January 30, 2025 • 22 mins
With President Donald Trump back in office, the US is leaving the Paris Agreement for the second time. Unlike in 2017, this withdrawal is set to have more lasting consequences, Akshat Rathi tells producer Mythili Rao. Meanwhile, even as the US gives up its climate leadership, China’s focus on clean energy is growing. A new report from BloombergNEF finds that global investment in the energy transition surpassed $2 trillion for the first time in 2024, with China driving two thirds of year-on-year growth. BNEF Deputy CEO Albert Cheung shares the report’s highlights, and reflects on the role international competition will play in this next phase of reaching net zero.
Explore further:
- Bloomberg Green's story The Global Climate Order Teeters Under Second Assault by Trump
- Bloomberg NEF’s energy transition investment trends 2025 report
- Reporter Zahra Hirji's roundup of the first slew of President Trump's climate moves
- Past episode with Yale historian Paul Sabin about what to expect in President Trump’s second term
Zero is a production of Bloomberg Green. Our producer is Mythili Rao. Special thanks this week to Sharon Chen, Alfred Cang, Ewa Krukowska, John Ainger, Jen Dlouhy, Zahra Hirji, Lou Del Bello, Simone Iglesias, Amanda Hurley and Jessica Beck. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to Zero. I am Actuatrati and I'm chy Lee Raw.
This week moving past Paris. Hello lukshut Hi mightily.
Speaker 2 (00:22):
So Trump has been in office for just over week.
As we record this, a lot has happened. Bloomberg Green
reporters Zarahirje has a great piece summarizing all the big
developments and what Trump's flurry of executive orders means for climate,
which I recommend listeners check out. There will be more
to come on all of that, but the big headline
(00:42):
that's going to have some impact, which everyone at Bloombergreen
is looking closely at, and what you're writing about this
week is Trump withdrawing from the Paris Agreement.
Speaker 1 (00:52):
Yes, it's something I'm working with lots of reporters across
Bloomberg News because this is the second time that Trump
has on the US out of the Paris Agreement, and
there is a lot that has happened since twenty seventeen
when he first attempted it. There's some similarities, but many differences.
Speaker 2 (01:11):
Okay, let's go through what's the same and what's different
from twenty seventeen.
Speaker 1 (01:14):
The first time it happened. There were all these rumors
that once the US exits, it's the world's largest emitter,
it's the world's largest economy. Other countries that weren't really
committed to climate will also leave. Well, that didn't happen,
and even now we are only a week out, it
hasn't happened yet. There's still rumors of countries like Argentina
(01:35):
and maybe Russia that might want to pull out, but
so far that hasn't happened. The other thing is that
the US does provide significant funding towards climate finance, especially
under the Biden administration. Now that money is nowhere close
to the fair contribution that an economy the size of
the US should be making, but it was, you know,
(01:56):
eleven billion dollars in twenty twenty four. According to the
Biden administration, that money is going to go away. Plus,
the world's largest banks are in the US, the world's
largest companies are in the US, and that did have
an impact last time around, and it will have an
impact this time around. Multilateralism itself, especially on the climate stage,
(02:16):
was always on shaky grounds. It is perhaps on shaky
air grounds.
Speaker 3 (02:21):
Now.
Speaker 2 (02:21):
Okay, so those are things that are quite similar. What
do you feel is radically different this time? Around than
from twenty seventeen.
Speaker 1 (02:28):
One is simply the time factor.
Speaker 3 (02:30):
Right.
Speaker 1 (02:30):
Twenty seventeen was thirteen years from twenty thirty, when many
companies and countries had set targets to reach. Now we
are just five years away and most countries and companies
aren't on track, so the urgency to act has grown.
Of course, climate impacts have grown in number and in ferocity,
and the urgency to act on climate change has grown.
(02:53):
There is also not that many were leaders who are
pushing for climate action. In twenty seventeen, you had just Trudeau,
you had Angela Merkel, you had David Cameron. This time
Trudeau is on his way out, Angler Merkele is not here.
David Cameron or none of the UK's very climate forward
(03:13):
leaders are stepping up. Sure, China's perhaps showing up in
bigger ways. There's an Australian leadership in place at least
for now, that's doing something, but the big bulwark of
world leaders against Trump's climate moves aren't here. And then,
the global economy in twenty seventeen had low interest rates
(03:33):
but very expensive clean energy. This time interest rates are higher,
but clean energy is cheaper and the sums being invested
in the clean energy transition are just far greater.
Speaker 2 (03:45):
And our colleagues at Bloomberg and EF have some new
numbers on that energy transition out in a report today.
You sat down with Albert Chung, Deputy CEO of Bloomberg NIF,
Bloomberg's New Energy Research Unit, to talk about what the
numbers are and what they have to tell us about
the momentum on the energy transition. So let's hear that conversation.
Speaker 1 (04:06):
Now, Albert, Welcome to the show.
Speaker 3 (04:22):
Thank you great to be here now.
Speaker 1 (04:24):
As a climate reporter, I often feel like I have
two distinct realities that I live through all the time.
