Investing in Global Climate Change Adaptation: The Emerging Resilience Economy

This transcript is from a CSIS event hosted on October 24, 2024. Watch the full video here.

Noam Unger: All right. Well, good morning. Good morning to all of you, or good afternoon. or good evening, depending on time zones. We have a lot of people tuning into the livestream from multiple different time zones. Welcome for today’s conversation to discuss investments in global climate change adaptation and the emerging resilience economy. I’m Noam Unger. I’m the director of the Sustainable Development and Resilience Initiative here at CSIS.

The world is already contending with the often harsh consequences of our changing climate. And as world leaders work to protect climate-vulnerable populations from the shocks and stresses associated with extreme weather, the new CSIS Sustainable Development and Resilience Initiative is aiming to better inform policies that will affect the adaptation prospects of developing countries. This entails examining the public and private investment landscape associated with a resilience economy that is just emerging.

The reality is we can no longer afford to focus our high-level dialogs and partnered initiatives for climate almost entirely on the challenges of decarbonization and mitigation. As critical as those net-zero related societal and industrial shifts are – and they are critical – we must find ways to simultaneously reduce and address the impacts of climate change that are already baked into our planetary systems for decades to come. And that’s only going to get worse if we continue to miss our mitigation targets.

The whole set of adaptation issues, it’s not a distraction or a defeatist approach, but rather out of necessity our collective ambition must go even farther. And struggling climate-vulnerable populations around the world already know that the race to resilience is not going to be effective if it is treated only as an add on. But we need to approach these issues from a more systemic and foundational way. We can’t focus solely on detailing the problems of climate change impacts and the costs of adaptation. We already know both of those lists are very long.

We must instead be solutions-oriented. As adaptation efforts will continue to rise in priority and edge closer and closer to center stage in climate change discussions, a related new economy – a whole new economy is emerging with the development of new investment asset classes, innovative approaches to insurance, technology-enabled climate information services, and even burgeoning efforts to catalog and monetize the benefits of adaptation measures.

So we’re here today to talk about current opportunities and challenges for implementing climate adaptation efforts, and how governments and multilateral institutions are shifting their approaches to prioritize resilience-oriented investments. And for this discussion, we have three excellent leaders with us.

John Podesta is the senior advisor to President Biden for international climate policy at the White House. And he’s known to many of you as critically – as a critically influential policymaker across multiple presidential administrations on issues domestically and internationally. So he barely needs an introduction. So I’ll just point out that he has, for decades, shaped approaches to U.S. security and global leadership that advance human dignity and opportunity around the world. Thank you for being with us.

Ambassador André Corrêa do Lago serves as the secretary of climate, energy, and environment at Brazil’s Ministry of Foreign Affairs. This is a role that suits him well, given his decades of experience on issues of sustainable development and climate, including prior experience as Brazil’s ambassador to multiple countries and as their chief climate negotiator in the past, as well as currently. So thank you and welcome.

And Dr. Pepukaye Bardouille is the director of the Bridgetown Initiative and a senior advisor for climate resiliency to Prime Minister Mia Mottley from Barbados. Among other roles, Pep, as she’s known, also served as the founder and CEO of the Climate Resilience Executive Agency for Dominica. So her experience means that she drives big, challenging, thorny policy reform thinking while also translating policies into delivery on the ground. Thanks for being with us.

And a note for those of you who looked at the agenda in advance, we were also planning to host a representative from the African Development Bank, but their vice president, Dr. Kevin Kariuki, sent me his regrets in a note late yesterday evening, due to an unanticipated conflict.

So welcome to you all.

John Podesta: It’s bank week.

Mr. Unger: It’s bank week. (Laughter.) It’s bank week. Lots of things come up.

John, I’d like to begin with you. 

Mr. Podesta: Sure.

Mr. Unger: Sitting where you sit, at the White House, why are global climate adaptation and resilience efforts – why are they important? And what has the United States been doing on this issue?

