WEBVTT - Kopi Time E103 - Helge Muenkel on climate finance

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<v Speaker 1>Welcome to Kobe Time, a podcast series on Markets and

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<v Speaker 1>Economies from Devi Group Research. I'm chief economist, welcoming you

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<v Speaker 1>to our 103rd episode

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<v Speaker 1>in the past year or so. I've spent quite a

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<v Speaker 1>bit of time reading up on the signs of climate change,

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<v Speaker 1>the tech to deal with it and the critically important

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<v Speaker 1>issue of climate finance. I've done a bit of writing

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<v Speaker 1>on that as well. And recently, I've done quite a

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<v Speaker 1>bit of collaboration with our guest today,

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<v Speaker 1>Helga Muko is the Chief sustainability Officer at D BS.

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<v Speaker 1>He is responsible for developing the bank's overarching sustainability framework.

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<v Speaker 1>He also chairs the group Sustainability Council which comprises of

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<v Speaker 1>senior D BS leaders across business and support units. Helga

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<v Speaker 1>represents D BS in several global and regional working groups

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<v Speaker 1>such as the World Business Council for sustainable Development, the

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<v Speaker 1>industry advisory panel of the ASEAN S joint sustainable financing

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<v Speaker 1>working group

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<v Speaker 1>and the ma s convened Green Finance Industry task force.

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<v Speaker 1>So quite a few hats you wear Helga. Welcome to

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<v Speaker 1>Cope Time. Thanks

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<v Speaker 2>a lot for having me. I appreciate

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<v Speaker 1>it. I've been looking forward to this conversation and we

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<v Speaker 1>have a lot to cover Helga. Uh let's start by

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<v Speaker 1>setting the basic foundation. Let's talk about the current state

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<v Speaker 1>of climate finance. What kind of money is needed to

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<v Speaker 1>make meaningful change in this green transition?

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<v Speaker 2>Absolutely. Let's do that before I jump into climate finance.

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<v Speaker 2>One setting the scene point around this, what do we

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<v Speaker 2>need it for? So if we just consider that climate

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<v Speaker 2>change is ultimately driven by accumulated greenhouse gas emissions that

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<v Speaker 2>be put up into the atmosphere. And we've done quite

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<v Speaker 2>a lot of that in the past. Looking forward,

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<v Speaker 2>we have another roughly 400 gigatons of greenhouse gas emissions

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<v Speaker 2>that we can put in the atmosphere until we hit

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<v Speaker 2>this famous 1.5 C scenario. So global temperatures will rise

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<v Speaker 2>by 1.5 C as compared to pre industrial levels. And

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<v Speaker 2>that's quite significant. It's not just a technical number, it

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<v Speaker 2>actually has real world impacts. So 400 gigatons roughly we

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<v Speaker 2>have left until we get there. If we don't change

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<v Speaker 2>the way we play live and work today,

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<v Speaker 2>we are roughly emitting 50 gigatons or thereabouts per annum.

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<v Speaker 2>So simple math, we have around eight years or so

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<v Speaker 2>left until we hit that famous 1.5 C limit. And again,

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<v Speaker 2>this 1.5 C, it's not just a technical number, it

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<v Speaker 2>has a real impact on the communities, especially here in Asia.

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<v Speaker 2>So that simply means

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<v Speaker 2>we have a lot to do in a very, very

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<v Speaker 2>short time frame. So ultimately, you can consider this within

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<v Speaker 2>another industrial revolution, only this time at the speed of

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<v Speaker 2>the digital transformation. So we need to completely rewire the

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<v Speaker 2>way we organize our life, rewire, the way we organize

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<v Speaker 2>our economies lightening quickly. So action matters and it matters

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<v Speaker 2>at scale and at speed.

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<v Speaker 2>So what do we now need in order to finance

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<v Speaker 2>that stuff really, really quickly, there are all sorts of

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<v Speaker 2>different studies out there from think tanks, science and industry groups.

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<v Speaker 2>But if I simplify this a little bit, then one

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<v Speaker 2>study tells us we need roughly nine trillion us D

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<v Speaker 2>per annum

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<v Speaker 2>to invest in our energy systems and land use systems

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<v Speaker 2>per annum per year between now and 2050 the nine

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<v Speaker 2>trillion you can break down. So a certain amount of

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<v Speaker 2>money we already spend today, we spend a certain amount

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<v Speaker 2>of money on existing energy infrastructure, which also by the

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<v Speaker 2>way includes fossil fuels because we can't switch them off

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<v Speaker 2>tonight and also already existing investments in clean tech.

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<v Speaker 2>But we need an additional. So out of the total

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<v Speaker 2>of nine, we did an initial 3.5 trillion to invest

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<v Speaker 2>in our energy systems and land use systems. So these

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<v Speaker 2>numbers are quite staggering three

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<v Speaker 1>and a half millions like India's GDP.

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<v Speaker 2>Yeah. Isn't that amazing? If you break it down into

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<v Speaker 2>GDP numbers per annum, then for a country like India,

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<v Speaker 2>we would need roughly a little bit more than 10%

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<v Speaker 2>of GDP per annum

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<v Speaker 2>to invest in the existing energy infrastructure a little bit

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<v Speaker 2>in the old, also fossil fuel infrastructure, but mainly of

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<v Speaker 2>course into the new one in other countries of Asia.

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<v Speaker 2>It might be around 9% of GDP in China. It's

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<v Speaker 2>a bit less, it's only 5%. But the numbers are

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<v Speaker 2>really staggering. So we need a lot of money at

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<v Speaker 2>a very, very short, within a very short period of time.

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<v Speaker 1>Big numbers. So

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<v Speaker 1>are we generating that money is serious money being deployed?

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<v Speaker 1>Where do we see the most momentum? And more importantly,

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<v Speaker 1>where is the money coming from?

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<v Speaker 2>Absolutely. So the answer is yes, but and I'm going

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<v Speaker 2>to give you a very simple number at the end.

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<v Speaker 2>But let me first highlight a couple of challenges. So

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<v Speaker 2>what prevents us from accelerating the allocation of capital to

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<v Speaker 2>the extent we need to? And there are a couple

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<v Speaker 2>of those challenges. Number one is policy certainty.

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<v Speaker 2>So if you want private sector to unlock Capex to

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<v Speaker 2>put money on the table, to build new infrastructure and

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<v Speaker 2>if you want private capital providers to finance that you

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<v Speaker 2>want to know what is the direction of travel.

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<v Speaker 2>So here government can play a really, really critical role,

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<v Speaker 2>not only setting out net 0 2050 targets but going much,

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<v Speaker 2>much deeper. How do we actually want to accomplish this? Singapore?

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<v Speaker 2>Does this actually very, very well. We have created industry

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<v Speaker 2>round tables where we all come together

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<v Speaker 2>in one room and discussing how are we decarbonising Singapore.

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<v Speaker 2>But we need to see much more of that on

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<v Speaker 2>a global scale to create policy certainty. And for example,

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<v Speaker 2>in Europe, they have decided on a stick regulation regulation regulation,

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<v Speaker 2>including a carbon price

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<v Speaker 2>in the US different approach. They use the carrot, one

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<v Speaker 2>of the biggest checks in corporate history where they said

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<v Speaker 2>we have now this inflation reduction Act where they support

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<v Speaker 2>um the investments in clean tech and so on and

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<v Speaker 2>so forth. In Asia. We don't yet have this on

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<v Speaker 2>a micro scale as such. So we need more of that.

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<v Speaker 2>The second key challenge is we actually spoiler alert don't

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<v Speaker 2>have a lack of capital. I actually think we have

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<v Speaker 2>enough capital in the system from private and public sector combined.

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<v Speaker 2>The problem very often is that the risk return profiles

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<v Speaker 2>of these new products or new projects that we need

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<v Speaker 2>to do are a bit challenging for providers of private

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<v Speaker 2>capital like ourselves. We do a lot, but we could

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<v Speaker 2>do even more. And there are some solutions that are

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<v Speaker 2>going to talk about maybe uh in a bit. A

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<v Speaker 2>third challenge is um tradeoff decisions, especially in Asia.

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<v Speaker 2>We need to be mindful that we not only need

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<v Speaker 2>to tackle the climate crisis, but there are billions of

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<v Speaker 2>people we need to take care of as well. We

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<v Speaker 2>need to have socio economic development, we need jobs and

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<v Speaker 2>all these types of things and they are interconnected issues.

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<v Speaker 2>We need to be quite mindful around that agenda and

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<v Speaker 2>then another one is simply capacity building.

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<v Speaker 2>Uh Sometimes we sit in a, in a banking room

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<v Speaker 2>and we look at power point slides and we know

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<v Speaker 2>all the numbers, but we still need people to actually

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<v Speaker 2>do it. We need a plumber, we need an engineer,

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<v Speaker 2>we need a mechanic to repair an ev we need

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<v Speaker 2>bankers and all this. So capacity building is a key

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<v Speaker 2>issue as well. So if I draw a line, there

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<v Speaker 2>are all these challenges and we tackle some of them

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<v Speaker 2>quite well. Some of them maybe not yet. Well, but

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<v Speaker 2>if I look at numbers,

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<v Speaker 2>it was a yes but answer right that I started with.

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<v Speaker 2>So last year, it already was very clear that we

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<v Speaker 2>are investing more and more in renewable energy. For 2023

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<v Speaker 2>the I A the International Energy Agency expects that we

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<v Speaker 2>invest roughly $1.7 trillion in clean tech

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<v Speaker 2>and we invest roughly one trillion in fossil fuels. So

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<v Speaker 2>that's a total of 2.7 trillion. Remember my, my nine trillion,

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<v Speaker 2>the positive news is this number is going up and

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<v Speaker 2>you see a tilt in the ratio.

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<v Speaker 2>So a number of years back for every dollar we

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<v Speaker 2>spend on fossil fuels, we spend roughly a buck on

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<v Speaker 2>clean tech. Now for 2023 the I A expects we

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<v Speaker 2>spend a buck on fossil fuels and 1.7 bucks for

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<v Speaker 2>renewables and clean tech more broadly. That's great news. We

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<v Speaker 2>just need to get this up probably to 1 to 4.

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<v Speaker 2>So for every buck on fossil fuel, we probably need

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<v Speaker 2>four bucks in clean tech. So this is my yes

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<v Speaker 2>but answer. So money is flowing. Not yet at the

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<v Speaker 2>scale we need and not at the ratio we need,

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<v Speaker 2>but we are slowly seeing momentum.

