A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.
The World Bank Claims It’s Helping the Climate. This Study Says Otherwise.
What happened: As the lender and funder of last resort, the World Bank is often a source for money for countries which can afford to do the least. That combined with pressure from its own funders has led it to tag thousands of projects as “climate finance” which may have nothing to do with the climate.
Why it matters: Urgency without scrutiny leads to bad incentives. The problem also highlights the lack of the World Bank’s own internal controls, substituting “climate tags” for the actual legwork required to see if the projects funded actual match the stated goal.
What’s next: Expect the pressure currently applied to the World Bank to do something, anything, about clean energy to shift to pressure to actually make sure money aimed to mitigate or adapt to climate change does what it’s supposed to. (By Vijaya Ramachandran and Scott Morris, Center for Global Development)
Developing World Sees Hypocrisy In Wealthy World’s Green Subsidies
What happened: India’s power minister accused the U.S. and Europe of “hypocrisy” over those nation’s simultaneous prodding of developing nations to build their own clean energy industries while subsidizing domestic production.
Why it matters: The energy transition basically cannot happen without the support and buy-in of developing countries, especially India, the world’s most populous country. Alienating India and others with green-friendly domestic policies could undermine its willingness to meet specific targets, like going Net Zero by 2070, or encouraging it to burn less coal, its main power source.
What’s next: Ahead of Prime Minister Narendra Modi’s visit to Washington, D.C., the power minister’s complaints look like the sort of tit-for-tat public policy disagreement that gets settled behind a very large, very ornate door. (By Benjamin Parkin, The Financial Times)
The Climate Workforce: So Many New Jobs and No One to Take Them
What happened: Battery factories, mineral mines, and solar companies. These workforces of the green energy future are booming, yet according to nearly 9 out of 10 hirers the “war for talent” is holding back hiring.
Why it matters: It’s as much a geopolitical issue as it is a global energy crisis issue. “As with many aspects of the energy transition, China is in a league of its own on worker training, with an estimated 70,000 undergraduates currently enrolled in mining engineering programs in the country compared to just 600 in the U.S.”
What’s next: An absolute feeding frenzy for qualified talent. And legislation, like a mining scholarship law currently on the House floor, aimed at making the clean energy job path that much clearer. (By Tim McDonnell, Semafor)
China Found a New Way to Reduce Pollution: Offshore Everything
What happened: China, the undisputed in taking rare earth materials and turning them into something useful, is now bumping up against its own state-mandated domestic capacity ceilings. So it’s doing for aluminum what it has been doing for nickel: refining and smelting it in nearby Indonesia, a country whose own goals fit hand-in-glove with China’s.
Why it matters: There’s no getting around the domestic capacity mandates handed down by Beijing. Those ceilings are meant to encourage old factories to shut down and for the country to never face an oversupply of the materials it uses to lead the world in domestic manufacturing. So this arrangement serves to keep supply flowing while also creating a more diverse supply chain, possibly reducing the risk of future geopolitical conflict.
What’s next: Complications. The world is moving towards import duties that take into account the energy produced to smelt and refine raw metals. If Indonesia doesn’t use this increase in capacity as a chance to update its power grid, what it produces using coal-fired power plants may be too costly to sell overseas. (By Bloomberg News)
Clean Energy Project Success Story Only Took 15 Years to Get Approved
What happened: The largest wind generation and transmission line project in the Western hemisphere is about to break ground in New Mexico. That’s the good news. The bad news is that Pattern Energy, the developer, first started pursuing permits 15 years ago.
Why it matters: “The U.S. Department of Energy’s latest triennial study of national transmission requirements, released in draft form in February, projects the need for an overall 57% increase in countrywide transmission infrastructure by 2035. That’s critical to support massive development of new clean energy resources over the next decade, and to meet growing consumer demand as the nation works to supplant combustion-based fossil fuels with renewable electricity to power up everything from homes and buildings to carbon-free vehicles.”
What’s next: More public-private partnerships, more outreach for community approval along the hundred-miles long transmission routes, and, advocates hope, expedited federal approval to make sure needed transmission lines get built a little faster in the future. (By Kevin Robinson-Avila, Albuquerque Journal)