One where because we keep putting green as gases into
the atmosphere, the world keeps heating up and we see
more extreme weather events and more catastrophes. On the other,
the energy transition, the solutions to try and tackle climate
(04:44):
change only seem to be growing in size accelerating despite
the politics around the world. And these two realities are
seemingly contradictory, but they are two realities, and at pressure
moments like the election of Donald Trump, those conflicting realities
are hard to parse. I know that this is something
(05:06):
you also think about a lot. In an analysis you
wrote for Bloomberg and EF, you said you are also
in a constant state of dissonance. What do you mean.
Speaker 3 (05:16):
Yeah, I mean, so we live and breathe energy transition
in BNF, and even if you just look at energy
transition all day, you also have this dissonance of things
sometimes looking really great and other times just not enough.
And certainly this year feels that way. I mean, there
was record investment across clean energy technologies, record numbers of
electric vehicles sold, record amounts of renewable energy installed, record
(05:37):
amounts of story you know, all these amazing achievements and
progress and scale and acceleration, which is great to see.
And yet and yet, and yet we always run the numbers,
as you know, at the beginning of every year on
what does actually need to happen to get on track
for the climate goals, for the Paris Agreement and so
on and so forth. And usually what we find is
the total amount of investment going into energy transition is
(05:58):
roughly about a third of what it needs to be
to get on track. So that's for me, that's the
dissonance we grapple with around this time of year. Actually,
funny enough in the winter when we're running those numbers.
Speaker 1 (06:07):
Well, talking of investment trends, Luomageni f is launching its
report for the Investment Trends in the Energy Transition of
twenty twenty four today. What do the numbers say?
Speaker 3 (06:17):
So the report is Energy Transition Investment Trends twenty twenty five.
It's a report we've been doing for twenty years and
this year we find that total global energy transition investment
hit two point one trillion dollars last year. That's a
new record.
Speaker 1 (06:30):
That's breaching the two trillion dollar mark.
Speaker 3 (06:32):
The first time over two trillion dollars, and so it's
a real milestone at a great achievement. But there are
some caveats in there. So one is growth year on
year was only ten point seven percent, which in most
industries you would take that as a growth industry.
Speaker 1 (06:45):
If you're having to be happy with that salary.
Speaker 3 (06:48):
Exactly exactly, I think we'd all be okay within eleven
percent rais. However, in previous years, the last three years,
the growth was between twenty four to twenty nine percent,
so the growth has been a bit slower. Now, what's
dry that growth. It's one country it's China. So China
invested more than eight hundred billion in energy transition last year.
(07:09):
That was more than the EU, the US and the
UK combined, which by the way hadn't been the case
the year before, So that doesn't happen every year. And
China alone drove two thirds of the global growth that
we saw last year.
Speaker 1 (07:22):
Wow.
Speaker 3 (07:23):
So yeah, it's a really interesting reader. We really enjoy
going through the data every year and kind of picking
out the trend. So I really thoroughly recommend that folks
take a look at that.
Speaker 1 (07:33):
And there is a framework that you have created to
try and understand this year that we are going into
with the politics where they are and with the energy
transition where it is. And you say that we have
gone through three phases of the energy transition, you describe
them as sacrifice, opportunity, and competition. Expand on that.
Speaker 3 (07:54):
Yeah, I mean this was in the piece that I
wrote really about the way that the multilateral climate action
and discussion has evolved over the time that you know,
benf have been following this. So in the twenty tens,
you know, prior to the Paris Agreement, most countries thought
of climate mitigation and low carbon transition as a sacrifice
they would have to make, you know, they would have
to lower living standards or sacrifice economic growth in order
(08:18):
to save the planet. That was the kind of the
overarching thesis, and so a lot of the discussion around them, well,
how do I make sure that I don't do too
much too quickly, and make sure that other countries do
their part, and really just kind of find a fair
way to share the sacrifice.
Speaker 1 (08:33):
Right, Developing countries were suffering and are suffering from most
of the climate impacts disproportionately, while developed countries have been
the ones that have put out all these venas gaz emissions. Then,
so there's always this push between developing countries wanting developed
countries to do.
Speaker 3 (08:47):
More exactly, and that was always the primary axis of
this debate, was developing and developed countries having that sort
of discussion, but even among developed countries discussion of who
bears more responsibility and how can we make sure others
are doing their part? And all of that changed, you know,
after the Paris Agreement, which was really coming together of
this idea that actually this can be an opportunity. And
(09:07):
at the same time that the Paris Agreement was being signed,
we were seeing these tremendous cost reductions in renewal energy technology,
basteries and storage and electric vehicles all coming down in cost.
Speaker 1 (09:16):
We had the IPCC one point five ZEA report come
out right after that, which sort of gave the world
and at zero framework, there's a Fridays for future with
all the kids marching on streets. That felt like a
momentum exactly.
Speaker 3 (09:28):
And so we arrived in Glasgow in twenty twenty one
for twenty six with this idea that countries are grasping
the opportunity. So it became an opportunity framing in countries
almost racing to say we can do this faster and
better than we thought, and potentially faster and better and
capture more opportunities than others as well.
Speaker 1 (09:45):
That led to record investments in the energy transition, but
also in climate tech startup which saw a huge amount
of investments coming through in twenty twenty one, twenty two,
and then over the past few years, even before the
US election, it all started to a little bit deflated.