Mr. Podesta: Great. Well, thanks – you know, thanks to CSIS, thank you – thanks to you, Noam, for not just hosting this event this morning, but for really focusing a whole line of work at CSIS on this critical topic. I think, from our perspective, of course, we’re looking at what’s going on around the world. The effects of extreme weather, the knock-on effects on human security across the globe, the hurricanes in the Southeast – Hurricane Milton, Hurricane Helene – the fires in the west, the historic drought. But it’s happening across the globe. In Brazil, fires in the Amazon, fires in the Pantanal, in the wetlands, which are burning. A historic drought in southern Africa that’s putting at risk millions of people, causing nutrition loss for literally millions of children. Flooding in Central Africa and West Africa – in Central Europe and West Africa.

So we’re seeing real time the effects of what a warming planet is doing. And we need to take action to help societies build a resilience that will let them continue to survive and thrive. And I think that, of course, for us begins at home, where the combination of the investments that President Biden and Vice President Harris have made in the bipartisan infrastructure law and the Inflation Reduction Act has a strong focus on not just investments in clean energy and reducing emissions and transitioning the economy from one that’s based on high-carbon energy to one that’s based on clean and renewable energy, but also to really focus on resilience.

So we’ve invested, through those two pieces of legislation, nearly $50 billion in resilience. To give you a couple examples, the NOAA has issued $575 million worth of grants to strengthen coastal communities and strengthen the resilience of coastal communities against storm surge, sea level rise, et cetera. We’ve spent $1.5 billion to – in urban forestry to provide people, particularly in the urban core, with the benefits of having trees that reduce the heat load in cities. Sometimes what you see in American cities is in the – in the poorest neighborhoods in the urban part of the city it’ll be 10 degrees Fahrenheit cooler than just two miles away in leafy suburban neighborhood.

Mr. Unger: You mean it’ll be hotter in those areas.

Mr. Podesta:

Ten degrees hotter in the urban core.

Mr. Unger: Yeah. Yeah.

Mr. Podesta: So we put, through USDA’s Urban Forestry Program, $1.5 billion on the table. To give you a comparison of that, that whole program, prior to the passage of the Inflation Reduction Act, was $35 million a year. So the level of scale is really critical. But we’re not just – so we’ve really made historic investments in – to deal with what is a drying out Southwest, through the investments we’re making in the – in the Colorado River. And I could go on and on. But I think we are taking that seriously. We’ve created a National Strategy on Resilience that was recently produced in the White House.

But we’re also, on the other side of the coin, thinking about that globally. And the president made a commitment to really amp up the scale of our support in our foreign assistance on resilience. We’ve increased, through a program called PREPARE which really involves a whole suite of government agencies to provide the kind of tools that countries need to really be able to understand, plan for, and build up resilience in their health care systems, their education systems, early warning – which we can talk more about. But that – the president in 2021 said that he wanted to increase that support to $3 billion a year. In 2023 we’re at $2.2 billion, and we’re on track to hit that $3 billion mark.

Why is that critical? Because, I think particularly in terms of being able to build these early warning tools, it is of tremendous value to let – when people are warned about extreme weather coming at them, the level and effect of reducing the cost of that is very, very substantial. But let me stop there. We can talk more about it.

Mr. Unger: No, that’s great. That’s a wonderful start to paint the picture. And I think we can look at some of the domestic examples as what you can do when there’s an investment and resources, and then compare it to what is possible in developing countries around the world.

Ambassador, let me turn to you to share your perspective on the growing role of adaptation, and what Brazil is doing.

André Corrêa Do Lago: Yes, well, thank you very much. I’m very glad to be here. And CSIS, I think, can have a very important role in putting adaptation where it should be. And, in fact, as you mentioned, I’ve been negotiating for climate change for many years, but – I was not, and I came back now. But I think that the vision I have and the perspective I have regarding adaptation has changed enormously in recent years.