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<v Speaker 1>Would it be safe to say that most of the

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<v Speaker 1>funding has to come from the private sector?

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<v Speaker 2>I think if you look at the numbers that I

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<v Speaker 2>mentioned at the beginning, the the the volumes are staggering. Yeah. Right.

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<v Speaker 2>So in my humble view, the answer is yes also,

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<v Speaker 2>but we need very often public money as a catalyst.

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<v Speaker 2>So we call this, for example, blended finance transactions. So

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<v Speaker 2>let's say there's a renewable energy project in a country

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<v Speaker 2>somewhere in Southeast Asia and maybe the risk return profiles

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<v Speaker 2>for a variety of reasons is not really conducive to us.

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<v Speaker 2>So can we create a blended finance structure where you

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<v Speaker 2>get a bit of

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<v Speaker 2>public money in, for example, as a first loss piece

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<v Speaker 2>or as an equity piece or whatever to ultimately crowd

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<v Speaker 2>in private capital and depending on what leverage ratio. So

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<v Speaker 2>for one buck of public money, how much bucks of

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<v Speaker 2>private capital do you get you then ultimately get to

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<v Speaker 2>the solution? So I think it's a combination

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<v Speaker 2>but the majority will have to come from private sector. Yes,

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<v Speaker 2>I think

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<v Speaker 1>these sort of first loss protections can be very useful.

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<v Speaker 1>Uh I've seen this not just on the E part

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<v Speaker 1>of the ESG side but the S and the G

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<v Speaker 1>side as well. So like gender related funding, a lot

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<v Speaker 1>of times you get an aid agency from Australia or

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<v Speaker 1>Europe or the US come up with the first trench

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<v Speaker 1>protection and that sort of galvanizes other investors to come in. So,

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<v Speaker 1>of course, it makes total sense that it will happen

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<v Speaker 1>on the climate change side as well. Um You mentioned

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<v Speaker 1>the phrase uh blended finance. So let's break that down

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<v Speaker 1>a little bit.

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<v Speaker 1>Uh There are all sorts of ways to fund a project.

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<v Speaker 1>So I'm sure there are all sorts of ways to

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<v Speaker 1>fund the climate uh transition project as well. So we've

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<v Speaker 1>got bonds and blended finance and grants, carbon credits. Give

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<v Speaker 1>us a sense of, you know, which one is big

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<v Speaker 1>these days, which one is cashing momentum and what they

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<v Speaker 1>are actually.

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<v Speaker 2>Absolutely. Let me maybe describe two broad categories here. One

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<v Speaker 2>category is what are the activities and assets we are

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<v Speaker 2>financing and the second one is what are the instruments

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<v Speaker 2>we're using to do? So.

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<v Speaker 2>So on the first one, what are the assets and activities?

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<v Speaker 2>Let me be a bit simplistic. So if you look

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<v Speaker 2>at everything that needs to be financed, it's almost like

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<v Speaker 2>a traffic light system

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<v Speaker 2>So there's the dark green stuff, think of electricity generation

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<v Speaker 2>by renewable energy. We all know it's clean. We all

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<v Speaker 2>know we need to do much, much more of that.

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<v Speaker 2>On the other side, the red traffic light, let's call

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<v Speaker 2>it dark, dark brown, think of electric electricity generation by power.

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<v Speaker 2>It's really, really dirty and no matter how much effort

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<v Speaker 2>you put in, there's never going to be a commercial

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<v Speaker 2>viable solution to make it clean or cleaner. So we

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<v Speaker 2>don't want to do it. So the only question is

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<v Speaker 2>when do we stop doing it?

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<v Speaker 2>But there's this gigantic pile in the middle, the ember

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<v Speaker 2>power of the traffic light which we call transition. So

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<v Speaker 2>it's stuff that is potentially brown light brown or whatever

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<v Speaker 2>the shade of brown might be. But with the right

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<v Speaker 2>efforts and the right technology, you can make it ultimately clean. Now,

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<v Speaker 2>having this traffic light on our minds, the world has

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<v Speaker 2>come together and we have broadly agreed on what is

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<v Speaker 2>this dark green stuff and what is this brown, dark

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<v Speaker 2>brown stuff? So we're good on that. So money is

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<v Speaker 2>flowing there and we're flowing into the green stuff and

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<v Speaker 2>we see money flowing out of the dark brown.

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<v Speaker 2>The issue in the middle is that we have not

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<v Speaker 2>yet come together as a global planet and agreed upon

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<v Speaker 2>what is a credible transition. What is a credible transition

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<v Speaker 2>activity and so on and so forth, work is being done.

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<v Speaker 2>So it's not that nothing has been done, but there's

0:11:29.440 --> 0:11:32.289
<v Speaker 2>no global agreement and we really need to unlock this

0:11:32.299 --> 0:11:35.859
<v Speaker 2>because more than 90% of our economic activities today are

0:11:35.869 --> 0:11:38.000
<v Speaker 2>in this orange bucket. So we don't tackle this.

0:11:38.440 --> 0:11:41.179
<v Speaker 2>We're not gonna save us on this planet. So that's

0:11:41.190 --> 0:11:43.949
<v Speaker 2>one area of looking at it. This transition is really

0:11:43.960 --> 0:11:47.049
<v Speaker 2>a key focus area and then looking at the various instruments,

0:11:47.059 --> 0:11:50.010
<v Speaker 2>I mean, there are use of proceeds instruments where I

0:11:50.020 --> 0:11:52.590
<v Speaker 2>give you money and you can only use that money

0:11:52.599 --> 0:11:55.299
<v Speaker 2>for a specific purpose, like you're financing a green building

0:11:55.309 --> 0:11:58.189
<v Speaker 2>or you're financing uh an electric vehicle and so on

0:11:58.200 --> 0:12:00.330
<v Speaker 2>and so forth. There are other instruments which we call

0:12:00.340 --> 0:12:01.510
<v Speaker 2>sustainability late,

0:12:01.710 --> 0:12:03.380
<v Speaker 2>I give you money and you can use it for

0:12:03.390 --> 0:12:06.289
<v Speaker 2>whatever you want to do. It's a general corporate purposes facility,

0:12:06.299 --> 0:12:09.760
<v Speaker 2>for example. However, the interest rate on this financing is

0:12:09.770 --> 0:12:14.439
<v Speaker 2>not fixed. So depending on your performance versus pre agreed

0:12:14.450 --> 0:12:17.780
<v Speaker 2>uh sustainability KPIS, the interest rate might go up and down.

0:12:18.210 --> 0:12:21.179
<v Speaker 2>Um And there are many, many other types of financing.

0:12:21.190 --> 0:12:22.919
<v Speaker 2>There are of course loans, there are bonds, there are

0:12:22.929 --> 0:12:26.940
<v Speaker 2>trade facilities. Um There are carbon credits which we also

0:12:26.950 --> 0:12:28.900
<v Speaker 2>think is a very important tool in the toolkit to

0:12:28.909 --> 0:12:31.210
<v Speaker 2>unlock capital, uh and so on and so forth. So

0:12:31.219 --> 0:12:34.880
<v Speaker 2>they're actually a wide variety of instruments that we can deploy.

0:12:34.950 --> 0:12:37.659
<v Speaker 2>You mentioned, blended finance and why is blended finance so

0:12:37.669 --> 0:12:40.400
<v Speaker 2>important I mentioned at the start. One of the key

0:12:40.409 --> 0:12:44.599
<v Speaker 2>challenges we have is the risk return profile of certain projects.

0:12:45.039 --> 0:12:47.530
<v Speaker 2>So we are a fairly sizable bank here in the

0:12:47.539 --> 0:12:50.020
<v Speaker 2>Asia Pacific region. And we are financing a lot more

0:12:50.030 --> 0:12:53.489
<v Speaker 2>than half or around half of our power portfolio is

0:12:53.500 --> 0:12:56.809
<v Speaker 2>already in renewable energy. But also we sometimes face situations

0:12:56.820 --> 0:12:59.689
<v Speaker 2>where we struggle with a risk return. So blended finance

0:12:59.700 --> 0:13:01.150
<v Speaker 2>is in simple terms,

0:13:01.539 --> 0:13:03.619
<v Speaker 2>you have a bucket of public money and you have

0:13:03.630 --> 0:13:07.250
<v Speaker 2>a bucket of private money, put it together. And ultimately,

0:13:07.260 --> 0:13:10.429
<v Speaker 2>by combining it the way that Everest cost of capital

0:13:10.440 --> 0:13:13.789
<v Speaker 2>comes down and you attract private capital by virtue of

0:13:13.799 --> 0:13:16.169
<v Speaker 2>having the public money in there. It's a very, very

0:13:16.179 --> 0:13:20.349
<v Speaker 2>important way of unlocking more capital flows. Uh It's by

0:13:20.359 --> 0:13:22.289
<v Speaker 2>the way, a product that we've known for decades,

0:13:22.710 --> 0:13:25.939
<v Speaker 2>so many of these instruments actually are not new, blended

0:13:25.950 --> 0:13:28.960
<v Speaker 2>finance for sure, not right. So the only question is

0:13:28.969 --> 0:13:31.390
<v Speaker 2>if you go back to the very start of our conversation,

0:13:31.500 --> 0:13:34.760
<v Speaker 2>eight years left until we hit the 1.5 C, how

0:13:34.770 --> 0:13:38.840
<v Speaker 2>can we scale it at speed? That is really the

0:13:38.849 --> 0:13:41.619
<v Speaker 2>key question. So we have all of those. So for example,

0:13:41.630 --> 0:13:44.599
<v Speaker 2>in blended finance, it's really all about can we agree

0:13:44.609 --> 0:13:45.780
<v Speaker 2>on a certain template

0:13:46.380 --> 0:13:48.809
<v Speaker 2>and then we do it again and again and again,

0:13:48.820 --> 0:13:52.108
<v Speaker 2>we're not renegotiating and starting with Adam and Eve, but

0:13:52.119 --> 0:13:54.469
<v Speaker 2>really doing it on the base of a template. I

0:13:54.479 --> 0:13:56.659
<v Speaker 2>know it's a bit simplistic because every country is different,

0:13:56.669 --> 0:13:59.130
<v Speaker 2>every asset is different, but we need to really scale

0:13:59.140 --> 0:14:01.369
<v Speaker 2>blended finance to unlock the capital. We need

0:14:02.059 --> 0:14:04.500
<v Speaker 1>Hilda. If I think about this issue from the private

0:14:04.510 --> 0:14:07.950
<v Speaker 1>sector's perspective, of course, the fact that whether it is

0:14:07.960 --> 0:14:12.348
<v Speaker 1>measurement of KPIS or even the measurement of the environmental

0:14:12.359 --> 0:14:16.190
<v Speaker 1>degradation that are happening, private sector is still not fully

0:14:16.200 --> 0:14:22.469
<v Speaker 1>on board with it, taxonomy and uh uh metrics, different jurisdictions,

0:14:22.479 --> 0:14:25.340
<v Speaker 1>different things. So they want some degree of hand holding

0:14:25.349 --> 0:14:27.510
<v Speaker 1>from the public sector to your point, you can lower

0:14:27.520 --> 0:14:29.909
<v Speaker 1>the cost of funding of a project by putting some

0:14:29.919 --> 0:14:30.929
<v Speaker 1>public money in the bucket.