Speaker 3 (10:02):
Yeah, and I think the opportunity framing that was so
strong three or four years ago hasn't gone away. But
what's happened is that there's just been this very strong
sense of competition and quite a strong kind of economic
cost benefit analysis that's been injected into that at a
country level. So policymakers, heads of state are also saying, look,
we see this low carbon transition, opportunity to create industries,
(10:23):
to create jobs, to capture the value of this transition,
but we need to actually see that materialize in order
to make the case to our people that this is
the right way forward.
Speaker 1 (10:32):
But if competition is being injected into the energy transition,
with what signals we're getting from President Donald Trump, around
increasing fossil fuel production, around taking all the subsidies away
from electric cars, around not giving any permissions to build
wind turbines in federal lands, and this very anti climate
(10:57):
it's not about economic, it's an anti climate move that's
being made. Does that mean the US just becomes less
competitive and the rest of the world competes instead.
Speaker 3 (11:06):
Well, we're talking about this in the very very early
days of the new Trump administration. It's just been a
few days since he was inaugurated, and what we've seen
so far is of course that he is doing everything
he can really to roll back any kind of policy support,
particularly for electric vehicles. That's really the sort of biggest target,
let's say, And so it's at things like reviewing the
(11:26):
corporate average field economy targets, looking at the California waiver
that allows California to set its own its own emission standards,
looking at the IRA funding, looking at the electric vehicle
charging infrastructure funding, and seeing if they can stop those
funds going out, funds that have been previously committed. So
those are quite strong actions that he and his administration
(11:47):
want to take, and we will see how much of
that is successful and has the desired effect that he's
looking for. But the net impact of all of that
is that will slow the adoption of electric vehicles in
the US relative to what it had been forecast to be.
And as been f we have lowered our electric vehicle forecast.
So in the US, we've taken our EV forecasts from
(12:07):
about half of all new vehicles sold in twenty thirty
being electric to about a third. That's still growth, So
we still think, you know, the fundamentals driving EV adoption
are going to be strong, the economics are getting.
Speaker 1 (12:19):
Better, and because it's going up from about ten percent.
Speaker 3 (12:22):
Today exactly exactly, so it's still growing but there's a
lot that governments can do to try and slow it down,
let's say, maybe not change the direction, but at least
slow it down.
Speaker 1 (12:31):
And what about the apparent slowdown of the EV transition
in Europe?
Speaker 3 (12:35):
Yeah, and in Europe. So we've looked at it, and
in the end, when you look at twenty twenty four
as a year, EV sales were flat in Europe, so
they weren't up, they weren't particularly down that it's going
to come out that they were roughly flat, And there
was a lot of hand ringing in the industry about
the you know, consumers don't want them, et cetera, et cetera.
But you know, when we looked at it, some of
the reporting was really picking on data that wasn't necessarily fair. So,
(12:59):
for example, in Germany, there'd been a big sudden change
in subsidy programs, which meant that sales dropped very suddenly,
which is totally expected and to be honest, is going
to be part of the transition as you remove subsidies,
but that was reported on as being a really negative
moment for the EV industry. And then more importantly, you know,
we follow the policy very very closely and Europe has
a set of emission standards that automakers must meet, and
(13:21):
part of their way of meeting them is to sell
electric vehicles. Now, those standards have remained stable from twenty
twenty one to twenty twenty four. So twenty twenty four
was the last year that automakers were still at the
same standard as they had been for the last few years,
and that standard steps up in twenty twenty five. So
the thinking that we've put through the ringer internally is
(13:42):
to say, well, if we were an automaker and we
were already achieving the emissions targets that we'd been set
the last three.
Speaker 1 (13:48):
Years, why would I do anything more?
Speaker 3 (13:50):
We would save up our effort for next year. We
would look to launch our new models, reduce prices, and
all that in the next year when we have a
suddenly higher compliance target. So we think that the fact
that European automaic is sold about the same number of
evs in twenty twenty four as they did in twenty
twenty three kind of makes sense. It may not be
as much of a disaster as.
Speaker 1 (14:09):
People thought.
Speaker 2 (14:15):
After the break Uckshutt and Albert discuss how much the
Paris Agreement and the COP frameworks still matter when it
comes to continuing to drive the energy transition.
Speaker 1 (14:31):
So a lot of these policies that we talked about
are policies that are now in place, partly because of
the Paris Agreement, where all the countries came together and
signed off on a target, and then some of the
countries went back and actually put legislations in action. Now
that all these legislations are in place, how much do
you think the COP framework still matters.
Speaker 3 (14:52):
I think the COP framework matters a huge deal. I
think that if we are to take the Paris Agreement
seriously and get on track for well below two degrees,
we need to see higher and higher tightening rageting climate
targets from countries. So right now as actually as you know,
this year, there's going to be a lot of discussion
about twenty thirty five nationally determined contributions. Countries are due
(15:13):
to put forward their plans in the coming weeks for
twenty thirty five emissions reductions. Those matter a great deal
because those countries, assuming they do come forward with ambitious targets,
those targets then end up driving lawmaking and regulatory action
within those countries towards meeting those goals. So I think
that while CARP and NBCs are not the only, by
(15:34):
far from it, the only mechanism for driving energy transition,
it's one of the top down leavers that can really
make a big difference.