As we all know, adaptation and mitigation have been an eternal fight in the negotiations. And I tended to be on the mitigation side, I have to say. But the circumstances that we are living have shown that we really have to completely change our way of looking at adaptation. And now recently, in the Brazilian G-20 presidency, we organized under the Working Group on Sustainable Climate and Environment a very special discussion on adaptation. A bit in a dimension that is somehow a bit new for most people who deal with that, which is the private sector’s role in adaptation.

Because somehow, in mitigation we see very clearly that most of the resources that we’re going to need will have to come from the private sector, because we’re talking about trillions in mitigation. And obviously, under the convention and the Paris accord, we’re talking about billions. So we really need the private sector in a very clear way, because it’s about investments, it’s about the economy. It’s about changing the economy. In adaptation, it’s much less clear. But it was very interesting in those discussions under the G-20 how many opportunities there are for private role in the discussions of adaptation.

But there is this eternal difference between mitigation and adaptation, is that when a country or when we have those discussions, when you put money in mitigation, you can tell – in another country, like in the case of the U.S. and other developed countries – you can tell your taxpayers that you’re putting money in another place, but mitigation is going to be good because it’s going to affect the entire world. So somehow, you are doing something that is good for all and is good for your taxpayers.

Now, in adaptation is much more complicated. And adaptation ends up being a bit in a category of local issues, which is a mistake, by the way. But, like biodiversity for instance, that has enormous difficulty to get resources. And also somehow the SDGs. So there are many people that think that adaptation somehow is more linked to the SDGs than to the negotiations of climate change itself. But I think that we have – and we have improved recently – this debate about adaptation.

And unfortunately, it’s the terrible things that are happening that John was mentioning that is also changing the perspective of the public regarding adaptation. So in the case of Brazil, when we had these floods in the south of Brazil – now, the south of Brazil looks much more like Argentina than when we look at Brazil as Amazon and Brazil as a tropical country. And the whole of Brazil was somehow perplexed that for most Brazilians climate change is about the Amazon. You know, it’s the image.

And suddenly you have these images in a completely different context that have given a very strong understanding in the Brazilian public about what adaptation means, and even for the government itself. So I think this is really the moment for us to discuss a new way of looking at adaptation. And that’s why I think it’s a very, very welcome opportunity we have today.

Mr. Unger: Great. Well, thank you.

Pep, I want to bring you in. As I said, you sort of toggle between sort of the big picture, sort of policy reforms at a global level, and the actual implementation. And you’ve also been at this nexus of public and private sector. So share your perspective a little bit on these issues.

Pepukaye Bardouille: Yeah. Thank you. And thank you so much for the opportunity. It’s a pleasure and a privilege.

I think what John said, or your introduction to John, on the humanitarian and the people side of this, is a critical piece, right? Is we’re doing this for a reason. And the reality is that most people who are affected by climate change were vulnerable to many other things before, right? They’re the ones who are struggling with access to basic infrastructure. They’re struggling in a number of ways. And the climate crisis is just the cherry on the top that makes everything worse. I think what, you know, the ambassador has said around mitigation – for your sins, it’s OK to come over to the adaptation side. (Laughter.) But the reality is that they’re also deeply connected.

Mr. Corrêa: It’s a confession.

Dr. Bardouille: Your confession. The reality is that they’re also deeply connected, right? You know, we have people who say, really, we’ve got to focus on loss and damage. Well, the reason we have to deal with loss and damage is that we didn’t solve mitigation. We’re not funding adaptation. And even when you fund adaptation, you know, in the – you talked about, you know, early warning. Early warning is fantastic, and you can prepare for a disaster, but then you have to have somewhere to go. Like, where do you go if you’re a Pakistan and 30 million people are affected by floods? Where do you go in smaller countries, like Dominica or Barbados? Do you have enough shelters? And so that preparedness is critical.

