Speaker 1: Hey, everyone, So think back your first semester of college.
Speaker 1: You walk into the room for economics one oh one
Speaker 1: or microbiology or art history, whatever it is. You take
Speaker 1: your seat, the professor walks in, and the teaching assistant
Speaker 1: passes out the syllabus. It outlines the material covered and
Speaker 1: the exam dates. Great, you know what to do. You're
Speaker 1: a good student, you'll be fine. But you quickly realize
Speaker 1: this isn't high school, and your parents are two thousand
Speaker 1: miles away. You end up studying a lot, but it's
Speaker 1: all kind of trial and error, and you crammed night
Speaker 1: before the exam. Anyway, what you need is a study
Speaker 1: guide to help you know what and how to study,
Speaker 1: what works, what's not worth spending time on. And you
Speaker 1: need to study group to share notes. Well, forgive the analogy,
Speaker 1: but it's kind of the same thing. For climate change.
Speaker 1: We know the exam is coming up, and unlike any
Speaker 1: of my college exams I thought were just so important,
Speaker 1: this one actually is. To be specific, without real action,
Speaker 1: the world is likely to hit one point five degrees
Speaker 1: celsius about pre industrial levels between and so sooner than
Speaker 1: I expected. That means this decade is critical to get
Speaker 1: things going okay. So countries and companies have begun to
Speaker 1: level up their decarbonization ambitions, many aiming to go net
Speaker 1: zero by but for the most part of not laid
Speaker 1: out clear pathways to getting there. They're putting themselves in
Speaker 1: the position of having to cram the night or decade
Speaker 1: before the exam and at that point it's too late.
Speaker 1: As I said, this decade is critical to get things going,
Speaker 1: but they need a study guide so they can implement
Speaker 1: the clear strategy and aced the exam. Well, Bloomberg has
Speaker 1: that study guide. Today. We've got BEENEF head of Energy
Speaker 1: Transitions Louisa tomorrow to talk about the net zero Pathfinders initiative,
Speaker 1: just launched on the eighteenth of October. The idea is
Speaker 1: to provide a resource of actionable policy ideas and case
Speaker 1: studies of what's worked around the world to help policymakers
Speaker 1: and other stakeholders design and implement decarbonization strategies today. So
Speaker 1: a study guide to help jurisdictions plan their climate strategies
Speaker 1: and figure out their study groups. And Louisa will mention
Speaker 1: this again in the interview, but go check it out
Speaker 1: at Bloomberg dot com. Forward slash net zero Pathfinders or
Speaker 1: sending examples of what's worked for you and your stakeholders
Speaker 1: at pathfinders at Bloomberg dot net as a reminder being
Speaker 1: if does not provide investment or strategy advice, and you
Speaker 1: can hear the full disclaimer at the end of the show.
Speaker 1: I'm Mark Taylor and you're listening to switch on to
Speaker 1: be net podcast. Louisa, thanks for joining, Thank you for
Speaker 1: having me here, Mark, and welcome to London. You just
Speaker 1: moved over from from Apollo, Is that right, Yes, that's right,
Speaker 1: moved exactly a month ago, sweet right on, just in
Speaker 1: time for it to get dark here all the time.
Speaker 1: I'm sorry we're pulling you away from the summer over there,
Speaker 1: but we're really glad to have you, and we're really
Speaker 1: glad to have you on the show today to talk
Speaker 1: about what countries and companies by extension can do to
Speaker 1: reach net zero targets. Now, let's start off just by
Speaker 1: digging into that a bit. We're going to start this
Speaker 1: show with the assumption that climate change is a thing,
Speaker 1: that it's real, that it has dire consequences if we
Speaker 1: don't get it solved. All that, and one way to
Speaker 1: do that is by setting what are called net zero targets? Now,
Speaker 1: can you just start us off by explaining what a
Speaker 1: net zero target is. I'm not your target is simply
Speaker 1: aiming or pablishing the goal data, country or a company,
Speaker 1: we will produce less greenhouse gas emissions. Then it takes
Speaker 1: from the atmosphere, so not to start getting to zero,
Speaker 1: but getting to zero net emissions, which is, by the way,
Speaker 1: it really hard considering how we produce everything today. And
Speaker 1: when I say we, am referring to us as a
Speaker 1: society as a participants of the economy. Yes, there you go,
Speaker 1: and everybody, just so you know, I called called that out.
Speaker 1: I asked Lisa to clarify that because I'm just really
Speaker 1: conscious that been for Bloomberg. We're analysts, not advocates, and
Speaker 1: we're going to say we a lot in this in
Speaker 1: this episode here today, and it's just going to refer
Speaker 1: to all of us collectively as the human race or humans.