Speaker 1 (15:41):
And so in terms of what it means for how
other countries and economies should navigate the transition. If the
US is no longer on board with the Paris Agreement,
what should the other countries be doing?
Speaker 3 (15:54):
In my view, there will be two different reactions to
the US pulling out of the Paris Agreement and so
on. One is major economy stepping up and saying we will lead,
we want to lead. This doesn't change the science, this
doesn't change the objectives that we have to hit, and
so we will put forward ambitious goals and we're going
to hit them. I think for me, I have a
worry that some of the smaller economies, or even rapidly
(16:15):
growing economies, will take the US pulling out of the
Paris Agreement as proof that rich countries are not serious
about climate action and therefore may come forward with less
ambitious targets, or at least have the cover to do
so if that's what they want to do, so that
would be something I'd be looking and hoping doesn't happen,
but be looking for.
Speaker 1 (16:33):
Thank you, alby thank you actually act.
Speaker 2 (16:44):
Let's talk a little more about that last point Albert
was making. He was essentially saying that the US withdrawing
from Paris might give other countries cover to be less
ambitious in their climate goals, even if they do stay
in the Paris Agreement. Is that something that's been bearing
out in your reporting as you following the story.
Speaker 1 (17:01):
I think that's right. There is a wide recognition among
experts we spoke to that the US leaving is not
a good thing for the international climate diplomacy sphere. We
spoke to Andre Corea do Lago, who is now the
COP thirty president and who was on the POD in
COP twenty nine when we met him in Baku, and
(17:22):
in a recent interview with Simone Iglesias, he said, given
that the world's largest economy has clearly decided to deviate
from the path of combating climate change, COP becomes even
more necessary in this adverse context, and then he went
on to add that you know, Brazil is part of
the Bricks framework, Brazil, Russia, India, China and South Africa
(17:42):
and that he hopes that that grouping will provoke discussions
at the COP in Brazil. And he said that he
hopes that countries can arrive at the COP in quotes
with new ideas and perceptions.
Speaker 2 (17:55):
And that sounds quite similar to the tone he was
taking when you talk to him in November. He wasn't
even officially in this role of COP thirty president yet,
but you spoke to him about Balm and it was
clear he was already feeling very ambitious about what role
Brazil can play on the global stage when it comes
to climate. So that will be something interesting to watch
another ten months from now. In blem. We haven't yet
(18:18):
talked about what the US withdrawing from the Paris Agreement
means for companies who are also using the goals set
out by Paris and the sort of binding framework to
set their own climate targets.
Speaker 1 (18:30):
Indeed, between twenty seventeen and now, most major companies around
the world have set net zero goals. Many of them
have twenty thirty targets, and as we know, many of
them aren't on track. I spoke to Helen Clarkson, the
CEO of the Climate Group, who said, especially in the
US particularly the weaponization of social media has led to
(18:53):
companies doing what is called green hushing, which is continuing
their green activities but not advertising it. She said. They
just don't want to put their heads above the parapet.
Speaker 2 (19:04):
So they might carry on doing what they've been doing,
but quietly trying to not draw attention to it, particularly
on social media, is what you're.
Speaker 1 (19:12):
Saying, right, And that's not the case for European companies,
where the governments have clearly legislated goals. And sure there's
some right wing turn in some countries, but European companies
and banks are quite committed to the Paris Agreement. We
also know in twenty seventeen that a number of non
state actors and regional governments in the US stepped up
to try and meet Paris Agreement goals, even though the
(19:33):
federal government wasn't a part of it.
Speaker 2 (19:35):
Speaking of other actors stepping in, this seems like the
place to mention that Mike Bloomberg, the founder and majority
owner of Bloomberg LP, which is the parent company of
Bloomberg News, is going to be making up the US's
contribution to the UN's climate body, the unf tripleC, and
he did provide that same support when Trump withdrew from
(19:55):
the Paris Accord in twenty seventeen. Last time that was
more than fifteen million dollars. It will probably be something similar,
I imagine this time.
Speaker 1 (20:03):
He's also a supporter of the All In coalition that
includes many of these non state actors and regional governments.
Speaker 2 (20:10):
One last big picture question before we go. The end
of this year, twenty twenty five will be ten years
from when the Paris Agreement was first signed. So the
US pulling out is a big deal, but we've already
had ten years of this agreement being in place, with
its ups and downs, and in some ways, is it
fair to say that that alone has been a pretty
(20:32):
big success.
Speaker 1 (20:33):
Yeah. I mean, we can discuss the numbers as we
did around investments, around energy trends, around company and government
commitments and legislations, but really, to me, the biggest thing
is that the reality of climate change and of climate
action has sunk in deeper into the public consciousness in
a way that just did not when the Paris Agreement
(20:55):
was signed. People kind of know what net zero is
today or one point five c or if not, they
definitely know that they can certainly start to connect some
of the most extreme weather events that are happening around
the world to climate change and the demand for climate
action despite the political outcomes in certain countries, hasn't yet.
Speaker 2 (21:16):
Gone down nice talking with you actually, thank.