But even after the preparedness, you need that emergency response. Look what happened after Katrina. Look what happened after Maria in Dominica and Puerto Rico. Like, for years you have this kind of post disaster. And then you end up with, oh, now we have loss and damage. So they’re a continuum, but they’re also deeply interlinked. It’s kind of a whole system. And the reality is that we could cut emissions right now, we’re still going to need to adapt for some time, because we’re going to pay for the impacts. And so the way I look at this is that adaptation is absolutely critical at all levels and in all countries. We cannot get away from it now, right? It’s floods, it’s fires, it’s north, it’s south, it’s east, it’s west. So the question is, what do you do about it?

You mentioned, you know, private sector. And it’s not always clear. In some instances, that’s absolutely right. In others, I think that there are ways to bring the private sector in. So if you think about housing. You know, making sure that not only are there resilient standards, but that those are implemented. And most of those housing, you know, assets are owned by private people. They have mortgages. They are participating, through their pockets, in the sector in adaptation and in building resilience. In other instances, particularly when you’re looking at low to middle income countries that are still building huge amounts of infrastructure, or infrastructure upgrades here in the U.S. or in Brazil, you know, how do you make sure that any upgrades are done to resilient standards?

And the private sector is really kind of – you know, that incremental increase, which years ago – I’m old enough to remember when you know the GEF, the Global Environment Facility, was set up. You talked about this. You know, financing of that gap between do I build a coal plant or do I build a renewable plant? And you have this incremental financing. There’s nothing new about it. The question is, sort of, how do you then catalyze private investment but make sure that, you know, the extra cost, done in the right way, is funded? Beyond that, I think that, you know, adaptation is critical, particularly in countries that are building new assets.

If you look at the continent of Africa, I mean my previous life, before I got into resilience proper, focused in large measure on the energy access challenge. There’s still 600-plus million people who don’t have access to electricity. They’re going to get access eventually. How do you do this in a way that’s truly resilient? Do you build decentralized systems? It’s not just about let’s do renewable, you know, centralized power plants, and then, you know, have overhead cables. And how do you make sure that you’re building this in?

And so for me, adaptation is so deeply interlinked with the development pathway now that we’re on. So it’s not like an add on. It’s really at the core. Otherwise, if you’re kind of not planning for it from the get-go, it’s seen as an extra. And then you kind of have to, you know, hustle for the funding or for the financing, and figure out what the new business models are. So I think it does need to be baked in. And that’s where the mindset shift comes. It’s a little bit like teaching children from a very, very early age, oh, consume less, right? Don’t consume and then recycle, like, you got to shift your mindset.

So I think that that’s where we need to head with adaptation. But it does not leave – and, you know, I’m sure we’ll get to this through the rest of your questions. It doesn’t kind of leave out the question that we still need, at least – and that’s what we’re calling for in the Bridgetown Initiative – $300 billion additionally every year, at least, in financing for adaptation. And that that needs to be in the form of more, cheaper, longer-term capital. Otherwise, it’s not really affordable from the public purse.

Mr. Unger: Mmm hmm, great.

Mr. Podesta: Can –

Mr. Unger: Yeah.

Mr. Podesta: To just put a fine point on what we’re talking about in terms of the distinction here. I think maybe 10 years ago, because I’ve been around doing this for a while, it used to be there was a school of thought that if you talked about resilience, you talked about adaptation, you were going to dissuade people from focusing on mitigation. You were going to – people would think, well, you know, yeah, it might be bad, but two degrees that, doesn’t sound like that much, or 1.5 sounds like there’s not that big of a delta. We know all that’s not true. But I think it was sort of a sense that if you – if the – if the world and societies focused on working their way around the problem, they wouldn’t solve the problem.

I think that was wrong then. It’s clearly wrong now. And I think people get – you have to do these – the challenge of making the investments to move the economy towards reduced emissions, towards clean technology, ultimately towards net zero, and to be taking as much carbon out of the atmosphere as we’re putting into it by midcentury, is an enormous challenge. The IPCC said it’s an economic transformation that’s never occurred in human history. So that’s the scope of the challenge. But has to be done understanding that as we – as we’re moving along, there’s plenty of opportunity to build more resilient societies.