Speaker 1: The reason why I say ways, because we, or the
Speaker 1: word we, will not get to zero if every single
Speaker 1: person and company and sector and government player isn't involved
Speaker 1: in this race. So, now that we know what net
Speaker 1: zero is and what it's designed to do, can you
Speaker 1: describe for us. The commitments that countries have made around
Speaker 1: that six years ago, in two thousands fift change pair
Speaker 1: is the government's most governments around the world have agreed
Speaker 1: to keep the increase in global warming below two degrees
Speaker 1: and to make efforts to limit it to one point
Speaker 1: five degrees. Why is that important? To degrees in one point?
Speaker 1: This is what i PCC or the inter Governmental Panel
Speaker 1: on Climate Change estimate. This is the maximum that we
Speaker 1: can increase global warming to limit catastrophic climate change effects.
Speaker 1: So that's why it's important. And I think the basic
Speaker 1: thing that's important to understanding is we're not talking about
Speaker 1: reducing the global warming. We're talking about limiting the increase
Speaker 1: of global warming. So government's got together six years ago
Speaker 1: and they had agreed to make efforts to limit this
Speaker 1: global warming, and they do this by committing to take
Speaker 1: action and committed to limit the two emissions. However, since then,
Speaker 1: we have not really gotten any better. To be more specific,
Speaker 1: the i p c C estimates that emissions need to
Speaker 1: fall about forty five belows two thousand ten levels by
Speaker 1: two thousand thirty to reach net zero on to town fifty.
Speaker 1: So twenty years later, however, we have actually increase emissions
Speaker 1: by around one five per year between ninety nine and
Speaker 1: two thousand nineteen. The good news is that over the
Speaker 1: past years, especially over the one year and a half,
Speaker 1: governments have started to take more action towards establishing NAT
Speaker 1: zero commitments, and today about seventy countries that represented around
Speaker 1: forty nine percent of global emissions have established and that's
Speaker 1: your target. The challenges they don't actually know how to
Speaker 1: get there. Okay, that seems to be the kicker there.
Speaker 1: So if we can back up or recap, all these
Speaker 1: countries got together and said, hey, we want to reduce
Speaker 1: submissions to reach a certain target. And then you're saying,
Speaker 1: kind of nothing, nothing has happened. There's some stuff for
Speaker 1: some efforts have been made. I guess we can get
Speaker 1: to that. But more recently they're saying, okay, actually we
Speaker 1: want to make a net zero target, but we don't
Speaker 1: know how to quite get there. Is that right Most
Speaker 1: are not saying we don't know how to get there,
Speaker 1: but through this they don't. It's a very hard job.
Speaker 1: There's a few reasons why it's very hard. Firstance, we
Speaker 1: need to start acting right now because a lot of
Speaker 1: governments and the takeholders in general are talking a lot
Speaker 1: about thousand fifty THOUSTA doesn't sixty. But we need to
Speaker 1: act now, and we need both action if we really
Speaker 1: want to change this emissions run. So if you leave
Speaker 1: it till to get started, you're never going to meet
Speaker 1: a target. Then we're done. Another reason why it's very
Speaker 1: hard is because it touches on every aspect, every sector
Speaker 1: of the economy. It touches on everyone's lives, which means
Speaker 1: that collaboration is key there. And to be honest, policymakers
Speaker 1: and many of the key stakeholders are not really good
Speaker 1: at collaborating. Right. Everybody's playing their own game. But it
Speaker 1: has to change if we're serious about getting there. When
Speaker 1: you and I were talking about this before the show,
Speaker 1: you mentioned what countries have been trying has mostly been
Speaker 1: kind of trial and error up to this point. So
Speaker 1: they made their commitments, they made their net zero targets,
Speaker 1: they're trying to collaborate, it seems, but the things that
Speaker 1: they're actually doing our guests in check or trial and errors.
