Speaker 1: Central to all our efforts is honoring our promises on
Speaker 1: climate finance. I know that for many finances are tough
Speaker 1: right now. The pandemic all but broke the global economy,
Speaker 1: and before coming here today, I spent last week working
Speaker 1: on the difficult decisions needed to ensure confidence and economic
Speaker 1: stability in my own country. But I can tell you
Speaker 1: today that the United Kingdom is delivering on our commitment
Speaker 1: of eleven point six billion pounds and as part of this,
Speaker 1: we will now triple our funding on adaptation to one
Speaker 1: point five billion pounds. By Richie soon At, once again
Speaker 1: promising to stick to delivering billions of pounds to tackle
Speaker 1: climate change. He was speaking at the CUP twenty seven
Speaker 1: conference here in Egypt on Monday. Of course, it was
Speaker 1: not long ago that the Prime Minister was not planning
Speaker 1: on attending the annual summit at all. I'm Francine lack One.
Speaker 1: This is in the City in the Desert to Bloomberg's
Speaker 1: podcast connecting you to the stories and the voices at
Speaker 1: the heart of the city of London. This week I'm
Speaker 1: in Charmel Shaik for the COP twenty seven summit, considering
Speaker 1: the question how committed to the green agenda is Richie
Speaker 1: Sunak and how concerned is a city? With where he
Speaker 1: stands with me? Bloomberg contributing editor and author of the
Speaker 1: read Out newsletter, But you have to read because it's
Speaker 1: always very funny at like restaurants and it was also
Speaker 1: the UK's government spokesperson for COP twenty six and November one,
Speaker 1: and is a co founder of zero is M, a
Speaker 1: zero consultancy, and Bloomberg Green's senior reporter and host of
Speaker 1: Bloomberg podcast Zero ac chat Ratti. Thank you both for
Speaker 1: joining me, Thanks for having us. We're just starting. We're like,
Speaker 1: what day three and we're surviving right the UK same
Speaker 1: but you know it's supposed to be two weeks and
Speaker 1: we've got to pace ourselves. We do. We do have
Speaker 1: to pace ourselves. REREGI SOONEG rebuilding the green agenda? Is
Speaker 1: he here? There was a U turn. He wasn't going
Speaker 1: to show up. Now he showed up. He pledged some
Speaker 1: things and saying morally he can't back down. Yeah. I
Speaker 1: think that the language of the Prime in the new
Speaker 1: Prime Minister yesterday in his speech to Cope was very
Speaker 1: very similar to language that Boris Johnson used a year ago.
Speaker 1: There wasn't. There wasn't really very much difference. Um, yes,
Speaker 1: he wasn't coming. Then he was coming, which I think
Speaker 1: I'm told explains why he had quite a late slot.
Speaker 1: My sense is that he got into office and he
Speaker 1: was focused on the Autumn Statement, which is what is
Speaker 1: it now ten days away and um, he felt that
Speaker 1: he had to give that his all and then you
Speaker 1: know there was a backlash. Um, the UK is the
Speaker 1: president of COP twenty. Actually not anymore, but it was
Speaker 1: at that point and it was until the first day
Speaker 1: of COP seven and it is right and fitting that
Speaker 1: the Prime Minister found time to come. I mean it
Speaker 1: was pretty awkward, right, It's Monday, the Prime Minister and
Speaker 1: you limited UK prime minister shows up and you have
Speaker 1: Boris Johnson that actually speaks ahead of him. You know, awkward.
Speaker 1: Um different Um, Look for countries around the world that
Speaker 1: we're wondering about the UK's commitment, you can make the
Speaker 1: case having double minister, former prime minister and current Prime
Speaker 1: minister that started CUP and the prime minister that ends
Speaker 1: it is a good thing. You certainly can't doubt UK
Speaker 1: um dedication and intellectual commitment to the issue on numbers alone. UM,
Speaker 1: I think actually, oddly for me, I worked for both men,
Speaker 1: but I worked for Boris Johnson at COP twenty six.
Speaker 1: I thought that the former PM was a bit gloomier.