And that is not – again, I think sometimes people think of that as kind of hardening infrastructure, or building climate smart infrastructure using natural systems, et cetera. It really has to be baked into and planned into all forms of kind of government service, at least. Whether that’s delivery of healthcare, delivery of education. You know, kids are out of school in developing countries for 18 sometimes 30 days a year, not learning, because of extreme heat that’s going on. You see that in the Philippines, Southeast Asia, you know, parts of the Middle East, where it is just so hot you can’t go to school. And so I think planning for systems that take account of what that changed environment is, is going to also build more sustainable, resilient societies.

Mr. Unger: So the planning certainly implicates sort of governmental leadership and operations, as you were describing in the education example and extreme heat. But you also mentioned opportunity. And in my mind, there are actually quite a number of opportunities around this rising priority in, as Pep said, every country around the world, and certainly in sort of climate-vulnerable and developing countries, for economic engagement. You’d mentioned the President’s Emergency Plan for Adaptation and Resilience. One feature that I actually think is quite astute or visionary of that presidential initiative is from, the get go, trying to engage the private sector.

And this is a – this is a point that the others have also made about the role of the private sector. I think there are now, like, 39 companies that have signed on to partner with that. So, like, tell me more about sort of how do you see the role of the private sector shaping climate adaptation discussions going forward?

Mr. Podesta: Well, look, I think it’s a feature of PREPARE Call to Action, which was, we’ve engaged the private sector. We’ve encouraged them to take their own initiatives. I think it’s good for their bottom line. BCG estimates that for a dollar invested in resilience and adaptation there’s high levels of return. Where we see –

Mr. Unger: For the company.

Mr. Podesta: For the companies. Where are we seeing that? Obviously, in sustainable water systems – and we –and we have pledges in this arena – in in the early warning systems, in data systems to help cities plan better for the effects of climate change, in insurance products. I think this is a growing interest in the insurance world to insure against. And spreading those products into the developing world. I think there’s – we see companies taking up the call and working with us, much like we’ve seen in the First Movers Coalition, on the mitigation side, where companies make pledges and then we try to hold them – (laughs) – to their plans to get things done. We’re seeing that now on the adaptation side.

Mr. Unger: Ambassador, I’m interested – you mentioned the G-20. And you’re about to host the G-20 next month. So at that level, with the world’s leading economies, on this set of issues, the challenge of resilience – and maybe even these issues of an emerging sort of economy and economic opportunity connected to resilience, what are you seeing or not seeing at the level of engagement in the G-20?

Mr. Corrêa: Well, in that case, quite interesting, because you have one country that has been obsessed with this theme for a long time, but for other reasons not for climate change, which is Japan. So Japan has, and I was lucky to live in Japan many years. And you can feel in Japan how much there is an entire economic logic linked to the threat of the earthquakes, in the case of Japan, and the tsunami. So but this logic and early warning, all these things, the Japanese started with that much earlier than the others. And so they had been insisting on that. And suddenly it’s climate change that brought this understanding to the other countries, I believe, in the G-20. So it was quite interesting.

But what I believe that is very important, and you both mentioned that, is that the challenge of climate change is that you have to change the economy. And you have to change the economy in all the countries, because all the countries – although they may have paths that are easier. I think that we were lucky because of energy and things like that. But the fact is that there are – in every country in the world there are sectors that are going to suffer enormously with the fight against climate change.

And so a new kind of economic logic has grown for mitigation, which I think has – I think has been pretty successful because we’re seeing the results of some of these things, and quite convincingly, that you can have cheaper energy that is renewable, et cetera. Took a certain time, but I think that there is a logic. I think we have to build the economic logic of adaptation, because it will bring some allies to this effort. And I think of the most obvious ally of this effort now are the insurance companies.

Insurance companies are really very concerned about what is happening. And they are very interested that the infrastructure becomes an infrastructure that makes things more resilient. So that was the very great lesson we had in these floods in the south of Brazil, is that how many things could have been done to reduce enormously the impact of what climate change provoked there.