Speaker 1: That right, nobody has a real clear strategy as far
Speaker 1: as I can tell. We're all figuring that out together
Speaker 1: right now. Right, And when I say collaborations key is
Speaker 1: not just about one country collaborating with another, which is
Speaker 1: important because the word has to learn from the other's
Speaker 1: mistakes about what works and what doesn't work. Otherwise we're
Speaker 1: going to take way longer together and we don't have
Speaker 1: this time we as the word as a society. Also,
Speaker 1: it also means collaborating across all policy layers in one country,
Speaker 1: which means city level policymakers collaborating with national level policy makers,
Speaker 1: which is sometimes it's very hard. And it also means
Speaker 1: the stakeholders, finance sector, civil society collaborating with government and
Speaker 1: collaborating among themselves. So collaborations really a fundamental aspect to
Speaker 1: get there. But we also understand that there there are
Speaker 1: challenges with this collaboration. Can you tell us a bit
Speaker 1: more about those challenges? First, the challenges when we're talking
Speaker 1: about a transition to a new economy, we're talking about
Speaker 1: something that we will touch on every single aspect of
Speaker 1: the economy, and that we'll touch on every by these lives,
Speaker 1: every industry, which means that it's not a job that
Speaker 1: can be done in isolation. In practice, we will need
Speaker 1: to see policy makers interacting with each other. We need
Speaker 1: to see city level policymakers working together with national level,
Speaker 1: international level to make things happen. And we will also
Speaker 1: need to see the finance sector to civil society engaging
Speaker 1: with governments and other players. And to be honest, most
Speaker 1: of those takeholders are not very good at collaborating. And
Speaker 1: the second challenge is that this is not something that
Speaker 1: we can plan a lot or only plan, because we
Speaker 1: need to start acting right now. So this engagement has
Speaker 1: to happen right now because policy makers and other players
Speaker 1: are talking a lot about action for two fifty but
Speaker 1: we don't have this time to wait, so we need
Speaker 1: to get started really soon. Okay, so how do we
Speaker 1: get there? How do we get started? This week we
Speaker 1: have launched a new Bloomberg initiative that aims to help
Speaker 1: policemakers and all your stakeholder solve those these questions. The
Speaker 1: name of the initiative is Nazio Pathfinders. This is a new,
Speaker 1: completely public initiative that aims to help policemakers and under
Speaker 1: stakeholders design and implement the carganization strategies today, not in
Speaker 1: ten years, but today. And we also aim to help
Speaker 1: those players simplify their search for a climate solution, and
Speaker 1: we do this by leveraging content capabilities of many Bloomberg
Speaker 1: organizations and also many of our partners. That's cool. How
Speaker 1: does it work? Walking through it a little bit? So,
Speaker 1: if I'm a policymaker and I want to make use
Speaker 1: of the new net zero Path Finders initiative, what do
Speaker 1: I do? Is it like a reference library of like
Speaker 1: projects that have worked, or is it a consulting service.
Speaker 1: We have just launched a public website where we highlight
Speaker 1: the key challenges and the key solutions in the Race
Speaker 1: to zero, and we also have a interactive library where
Speaker 1: policy makers and other stakeholders can future by sector, policy
Speaker 1: layer and key peelers which I would touch on in
Speaker 1: a minute of Nazio strategies and find examples of what
Speaker 1: is working for others, what other policymakers have implemented that
Speaker 1: has actually proven to have effect and impact in the
Speaker 1: carbonizing some sectors of their economy, or on leveraging financing
Speaker 1: for example, or engaging the view society to get to
Speaker 1: some successful the carbonization measure. That's cool. So it's like
Speaker 1: a menu of things I can choose from that have
Speaker 1: proven to be successful in other jurisdictions. If I'm a
Speaker 1: policymaker exactly. And the way we do that is we
Speaker 1: have organize those best practices around four key pillers. Yeah,
Speaker 1: let's get into those. So in the Pathfinders initiative, I
Speaker 1: guess what I'm getting at is that that maybe this
Speaker 1: could be a start to the end of trial and error.
Speaker 1: That there are I think you've got identified, as you said,
Speaker 1: four key pillars of things that work. Can you describe
Speaker 1: those four key pillars? And before I do, we consider
Speaker 1: those four key pillars from Memento because they are relevant
Speaker 1: to all keys takeholders of the economy and all we
Speaker 1: meeting sectors. The first pillar is accelerating deployment of mature
Speaker 1: climate solutions. The second pillar is supporting the development of
Speaker 1: new climate solutions, third pillar is managing the transition and
Speaker 1: phasing out carbon intensive activities, and the last one is
Speaker 1: creating appropriate climate transition government structures. So those are what
Speaker 1: we believe to be the fundamental aspects of any net
Speaker 1: zero strategy that a policymaker or even other privates that
Speaker 1: holder can put together when thinking about their race to zero.