Speaker 1: It's incredible to think how much has changed since that
Speaker 1: last COP, and to be frank, how much damage has
Speaker 1: been done in just one year to our great common
Speaker 1: purpose of tackling man made climate change. I mean, people
Speaker 1: said it was boosterism, but I thought it was not
Speaker 1: boot Boris boosterism. He was saying the spirit of Glasgow
Speaker 1: is in danger of of did he say dying or
Speaker 1: some something similarly catastrophic. I don't think you can say that. Yeah,
Speaker 1: I mean, and yourself will have will have views on this,
Speaker 1: but I think that actually the main theme so far
Speaker 1: of this CARP has been we had some good commitments
Speaker 1: tolve months ago, let's push him forward. I mean, I
Speaker 1: love what you wrote actually, which has showed me the money.
Speaker 1: So it's seen maybe as a bit crass, but actually
Speaker 1: it's not, because we're here to talk about financing and
Speaker 1: that's how you get stuff done. Absolutely, and yes, there
Speaker 1: were new commitments that were made by issues and A
Speaker 1: specifically on protection of forests, and there was sum attached
Speaker 1: to it. Ninety million and sixty five million pounds, but
Speaker 1: the total amount that the UK is committing to climate
Speaker 1: finance over the next five years hasn't changed. That's eleven
Speaker 1: point six billion. This new money for protection of forests
Speaker 1: is just coming from the same pot, and so we're
Speaker 1: expecting more at this time when the UK government is
Speaker 1: going into a mini budget where it has to find
Speaker 1: ways to cut as much of its spending as possible.
Speaker 1: The fact that they haven't cut climate is a positive sign.
Speaker 1: But we are here at CORPS where the entire demand
Speaker 1: from developing countries is you made promises that you haven't
Speaker 1: been able to meet yet. So yes, it's a difficult
Speaker 1: time for developed countries and for developing countries, but you
Speaker 1: have to show more money. I think actually that's right.
Speaker 1: I mean, what I think is coming across loud and
Speaker 1: clear from this CORP is that the magnitude of the
Speaker 1: money needed by the developing world is just in another
Speaker 1: galaxy towards on the table at the moment. And you know,
Speaker 1: you just up then about millions. You know, it's not enough.
Speaker 1: Billions isn't enough. And I think that that's one of
Speaker 1: the political crunches of the next five to ten years
Speaker 1: is the rich world the richer world figuring out what
Speaker 1: the mechanism is going to be because at the moment,
Speaker 1: the sums that developing world is talking about needing, they're
Speaker 1: just it's not it's not on the table at the moment.
Speaker 1: And you have to flip this around because the framework
Speaker 1: isn't to say we're just going to keep needing more
Speaker 1: and more and more money. In fact, if you do
Speaker 1: put more money now, you will need less money in
Speaker 1: the future. Yes, that feels like a really good thing
Speaker 1: to pull off at a time where everybody is worried
Speaker 1: about a crisis. But it just fundamentally is true. But
Speaker 1: we're not worried about Chris. We're living through a crisis,
Speaker 1: right if you look at the last twelve months, and
Speaker 1: I think Boris Johnson made this point. We can't really
Speaker 1: afford his words are not mine as a UK to
Speaker 1: give more. As Akhat says, you've got the ultimate statement
Speaker 1: in ten days, maybe maybe less have lost track um
Speaker 1: And I think it is a good thing that that
Speaker 1: that climate International Climate Finance eleven point six billion, it
Speaker 1: continues to be ring fenced at a time when lots
Speaker 1: of hard choices will have been made in the treasury
Speaker 1: right now as we speak. So it is a good thing,
Speaker 1: but it's the still the magnitude is not near to
Speaker 1: what they to, to what developing nations will need. And
Speaker 1: this debate about loss and damage, which Boris Johnson addressed
Speaker 1: head on. The best way to fix this is not
Speaker 1: to look backwards and to try to top up some
Speaker 1: bill for loss and damage that the UK or other
Speaker 1: countries have done, but try to try to look at
Speaker 1: what the UK can do to help to take countries
Speaker 1: forward and to give them help them to achieve the
Speaker 1: carbon reductions and the green technology that they need. He
Speaker 1: was uncomfortable about it at copy because he thinks that
Speaker 1: there will be a limit to to what will be possible.