Mr. Unger: Pep, John mentioned insurance. Ambassador Corrêa just mentioned insurance as well. The prime minister of Barbados, who is a tremendously compelling leader on these issues of not just resilience but climate change and the reform of international institutions and financing, but she has said: What is not insurable is not investable, right? So I’m interested, you live and breathe these issues. What evolutions are you seeing, or would you like to see, at the nexus of insurance and public policy, to support climate vulnerable nations?

Dr. Bardouille: No, thank you for bringing that up. And funnily enough, this week I’ve spoken a lot about insurance. But maybe before going into that, if I may just take a page out of John’s book, and just jump in. I think you’re absolutely right, Ambassador, fundamentally. And I think John mentioned this as well. Fundamentally I think we’re on a very, very, very precarious development pathway, right, where we need to fundamentally change both our definition of progress – and this is going a little bit far – but also what we see as truly sustainable.

I’m old enough to remember the Rio Conference, 1992.

Mr. Corrêa: You insist on that; that nobody believes you.

Dr. Bardouille: (Laughs.) I’ve got the gray hair. My first job as an intern was working on a report called, Energy after Rio. With also a reformed – while we’re on this path – a reformed nuclear physicist who got into renewables, Thomas B. Johansson at UNDP, years and years and years ago. And he put me to work as an intern on this Energy after Rio report, five years after Rio. And that’s when I got into the energy and the climate space, before it was, you know, particularly sort of mainstream, but enough people had been working on it for a while.

And I think that’s really where we have to go back to basics, to the Brundtland Commission, to all of these, you know, luminaries who spoke years ago about sustainable development, right? So for me, resilience is kind of the new sustainable development. If we’d gotten it right then, we probably wouldn’t be in the mess that we’re in now. And that’s critical, because that does require us, I think, to ask not just how does a private sector produce the solutions to adaptation, but how do we shift globally, north, south, particularly for countries that demographically will be the next superpowers or the next crippling factor for the planet, if we look at the continent of Africa. Where you have – that’s where you have the young people, right?

Either they’re going to have opportunities or we’re going to have issues. And if they don’t have opportunities, you know, we will have issues. But if they do have opportunities, how do you make sure that those are contributing, again from the get-go, to much more sustainable development pathways? And this applies to all of us. It’s not just picking continents for the sake of it. I think every single one of us every single day has got to do two things differently. And that’s key.

So speaking about the daily, I mentioned this a couple of times this week so sorry if you’ve heard it already, but I got a call from the gentleman who I kind of signed up to get me insurance years ago. I live in D.C. most of the time. I’m in Barbados a large chunk of the time. He’s, like, oh, Pep, your insurance premium – your rate came in. It’s 40 percent higher this year. I live in D.C., in Georgetown. Not a flood zone. Not a coastal country. It’s not even a house – it’s like a tiny rowhouse built in the ’80s, brick, pretty solid. Nothing wrong with the roof, nothing about the neighborhood, no crime – well, low crime. And it’s gone up 40 percent. He says, but you didn’t see it went up 20 percent last year? Because I wasn’t paying attention. I have a direct debit. So it’s gone up 60 percent in D.C. in the past 14 months. (Laughs.)

That’s a challenge. So I said, OK, let me be smart. I went online. I went to one of these insurance things that has some cute mascot associated with it. (Laughter.) And I was like, get me a quote. And it comes back. And there were three companies. I didn’t recognize any of the names. They’re sort of lesser-known companies. And then I was like, can I get a quote from anyone that I know has a brand name? None. And I finally did find one company, one company, that gave me a quote that was kind of on par with what I had last year, so still 20 percent higher than the year before. But essentially, the market wasn’t giving me quotes. They’re not insuring anymore right now until they can figure out what they want to do.

