Clean Energy Ministerial (CEM8) and Mission Innovation Summit (MI2) in Beijing, China

By Fang Zhang and Zdenka Myslikova

This summer, Climate Policy Lab (CPL) director Kelly Gallagher, and research fellows Zdenka Myslikova and Fang Zhang, attended the eighth Clean Energy Ministerial (CEM8) and the second Mission Innovation Summit (MI2), held in Beijing on June 6-8th. Beyond attending the two summits and interacting with delegates from many of the participating countries, the CPL team assisted the Energy Foundation in hosting a CEM8 side event on Innovation of Growth Pattern: Clean Energy Economic Transition where Gallagher spoke on the panel entitled, “What have we learned?”. Professor Gallagher was also invited to participate at the MI round table Getting to the Future Fast: Accelerating Innovation in Clean Energy Technology through Public and Private Collaboration. The team also circulated its new report, Mission Innovation 2.0, among delegates from different countries, drawing attention to the opportunities that exist around a new and improved Mission Innovation institution.

Professor Gallagher speaks on a panel during one of the side events of the Clean Energy Ministerial

Professor Gallagher speaks on a panel during one of the side events of the Clean Energy Ministerial

CEM and MI are unique multilateral initiatives aiming to share best practices for policies, inspire new action, and accelerate global clean energy innovation. The Clean Energy Ministerial was established in 2010 and currently includes 24 countries and the European Union as its members. Mission Innovation was announced on November 30, 2015 by 22 countries and the European Union with a clear objective and commitment to double their government’s clean energy research, development and demonstration (RD&D) investments over five years.

What can we expect from the United States participation in the clean energy transition?

During the MI2/CEM8 closed door sessions, delegations of the member countries announced pledges and new initiatives, which were a result of the negotiations during the past year among various working sub-groups within the MI2/CEM8. Some of the key announcements for MI were a new collaboration with the World Economic Forum, which aims to deepen the private sector engagement and facilitate the public-private dialogue, and an initiative named “Investor Scan” which aims to identify key actors in clean energy finance.

In addition, each delegation head signaled which technologies are of key interest to their country. The new Secretary of Energy of the United States, Rick Perry, advocated for cost-effective research and clearly stated that the areas of US interest for future research investment will be limited to carbon capture, utilization and storage (CCUS) and nuclear technologies. This message was inconsistent with the fact that the Trump Administration’s FY18 budget request to Congress cuts CCUS 85% and nuclear fission by 29% below the FY17 budget.  Perry’s words might not be surprising to some, but they set the tone for a major part of the subsequent discussions. For the rest of the talks, the dialogue was steered away from a focus on renewables and advanced network technologies towards what could be considered the lowest common denominator.

While Perry made clear that investment in a broader spectrum of clean energy technologies is not a priority, the governor of California, Jerry Brown, who was also in attendance, voiced different thoughts. He stated that decarbonizing is the main challenge of society today and that California, with other “We are still in” states, cities, academic institutions and businesses in the US, is committed to forging the path towards achieving the Paris agreement goals.

Can we look to China for new leadership on clean energy?

Despite the fact that President Trump decided to withdraw from the Paris climate accord just a couple of days before MI2/CEM8, China reconfirmed its leading efforts in the clean energy transition. Zhang Gaoli, Chinese Vice Premier and one of the seven members of the Politburo Standing Committee of the Communist Party of China, outlined massive efforts in China to establish a clean energy consumption system, develop cleaner burning coal plants, continue expanding solar and wind power capacity, and extend international clean energy cooperation. Zhang also declared that, to implement the UN Sustainable Development Agenda 2030 and Paris Agreement, “China is willing to work together with the global community to improve the global energy governance system and promote green and low-carbon transition.”

Notably, Chinese President Xi Jinping had a forty-five-minute closed-door meeting with Governor Brown in the Great Hall of the People in Beijing on the first day of the summit.  There were no signs of a meeting between President Xi and Secretary Perry. It is unusual for a Chinese president to meet with a state-level American governor in such a formal setting in Beijing for such long time, especially considering the timing of  President Trump’s aforementioned announcement. The message from this unusual meeting is that provincial and state corporation may become a new, growing channel for cooperation between China and the United States under the Trump Administration. In line with this new approach, two new sister-state agreements were signed between California and two Chinese provinces, Sichuan and Jiangsu, on Governor Brown’s continuing trip in China. Both agreements state further state-level cooperation on clean energy transition.