Speaker 1: I think therefore, in that context, what is increasingly interesting
Speaker 1: are the different mechanisms. The highest profile person to push
Speaker 1: them is obviously me and my talking about a couple
Speaker 1: of options. One is winful tax arl and gas A.
Speaker 1: Now there is special drawing rights at the i m F.
Speaker 1: There will be a spectrum of these ideas that will
Speaker 1: come out in the next few years. So is it
Speaker 1: too soon to know to say whether the UK's climate
Speaker 1: crown is slipping. Let's start with the basic fact that
Speaker 1: UK has cut the most emissions among G seven countries
Speaker 1: since n That did put UK in a leadership position
Speaker 1: going into copy and there were some lucky circumstances that
Speaker 1: made it happen. There was some serious policies that made
Speaker 1: it happen, and the UK did lead on creating a law,
Speaker 1: the Climate Change Act, which has been copied by countries.
Speaker 1: But it is also accurate that that Crown is certainly slipping.
Speaker 1: This year the amount of renewable investment going into the
Speaker 1: UK has fallen ninety percent, and that's at the same
Speaker 1: time when Boris Johnson committed to a higher renewable target
Speaker 1: into the thirty, committed to reaching net zero on the
Speaker 1: electric grid by committed to electrifying transport which will consume
Speaker 1: more electricity um and so the signs aren't good. The
Speaker 1: Climate Change Committee has said that UK's next carbon budget,
Speaker 1: which are coming up starting three, the UK is not
Speaker 1: on track and so that Crown is certainly slipping and
Speaker 1: Richie soon if he stays in office longer than his
Speaker 1: predecessor did, we'll certainly will have to deal with that.
Speaker 1: I mean, that was what forty days, so let's was
Speaker 1: the last days UM. But what's also interesting the guidelines
Speaker 1: on disclosures for firms and their climate risk. And that
Speaker 1: was something that we seeing as chancellor at CUP twenty
Speaker 1: six last year, UM did and that would be the
Speaker 1: first country to bring in this kind of rules. And
Speaker 1: I think that they're publishing at the moment consultation and
Speaker 1: then in the spring will get some detail. So I mean,
Speaker 1: actually it's very knowledgeable about this, and I read this
Speaker 1: stuff and I love this stuff, so I differ. But
Speaker 1: I also think that in many ways, the plumbing and
Speaker 1: the piping on the mechanisms that are going to lower
Speaker 1: our carbon emissions over the next ten years are just
Speaker 1: being hammered out UM, particularly the disclosure piece that Rishie
Speaker 1: launched last year. UM. That will make companies have to say, right,
Speaker 1: this is where our risk is, this is where exposure
Speaker 1: to climate is, and therefore this is how we're going
Speaker 1: to change how we're invested or whatever. So I think
Speaker 1: we are all of us, you know, sort of watching
Speaker 1: as these things evolve and develop. So actually, how do
Speaker 1: private and public actually work together? Well, the clearest way
Speaker 1: is really near zero, right UM. Until twenty eighteen, we
Speaker 1: did not have net zero by a target. Then country
Speaker 1: started adopting it. As soon as country started adopting it,
Speaker 1: corporations started adopting it. And when corporations adopted and they're
Speaker 1: held to account by journalists and by their shareholders there,
Speaker 1: they have to put in the money to make that happen.
Speaker 1: And so that's the very clear line through point that
Speaker 1: you can see where the transition has begun. But we're
Speaker 1: going to have to do a lot more to enable
Speaker 1: public sector money to help the private sector move along.
Speaker 1: So there's a lot of conversation happening around blended finance.
Speaker 1: This is a term. We're developing countries which are struggling
Speaker 1: with a strong dollar, struggling with debt payments, but are
Speaker 1: also the places where renewable energy is the cheapest, do
Speaker 1: not have the financial capacity to build them. So you
Speaker 1: bring in blended finance, You bring in money from governments
Speaker 1: and philanthropies that take some of the risk away and
Speaker 1: allow private players to provide most of that capital for
Speaker 1: those projects. What does this all mean for the City
Speaker 1: of London. So we had a conversation with Mark Karney
Speaker 1: and I'm saying, is you know the City of London
Speaker 1: still the green one of the green finance capitals of
Speaker 1: the world. He said, of course it is. London's been
Speaker 1: out ahead and you know the then chance are now
Speaker 1: Prime Minister Richie soon Act said a year ago We're
Speaker 1: going to make London the world first netzero financial center.