That’s terrifying. So what’s the impact of that, right? Zillow, now, the U.S., is going to add to what Redfin has, which is, like, a little climate risk indicator on your property listing. So that’s going to affect, ultimately, the price of your home. And this is how intergenerational wealth is created, right, is through home equity. So it’s not just, you know, small, vulnerable nations, and how do we ensure after. To bring it back to Dominica. After Hurricane Maria insurance premium went up 86 percent. Most people weren’t insured to begin with, and the little part of the market – and including the power system wasn’t insured. Most government assets weren’t insured, because the government couldn’t, you know, afford the premium on the CRIF facility. So insurance is absolutely critical at all levels.

So what do you do about it? I see three potential, you know, ways – and we could not call them solutions – but ways to address this. If you want to deal with the uninsurable, uninvestable point the prime minister makes, and rightly so, the first is to say, OK, well, we subsidize the rate. So someone’s going to have to fork out a whole bunch of public money, grant money, to subsidize the rate between the 86 percent increase or the 40 percent increase, or whatever, in a market, and what is considered affordable, so that companies actually get insurance so they don’t go bankrupt. So you have that viability gap financing, let’s call it. That’s one option.

The second option is to say, well, no, just because Dominica got hit by a hurricane, it shouldn’t affect the insurance premium in Barbados, because the hurricanes, you know, for the most part, for the time being, are not hitting Barbados head on. So let’s not take this whole, you know, West Africa, the whole market goes up because of one incident. Let’s kind of be much more nuanced. So let’s have the insurance sector be very targeted with their data. But the reality is that they need a risk pool. So they’re not going to give you a good premium while the others got – they’ve got to spread the risk, right? So those are – you know, you can use data, but there’s going to be a knock-on effect.

And I think the third aspect is precisely this, to bring the insurers in – which is what we plan to do, and actually beginning early next year with the Insurance Development Forum – and figure out, OK, how does this work? Because you guys need to still exist. (Laughs.) And we need you, right? And that’s the other part of the equation, when we talk about that whole cycle of things that have to come together for mitigation, et cetera. Insurance also needs to come in when we talk about the financial architecture. It’s not just the MDBs, and the IFIs, and the IMF, and the World Bank. It’s, like, insurance is a critical part of this.

And the other thing that I learned, incidentally, earlier this year, is just how important the role of insurance is in terms of asset ownership. They have a huge chunk of assets – billions, trillions of dollars of assets, that actually have to do something in these markets. And for them to continue to invest in them, how do you use them as a catalyst? So I see insurance playing multiple roles. Again, this is not – none of this stuff that we’re doing in climate and/or development as a one-trick pony, right? We’ve got to – we got to have all of this at the table.

So how do you make sure that we’re getting the best out of insurance, both in terms of data? How do we make sure that – in some instances you’re going to have to have public capital financing, you know, financing the gap, or you’ll have entire markets collapse, particularly small- and medium-sized – small- and medium-sized enterprises that just don’t have savings. So complex, but it’s – and actually explicitly put it into Bridgetown, under the private capital mobilization. But it’s actually much bigger than that. It’s across the entire economy. (Laughs.)

Mr. Unger: Yeah. John, do you want to –

Mr. Podesta: Yeah, well I just want to make a point that insurance companies can’t afford ideology. So they can’t sit around in Florida and scratch climate change out of all their documents and pretend it’s not there. They have to deal with the reality they’re facing, deal with the losses that are being experienced. And the net result of that is you can’t get insurance.

Dr. Bardouille: Right.

Mr. Podesta: And, you know, it’s not just the rise of the rates, but in places across the country that are particularly climate vulnerable, in the U.S., the insurance market is essentially drying up. You can’t – you can’t get insurance if you’re in – if you’re in certain communities in Florida, or if you’re in California. The state of California has come up with a state-backed pooled investment scheme to provide housing insurance. If you apply that against people who are more vulnerable in the developing world, just small amounts of insurance can be really critical if their livelihoods are built around natural systems.

If they’re – you know, if they’re small-scale farmers, et cetera, being able to provide those insurance products is going to be really, I think, critical to keep people in a place where they could survive from one year to the next, based on disaster. And I, you know, we talked about PREPARE Call to Action. There are a number of companies that have come forward and are not just thinking about how they’re dealing with markets where there are people who can afford something, but how do you develop products that are really at small scale and can be useful in places like Mozambique, and Mali, and other places?