How can some of the RD&D gaps be filled?

An alarming fact, highlighted by Fatih Birol of the IEA, and also mentioned in our report is that rather than increasing, the global public investments in clean energy technology RD&D since 2010 dropped approximately USD $1 billion to USD $26 billion in 2015. Birol noted that public RD&D clean energy expenditures worldwide are significantly lower than research and development (R&D)  investment in other sectors.  For instance, in 2015, public RD&D expenditures in clean energy technologies reached only half of the R&D spending carried out by three major IT companies in the same year!

It’s not a secret that the Trump administration’s plan to substantially cut energy RD&D spending in the new federal budget further challenges the Mission Innovation goal of doubling global energy RD&D spending. However, without neglecting the importance of RD&D expenditures, it is crucial to set additional performance-based goals as well.  

The CPL team prepared a set of recommendations for the next phase of the MI, highlighting the need for, and benefits of, striving for improved data collection and data management systems, as well as collecting comparable data on key innovation metrics beyond RD&D expenditures. These are, for example, the cost reduction by technology, performance improvements by technology, annual rates of improvement, etc. Also, since currently there is no data collection system to capture the progress in energy technology innovation for the non-OECD countries, MI could provide the needed institutional setting and fill this gap. However, it’s not until next year’s MI/CEM gathering that we may witness a stronger push in this direction. Meanwhile, our CPL team will keep collecting data on public energy RD&D expenditures for the non-OECD countries we don’t yet have information on in cooperation with the International Energy Agency.

How should ministers enable public and private cooperation?

Public and private partnerships continued to be the hot topic this year. Both CEM8 and MI2  featured a public-private action day to share lessons and facilitate engagement among private and public actors; multiple closed and high-profile roundtable discussions with ministers, enterprises and academic professors; and a series of side events on how the private and public sector can cooperate. Mariana Mazzucato, Professor in the Economics of Innovation and Public Value at the University College London (UCL) and author of The Entrepreneurial State: Debunking Public vs. Private Sector Myths, was invited to give a keynote speech on June 7th. She made the argument that every major technological change in recent years can trace most of its funding back to state funding, and called for more ambitious actions from the government on clean energy transition.

More lessons came from closed-door roundtable discussions on public and private collaboration in accelerating innovation in clean energy technologies. Energy ministers from different regions and countries, including the European Commission, United Kingdom, Finland, Norway, Australia, China, India, Mexico, and Saudi Arabia, shared their experiences with public and private sectors working together to cut costs of advanced new clean technologies (such as energy storage technologies), and how public actors can share risks where private investors hesitate to do so. A consensus reached among ministers, entrepreneurs and experts, was that governments should play a more active role in new technology adaptation. This includes setting up clear goals and targets to guide innovation, providing risky finance, establishing new mechanisms to foster knowledge sharing, and ensuring wide sharing of the benefits of a green transition.

Conclusion

As mentioned in the Climate Policy Lab’s report, the Mission Innovation group is unique in bringing together the leading countries -- both industrialized and developing -- in energy innovation. This diversity of countries will be especially beneficial when some members slow the pace or deviate attention - even in that case the rest of the group could still come together, take the relay and forge the path towards the ambitious goals of MI and CEM. The diversity will also facilitate sharing of best practices and promoting policies and programs to scale the deployment of clean energy technologies (the purpose of the CEM), which eventually leads to widely affordable clean energy (the purpose of the MI).

Perhaps the path will have a little different scenery, based on which members set the tone, but as long as the objectives are clear and the pace is maintained, who holds the torch is not important. The next ministerial for both the MI and the CEM will be held in Europe in May 2018, with the European Commission, Denmark, Finland, Norway, and Sweden co-hosting the event. We look forward to seeing what happens there and until then!