Speaker 1: That's smart, that's good business and honestly good for the planet.
Speaker 1: But actually we don't really know where this current government
Speaker 1: stands on making the city of London priority. What will
Speaker 1: they do with regulation to attract some of you know,
Speaker 1: maybe the last revenue that they've had the last two
Speaker 1: years UM on this. I think that actually I'm waiting
Speaker 1: to see more what the actual banks do. So I
Speaker 1: think that a lot of the policy architecture has been
Speaker 1: put in place, and we're now as we're talking about
Speaker 1: earlier with disclosure on climate risk. So we need to
Speaker 1: be seeing how some of these big financial institutions are
Speaker 1: starting to um not necessarily divest by the way, but
Speaker 1: are starting to deal with with the with the riskier
Speaker 1: climate parts of their portfolio. So I think that I'm
Speaker 1: I'm interested. This is what we mean by implementation, cop like,
Speaker 1: I think it's one of the many facets where it's
Speaker 1: it is the phrase of the conference, show show us
Speaker 1: the money right. It's you hear it a lot on
Speaker 1: a number of different levels. It says we've discussed developing
Speaker 1: countries needing the hundred billions, then part of that hundred
Speaker 1: billion more of it going to adaptation. Then on top
Speaker 1: of that some going to lost and damage and so on.
Speaker 1: So there's that show us the money, but there's also
Speaker 1: show us the money in terms of in order to
Speaker 1: get to these magnitudes that we were talking about earlier,
Speaker 1: not the millions, not really the billions, but the trillions,
Speaker 1: we are going to be needing private investments to be
Speaker 1: leveraged in. And this is what actually talks about with
Speaker 1: blended finance. I would also say from a private sector
Speaker 1: of financial transfer from private finance, the whole notion around
Speaker 1: e s G or environmental social governance is mostly a
Speaker 1: hisze right now, because there are people coming up with
Speaker 1: their own rules, their own metrics, own ways of trying
Speaker 1: to move the money in the right place. But because
Speaker 1: of lack of clarity, it's unclear if that money is
Speaker 1: actually moving and so rules need to come in place.
Speaker 1: And that's where if the a deal of London is
Speaker 1: serious about becoming the green financial capital of the world,
Speaker 1: are one of them. It needs to play alongside government
Speaker 1: to figure out rules that will allow private finance to
Speaker 1: understand where that money needs to go very clearly. It's
Speaker 1: I mean, the way I've been looking at it recently
Speaker 1: is I think that you and our listeners will have
Speaker 1: noticed that in the States there have been banks that
Speaker 1: have wobbled on this commitment to dealing with climate risk,
Speaker 1: and in response, chief fans, this is the Glasgow Financial
Speaker 1: net zero Alliance zero. Sorry I'm tired, um, they have
Speaker 1: had to pull their horns in. But equally, there's some
Speaker 1: evidence that European banks are really going for it. I'm
Speaker 1: really dealing with climate risk, um, and we could you know,
Speaker 1: there's some that I'm thinking of in particular, but that
Speaker 1: they are really grasping it. So I think there is
Speaker 1: a debate. You're right, there is a debate about whether
Speaker 1: the City of London will over the next five to
Speaker 1: ten years keep that crown of being the green finance.
Speaker 1: I mean, if you're talking competition here, actually the City
Speaker 1: of London has a good chance. Now, well, we don't
Speaker 1: know what the midterms are going to do to the US,
Speaker 1: but we do know that Republican states are trying to
Speaker 1: question e s G and that's causing these wobbles in
Speaker 1: American banks. But if City of London provides clarity, in
Speaker 1: the UK, all political parties are clear on what they
Speaker 1: want to do and net zero. In America it's a
Speaker 1: divided government. It's forcing their regulator, the SEC, to rethink
Speaker 1: whether the clear E s G rules that it had
Speaker 1: put out will come through because it's worried about lawsuits.
Speaker 1: The City of London doesn't have to worry about all that.