0:14:31.380 --> 0:14:33.830
<v Speaker 1>But if I look at it from the public sector's perspective,

0:14:33.979 --> 0:14:36.750
<v Speaker 1>it would be like, well, econ 101 tells me that

0:14:36.760 --> 0:14:38.510
<v Speaker 1>I just need to get the pricing right. So I

0:14:38.520 --> 0:14:41.239
<v Speaker 1>will just do heavy carbon taxing and the private sector

0:14:41.250 --> 0:14:42.530
<v Speaker 1>can figure things out.

0:14:42.929 --> 0:14:46.369
<v Speaker 1>Why hasn't that approach worked? Is it because we don't

0:14:46.380 --> 0:14:49.380
<v Speaker 1>have a very good way to trade carbon yet? Or

0:14:49.390 --> 0:14:51.460
<v Speaker 1>there are other rigidities that I have not thought through,

0:14:51.469 --> 0:14:53.210
<v Speaker 1>but maybe you can help us understand.

0:14:53.219 --> 0:14:56.159
<v Speaker 2>Yeah, absolutely. So if we look at the entire world

0:14:56.169 --> 0:14:59.619
<v Speaker 2>a bit more than 20% of global greenhouse gas emissions

0:14:59.630 --> 0:15:02.809
<v Speaker 2>are now subjected to a carbon price that can be

0:15:02.820 --> 0:15:04.840
<v Speaker 2>either in the form of a tax. Like here in Singapore,

0:15:04.849 --> 0:15:05.020
<v Speaker 2>we have

0:15:05.125 --> 0:15:07.776
<v Speaker 2>carbon tax or a what we call a cap and

0:15:07.786 --> 0:15:10.546
<v Speaker 2>trade scheme like we have in the European Union, we

0:15:10.556 --> 0:15:13.565
<v Speaker 2>have these instruments in China, we have it in certain

0:15:13.575 --> 0:15:16.546
<v Speaker 2>states in the US, for example, in California, but we

0:15:16.556 --> 0:15:19.325
<v Speaker 2>don't have it on federal level in the US. So

0:15:19.385 --> 0:15:23.565
<v Speaker 2>around 80% plus or miners are not covered by a

0:15:23.575 --> 0:15:26.195
<v Speaker 2>carbon tax. So the question is very valid and a

0:15:26.205 --> 0:15:27.236
<v Speaker 2>really good one. The only

0:15:27.322 --> 0:15:31.242
<v Speaker 2>answer I have is it's probably a political will situation

0:15:31.372 --> 0:15:35.021
<v Speaker 2>because coming back, especially in Asia Pacific, talking about the

0:15:35.031 --> 0:15:41.441
<v Speaker 2>just transition, the interconnectedness of issues, how hostile situations can become,

0:15:41.452 --> 0:15:44.872
<v Speaker 2>I can only assume it's politically sometimes really, really difficult

0:15:44.882 --> 0:15:49.481
<v Speaker 2>to implement these measures given the implications it has, right?

0:15:49.762 --> 0:15:50.970
<v Speaker 1>And I think, you know,

0:15:52.080 --> 0:15:54.530
<v Speaker 1>not necessarily, you know, I'm keen on defending the profession

0:15:54.539 --> 0:15:57.960
<v Speaker 1>of economics too much. So ideally, yes, a price on

0:15:57.969 --> 0:16:01.469
<v Speaker 1>carbon should be able to internalize a lot of externalities.

0:16:01.520 --> 0:16:03.700
<v Speaker 1>But in real life, whether it is a political issue

0:16:03.710 --> 0:16:06.469
<v Speaker 1>that you talk about or just a matter of, you know,

0:16:06.479 --> 0:16:09.429
<v Speaker 1>sort of measuring the impact and putting the right price,

0:16:09.570 --> 0:16:12.250
<v Speaker 1>not that straightforward as we have seen with carbon exchanges

0:16:12.260 --> 0:16:16.049
<v Speaker 1>around the world, including Europeans Union's experience and China's experience

0:16:16.059 --> 0:16:17.789
<v Speaker 1>with putting a tax on carbon.

0:16:19.010 --> 0:16:23.010
<v Speaker 1>You just mentioned the phrase just transition to unpack that

0:16:23.020 --> 0:16:25.500
<v Speaker 1>because we got a bit of a loaded phrase during

0:16:25.510 --> 0:16:28.210
<v Speaker 1>the cop meetings. We hear a lot about it, particularly

0:16:28.219 --> 0:16:31.729
<v Speaker 1>from developing countries. There's some degree of impatience. I'll give

0:16:31.739 --> 0:16:35.059
<v Speaker 1>you one example, I was in Indonesia recently and it

0:16:35.070 --> 0:16:36.979
<v Speaker 1>seemed to me it was very clear that the government

0:16:36.989 --> 0:16:39.210
<v Speaker 1>or the government officials there who were at that meeting

0:16:39.270 --> 0:16:42.099
<v Speaker 1>basically expected a lot of grant money from the West

0:16:42.109 --> 0:16:43.969
<v Speaker 1>because they feel that's the best thing for the West

0:16:43.979 --> 0:16:46.460
<v Speaker 1>to do, having polluted the world. Now, they're putting all

0:16:46.469 --> 0:16:48.460
<v Speaker 1>this pressure on developing countries. So

0:16:48.989 --> 0:16:51.950
<v Speaker 1>break down the just transition concept for us a bit.

0:16:52.200 --> 0:16:53.479
<v Speaker 2>So in simple terms,

0:16:54.119 --> 0:16:55.710
<v Speaker 2>it's not only about climate,

0:16:56.479 --> 0:17:01.200
<v Speaker 2>we have 17 United Nations Sustainability Development Goals. That's a

0:17:01.210 --> 0:17:04.829
<v Speaker 2>bit the north star of how we look at sustainability.

0:17:04.839 --> 0:17:07.719
<v Speaker 2>So what does it mean? It means we probably have

0:17:07.729 --> 0:17:12.810
<v Speaker 2>around 9 billion people by 2050 thereabouts. So sustainability would

0:17:12.819 --> 0:17:15.688
<v Speaker 2>mean that these 9 billion people can live well.

0:17:16.160 --> 0:17:18.510
<v Speaker 2>Now what does live well mean it means you have

0:17:18.520 --> 0:17:21.639
<v Speaker 2>food on the plate, it means you have access to

0:17:21.650 --> 0:17:24.630
<v Speaker 2>fresh water and fresh air. It means you have access

0:17:24.640 --> 0:17:28.339
<v Speaker 2>to medical services, you have shelter and all these types

0:17:28.349 --> 0:17:32.369
<v Speaker 2>of things. But secondly, we also need to assure that

0:17:32.380 --> 0:17:33.670
<v Speaker 2>the way we do this

0:17:34.199 --> 0:17:37.149
<v Speaker 2>is within planetary boundaries so that the people that are

0:17:37.160 --> 0:17:40.170
<v Speaker 2>very young today or not even yet born can also

0:17:40.180 --> 0:17:44.050
<v Speaker 2>live well. So this is this intergenerational fairness which humans

0:17:44.060 --> 0:17:47.170
<v Speaker 2>in my humble view have always struggled with it in history.

0:17:47.180 --> 0:17:50.000
<v Speaker 2>So humans have been extraordinary in the things we have done,

0:17:50.170 --> 0:17:54.780
<v Speaker 2>but very often intergenerational unfair. So sustainability bringing it back

0:17:54.939 --> 0:17:59.010
<v Speaker 2>means that 9 billion people plus live well

0:17:59.770 --> 0:18:01.139
<v Speaker 2>with all the things I mentioned.

0:18:01.790 --> 0:18:03.760
<v Speaker 2>But we also do it in a way that future

0:18:03.770 --> 0:18:06.439
<v Speaker 2>generations can live well. That to me is a simple

0:18:06.449 --> 0:18:11.599
<v Speaker 2>concept of sustainability. So if you take an action, for example,

0:18:11.609 --> 0:18:12.540
<v Speaker 2>on climate,

0:18:12.829 --> 0:18:15.530
<v Speaker 2>you need to be mindful of the implications it might

0:18:15.540 --> 0:18:19.760
<v Speaker 2>have on the other sustainability goals. So that's a simple

0:18:19.770 --> 0:18:22.609
<v Speaker 2>fact around the just transition. And I think one thing

0:18:22.619 --> 0:18:26.060
<v Speaker 2>that's not often talked about is this intergenerational fairness thing.

0:18:26.069 --> 0:18:28.169
<v Speaker 2>So you're not only doing it today, but you're actually

0:18:28.180 --> 0:18:31.319
<v Speaker 2>doing it for good. So that's to me the simple

0:18:31.329 --> 0:18:32.890
<v Speaker 2>way of looking at it. Sure.

0:18:32.900 --> 0:18:36.030
<v Speaker 1>So this thing that we see all these activists basically

0:18:36.040 --> 0:18:38.300
<v Speaker 1>saying that, you know, the US and Europe have polled

0:18:38.310 --> 0:18:40.020
<v Speaker 1>the world for a century.

0:18:40.430 --> 0:18:43.609
<v Speaker 1>China began only 2030 years ago. India is about to

0:18:43.619 --> 0:18:46.639
<v Speaker 1>join the party. How can we tell these countries to

0:18:46.650 --> 0:18:50.709
<v Speaker 1>stop following the growth paradigm that their Western counterparts did?