Zdenka Myslikova, Kelly Sims Gallagher, and Fang Zhang at the Olympic Village in Beijing where the Mission Innovation and Clean Energy Ministerial meetings were held in June 2017

Zdenka Myslikova, Kelly Sims Gallagher, and Fang Zhang at the Olympic Village in Beijing where the Mission Innovation and Clean Energy Ministerial meetings were held in June 2017

Second Generation Climate Action in Bangladesh

By Rishikesh Ram Bhandary

Over the last three weeks, I have been meeting with officials and experts to discuss climate finance in Bangladesh. In this brief blog post, I will provide a brief snapshot of the recent developments that have been taking place.

Bangladesh is going through an important transition. In many ways, the first generation of climate action is giving way to the next generation of deeper and broader policies and actions. In this post, I will highlight three aspects: planning and implementation, institutional arrangements, and finance-related issues.

The first generation of climate action revolved around the Bangladesh Climate Change Strategy and Action Plan (BCCSAP) which was launched in 2009. For example, both of the climate funds, the Bangladesh Climate Change Trust Fund and the Bangladesh Climate Change Resilience Fund, have aligned their projects with the thematic areas identified in the plan. As the BBCSAP was envisioned as a ten-year plan, officials are now busy doing reviews to identify areas where improvements can be made and how synergies and overlaps can be worked out other planning processes such as the nationally determined contribution (NDC), and the national adaptation plan (NAP). A consistent observation made by many people is the need for a more actionable plan that has financial details worked out.

There are also a number of activities that are being undertaken that will inform the planning processes. The government is also planning on conducting a vulnerability analysis, at the district level, for the entire country. An inclusive budgeting and financing for resilience framework is being developed. And, a climate transparency mechanism is also in the works.

Likewise, the nationally determined contribution of Bangladesh (NDC), is being translated into greater concreteness by developing sectoral mitigation action plans in a quantified form. The three areas are: power, transportation, and industry. These sectoral action plans will be supported by an overarching implementation roadmap.

Accessing international finance

The Economic Relations Division has been designed as the National Designated Authority of the Green Climate Fund. The NDA secretariat is being strengthened and staff capacity has been increased to five people. The NDA is hopeful that at least one of the nominated entities will achieve national implementing entity status by the end of the year. The NIE status would allow for the entity to directly access funds from the GCF without having to go through an an intermediary organization.

International partners are providing support to bolster capacity. For example, an accreditation gap readiness analysis is going on to support LGED. Similarly, the DOE is also being provided with support to improve fiduciary standards.

The six entities that have received nominations are:

a.      Bangladesh Bank

b.      IDCOL (Stage 2)

c.       Bangladesh Climate Change Trust Fund

d.      Department of Environment, Ministry of Environment and Forests (Stage 1)

e.      PKSF (Stage 2)

f.        Local Government Engineering Department (LGED)

One of the first GCF projects awarded was to Bangladesh with KfW as implementing entity together with the Local Government Engineering Department. This project will focus on flood and storm protection in coastal areas.

At the last board meeting of the GCF, the proposal by UNDP (as the implementing entity) and Ministry of Women and Child Affairs was taken up. The Board has asked for revisions and will the proposal will be considered in due time.

Greater engagement from the Ministry of Finance and Ministry of Planning.

The Seventh Five Year Plan of Bangladesh (2015/2016-2019/2020) is informed by the BCCSAP. With such close alignment, this plan pushes the envelope of climate mainstreaming compared to earlier plans. There are other supporting elements that are provide the plan with some teeth.

For example, in what has been described as a major breakthrough in mainstreaming climate change into development planning, the Planning Commission introduced changes in Development Project Proforma/Proposal with explicit guidance on incorporating climate risks. The DPP is a key element of the public expenditure process and the incorporation of climate risks in the formulation of this document could play a major role in forging a climate resilient development path.

This post would be remiss if it did not mention the substantial amount of research and knowledge generation and exchange taking place as well. The research community and civil society writ large are vibrant in Bangladesh. One example is Gobeshona- an initiative that brings together research on climate change and has ambitions of connecting and networking with other actors around the world. The third conference was held just a while ago in January 2017.

           

Rishi with Dipal Barua, CEO of Bright Green Energy Foundation.

Rishi with Dipal Barua, CEO of Bright Green Energy Foundation.