Speaker 1: When you look at g fans and Mark Arney was
Speaker 1: saying that from four fifty members in Glasgow they went
Speaker 1: to five fifty. The question is do you need very
Speaker 1: aggressive frameworks and regulation but risk losing members just to
Speaker 1: hit that target, or do you rather have a broad
Speaker 1: church with weaker targets. I think he's gone for the last, right,
Speaker 1: I mean, that's what there was. There was talk in
Speaker 1: September that raised to zero, which is the u N
Speaker 1: kind of mirror to g fans, was gonna be penalizing
Speaker 1: of banks, right, And there were a couple of institutions
Speaker 1: that said, right, well, this is too tough for us.
Speaker 1: We're off and I think for all of us. We
Speaker 1: were watching that debate and thinking, gosh, is this the
Speaker 1: beginning of a stampede away because of the different political
Speaker 1: and economic context? Is this you know this was too
Speaker 1: good to be true twelve months ago? Now this is
Speaker 1: the rubberts sitting the road and people that are going
Speaker 1: to leave. Actually, in the end, I think they stabilized
Speaker 1: it and they kept it to a few more banks
Speaker 1: then went public with worries, but they were kept in
Speaker 1: the team. And so I think he's made the latter
Speaker 1: of your two choices. He's made that choice that he
Speaker 1: wants to keep it intact to keep everybody trying to
Speaker 1: work this out together. And that makes sense. I mean,
Speaker 1: if everybody works together, even with less aggressive targets, is
Speaker 1: it easier to then reach our goals and five, ten
Speaker 1: fifty years. I think Carney and Givans in general probably
Speaker 1: are forced to do that because the rules around the
Speaker 1: s G aren't that clear. If governments were to provide
Speaker 1: more clarity, then private sector will follow suit. Um right now,
Speaker 1: because so many of the commitments are voluntary commitments, where
Speaker 1: do you draw the boundaries are voluntarily decided, and if
Speaker 1: you don't like them, you can walk out of a group.
Speaker 1: If government set regulations and clear rules, then they can't
Speaker 1: do it so easily. You know, we we see banks
Speaker 1: as um as you know, all doing the same thing,
Speaker 1: but actually a lot of banks are doing different things
Speaker 1: right now. Western Lloyd's have a different portfolio with different
Speaker 1: carbon emissions from a Barclays and HSPC with a different
Speaker 1: geographical footprints. So I can completely see why this is
Speaker 1: a really complex issue to try and corral. If you're
Speaker 1: Mark Coni, what's the one question that regulators now need
Speaker 1: to think of? So as we try and hit the targets,
Speaker 1: do you have to get finance people behind you by
Speaker 1: just looking at the economics or does this have to
Speaker 1: be a belief of people wanting to save the planet.
Speaker 1: I think belief is one that you could have pulled
Speaker 1: off before Paris. You could be like, yes, we should believe,
Speaker 1: but now we actually have legally binding targets in law.
Speaker 1: They might be years out, decades out. Um. I think
Speaker 1: it's more about making sure that the rules will allow
Speaker 1: the private sector to go in that direction. But economically
Speaker 1: does it make sense? So if you invest in the
Speaker 1: s G and I know there's so many questions about transparency,
Speaker 1: does it just make wise financial sense to invest in
Speaker 1: this space? That's being the case from the very beginning.
Speaker 1: There's a clear hierarchy for how to think about money
Speaker 1: spent on climate action. Three steps. The first is to avoid,
Speaker 1: which is to reduce emission so that warming doesn't happen.
Speaker 1: The second step is to minimize if varming is happening,
Speaker 1: adapt by building sea walls, by building cooling spaces so
Speaker 1: that you can deal with the heat waves. And the
Speaker 1: third step is if you don't do either of those,
Speaker 1: there will be lost and damage and you're going to
Speaker 1: have to pay for it, and it gets more expensive
Speaker 1: every step. So the economic case has actually been there
Speaker 1: for all this time. It's just that that economic case
Speaker 1: is over decades, not over the quarter by quarter reports
Speaker 1: that companies have to put up. I mean, and to
Speaker 1: end you, I mean these are not small easy subjects,
Speaker 1: but I mean increasingly I think people think you need
Speaker 1: a carbon price, So I'm sorry, let's have it already.