0:18:50.890 --> 0:18:53.119
<v Speaker 1>Where is the justice in that? Because we also want

0:18:53.130 --> 0:18:56.099
<v Speaker 1>to live well to your point that within 10, 2030 years,

0:18:56.109 --> 0:19:00.260
<v Speaker 1>we want to achieve all the SDGS. So from your perspective,

0:19:00.270 --> 0:19:04.540
<v Speaker 1>this this ethical question that what is the burden for

0:19:04.550 --> 0:19:07.180
<v Speaker 1>a developing country which is not responsible for pollution

0:19:07.439 --> 0:19:11.170
<v Speaker 1>but still needs to do its share of adjustment.

0:19:11.540 --> 0:19:14.430
<v Speaker 2>Let me put first some facts around your statement around

0:19:14.439 --> 0:19:18.729
<v Speaker 2>historical contributions because there are numbers to this. So science

0:19:19.380 --> 0:19:22.000
<v Speaker 2>tells us. And when I say science, I refer to

0:19:22.010 --> 0:19:25.530
<v Speaker 2>the IPCC report. So every seven or so years, a

0:19:25.550 --> 0:19:30.229
<v Speaker 2>huge number of scientists comes together and writes, ultimately reports

0:19:30.239 --> 0:19:31.449
<v Speaker 2>on the state of climate.

0:19:32.040 --> 0:19:36.589
<v Speaker 2>And in the most recent iteration in 2022 there was

0:19:36.599 --> 0:19:41.569
<v Speaker 2>a report again being published and on page two or sorry,

0:19:41.579 --> 0:19:45.180
<v Speaker 2>on page 10 of the third working paper, you will

0:19:45.189 --> 0:19:49.619
<v Speaker 2>find a graph that tells you that globally historically accumulated

0:19:49.630 --> 0:19:54.239
<v Speaker 2>greenhouse gas emissions, 39% of these arose from Europe and

0:19:54.250 --> 0:19:58.189
<v Speaker 2>North America. So roughly 40% of all the greenhouse gas

0:19:58.199 --> 0:19:59.629
<v Speaker 2>emissions that are already up there

0:20:00.030 --> 0:20:05.040
<v Speaker 2>originate from these two regions. That is the historical responsibility

0:20:05.050 --> 0:20:08.569
<v Speaker 2>that we are always talking about. And actually even still today,

0:20:08.689 --> 0:20:12.439
<v Speaker 2>if you calculate greenhouse gas emissions on a per capita basis,

0:20:12.949 --> 0:20:16.949
<v Speaker 2>then still Europe today is much dirtier than various parts

0:20:16.959 --> 0:20:19.239
<v Speaker 2>of Asia, which by the way is not too surprising

0:20:19.250 --> 0:20:22.969
<v Speaker 2>because of course, you see that more developed nations typically

0:20:22.979 --> 0:20:27.030
<v Speaker 2>have higher greenhouse gas emissions, economic

0:20:27.040 --> 0:20:27.750
<v Speaker 1>activity, more

0:20:27.760 --> 0:20:30.448
<v Speaker 2>emissions. Exactly. Right. So that's just I wanted just to

0:20:30.459 --> 0:20:33.729
<v Speaker 2>give you a fact around these historical obligations. Now, looking

0:20:33.739 --> 0:20:36.139
<v Speaker 2>forward ultimately doesn't matter, right. A ton of carbon is

0:20:36.239 --> 0:20:38.239
<v Speaker 2>a ton of carbon is a ton of carbon. We

0:20:38.250 --> 0:20:41.939
<v Speaker 2>have 400 gigatons left. So finger pointing doesn't really help

0:20:41.949 --> 0:20:43.770
<v Speaker 2>us anyhow. So we need to really come to a

0:20:43.780 --> 0:20:47.709
<v Speaker 2>solution together. But I think what it means is that

0:20:47.719 --> 0:20:50.149
<v Speaker 2>of course, in Asia, you see a lot of population growth,

0:20:50.160 --> 0:20:53.550
<v Speaker 2>you see an amazing GDP growth. So in terms of

0:20:53.560 --> 0:20:56.439
<v Speaker 2>future sources of emissions, it's very clear we probably gonna

0:20:56.449 --> 0:20:58.920
<v Speaker 2>account for more than half global greenhouse gas emissions very

0:20:58.930 --> 0:20:59.468
<v Speaker 2>very soon.

0:20:59.739 --> 0:21:03.319
<v Speaker 2>So taking these two things into account historical responsibility, but

0:21:03.329 --> 0:21:05.949
<v Speaker 2>also how the future will look like. I think we

0:21:05.959 --> 0:21:11.129
<v Speaker 2>simply need some help from developed nations. Acknowledging the fact

0:21:11.140 --> 0:21:13.910
<v Speaker 2>of what happened in the past, which science tells us,

0:21:13.920 --> 0:21:15.839
<v Speaker 2>you know, is a matter of fact. So what I

0:21:15.849 --> 0:21:16.728
<v Speaker 2>would see is

0:21:17.369 --> 0:21:21.640
<v Speaker 2>the developed nations providing know how and capital for developing

0:21:21.650 --> 0:21:25.619
<v Speaker 2>nations to accomplish this trust, just transition one template that

0:21:25.630 --> 0:21:30.800
<v Speaker 2>I really like is this just energy transition partnership, Jack.

0:21:31.380 --> 0:21:34.479
<v Speaker 2>So it arose at COP 26 in Scotland. And the

0:21:34.489 --> 0:21:37.579
<v Speaker 2>basic idea is that G7 countries provide money to a

0:21:37.589 --> 0:21:41.910
<v Speaker 2>developing nation for empowering that developing nation to transition to

0:21:41.920 --> 0:21:44.560
<v Speaker 2>a lower carbon society. It started with South Africa. Now

0:21:44.569 --> 0:21:46.719
<v Speaker 2>we are discussing it with Indonesia and Vietnam, both of

0:21:46.729 --> 0:21:49.270
<v Speaker 2>which is in our backyard and maybe India is the

0:21:49.280 --> 0:21:51.170
<v Speaker 2>next one. So again, the basic idea

0:21:51.239 --> 0:21:55.020
<v Speaker 2>is G7 provides capital and hopefully know how and these

0:21:55.030 --> 0:21:59.069
<v Speaker 2>countries are better equipped to transition, giving them also some

0:21:59.079 --> 0:22:03.250
<v Speaker 2>breathing space to buffer the implications on for example, certain

0:22:03.260 --> 0:22:06.459
<v Speaker 2>social dimensions that we discussed, right, for example, certain jobs

0:22:06.469 --> 0:22:09.050
<v Speaker 2>because let's not forget in this transition to a low

0:22:09.060 --> 0:22:11.030
<v Speaker 2>carbon society, they are going to be winners and losers.

0:22:11.430 --> 0:22:14.180
<v Speaker 2>Yeah, if I break it down, if you are a

0:22:14.189 --> 0:22:18.160
<v Speaker 2>50 year old engineer at a coal power plant, it

0:22:18.170 --> 0:22:22.520
<v Speaker 2>is very unlikely that you overnight become a solar PV

0:22:22.530 --> 0:22:26.329
<v Speaker 2>engineer or a mechanic that can repair electric vehicles. So

0:22:26.339 --> 0:22:28.760
<v Speaker 2>it is simply a fact. So we need to make

0:22:28.770 --> 0:22:31.139
<v Speaker 2>conscious choices. How can we support them? How can we

0:22:31.150 --> 0:22:34.290
<v Speaker 2>take them along? So by way of having these templates,

0:22:34.319 --> 0:22:36.939
<v Speaker 2>the just energy transition partnerships, jet P, I think I

0:22:36.949 --> 0:22:38.379
<v Speaker 2>got the name wrong at the start.

0:22:38.689 --> 0:22:41.639
<v Speaker 2>Um We actually have a nice template on how we

0:22:41.650 --> 0:22:44.420
<v Speaker 2>could actually move forward to accomplish this. Maybe just

0:22:44.430 --> 0:22:48.030
<v Speaker 1>transition. One clarification on TP is uh we're talking about

0:22:48.040 --> 0:22:49.930
<v Speaker 1>debt capital or grants.

0:22:50.510 --> 0:22:54.189
<v Speaker 2>Uh it can take different forms, but ultimately, it's a

0:22:54.199 --> 0:22:57.920
<v Speaker 2>certain pool of capital that is provided uh to really

0:22:57.930 --> 0:23:01.160
<v Speaker 2>uh facilitate the transition. It's not really defining the instrument

0:23:01.390 --> 0:23:02.449
<v Speaker 2>uh as such, right,

0:23:02.459 --> 0:23:05.260
<v Speaker 1>I've seen, for example, the IMF now has a climate

0:23:05.270 --> 0:23:07.979
<v Speaker 1>change Trust fund and a few countries around the world

0:23:07.989 --> 0:23:11.140
<v Speaker 1>have taken in that money. It's, it's still debt capital,

0:23:11.150 --> 0:23:14.560
<v Speaker 1>that extremely low interest rate with a very long advert period.

0:23:14.569 --> 0:23:17.719
<v Speaker 1>So almost free money if you will. Um

0:23:19.040 --> 0:23:22.770
<v Speaker 1>So the key question around climate finance is the biggest

0:23:22.780 --> 0:23:25.209
<v Speaker 1>source of finance in the world which are banks. And

0:23:25.219 --> 0:23:27.619
<v Speaker 1>you and I work in one of those uh tell

0:23:27.630 --> 0:23:31.010
<v Speaker 1>us about what banks have been doing the last decade

0:23:31.020 --> 0:23:34.790
<v Speaker 1>or so and how optimistic or energized. You are by

0:23:34.800 --> 0:23:37.849
<v Speaker 1>banks role in transition and climate transition.

0:23:38.079 --> 0:23:43.650
<v Speaker 2>Absolutely. Let's first maybe establish that we really need ecosystem change.

0:23:43.660 --> 0:23:45.458
<v Speaker 2>And what I mean by that is that all of

0:23:45.469 --> 0:23:47.188
<v Speaker 2>us need to come together. It's government,

0:23:47.479 --> 0:23:51.290
<v Speaker 2>it's regulators, it's the real world uh players like the

0:23:51.300 --> 0:23:54.319
<v Speaker 2>private sector, companies, the finance sector and all of us

0:23:54.329 --> 0:23:56.750
<v Speaker 2>embedded in the community at large, we really all need

0:23:56.760 --> 0:23:59.869
<v Speaker 2>to come together. Why we have these eight years left, right?

0:23:59.880 --> 0:24:02.910
<v Speaker 2>So no one of us in this ecosystem can do

0:24:02.920 --> 0:24:06.250
<v Speaker 2>it alone. So everyone has a distinct role to play

0:24:06.560 --> 0:24:09.589
<v Speaker 2>and banks, I would say have at least two critical roles.