Speaker 1 (21:19):
You, Mite, and thank you for listening to Zero. And
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(21:41):
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Speaker 2 (21:56):
Multilateralism.
Speaker 1 (21:58):
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Music is composed by Wondering Special thanks to Alfred san
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(22:24):
So
Welcome to Zero. I am Actuatrati and I'm chy Lee Raw.
This week moving past Paris. Hello lukshut Hi mightily.
Speaker 2 (00:22):
So Trump has been in office for just over week.
As we record this, a lot has happened. Bloomberg Green
reporters Zarahirje has a great piece summarizing all the big
developments and what Trump's flurry of executive orders means for climate,
which I recommend listeners check out. There will be more
to come on all of that, but the big headline
(00:42):
that's going to have some impact, which everyone at Bloombergreen
is looking closely at, and what you're writing about this
week is Trump withdrawing from the Paris Agreement.
Speaker 1 (00:52):
Yes, it's something I'm working with lots of reporters across
Bloomberg News because this is the second time that Trump
has on the US out of the Paris Agreement, and
there is a lot that has happened since twenty seventeen
when he first attempted it. There's some similarities, but many differences.
Speaker 2 (01:11):
Okay, let's go through what's the same and what's different
from twenty seventeen.
Speaker 1 (01:14):
The first time it happened. There were all these rumors
that once the US exits, it's the world's largest emitter,
it's the world's largest economy. Other countries that weren't really
committed to climate will also leave. Well, that didn't happen,
and even now we are only a week out, it
hasn't happened yet. There's still rumors of countries like Argentina
(01:35):
and maybe Russia that might want to pull out, but
so far that hasn't happened. The other thing is that
the US does provide significant funding towards climate finance, especially
under the Biden administration. Now that money is nowhere close
to the fair contribution that an economy the size of
the US should be making, but it was, you know,
(01:56):
eleven billion dollars in twenty twenty four. According to the
Biden administration, that money is going to go away. Plus,
the world's largest banks are in the US, the world's
largest companies are in the US, and that did have
an impact last time around, and it will have an
impact this time around. Multilateralism itself, especially on the climate stage,
(02:16):
was always on shaky grounds. It is perhaps on shaky
air grounds.
Speaker 3 (02:21):
Now.
Speaker 2 (02:21):
Okay, so those are things that are quite similar. What
do you feel is radically different this time? Around than
from twenty seventeen.
Speaker 1 (02:28):
One is simply the time factor.
Speaker 3 (02:30):
Right.
Speaker 1 (02:30):
Twenty seventeen was thirteen years from twenty thirty, when many
companies and countries had set targets to reach. Now we
are just five years away and most countries and companies
aren't on track, so the urgency to act has grown.
Of course, climate impacts have grown in number and in ferocity,
and the urgency to act on climate change has grown.
(02:53):
There is also not that many were leaders who are
pushing for climate action. In twenty seventeen, you had just Trudeau,
you had Angela Merkel, you had David Cameron. This time
Trudeau is on his way out, Angler Merkele is not here.
David Cameron or none of the UK's very climate forward
(03:13):
leaders are stepping up. Sure, China's perhaps showing up in
bigger ways. There's an Australian leadership in place at least
for now, that's doing something, but the big bulwark of
world leaders against Trump's climate moves aren't here. And then,
the global economy in twenty seventeen had low interest rates
(03:33):
but very expensive clean energy. This time interest rates are higher,
but clean energy is cheaper and the sums being invested
in the clean energy transition are just far greater.
Speaker 2 (03:45):
And our colleagues at Bloomberg and EF have some new
numbers on that energy transition out in a report today.
You sat down with Albert Chung, Deputy CEO of Bloomberg NIF,
Bloomberg's New Energy Research Unit, to talk about what the
numbers are and what they have to tell us about
the momentum on the energy transition. So let's hear that conversation.
Speaker 1 (04:06):
Now, Albert, Welcome to the show.
Speaker 3 (04:22):
Thank you great to be here now.
Speaker 1 (04:24):
As a climate reporter, I often feel like I have
two distinct realities that I live through all the time.
One where because we keep putting green as gases into
the atmosphere, the world keeps heating up and we see
more extreme weather events and more catastrophes. On the other,
the energy transition, the solutions to try and tackle climate
(04:44):
change only seem to be growing in size accelerating despite
the politics around the world. And these two realities are
seemingly contradictory, but they are two realities, and at pressure
moments like the election of Donald Trump, those conflicting realities
are hard to parse. I know that this is something
(05:06):
you also think about a lot. In an analysis you
wrote for Bloomberg and EF, you said you are also
in a constant state of dissonance. What do you mean.
Speaker 3 (05:16):
Yeah, I mean, so we live and breathe energy transition
in BNF, and even if you just look at energy
transition all day, you also have this dissonance of things
sometimes looking really great and other times just not enough.
And certainly this year feels that way. I mean, there
was record investment across clean energy technologies, record numbers of
electric vehicles sold, record amounts of renewable energy installed, record
(05:37):
amounts of story you know, all these amazing achievements and
progress and scale and acceleration, which is great to see.
