business as usual, we should only be funding the new clean stuff. So, are you promoting “colonial” plans prioritizing clean energy, or are the ‘colonial’ plans the ones that are promoting gas?

AS Well, let’s take the Climate Promise as an example. We were essentially saying to developing countries, you're signed up to the Paris Agreement, every time you go to a climate COP, you're expected to deliver more ambition, and in return, you're supposed to get more financing. So far, that equation has been singularly to the disadvantage of developing countries. With the Climate Promise, UNDP saw an opportunity here to help countries write sovereign national climate strategies, to use these as platforms in a regular cycle to reflect on how the future of energy might look in their countries. UNDP's commitment is to national sovereignty being critical; I refrain from telling African countries, you should or should not touch your fossil fuel resources, because as we see around the world today, some of the greatest advocates of that are also some of the greatest producers of fossil fuels, including increasing their production. We do not finance fossil fuel development, but we believe a country has the right to do so. Our focus has been to show that you can build a renewable energy future that is perfectly compatible with accelerated development, poverty eradication and industrialization. People often think that renewable energy frontiers are only being pushed in the so-called developed world; Kenya is now at over 90% of its electricity consumption being sourced and powered by renewables. What is unfortunate is that many developed countries are constantly pushing developing countries to decarbonize their energy systems but are not willing to co-invest. And for those who continue to argue that the developing world will not move faster if the north doesn't pay for it - wrong again. It's hundreds of billions of dollars that developing countries are investing in clean energy. We've got to stop asking developing countries to jump ever higher, ever faster, in the midst of a global economic crisis, with debt problems being extremely dangerous right now.

ML So, what is the actual solution here? How do you get hundreds of billions of dollars flowing?

AS First of all, hundreds of billions of dollars are already flowing. We often speak about the energy revolution as if it's something in the future, as if it’s science fiction - it's already happening. But it's happening very unevenly. Finance needs to change. People always equate investment to buying a stake in something and then being able to take the money out again. I'm actually arguing first of all that we need to come to a co-investment perspective; if we don’t we will remain in a very distorted, aid and charitable approach to this, where one will always look at the other as essentially an illegitimate partner. For countries on the African continent, or small island developing states, when they go to the capital markets, they are paying punitive risk premiums in order to borrow money. Therefore, they cannot invest in these energy transitions. If China's energy paths were to be Africa's development path, the Paris Agreement is irrelevant to what happens next. We have a vested interest from a geopolitical and human security point of view, but particularly also from a decarbonisation point of view, to co-invest with developing countries in pivoting towards clean energy infrastructure. Finance is fundamental to actually being able to move forward with the Paris Agreement alive.

ML Achim, a final question: with everything that you see going on in the world - this horrible aggression by Russia on Ukraine, populism and pushback - do you remain optimistic? And if so how?

AS Let's also be clear: both the pandemic and this horrendous attack on Ukraine, have actually sharpened the world's understanding that energy security, geopolitical security, human security are all tied together. The investment in a decarbonized energy pathway to the future maybe has its greatest dividends in wars avoided, in disruptions avoided, that we are just living through right now. We will come out of this crisis with many wounds and many scars. But one thing I have absolutely no doubt about: the energy transition, the decarbonisation of our energy systems, has suddenly moved from second gear to third gear. Tragic that it requires wars and pandemics to drive that. I actually think we will perhaps get back to within range of a 1.5-degree world, simply because the degree of acceleration on energy transitions is now being driven by the very factors, plus the common-sense factor of the last 20 years. And that makes me hopeful.