0:24:09.599 --> 0:24:13.150
<v Speaker 2>One is simple, the simple in in in theory is

0:24:13.160 --> 0:24:16.459
<v Speaker 2>the reallocation of capital. So you reallocate capital away from

0:24:16.469 --> 0:24:18.310
<v Speaker 2>polluting activities towards low carbon

0:24:18.959 --> 0:24:21.949
<v Speaker 2>activities. That's one thing. The other one is really innovation.

0:24:22.560 --> 0:24:26.880
<v Speaker 2>We can also foster innovation. It's not only uh technological

0:24:26.890 --> 0:24:30.589
<v Speaker 2>innovation in the field of renewable energy or energy efficiency

0:24:30.599 --> 0:24:32.910
<v Speaker 2>or the production of steel or the production of cement,

0:24:32.939 --> 0:24:36.569
<v Speaker 2>we can also be innovative. How can we be innovative?

0:24:36.579 --> 0:24:40.569
<v Speaker 2>For example, with regards to financing structures, we mentioned blended

0:24:40.579 --> 0:24:42.979
<v Speaker 2>finance where we can actually really tweak it here and

0:24:42.989 --> 0:24:45.469
<v Speaker 2>there to make it work to really scale it at speed.

0:24:45.770 --> 0:24:49.659
<v Speaker 2>Uh We can be innovative in finding digital solutions to

0:24:49.670 --> 0:24:53.540
<v Speaker 2>empower our retail customers to be more aware around sustainability

0:24:53.550 --> 0:24:57.489
<v Speaker 2>and to also take conscious choices which in aggregate can

0:24:57.500 --> 0:25:02.099
<v Speaker 2>have an impact. We also always think beyond our client base.

0:25:02.109 --> 0:25:04.229
<v Speaker 2>So for example, we are a proud founding shareholder of

0:25:04.239 --> 0:25:07.829
<v Speaker 2>Climate Impact Xcix, which is a Singapore headquartered but global

0:25:07.839 --> 0:25:11.369
<v Speaker 2>carbon market and exchange, which has set up platforms that

0:25:11.380 --> 0:25:13.520
<v Speaker 2>facilitate the buying and selling of high

0:25:13.609 --> 0:25:17.979
<v Speaker 2>equality integrity are carbon credits. So there are a lot

0:25:17.989 --> 0:25:20.770
<v Speaker 2>of things we can do in the field of innovation ourselves.

0:25:20.780 --> 0:25:24.689
<v Speaker 2>So capital, innovation both very, very critical and it needs

0:25:24.699 --> 0:25:27.589
<v Speaker 2>to work in tandem with the other ecosystem partners. And

0:25:27.599 --> 0:25:31.139
<v Speaker 2>I very loosely mentioned earlier that Singapore is doing this

0:25:31.150 --> 0:25:34.000
<v Speaker 2>very well. So if I double click on that in Singapore,

0:25:34.069 --> 0:25:38.560
<v Speaker 2>the Prime Minister's office in Singapore in coordination with other regulators.

0:25:38.569 --> 0:25:41.359
<v Speaker 2>For example, the MA S which is our financial regulator

0:25:41.699 --> 0:25:46.688
<v Speaker 2>convenes and brings people together in a room, government regulator,

0:25:46.699 --> 0:25:50.380
<v Speaker 2>private sector, finance sector to really discuss how are we

0:25:50.390 --> 0:25:53.420
<v Speaker 2>gonna do this because this interplay of these players is

0:25:53.430 --> 0:25:56.290
<v Speaker 2>really very important now ground that Singapore is a bit smaller.

0:25:56.530 --> 0:25:59.229
<v Speaker 2>Uh and maybe the political situation in Europe and in

0:25:59.239 --> 0:26:01.550
<v Speaker 2>the US is a little bit more complex, I understand,

0:26:01.560 --> 0:26:04.270
<v Speaker 2>but it's actually a really interesting template on how you

0:26:04.280 --> 0:26:07.079
<v Speaker 2>could do it. Just get everyone in the ecosystem into

0:26:07.089 --> 0:26:07.409
<v Speaker 2>a room,

0:26:08.000 --> 0:26:12.180
<v Speaker 1>putting politics aside. I mean, I'm being told by my

0:26:12.290 --> 0:26:15.239
<v Speaker 1>colleagues in the US that regardless of what happens in

0:26:15.250 --> 0:26:19.839
<v Speaker 1>Washington DC by and large US, banks, us, corporate sectors

0:26:19.930 --> 0:26:23.510
<v Speaker 1>are moving in a single direction toward green transition toward

0:26:23.520 --> 0:26:26.448
<v Speaker 1>climate finance and that is not going to change regardless

0:26:26.459 --> 0:26:29.390
<v Speaker 1>of the political cycle. Are they being too optimistic?

0:26:30.109 --> 0:26:33.649
<v Speaker 2>I hope not is the answer. So I think, I

0:26:33.660 --> 0:26:35.760
<v Speaker 2>hope the train left the station

0:26:36.420 --> 0:26:38.989
<v Speaker 2>and why do I think the train has left the station?

0:26:39.000 --> 0:26:40.969
<v Speaker 2>Let's first look at a couple of numbers

0:26:41.750 --> 0:26:45.300
<v Speaker 2>right now. We have more than 90% of global greenhouse

0:26:45.310 --> 0:26:48.698
<v Speaker 2>gas emissions covered by nation states as net zero pledges.

0:26:48.709 --> 0:26:51.670
<v Speaker 2>So we now have 140 plus countries that have net

0:26:51.680 --> 0:26:54.979
<v Speaker 2>zero pledges by a certain time frame. Are they perfect? No,

0:26:54.989 --> 0:26:56.180
<v Speaker 2>but we are really getting there.

0:26:56.459 --> 0:26:59.909
<v Speaker 2>We have in the private sector now, more than 5000

0:26:59.920 --> 0:27:04.339
<v Speaker 2>Corporates that have either already implemented or committed to implement

0:27:04.390 --> 0:27:08.239
<v Speaker 2>science based decarbonisation targets around 25% of that by the

0:27:08.250 --> 0:27:10.839
<v Speaker 2>way is, sits, sits in Asia and then if you

0:27:10.849 --> 0:27:13.660
<v Speaker 2>look at the finance sector, we have for example G

0:27:13.869 --> 0:27:14.609
<v Speaker 2>fans which is a

0:27:14.680 --> 0:27:18.649
<v Speaker 2>of financial institutions from different areas. So insurance companies, pension funds, banks,

0:27:18.660 --> 0:27:23.129
<v Speaker 2>asset managers, asset owners, etcetera that in totality right now

0:27:23.140 --> 0:27:28.250
<v Speaker 2>have an A am of around $150 trillion. So government,

0:27:28.260 --> 0:27:31.659
<v Speaker 2>private sector, finance sector, everything is moving. Look at the

0:27:31.670 --> 0:27:34.250
<v Speaker 2>community at large when I was very young,

0:27:34.540 --> 0:27:36.859
<v Speaker 2>I didn't have gray hair back then. In Germany. We

0:27:36.869 --> 0:27:38.599
<v Speaker 2>were all, you know, huddling in the lower ground. We

0:27:38.609 --> 0:27:41.550
<v Speaker 2>were all like lower, we were young teenagers and we

0:27:41.560 --> 0:27:44.750
<v Speaker 2>discussed this book. The Limits of Growth was actually written

0:27:44.760 --> 0:27:46.750
<v Speaker 2>in the seventies sponsored by the Club of Rome.

0:27:46.989 --> 0:27:50.839
<v Speaker 2>But the eighties were a bad time to discuss sustainability.

0:27:50.849 --> 0:27:53.609
<v Speaker 2>The Soviet Union just collapsed and everybody looked at the

0:27:53.619 --> 0:27:57.390
<v Speaker 2>US and that was kind of the role model, profit maximization.

0:27:57.420 --> 0:28:00.469
<v Speaker 2>Uh growth, growth, growth was key and sustainability was a

0:28:00.479 --> 0:28:04.849
<v Speaker 2>bit brushed to the side. Fast forward, 35 plus years,

0:28:04.989 --> 0:28:08.619
<v Speaker 2>the awareness in the community at large is quite staggering

0:28:09.010 --> 0:28:11.280
<v Speaker 2>and you can slice and dice the community. Of course,

0:28:11.290 --> 0:28:14.959
<v Speaker 2>in different areas, the younger people for sure are very,

0:28:14.969 --> 0:28:17.569
<v Speaker 2>very much aware of what's going on and also more

0:28:17.579 --> 0:28:20.339
<v Speaker 2>and more willing to do something about it. Of course,

0:28:20.349 --> 0:28:24.030
<v Speaker 2>I know it's different between developed countries and developing countries

0:28:24.199 --> 0:28:25.750
<v Speaker 2>uh and so on and so forth because there are

0:28:25.760 --> 0:28:29.089
<v Speaker 2>different considerations and constraints. But I think the awareness in

0:28:29.099 --> 0:28:32.750
<v Speaker 2>the community large also rising. So I think the train

0:28:32.760 --> 0:28:35.169
<v Speaker 2>has left the station and what I really like about

0:28:35.180 --> 0:28:37.739
<v Speaker 2>the Inflation Reduction Act, I think it's actually a genius

0:28:37.750 --> 0:28:38.560
<v Speaker 2>piece of work

0:28:39.130 --> 0:28:41.010
<v Speaker 2>and it's a genius piece of work because it got

0:28:41.020 --> 0:28:44.119
<v Speaker 2>support from a vast amount of Republicans, right?

0:28:44.400 --> 0:28:48.390
<v Speaker 2>Because ultimately, firstly, the name is quite amazing Inflation reduction Act,

0:28:48.400 --> 0:28:51.420
<v Speaker 2>which of course is, is a good sell, right. But secondly,

0:28:51.430 --> 0:28:55.770
<v Speaker 2>it actually creates job jobs in the US on the ground.