Speaker 1: We're gonna take a quick break when we come back,
Speaker 1: We're going to make our way through each of these
Speaker 1: pillars and describe how they can be used to achieve
Speaker 1: net zero targets. Stay with us, okay, welcome back. Let's
Speaker 1: just start going through them. So number one, accelerating deployment
Speaker 1: of mature climate solutions. When I hear that, I think
Speaker 1: that just means helping build wind, solar, and batteries. Is
Speaker 1: that right? It is right, It's not limited to it.
Speaker 1: But this isn't a big part of this. In this piller,
Speaker 1: we're talking about deploying right now the solutions that are
Speaker 1: low cost and widely available. It includes, for example, Winen
Speaker 1: solar technologies, but it also includes storage technologies, deploying evs
Speaker 1: and evy chargingfrastructure, but also solutions simple solutions such as
Speaker 1: boost walking and public transportation micromobility in general, also encouraging
Speaker 1: sustainable food consumption, which is a key part of ancient zero.
Speaker 1: To give you an example of like why we need
Speaker 1: to act really fast under the ban off new energy
Speaker 1: outlook under the last reports green scenario we be enough
Speaker 1: to say is that getting to the your emissions requires
Speaker 1: one point for tear warts of renewables added every year
Speaker 1: over the next three decades, and at the moment we
Speaker 1: have less than one point seven gig wats everybody for scale,
Speaker 1: that's just a whole ton of renewables that we are
Speaker 1: not adding that we in the world that needs to
Speaker 1: be added to meet these targets. So there's just a
Speaker 1: lot of that needs to be done there. And to
Speaker 1: highlight how important it is to acts fast and deploy
Speaker 1: fast solutions that are widely available right now, be enough
Speaker 1: estimates under news green scenario, the new Energy Outlook Ring
Speaker 1: scenario that to get to zero, we actually need over
Speaker 1: the next three decades to deploy per year more renewable
Speaker 1: energy technologies that we have installed at the moment in
Speaker 1: the world. I mean, I just read yesterday about what
Speaker 1: if they're doing trying to do a solar plant in China.
Speaker 1: Now that's a hundred giga watts or something like that.
Speaker 1: It's gigantic. But what you're saying is that, you know,
Speaker 1: things like this need to become more than norm than
Speaker 1: the exception. Number two, what do we got? Number two
Speaker 1: is about supporting the development of new climate solutions. And
Speaker 1: here we're talking about developing that technologies that are not
Speaker 1: widely available or low cost right now, but that will
Speaker 1: be key in the second phase after racial zero, and
Speaker 1: I'm talking here about post a thousand, like what you
Speaker 1: were talking about low carbon hydrogen, we're talking about carbon capturing, storage,
Speaker 1: about direct air capture, I guess as well also, but
Speaker 1: also like deploying, developing electrification of planes, of shapes, of
Speaker 1: other transports. And it's important to mention that if we
Speaker 1: really want to get to zero, we need to tackle
Speaker 1: every sector of the economy, not only the easy ones.
Speaker 1: So we need to start develop the technologies to abate
Speaker 1: the heart sectors right now, otherwise those won't be ready
Speaker 1: in ten years. So these are kind of like where
Speaker 1: wind and solar and others were, you know, ten plus
Speaker 1: years ago, right, so they're expensive and YadA YadA, but
Speaker 1: now they're they're cheap and where they available, as you said,
Speaker 1: So just starting down that that cost curve for those
Speaker 1: other technologies basically, and it needs time, right, so we
Speaker 1: cannot wait to get this done. Number three. Number three
Speaker 1: is about managing the transition and phasing out carbon intensive activities,
Speaker 1: and it's about really about your things. First is it's
Speaker 1: the transition won't be just about adding NW clean technologies.
Speaker 1: We also need to retire and phase out the high
Speaker 1: emitting technologies that are in our operating today. This includes
Speaker 1: coal plants, internal combution engine vehicles for example, and even
Speaker 1: high emitting heating sources. So we need to get rid
Speaker 1: of those as fast as we can, and especially start
Speaker 1: financing new ones. But also it's about the fact that
Speaker 1: retiring or phasing out those technologies also means that a
Speaker 1: lot of people will be impacked. So we need to
Speaker 1: make sure that the transition is fast, but also the
Speaker 1: transition is just and fair to those business and to
Speaker 1: those workers that have for a long time relied on
Speaker 1: those technologies. Absolutely. I saw on TV last night during
Speaker 1: the Great British bayoff an advert for the what is it,
Speaker 1: the new ultra low emission zone for London, any anything
Speaker 1: inside the M twenty. And that's a change that's going
Speaker 1: to affect a lot of people. And so I think
Speaker 1: that's what you're saying. So it's managing this transition. I
Speaker 1: remember last year hearing about it, and then they've just
Speaker 1: been saying this is coming, and then now they're saying, hey,
Speaker 1: this is coming next week. Managing the transition. Glad I
Speaker 1: don't drive here, Yeah, hey, there you go, But a
Speaker 1: lot of people do, right, and it will affect tons
Speaker 1: and tons of people, So yeah, this is super super important.