And yet and yet, and yet we always run the numbers,
as you know, at the beginning of every year on
what does actually need to happen to get on track
for the climate goals, for the Paris Agreement and so
on and so forth. And usually what we find is
the total amount of investment going into energy transition is
(05:58):
roughly about a third of what it needs to be
to get on track. So that's for me, that's the
dissonance we grapple with around this time of year. Actually,
funny enough in the winter when we're running those numbers.
Speaker 1 (06:07):
Well, talking of investment trends, Luomageni f is launching its
report for the Investment Trends in the Energy Transition of
twenty twenty four today. What do the numbers say?
Speaker 3 (06:17):
So the report is Energy Transition Investment Trends twenty twenty five.
It's a report we've been doing for twenty years and
this year we find that total global energy transition investment
hit two point one trillion dollars last year. That's a
new record.
Speaker 1 (06:30):
That's breaching the two trillion dollar mark.
Speaker 3 (06:32):
The first time over two trillion dollars, and so it's
a real milestone at a great achievement. But there are
some caveats in there. So one is growth year on
year was only ten point seven percent, which in most
industries you would take that as a growth industry.
Speaker 1 (06:45):
If you're having to be happy with that salary.
Speaker 3 (06:48):
Exactly exactly, I think we'd all be okay within eleven
percent rais. However, in previous years, the last three years,
the growth was between twenty four to twenty nine percent,
so the growth has been a bit slower. Now, what's
dry that growth. It's one country it's China. So China
invested more than eight hundred billion in energy transition last year.
(07:09):
That was more than the EU, the US and the
UK combined, which by the way hadn't been the case
the year before, So that doesn't happen every year. And
China alone drove two thirds of the global growth that
we saw last year.
Speaker 1 (07:22):
Wow.
Speaker 3 (07:23):
So yeah, it's a really interesting reader. We really enjoy
going through the data every year and kind of picking
out the trend. So I really thoroughly recommend that folks
take a look at that.
Speaker 1 (07:33):
And there is a framework that you have created to
try and understand this year that we are going into
with the politics where they are and with the energy
transition where it is. And you say that we have
gone through three phases of the energy transition, you describe
them as sacrifice, opportunity, and competition. Expand on that.
Speaker 3 (07:54):
Yeah, I mean this was in the piece that I
wrote really about the way that the multilateral climate action
and discussion has evolved over the time that you know,
benf have been following this. So in the twenty tens,
you know, prior to the Paris Agreement, most countries thought
of climate mitigation and low carbon transition as a sacrifice
they would have to make, you know, they would have
to lower living standards or sacrifice economic growth in order
(08:18):
to save the planet. That was the kind of the
overarching thesis, and so a lot of the discussion around them, well,
how do I make sure that I don't do too
much too quickly, and make sure that other countries do
their part, and really just kind of find a fair
way to share the sacrifice.
Speaker 1 (08:33):
Right, Developing countries were suffering and are suffering from most
of the climate impacts disproportionately, while developed countries have been
the ones that have put out all these venas gaz emissions. Then,
so there's always this push between developing countries wanting developed
countries to do.
Speaker 3 (08:47):
More exactly, and that was always the primary axis of
this debate, was developing and developed countries having that sort
of discussion, but even among developed countries discussion of who
bears more responsibility and how can we make sure others
are doing their part? And all of that changed, you know,
after the Paris Agreement, which was really coming together of
this idea that actually this can be an opportunity. And
(09:07):
at the same time that the Paris Agreement was being signed,
we were seeing these tremendous cost reductions in renewal energy technology,
basteries and storage and electric vehicles all coming down in cost.
Speaker 1 (09:16):
We had the IPCC one point five ZEA report come
out right after that, which sort of gave the world
and at zero framework, there's a Fridays for future with
all the kids marching on streets. That felt like a
momentum exactly.
Speaker 3 (09:28):
And so we arrived in Glasgow in twenty twenty one
for twenty six with this idea that countries are grasping
the opportunity. So it became an opportunity framing in countries
almost racing to say we can do this faster and
better than we thought, and potentially faster and better and
capture more opportunities than others as well.
Speaker 1 (09:45):
That led to record investments in the energy transition, but
also in climate tech startup which saw a huge amount
of investments coming through in twenty twenty one, twenty two,
and then over the past few years, even before the
US election, it all started to a little bit deflated.
Speaker 3 (10:02):
Yeah, and I think the opportunity framing that was so
strong three or four years ago hasn't gone away. But
what's happened is that there's just been this very strong
sense of competition and quite a strong kind of economic
cost benefit analysis that's been injected into that at a
country level. So policymakers, heads of state are also saying, look,
we see this low carbon transition, opportunity to create industries,
(10:23):
to create jobs, to capture the value of this transition,
but we need to actually see that materialize in order
to make the case to our people that this is
the right way forward.
Speaker 1 (10:32):
But if competition is being injected into the energy transition,
with what signals we're getting from President Donald Trump, around
increasing fossil fuel production, around taking all the subsidies away
from electric cars, around not giving any permissions to build
wind turbines in federal lands, and this very anti climate
(10:57):
it's not about economic, it's an anti climate move that's
being made. Does that mean the US just becomes less
competitive and the rest of the world competes instead.