0:28:55.780 --> 0:28:58.099
<v Speaker 2>You can criticize this if you zoom out and you

0:28:58.109 --> 0:29:01.459
<v Speaker 2>have a super national view, that's a fairly heavy industrial

0:29:01.469 --> 0:29:03.969
<v Speaker 2>policy piece that they have implemented. So you can be

0:29:03.979 --> 0:29:06.660
<v Speaker 2>very critical about this from outside of the US. But

0:29:06.670 --> 0:29:10.959
<v Speaker 2>within the US, it will probably generate jobs. And I

0:29:10.969 --> 0:29:12.729
<v Speaker 2>find it hard to believe

0:29:13.170 --> 0:29:15.859
<v Speaker 2>that if there was a Republican president, that they would

0:29:15.869 --> 0:29:19.410
<v Speaker 2>pull it back if there are actually jobs being created

0:29:19.550 --> 0:29:24.560
<v Speaker 1>100% been sort of looking at the implementation of this

0:29:24.569 --> 0:29:28.800
<v Speaker 1>uh Ira. So Washington DC is basically making states compete

0:29:28.810 --> 0:29:33.030
<v Speaker 1>states that have easier regulation hurdles for implementing some of

0:29:33.040 --> 0:29:36.349
<v Speaker 1>these green projects, get the contract. And right now it's

0:29:36.359 --> 0:29:38.439
<v Speaker 1>the red states that are actually winning more of the

0:29:38.449 --> 0:29:40.500
<v Speaker 1>contracts because the blue states tend to be a little

0:29:40.510 --> 0:29:42.219
<v Speaker 1>more regulation heavy and a little more,

0:29:42.780 --> 0:29:44.699
<v Speaker 1>you know, thoughtful into whether they want to take this

0:29:44.709 --> 0:29:46.660
<v Speaker 1>money and the permits and that sort of stuff. So

0:29:46.829 --> 0:29:48.979
<v Speaker 1>I was reading an interview about of the Governor of

0:29:48.989 --> 0:29:51.900
<v Speaker 1>California and Gavin Newsom. He's expressing frustration that some of

0:29:51.910 --> 0:29:54.420
<v Speaker 1>the money that should be. California is going to Texas

0:29:54.430 --> 0:29:56.619
<v Speaker 1>and other places. Here we go to that competition and

0:29:56.630 --> 0:29:59.540
<v Speaker 1>surely that would not change if Washington DC scene were

0:29:59.550 --> 0:30:01.390
<v Speaker 1>to change. Uh Absolutely,

0:30:01.939 --> 0:30:04.989
<v Speaker 1>I want to talk about coal momentarily, but before I

0:30:05.000 --> 0:30:08.520
<v Speaker 1>go there, um you talked about the role of banks

0:30:08.530 --> 0:30:11.130
<v Speaker 1>in general. Can you use a little flavor about the

0:30:11.140 --> 0:30:14.050
<v Speaker 1>banks in China? Because you know, without China's progress,

0:30:14.969 --> 0:30:16.380
<v Speaker 1>we're not going to be able to make any meaningful

0:30:16.390 --> 0:30:18.800
<v Speaker 1>change on green transition, given their size and scale and

0:30:18.810 --> 0:30:23.739
<v Speaker 1>industrial footprint. How is Blender finance, climate change, finance and banks,

0:30:23.750 --> 0:30:25.459
<v Speaker 1>you know, all working out in China?

0:30:26.180 --> 0:30:28.819
<v Speaker 2>I think when we talk about the banks in China,

0:30:28.829 --> 0:30:30.760
<v Speaker 2>they are, of course, the big ones are all state owned.

0:30:30.770 --> 0:30:33.130
<v Speaker 2>I think we actually need to talk about what's happening

0:30:33.140 --> 0:30:37.520
<v Speaker 2>on government level because this is really definitely very interconnected.

0:30:37.859 --> 0:30:38.319
<v Speaker 2>And

0:30:38.989 --> 0:30:42.420
<v Speaker 2>when I talk to people outside of Asia, my maybe

0:30:42.430 --> 0:30:46.400
<v Speaker 2>slightly naive or superficial commenters don't worry too much about China.

0:30:47.199 --> 0:30:50.390
<v Speaker 2>I actually believe if you look back at history, if

0:30:50.400 --> 0:30:53.050
<v Speaker 2>the Communist Party says they will deliver something,

0:30:53.989 --> 0:30:57.739
<v Speaker 2>they typically deliver it. So my feeling actually is that

0:30:57.750 --> 0:31:02.050
<v Speaker 2>China is very strategic in the way it approaches sustainability. Yes,

0:31:02.060 --> 0:31:04.910
<v Speaker 2>there's a lot of coal. Yes, they might even add

0:31:04.920 --> 0:31:07.770
<v Speaker 2>a few coal power plants but they are investing so

0:31:07.780 --> 0:31:09.479
<v Speaker 2>heavily in renewable energy.

0:31:09.719 --> 0:31:15.180
<v Speaker 2>Last year, they increased renewable energy generation by 26%. And

0:31:15.189 --> 0:31:20.410
<v Speaker 2>this additional generation was roughly half of the world's edition

0:31:20.420 --> 0:31:25.390
<v Speaker 2>in that area. The Chinese are very smart around electric vehicles,

0:31:25.400 --> 0:31:28.510
<v Speaker 2>the entire value chain around this and I could go

0:31:28.520 --> 0:31:30.500
<v Speaker 2>on and could go on. So I think they are

0:31:30.510 --> 0:31:33.770
<v Speaker 2>very strategic. I think they also see it as a

0:31:33.885 --> 0:31:38.084
<v Speaker 2>important domestic policy tool. So I wouldn't be too concerned

0:31:38.094 --> 0:31:41.564
<v Speaker 2>about China as superficial as this might sound and the

0:31:41.574 --> 0:31:44.805
<v Speaker 2>banks will simply be there also to facilitate that. Do

0:31:44.814 --> 0:31:48.415
<v Speaker 2>we see Chinese banks as vocal as maybe European banks

0:31:48.425 --> 0:31:51.964
<v Speaker 2>or also ourselves. For example D BS, we have one

0:31:51.974 --> 0:31:55.824
<v Speaker 2>of the most comprehensive and ambitious decarbonization targets for our

0:31:55.834 --> 0:31:57.994
<v Speaker 2>lending and financing activities.

0:31:58.250 --> 0:32:01.599
<v Speaker 2>Yeah, we have those targets by 2030 all of which

0:32:01.609 --> 0:32:04.709
<v Speaker 2>are science based, very, very detailed. How are we going

0:32:04.719 --> 0:32:08.469
<v Speaker 2>to do this? Um Not many banks in China are

0:32:08.479 --> 0:32:11.280
<v Speaker 2>even remotely on these types of levels, but I would

0:32:11.290 --> 0:32:14.750
<v Speaker 2>still claim it's all interconnected and ultimately they will deliver

0:32:14.760 --> 0:32:17.380
<v Speaker 2>what the government is saying they're going to do. And

0:32:17.390 --> 0:32:19.829
<v Speaker 2>I have great confidence actually that they're going to deliver.

0:32:20.150 --> 0:32:22.920
<v Speaker 1>So I also think that in the case of China,

0:32:23.130 --> 0:32:26.800
<v Speaker 1>they are so pragmatic in terms of what is needed

0:32:26.810 --> 0:32:27.459
<v Speaker 1>to grow.

0:32:27.869 --> 0:32:30.430
<v Speaker 1>Uh and the fact that they have a huge debt burden,

0:32:30.439 --> 0:32:32.859
<v Speaker 1>they have a dysfunctional property sector and the banking system

0:32:32.869 --> 0:32:35.930
<v Speaker 1>is not the sound is either that a ready made

0:32:35.939 --> 0:32:39.319
<v Speaker 1>engine of growth is climate transition. So whether it is,

0:32:39.329 --> 0:32:42.670
<v Speaker 1>you know, redoing their urban grid or the ev uh

0:32:42.680 --> 0:32:46.800
<v Speaker 1>ecosystem that you talked about or renewable energy generation, whether

0:32:46.810 --> 0:32:49.880
<v Speaker 1>it's wind or nuclear or solar,

0:32:50.479 --> 0:32:52.890
<v Speaker 1>it's like if they want to grow at four or 5%

0:32:53.040 --> 0:32:55.900
<v Speaker 1>that's the only viable area that they have left. So

0:32:55.910 --> 0:32:58.420
<v Speaker 1>there's a convergence of interest and what is right for

0:32:58.430 --> 0:33:00.550
<v Speaker 1>the world. So, yeah, I think I I share your

0:33:00.560 --> 0:33:05.410
<v Speaker 1>perspective on China very much um recently, uh the last

0:33:05.420 --> 0:33:07.510
<v Speaker 1>two months to be precise every Friday, you and I

0:33:07.520 --> 0:33:12.170
<v Speaker 1>met virtually sometimes in person and we talked about coal

0:33:12.180 --> 0:33:15.430
<v Speaker 1>and banks roles in it and we wrote a paper

0:33:15.680 --> 0:33:18.709
<v Speaker 1>so share with our audience what we wrote about and

0:33:18.719 --> 0:33:20.739
<v Speaker 1>what are the bottom lines in that paper? First

0:33:20.750 --> 0:33:23.430
<v Speaker 2>and foremost, I am so happy that you now know

0:33:23.439 --> 0:33:25.689
<v Speaker 2>how a sustainability professional feels

0:33:26.069 --> 0:33:30.540
<v Speaker 2>because you have ups and you have downs. Sometimes you

0:33:30.550 --> 0:33:32.930
<v Speaker 2>read about hard facts and data and you really get

0:33:32.939 --> 0:33:35.439
<v Speaker 2>a bit down and think I get God, is this

0:33:35.449 --> 0:33:38.410
<v Speaker 2>even possible? But then you also look at acceleration of

0:33:38.420 --> 0:33:41.280
<v Speaker 2>efforts or some positive news and it lifts you up again.