Speaker 1: And honestly, transition is not always comfortable, no jeez, it's
Speaker 1: it's for sure more comfortable than the impact of not
Speaker 1: doing it. Finally, number four, creating appropriate climate transition governance structures.
Speaker 1: Now this sounds like when I read this earlier, I
Speaker 1: was like, oh, that sounds boring, but then you think
Speaker 1: about it, like it's probably the most important one exactly.
Speaker 1: That's what I said, Like, those people don't engage much,
Speaker 1: and that's really key, and that's really key for many things. First,
Speaker 1: like governments change in like really short period, so those
Speaker 1: players need to make sure that the climate plans and
Speaker 1: climate projects will remain despite of who is leading a
Speaker 1: country or a city. This is part of it, but
Speaker 1: also part of it is creating mechanisms to make sure
Speaker 1: that different players and gay across the government and across
Speaker 1: different stakeholder groups, and also creating mechanisms dream courage and
Speaker 1: to enforce commitments from others such as from corporation. And finally,
Speaker 1: there is a big role for the finance actor to
Speaker 1: play there as well, and also for the civil society
Speaker 1: in the finance sector, for example, it's really key to
Speaker 1: encourage climate related financial disclosures such as GCFT and for
Speaker 1: civil society doors organization have a really big role to
Speaker 1: play in driving social development and equality across the value chain.
Speaker 1: And this is very important because a very fast transition
Speaker 1: can have a good impact in many countries, especially countries
Speaker 1: that export, for example, of raw materials. But this impact
Speaker 1: might be good or it might be bad, and it
Speaker 1: really depends on how much attention we pay on it.
Speaker 1: So we've gone throughout the four pillars of the Pathfinder project,
Speaker 1: and if I'm a policymaker, I will be able to
Speaker 1: find examples of cases where these things have worked for
Speaker 1: other dissections. But we're can I find out more? What
Speaker 1: can I do to get started engaging with the net
Speaker 1: zero platform organization? First, the natural Pathfinders platform is publicly
Speaker 1: available at Bloomberg dot com slash Nazero. Pathfinders website includes
Speaker 1: description of all those solutions, the best practice library, as
Speaker 1: well as a brand new report that we have launched
Speaker 1: detailing those pillars and discussing what others have done that
Speaker 1: has proven to work. And the very important thing to
Speaker 1: mention before we're done here is we recognize that there
Speaker 1: is no single path through Zero. We're not trying to
Speaker 1: give a final answer of what works and or what
Speaker 1: doesn't work. And as I mentioned, engagement is key. So
Speaker 1: this is supposed to be an evolving initiative that welcomes
Speaker 1: contributions from other players. So if you're a policemaker or
Speaker 1: stakeholder that has implemented something that works, reach out to
Speaker 1: us and going to be really happy to receive your contribution,
Speaker 1: to publish it on our website and to discuss how
Speaker 1: we can continue engaging with you as well, and you
Speaker 1: can contact us at Pathfinders at Bloomberg dot net. I mean,
Speaker 1: congrats on the release of the website or launch of
Speaker 1: the website. And again, everybody that's pathfinders at Bloomberg dot net,
Speaker 1: is there any next step that you're looking forward to
Speaker 1: with regard to the Pathfinders initiative. The next step is
Speaker 1: really an engagement. So we have launched the website, we
Speaker 1: have made the report publicly available, and now what we're
Speaker 1: really looking forward to engage with new organizations, with other
Speaker 1: policy makers to make sure that we are really a
Speaker 1: hope to highlight what works, what can be done, and
Speaker 1: how others can get there. That's fantastic This seems super
Speaker 1: needed and I look forward to hearing a lot more
Speaker 1: about it in the future. Again, Bloomberg dot Com, Forward,
Speaker 1: slash net zero, Pathfinders, Luisa, thanks for joining us. Thank you,
Speaker 1: Mark with a pleasure. Today's episode of Switched On was
Speaker 1: edited by Rex Warner with Great Stoke Media. Bloomberg Any
Speaker 1: add is a service provided by Bloomberg Finance LP and
Speaker 1: its affiliates. This recording does not constitute, nor should it
Speaker 1: be construed, as investment advice, investment recommendations, or a recommendation
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