Speaker 1: Where where is the price? In in the UK and Europe?
Speaker 1: There is one right cabin trade is a carbon price?
Speaker 1: You know the UK number? What's that magic number? I
Speaker 1: think seven. I think what political sciences have figured out
Speaker 1: is like trying to force people to accept carbon pricing
Speaker 1: It's much harder than the plain economic case that if
Speaker 1: you have a carbon price will automatically move to a
Speaker 1: cleaner world. The politics is hard, right. If you go
Speaker 1: to the gas bump and you're paying really high process
Speaker 1: for your petrol and diesel, then you are going to
Speaker 1: blame the carbon price, not all the other macroeconomic factors
Speaker 1: that are causing that to happen. For all the social
Speaker 1: media haters, I keep on saying, this is a jolly.
Speaker 1: Why are you roll in Egypt and charm? First of all,
Speaker 1: the conditions are are not the easiest to deal with.
Speaker 1: I mean, we have some really pretty robust drivers of
Speaker 1: buggies getting us from It's like driving electric Lewis the
Speaker 1: electric buggies like Lewis Ham. I mean they scare me
Speaker 1: when when I try and write an email and they
Speaker 1: go really fast. That each of the place you need
Speaker 1: to be Actually, can we once and for all maybe
Speaker 1: try and agree that that even if there's not going
Speaker 1: to be a big headline number, these are important because
Speaker 1: bringing people together at all levels as a state but
Speaker 1: also NGO's could give us a better chance of hitting
Speaker 1: our targets. Well, we had Lewis, you who is the
Speaker 1: U n Patron of Oceans on the podcast on Zero
Speaker 1: and he said this thing, which you know, clears up
Speaker 1: why COP meetings have to happen. He said, sometimes you
Speaker 1: just have to look people in the eyes to agree
Speaker 1: on a difficult thing. You can have as many zoom
Speaker 1: meetings as you want, and there is an important role
Speaker 1: for zoom meetings and virtual meetings, but when it comes
Speaker 1: to these crucial things where you need to bridge the
Speaker 1: gap with diplomacy, you actually need to look the people
Speaker 1: straight in the eyes, and COP meetings have made that possible.
Speaker 1: Year over year, not enough and the progress has to
Speaker 1: happen a lot faster going forward. But that is why
Speaker 1: meeting in person is so important. Yes, it's attached with
Speaker 1: coming footprint when you travel all this while, but it
Speaker 1: makes the work much much easier than if it was
Speaker 1: just virtual. There's some really moving stories. Some people came
Speaker 1: up to me from South Korea and they said, it
Speaker 1: took us twenty hours to get here. You know, they
Speaker 1: really wanted to come and they've you know, and they
Speaker 1: had a lot of things they wanted to know how
Speaker 1: it was being done in the UK UM. So for
Speaker 1: a lot of people it matters hugely. Well, there is
Speaker 1: also we had the president of Mozambique this morning who said,
Speaker 1: for the price that I've paid for my delegation to
Speaker 1: come here, we could have built three schools. But we
Speaker 1: do think the money we're spending to come here is
Speaker 1: worth it. As actually says that moment of jeopardy and
Speaker 1: the encounter in the kind of visceral whites of the eyes,
Speaker 1: you're really telling me that the decisions you take are
Speaker 1: going to raise sea level. You really think that's acceptable,
Speaker 1: that that is politically powerful. Thank you so much, actually
Speaker 1: a legraph pleasure. Thanks for listening to this week's in
Speaker 1: the City. Will be back next week, but in the meantime,
Speaker 1: if you like our show, we hope you do, please
Speaker 1: head on over to the Apple Podcasts or wherever you
Speaker 1: listen to podcasts, rate, review, and subscribe. This episode was
Speaker 1: hosted by me Francie Lackwhite, was produced by Oscar Boyd
Speaker 1: and Smersati. Editing and sound designed by Blake Maple's Special
Speaker 1: thanks to Allegra Stratton acchat Ratty and be sure to
Speaker 1: check out Allegra's great newsletter, The Redoubts on bloomberg dot
Speaker 1: com Slash Newsletters, or check out the show notes for
Speaker 1: a link and actuats podcast zero. Find it wherever you
Speaker 1: listen to podcasts.