0:33:41.290 --> 0:33:43.800
<v Speaker 2>But it's literally a cycle, isn't it that we had

0:33:43.810 --> 0:33:47.800
<v Speaker 2>in those couple of weeks? So why did we write

0:33:47.810 --> 0:33:48.859
<v Speaker 2>about coal

0:33:49.280 --> 0:33:51.709
<v Speaker 2>at the very start of our conversation, I talked about

0:33:51.719 --> 0:33:54.949
<v Speaker 2>the 400 gigatons of greenhouse gas emissions. We have left

0:33:54.959 --> 0:33:59.300
<v Speaker 2>until we hit the 1.5 C uh temperature limit. Now,

0:33:59.449 --> 0:34:03.300
<v Speaker 2>if we leave coal untouched and right now, we have

0:34:03.310 --> 0:34:08.409
<v Speaker 2>around 5000 operational coal power plants in Asia Pacific, 86%

0:34:08.419 --> 0:34:11.510
<v Speaker 2>of which measured by our capacity are in China and

0:34:11.520 --> 0:34:13.909
<v Speaker 2>in India. And then we have other countries like Indonesia

0:34:13.919 --> 0:34:17.399
<v Speaker 2>also fairly, fairly significant. So if we leave them untouched,

0:34:17.810 --> 0:34:19.010
<v Speaker 2>then two thirds

0:34:19.459 --> 0:34:22.189
<v Speaker 2>of our carbon budget will be exhausted just by the

0:34:22.199 --> 0:34:24.879
<v Speaker 2>coal power plants. So we haven't yet talked about the

0:34:24.889 --> 0:34:28.969
<v Speaker 2>mobility sector. We haven't yet talked about production of steel

0:34:28.979 --> 0:34:30.979
<v Speaker 2>and cement and all those types of things, two thirds

0:34:30.989 --> 0:34:34.870
<v Speaker 2>gone just because of the coal power plants. So that's

0:34:34.879 --> 0:34:37.629
<v Speaker 2>not even your entire energy system. It's one portion within

0:34:37.639 --> 0:34:41.589
<v Speaker 2>the energy system. So if you invest a lot in

0:34:41.600 --> 0:34:45.250
<v Speaker 2>clean tech and we have to do this, it's mission critical,

0:34:45.429 --> 0:34:47.169
<v Speaker 2>you're not gonna meet the schools

0:34:47.530 --> 0:34:50.050
<v Speaker 2>and the Paris goals are just as a reminder to

0:34:50.060 --> 0:34:54.520
<v Speaker 2>keep temperature rises to well below two degrees Celsius.

0:34:55.280 --> 0:34:59.419
<v Speaker 2>So what we wrote about ultimately is a bit, why

0:34:59.429 --> 0:35:01.800
<v Speaker 2>do we have to do this and how are we

0:35:01.810 --> 0:35:07.360
<v Speaker 2>gonna do this? And phasing out coal is unbelievably complex

0:35:07.370 --> 0:35:11.030
<v Speaker 2>on at least three levels. The first one is how

0:35:11.040 --> 0:35:11.949
<v Speaker 2>do we assess

0:35:12.790 --> 0:35:17.030
<v Speaker 2>a certain opportunity? For example, there are risks like leakage.

0:35:17.050 --> 0:35:20.520
<v Speaker 2>If we phase out a coal power plant in Northern Sumatra,

0:35:20.530 --> 0:35:23.120
<v Speaker 2>what prevents the government from building a new one in

0:35:23.129 --> 0:35:25.959
<v Speaker 2>East Java or I could name any other country for

0:35:25.969 --> 0:35:29.799
<v Speaker 2>that matter? Or a company that operates a coal power

0:35:29.810 --> 0:35:32.330
<v Speaker 2>plant agrees to phasing out a coal power plant in

0:35:32.340 --> 0:35:33.290
<v Speaker 2>one country but

0:35:33.399 --> 0:35:35.540
<v Speaker 2>build a new one in another country. So there are

0:35:35.550 --> 0:35:38.658
<v Speaker 2>all sorts of what we call leakage risks. So how

0:35:38.669 --> 0:35:41.790
<v Speaker 2>do we assess a certain opportunity? What are the commitments

0:35:41.800 --> 0:35:45.638
<v Speaker 2>on country level on company level? How do we assess

0:35:45.649 --> 0:35:47.770
<v Speaker 2>a specific asset, the specific coal power plant? Is it

0:35:47.780 --> 0:35:49.739
<v Speaker 2>worth a while? How can we really do it? So

0:35:49.750 --> 0:35:52.350
<v Speaker 2>it's really, really, really complex. So let's assume we've done

0:35:52.360 --> 0:35:54.850
<v Speaker 2>all of this. We have a great project. Then the

0:35:54.860 --> 0:35:57.409
<v Speaker 2>next one is, well, we can't just shut down coal,

0:35:57.419 --> 0:35:57.989
<v Speaker 2>can we?

0:35:58.879 --> 0:36:01.129
<v Speaker 2>So if we are really, really successful in phasing out

0:36:01.139 --> 0:36:03.889
<v Speaker 2>fossil fuels, but at the same time, we're not rebuilding

0:36:03.899 --> 0:36:07.489
<v Speaker 2>renewable energy, then people don't have access to affordable energy.

0:36:08.080 --> 0:36:12.550
<v Speaker 2>And earlier I talked about 17 UN SDGS. One is

0:36:12.560 --> 0:36:15.719
<v Speaker 2>we need to have access to affordable clean energy. So

0:36:15.729 --> 0:36:17.899
<v Speaker 2>you need to do this right away, but that's not

0:36:17.909 --> 0:36:20.610
<v Speaker 2>always easy. So a coal power plant might be in

0:36:20.620 --> 0:36:23.889
<v Speaker 2>a geographical location where there is no wind or solar potential.

0:36:23.899 --> 0:36:25.699
<v Speaker 2>So how do you deal with these situations? There are

0:36:25.709 --> 0:36:27.989
<v Speaker 2>solutions but I'm just saying it is something to need

0:36:28.000 --> 0:36:30.810
<v Speaker 2>to be looked after. And the third one is there

0:36:30.820 --> 0:36:34.149
<v Speaker 2>are also other social dimensions, right? I think you very

0:36:34.159 --> 0:36:37.229
<v Speaker 2>nicely wrote about the implications on jobs

0:36:37.719 --> 0:36:41.569
<v Speaker 2>and the entire ecosystem that is built around coal power

0:36:41.580 --> 0:36:45.560
<v Speaker 2>plants in various countries. Entire communities depend on that coal

0:36:45.570 --> 0:36:48.689
<v Speaker 2>power plant. So if you shut it down, many, many

0:36:48.699 --> 0:36:50.979
<v Speaker 2>people will lose the jobs, kids might not be able

0:36:50.989 --> 0:36:53.330
<v Speaker 2>to go to school anymore because the parents lost the job.

0:36:53.340 --> 0:36:55.370
<v Speaker 2>So how do we deal with that? So all of

0:36:55.379 --> 0:36:58.750
<v Speaker 2>this I think can be solved, but it's really, really complex.

0:36:58.760 --> 0:37:00.388
<v Speaker 2>And that's ultimately what we wrote about.

0:37:00.899 --> 0:37:04.290
<v Speaker 1>You also were adamant that we include something that you

0:37:04.300 --> 0:37:08.149
<v Speaker 1>alluded to earlier. The intergenerational aspect. Why is it that

0:37:08.159 --> 0:37:10.939
<v Speaker 1>critical in the context of coal? Is it because we

0:37:10.949 --> 0:37:13.000
<v Speaker 1>are sort of fixated on the potential job losses? And

0:37:13.010 --> 0:37:15.729
<v Speaker 1>we're not thinking about the dividend that can come from many,

0:37:15.739 --> 0:37:16.909
<v Speaker 1>many generations of clean air.

0:37:16.919 --> 0:37:19.040
<v Speaker 2>Yeah, I think that's exactly it. I think very often

0:37:19.050 --> 0:37:21.639
<v Speaker 2>when we talk about interconnectedness or dilemmas, we have a

0:37:21.649 --> 0:37:25.060
<v Speaker 2>very static approach. So you take action a let's say

0:37:25.070 --> 0:37:27.489
<v Speaker 2>you shut down a coal power plant. And the implication

0:37:27.500 --> 0:37:30.389
<v Speaker 2>is b for example, certain people lose the job.

0:37:30.760 --> 0:37:33.589
<v Speaker 2>But if you think about dynamically over a longer period

0:37:33.600 --> 0:37:38.889
<v Speaker 2>of time, the implications on health by air pollution, water stress,

0:37:38.899 --> 0:37:41.169
<v Speaker 2>the carbon emissions and so on and so forth on

0:37:41.179 --> 0:37:45.408
<v Speaker 2>future generations, the costs are immense. So if you were

0:37:45.419 --> 0:37:49.529
<v Speaker 2>to take them into account and ultimately calculate the NPV today,

0:37:49.540 --> 0:37:52.330
<v Speaker 2>then actually you see that taking action today

0:37:52.620 --> 0:37:56.100
<v Speaker 2>um is becoming ever more convincing. So we talked a

0:37:56.110 --> 0:37:59.139
<v Speaker 2>little bit about this intergenerational fairness, which as I mentioned

0:37:59.149 --> 0:38:02.589
<v Speaker 2>earlier is not a stronghold for human beings. Generally, we've

0:38:02.600 --> 0:38:04.320
<v Speaker 2>always struggled a little bit with that.

0:38:04.639 --> 0:38:06.709
<v Speaker 1>Let me ask you one technical question.

0:38:07.340 --> 0:38:11.030
<v Speaker 1>A bank has given loans to a coal company. The

0:38:11.040 --> 0:38:13.360
<v Speaker 1>coal company's plant is actually not that old. It's only

0:38:13.370 --> 0:38:15.600
<v Speaker 1>four or five years old and it has like a

0:38:15.610 --> 0:38:20.350
<v Speaker 1>10 year amortization depreciation schedule for that asset. So now

0:38:20.360 --> 0:38:23.109
<v Speaker 1>if we want to target some sort of a 2030

0:38:23.120 --> 0:38:26.439
<v Speaker 1>net zero emer, we probably need to phase that coal

0:38:26.449 --> 0:38:27.509
<v Speaker 1>plant out earlier.

0:38:27.770 --> 0:38:30.620
<v Speaker 1>So who's gonna be left catching that bill? The bank

0:38:30.629 --> 0:38:33.020
<v Speaker 1>doesn't want to lose its investment and the asset owner

0:38:33.030 --> 0:38:34.560
<v Speaker 1>doesn't want to lose their investment

0:38:34.570 --> 0:38:38.169
<v Speaker 2>either. That's a very important question, of course, because the

0:38:38.179 --> 0:38:41.679
<v Speaker 2>way we approached it in this paper that we recently

0:38:41.689 --> 0:38:44.199
<v Speaker 2>published under the umbrella of G. So again, GF is

0:38:44.209 --> 0:38:49.000
<v Speaker 2>this collection of financial institutions globally and together with HS BC,

0:38:49.010 --> 0:38:52.620
<v Speaker 2>we led a work stream on how should we do this?

0:38:52.629 --> 0:38:55.739
<v Speaker 2>And our paper was complimentary to, to that consultation paper

0:38:55.750 --> 0:38:56.679
<v Speaker 2>that we published, right.