Speaker 3 (11:06):
Well, we're talking about this in the very very early
days of the new Trump administration. It's just been a
few days since he was inaugurated, and what we've seen
so far is of course that he is doing everything
he can really to roll back any kind of policy support,
particularly for electric vehicles. That's really the sort of biggest target,
let's say, And so it's at things like reviewing the
(11:26):
corporate average field economy targets, looking at the California waiver
that allows California to set its own its own emission standards,
looking at the IRA funding, looking at the electric vehicle
charging infrastructure funding, and seeing if they can stop those
funds going out, funds that have been previously committed. So
those are quite strong actions that he and his administration
(11:47):
want to take, and we will see how much of
that is successful and has the desired effect that he's
looking for. But the net impact of all of that
is that will slow the adoption of electric vehicles in
the US relative to what it had been forecast to be.
And as been f we have lowered our electric vehicle forecast.
So in the US, we've taken our EV forecasts from
(12:07):
about half of all new vehicles sold in twenty thirty
being electric to about a third. That's still growth, So
we still think, you know, the fundamentals driving EV adoption
are going to be strong, the economics are getting.
Speaker 1 (12:19):
Better, and because it's going up from about ten percent.
Speaker 3 (12:22):
Today exactly exactly, so it's still growing but there's a
lot that governments can do to try and slow it down,
let's say, maybe not change the direction, but at least
slow it down.
Speaker 1 (12:31):
And what about the apparent slowdown of the EV transition
in Europe?
Speaker 3 (12:35):
Yeah, and in Europe. So we've looked at it, and
in the end, when you look at twenty twenty four
as a year, EV sales were flat in Europe, so
they weren't up, they weren't particularly down that it's going
to come out that they were roughly flat, And there
was a lot of hand ringing in the industry about
the you know, consumers don't want them, et cetera, et cetera.
But you know, when we looked at it, some of
the reporting was really picking on data that wasn't necessarily fair. So,
(12:59):
for example, in Germany, there'd been a big sudden change
in subsidy programs, which meant that sales dropped very suddenly,
which is totally expected and to be honest, is going
to be part of the transition as you remove subsidies,
but that was reported on as being a really negative
moment for the EV industry. And then more importantly, you know,
we follow the policy very very closely and Europe has
a set of emission standards that automakers must meet, and
(13:21):
part of their way of meeting them is to sell
electric vehicles. Now, those standards have remained stable from twenty
twenty one to twenty twenty four. So twenty twenty four
was the last year that automakers were still at the
same standard as they had been for the last few years,
and that standard steps up in twenty twenty five. So
the thinking that we've put through the ringer internally is
(13:42):
to say, well, if we were an automaker and we
were already achieving the emissions targets that we'd been set
the last three.
Speaker 1 (13:48):
Years, why would I do anything more?
Speaker 3 (13:50):
We would save up our effort for next year. We
would look to launch our new models, reduce prices, and
all that in the next year when we have a
suddenly higher compliance target. So we think that the fact
that European automaic is sold about the same number of
evs in twenty twenty four as they did in twenty
twenty three kind of makes sense. It may not be
as much of a disaster as.
Speaker 1 (14:09):
People thought.
Speaker 2 (14:15):
After the break Uckshutt and Albert discuss how much the
Paris Agreement and the COP frameworks still matter when it
comes to continuing to drive the energy transition.
Speaker 1 (14:31):
So a lot of these policies that we talked about
are policies that are now in place, partly because of
the Paris Agreement, where all the countries came together and
signed off on a target, and then some of the
countries went back and actually put legislations in action. Now
that all these legislations are in place, how much do
you think the COP framework still matters.
Speaker 3 (14:52):
I think the COP framework matters a huge deal. I
think that if we are to take the Paris Agreement
seriously and get on track for well below two degrees,
we need to see higher and higher tightening rageting climate
targets from countries. So right now as actually as you know,
this year, there's going to be a lot of discussion
about twenty thirty five nationally determined contributions. Countries are due
(15:13):
to put forward their plans in the coming weeks for
twenty thirty five emissions reductions. Those matter a great deal
because those countries, assuming they do come forward with ambitious targets,
those targets then end up driving lawmaking and regulatory action
within those countries towards meeting those goals. So I think
that while CARP and NBCs are not the only, by
(15:34):
far from it, the only mechanism for driving energy transition,
it's one of the top down leavers that can really
make a big difference.
Speaker 1 (15:41):
And so in terms of what it means for how
other countries and economies should navigate the transition. If the
US is no longer on board with the Paris Agreement,
what should the other countries be doing?
Speaker 3 (15:54):
In my view, there will be two different reactions to
the US pulling out of the Paris Agreement and so
on. One is major economy stepping up and saying we will lead,
we want to lead. This doesn't change the science, this
doesn't change the objectives that we have to hit, and
so we will put forward ambitious goals and we're going
to hit them. I think for me, I have a
worry that some of the smaller economies, or even rapidly
(16:15):
growing economies, will take the US pulling out of the
Paris Agreement as proof that rich countries are not serious
about climate action and therefore may come forward with less
ambitious targets, or at least have the cover to do
so if that's what they want to do, so that
would be something I'd be looking and hoping doesn't happen,
but be looking for.