0:38:56.879 --> 0:39:00.219
<v Speaker 2>And one key consideration was financial viability, like how do

0:39:00.229 --> 0:39:03.299
<v Speaker 2>we structure this in a way that we incentivize everyone

0:39:03.310 --> 0:39:06.850
<v Speaker 2>to do the right thing because it's really hard to negotiate,

0:39:06.860 --> 0:39:09.929
<v Speaker 2>for example, hair cuts or, or things like this. But

0:39:09.939 --> 0:39:13.589
<v Speaker 2>here one critical element indeed is this blended finance structure.

0:39:13.600 --> 0:39:17.060
<v Speaker 2>So if I simplify this a little bit, we need

0:39:17.070 --> 0:39:19.669
<v Speaker 2>a new pool of capital and this new pool of

0:39:19.679 --> 0:39:23.489
<v Speaker 2>capital has a lower return requirement than the existing pool

0:39:23.500 --> 0:39:26.469
<v Speaker 2>of capital that finance the existing core power plant.

0:39:26.729 --> 0:39:30.279
<v Speaker 2>So this differential in these two allows you to actually

0:39:30.290 --> 0:39:33.239
<v Speaker 2>shut it down earlier, you are satisfied with less future

0:39:33.250 --> 0:39:37.370
<v Speaker 2>cash flows arising out of power purchase agreements. Um But

0:39:37.379 --> 0:39:40.219
<v Speaker 2>in order to do this new package, you then need

0:39:40.229 --> 0:39:42.739
<v Speaker 2>different layers of capital, you need

0:39:43.209 --> 0:39:47.860
<v Speaker 2>public potentially public money or multilateral development banks. Like for example,

0:39:47.870 --> 0:39:50.739
<v Speaker 2>the Asian Development bank is very, very active in the Spain.

0:39:50.909 --> 0:39:54.939
<v Speaker 2>And then one really interesting lay of capitalist philanthropic capital.

0:39:54.949 --> 0:39:59.299
<v Speaker 2>So they are actually big global philanthropies foundations in the

0:39:59.310 --> 0:40:00.409
<v Speaker 2>world that actually

0:40:00.544 --> 0:40:03.294
<v Speaker 2>support these types of financing. And then if you merge

0:40:03.304 --> 0:40:06.314
<v Speaker 2>it all together, you can create these lower return requirements

0:40:06.324 --> 0:40:09.044
<v Speaker 2>and actually make it work. One other option is a

0:40:09.054 --> 0:40:12.125
<v Speaker 2>highly contentious topic, but we think worthwhile looking at the

0:40:12.135 --> 0:40:16.094
<v Speaker 2>generation of carbon credits that might arise out of this action,

0:40:16.104 --> 0:40:19.114
<v Speaker 2>the action is a phase out core. Yeah, so there's

0:40:19.125 --> 0:40:20.074
<v Speaker 2>not gonna be

0:40:20.500 --> 0:40:23.350
<v Speaker 2>more greenhouse gas emissions because I shut the coal power

0:40:23.360 --> 0:40:26.820
<v Speaker 2>plant actually down. We can translate this and it needs

0:40:26.830 --> 0:40:29.069
<v Speaker 2>to be transparent, it needs to be credible and all

0:40:29.080 --> 0:40:32.070
<v Speaker 2>these types of things. But we can create a methodology

0:40:32.080 --> 0:40:35.750
<v Speaker 2>based on which we say, OK, we saved quotation mark

0:40:35.760 --> 0:40:39.020
<v Speaker 2>this volume of greenhouse gas emissions because we shut down early.

0:40:39.100 --> 0:40:42.620
<v Speaker 2>We allow carbon credits to be generated. You can sell

0:40:42.629 --> 0:40:43.569
<v Speaker 2>them in the market

0:40:43.830 --> 0:40:46.439
<v Speaker 2>and actually generate additional revenue. So that could be a

0:40:46.449 --> 0:40:50.219
<v Speaker 2>very interesting construct as well. And given the contentious nature

0:40:50.229 --> 0:40:52.819
<v Speaker 2>of carbon credits, uh we just need to make sure

0:40:52.830 --> 0:40:55.320
<v Speaker 2>it's the right methodology, it's credible and everyone really is

0:40:55.330 --> 0:40:56.949
<v Speaker 2>very clear on how we can do this, but that's

0:40:56.959 --> 0:40:59.120
<v Speaker 2>roughly the the idea. Absolutely

0:40:59.129 --> 0:41:02.280
<v Speaker 1>fasting. That sounds really, really cool. Um Finally, Hilda, I

0:41:02.290 --> 0:41:04.860
<v Speaker 1>want to talk a little bit about our backyard, Singapore.

0:41:05.370 --> 0:41:08.120
<v Speaker 1>You talk to government officials you talk to your peers

0:41:08.129 --> 0:41:10.600
<v Speaker 1>in the banking and financial industry. And also I believe

0:41:10.610 --> 0:41:14.250
<v Speaker 1>sometimes you meet with uh students and young Singaporeans and

0:41:14.260 --> 0:41:18.330
<v Speaker 1>hear about their vision for uh Green Singapore. What's your

0:41:18.340 --> 0:41:21.689
<v Speaker 1>sense of this society and this government's journey toward the

0:41:21.699 --> 0:41:22.020
<v Speaker 1>green

0:41:22.030 --> 0:41:26.659
<v Speaker 2>transition? Yeah, absolutely. So Singapore has actually been on a

0:41:26.669 --> 0:41:27.199
<v Speaker 2>very

0:41:27.500 --> 0:41:30.159
<v Speaker 2>nice journey when it comes to sustainability. If we go

0:41:30.169 --> 0:41:32.860
<v Speaker 2>a little bit back in time, the government just a

0:41:32.870 --> 0:41:35.229
<v Speaker 2>little while ago said we want to be net zero

0:41:35.239 --> 0:41:39.100
<v Speaker 2>sometime in the second half of the century, then they

0:41:39.110 --> 0:41:41.290
<v Speaker 2>accelerated it and said we want to be net zero

0:41:41.300 --> 0:41:46.350
<v Speaker 2>by or around 2050 then they accelerated further and say

0:41:46.360 --> 0:41:49.310
<v Speaker 2>no 2050 we're gonna be uh net zero. So from

0:41:49.320 --> 0:41:51.889
<v Speaker 2>government point of view, there's a huge focus

0:41:52.540 --> 0:41:55.189
<v Speaker 2>and an acceleration of targets and so on and so forth.

0:41:55.199 --> 0:41:57.959
<v Speaker 2>So that's actually very, very promising. We are also blessed

0:41:57.969 --> 0:42:01.989
<v Speaker 2>in Singapore by having extremely smart regulators. I think the

0:42:02.000 --> 0:42:05.229
<v Speaker 2>MA S hands down is probably the best financial regulator

0:42:05.239 --> 0:42:08.489
<v Speaker 2>I could think of very strategic always thinking in ecosystems.

0:42:08.500 --> 0:42:10.949
<v Speaker 2>How can we bring everybody together? What are the future?

0:42:10.959 --> 0:42:13.780
<v Speaker 2>So solutions, how we address our problem statements. That is

0:42:13.790 --> 0:42:14.530
<v Speaker 2>quite amazing.

0:42:14.939 --> 0:42:18.209
<v Speaker 2>Also in the society at large, I mentioned before I

0:42:18.219 --> 0:42:20.669
<v Speaker 2>stepped in here that I had the honor and pleasure

0:42:20.679 --> 0:42:23.530
<v Speaker 2>um recently with the minister to be on stage and

0:42:23.540 --> 0:42:26.429
<v Speaker 2>we were grilled by a couple of 100 of young

0:42:26.439 --> 0:42:29.300
<v Speaker 2>people that ultimately questioned. Are we doing enough? And they

0:42:29.310 --> 0:42:31.629
<v Speaker 2>were really pushing very, very hard. So I can see,

0:42:31.639 --> 0:42:35.810
<v Speaker 2>especially in the younger part of society, there's definitely growing awareness.

0:42:35.820 --> 0:42:39.080
<v Speaker 2>So it's all sounds very positive, right? But let's be

0:42:39.090 --> 0:42:41.840
<v Speaker 2>also honest, we don't really have an excuse. Singapore is

0:42:41.850 --> 0:42:43.089
<v Speaker 2>a very rich country

0:42:43.419 --> 0:42:46.860
<v Speaker 2>because of an amazing, amazing economic success story ever since

0:42:46.870 --> 0:42:50.389
<v Speaker 2>it was founded in 1965 probably an economic success story

0:42:50.399 --> 0:42:52.830
<v Speaker 2>that is unmatched in the world to be very honest,

0:42:53.010 --> 0:42:56.379
<v Speaker 2>build on extremely smart people doing this extremely well and

0:42:56.389 --> 0:42:58.388
<v Speaker 2>we have very good education, right?

0:42:58.510 --> 0:43:00.870
<v Speaker 2>So we have a lot of capital. We have really

0:43:00.879 --> 0:43:03.209
<v Speaker 2>a lot of smart people, so we really got to

0:43:03.219 --> 0:43:05.760
<v Speaker 2>do it. If Singapore can't accomplish that, then I would

0:43:05.770 --> 0:43:09.009
<v Speaker 2>be very pessimistic about the world. But I'm optimistic that

0:43:09.020 --> 0:43:13.540
<v Speaker 2>Singapore will actually further advance and also act upon its targets.

0:43:14.199 --> 0:43:18.270
<v Speaker 1>Well, on that somewhat optimistic note, he weel thank you

0:43:18.280 --> 0:43:20.239
<v Speaker 1>so much for your time and insights. Thanks

0:43:20.250 --> 0:43:20.530
<v Speaker 2>a lot.

0:43:21.510 --> 0:43:23.350
<v Speaker 1>So grabbing me, great, great chat.

0:43:23.649 --> 0:43:26.589
<v Speaker 1>Um Thanks to our listeners as well. Koby Time was

0:43:26.600 --> 0:43:30.149
<v Speaker 1>produced by Ken Delbridge at spy studios, Daisy Sharma and

0:43:30.159 --> 0:43:34.469
<v Speaker 1>Violet Lee provided additional assistance. All 103 episodes of Coby

0:43:34.479 --> 0:43:37.759
<v Speaker 1>Time are available on youtube as well as on all

0:43:37.770 --> 0:43:42.580
<v Speaker 1>major podcast platforms including Apple Google and Spotify. As for

0:43:42.590 --> 0:43:45.800
<v Speaker 1>our all research publications and webinars are concerned, you can

0:43:45.810 --> 0:43:49.699
<v Speaker 1>find them by Googling Devis research library. Have a great day.