Speaker 1 (16:33):
Thank you, alby thank you actually act.
Speaker 2 (16:44):
Let's talk a little more about that last point Albert
was making. He was essentially saying that the US withdrawing
from Paris might give other countries cover to be less
ambitious in their climate goals, even if they do stay
in the Paris Agreement. Is that something that's been bearing
out in your reporting as you following the story.
Speaker 1 (17:01):
I think that's right. There is a wide recognition among
experts we spoke to that the US leaving is not
a good thing for the international climate diplomacy sphere. We
spoke to Andre Corea do Lago, who is now the
COP thirty president and who was on the POD in
COP twenty nine when we met him in Baku, and
(17:22):
in a recent interview with Simone Iglesias, he said, given
that the world's largest economy has clearly decided to deviate
from the path of combating climate change, COP becomes even
more necessary in this adverse context, and then he went
on to add that you know, Brazil is part of
the Bricks framework, Brazil, Russia, India, China and South Africa
(17:42):
and that he hopes that that grouping will provoke discussions
at the COP in Brazil. And he said that he
hopes that countries can arrive at the COP in quotes
with new ideas and perceptions.
Speaker 2 (17:55):
And that sounds quite similar to the tone he was
taking when you talk to him in November. He wasn't
even officially in this role of COP thirty president yet,
but you spoke to him about Balm and it was
clear he was already feeling very ambitious about what role
Brazil can play on the global stage when it comes
to climate. So that will be something interesting to watch
another ten months from now. In blem. We haven't yet
(18:18):
talked about what the US withdrawing from the Paris Agreement
means for companies who are also using the goals set
out by Paris and the sort of binding framework to
set their own climate targets.
Speaker 1 (18:30):
Indeed, between twenty seventeen and now, most major companies around
the world have set net zero goals. Many of them
have twenty thirty targets, and as we know, many of
them aren't on track. I spoke to Helen Clarkson, the
CEO of the Climate Group, who said, especially in the
US particularly the weaponization of social media has led to
(18:53):
companies doing what is called green hushing, which is continuing
their green activities but not advertising it. She said. They
just don't want to put their heads above the parapet.
Speaker 2 (19:04):
So they might carry on doing what they've been doing,
but quietly trying to not draw attention to it, particularly
on social media, is what you're.
Speaker 1 (19:12):
Saying, right, And that's not the case for European companies,
where the governments have clearly legislated goals. And sure there's
some right wing turn in some countries, but European companies
and banks are quite committed to the Paris Agreement. We
also know in twenty seventeen that a number of non
state actors and regional governments in the US stepped up
to try and meet Paris Agreement goals, even though the
(19:33):
federal government wasn't a part of it.
Speaker 2 (19:35):
Speaking of other actors stepping in, this seems like the
place to mention that Mike Bloomberg, the founder and majority
owner of Bloomberg LP, which is the parent company of
Bloomberg News, is going to be making up the US's
contribution to the UN's climate body, the unf tripleC, and
he did provide that same support when Trump withdrew from
(19:55):
the Paris Accord in twenty seventeen. Last time that was
more than fifteen million dollars. It will probably be something similar,
I imagine this time.
Speaker 1 (20:03):
He's also a supporter of the All In coalition that
includes many of these non state actors and regional governments.
Speaker 2 (20:10):
One last big picture question before we go. The end
of this year, twenty twenty five will be ten years
from when the Paris Agreement was first signed. So the
US pulling out is a big deal, but we've already
had ten years of this agreement being in place, with
its ups and downs, and in some ways, is it
fair to say that that alone has been a pretty
(20:32):
big success.
Speaker 1 (20:33):
Yeah. I mean, we can discuss the numbers as we
did around investments, around energy trends, around company and government
commitments and legislations, but really, to me, the biggest thing
is that the reality of climate change and of climate
action has sunk in deeper into the public consciousness in
a way that just did not when the Paris Agreement
(20:55):
was signed. People kind of know what net zero is
today or one point five c or if not, they
definitely know that they can certainly start to connect some
of the most extreme weather events that are happening around
the world to climate change and the demand for climate
action despite the political outcomes in certain countries, hasn't yet.
Speaker 2 (21:16):
Gone down nice talking with you actually, thank.
Speaker 1 (21:19):
You, Mite, and thank you for listening to Zero. And
now for the sound of the week, that's the sound
of rock being melted using microwave, a technology from a
(21:41):
startup called Quas that could make geothermal accessible anywhere in
the world. If you like this episode, please take a
moment to rate and review the show on Apple Podcasts
and Spotify. Share this episode with a friend or with
someone who doesn't trip on the word multilateralism.
Speaker 2 (21:56):
Multilateralism.
Speaker 1 (21:58):
You can get in touch at zero at Bloomberg dot net.
Zero's producer is Mighty Lee Rao. Bloomberg's head of podcast
is Sage Bauman and head of Talk is Brendan nuna Aati.
Music is composed by Wondering Special thanks to Alfred san
Iva Kokowska, John Anger, gend Delouis, Sarah hug Lou del Vellow,
Simon Iglesias, Amanda Hurley, and jessicabec I. Am Akshatrati back
(22:24):
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