Mr. Unger: Yeah, the Call to Action, actually, it includes a range of different – the Call to Action to the private sector, again, it’s a range of different companies – some of them commodities firms, some of them tech firms. But within the insurance space it includes, like, you know, actuarial firms, like Milliman, it includes WTW, AXA, AON, Marsh McLennan. Like, there’s a – Blue Marble, in terms of innovation. Like, there’s a lot of that innovation that’s happening. And those markets look different, actually, around the world, than they do in the U.S. And we sometimes, I think, tend to underappreciate or underestimate just the role of that foundational intervention, the role of that foundational intervention has even played in our own development in developed economies.

And then we sort of forget that, like, so much of the world actually doesn’t even benefit from any form of insurance. And yet, there are potential markets. It’s at a different scale. It’s a different kind. And there’s new innovations with regard to sort of parametric approaches so that you don’t actually have to have somebody go and check, did you individually experience this damage? It’s based on certain indices. And technologies help with that, right? So, like, there’s a there’s a changing set of – there’s a changing equation around this for private sector companies that are associated with, I think, like, the biggest – or, the second-biggest pool of capital in the world. I think next to pension funds, are the insurance industry. So, like, we also have to tap those investments.

Ambassador, you know, we’re all – well, I’ll turn to you next, but this is really for all of you. We’re just a few weeks out from COP-29 in Azerbaijan. And the next COP, COP-30, is going to be in Brazil. So sort of, where do you – how do you how do you define sort of success on these issues of adaptation and resilience for the COP that’s just a few weeks out, your sort of expectations for that? And then also, when you look towards the next year, is this sort of an issue that’s going to sort of really be prominent in Brazil?

Mr. Corrêa: Oh, definitely, yes. By the way, we had this discussion at breakfast today. But the fact is that there’s – there must be a new way of reaching the public and reaching support for the agenda of the fight against climate change. And, as John was saying, that the insurance companies have no ideology, but they have enormous trends to convince, maybe – I’m not going to give specifically the example of the governor of Florida – (laughter) –

Mr. Unger: You wouldn’t be so bold. (Laughter.)

Mr. Corrêa: No, I wouldn’t be so bold. But to convince some politicians of maybe doing things that can make sense. But I believe that adaptation is going to be very, very strong, because we – in the case of Brazil, these climate tragedies of this year, I believe, have brought a new dimension to the support to the government in having a bold COP-30. Because what we are quite lucky in Brazil is that President Lula, who, as you all know, has already been twice president before. But this time, he’s really completely convinced of the climate urgency. And so we have very little time to do things. And he – it’s his third term.

He wants to really leave a very strong legacy. And I believe that COP-30 has to – we really want it to be something that changes people’s perspective of the fight against climate change, in a less tragic way. Because I think that many people are tired of the idea that is going to be a sacrifice, et cetera. I think that we have enough good news of economic alternatives. We have enough good news about new technologies. We have enough good news of communities that have found solutions. And I think that’s what we have to focus on, is to have the support of people to fight against climate change.

Dr. Bardouille: Can I jump in on this? I think this is exactly right. And the prime minister has been speaking a lot about it this week. Which is, we really need – and this is not intended to sound, you know, simplistic or kind of pie in the sky. But we really do need to switch things around to have just a little bit more of a hopeful perspective. And it’s not just for its own sake. But there are those examples. And without that hope and motivation and examples of what it is that can truly be scaled, I think we’re losing people. Honestly, this year – the past few years, actually, have been just horrifying for many people. And those are the people who are not even in the thick of the messes that we’re seeing geopolitically.

And it’s very, very easy to then shut yourself off. Say, I’ve had enough. This is sensory overload. I can’t take it anymore. So I’m just going to live my life, in my space, and the rest of the world is so overwhelming that I just pretend it’s not there. And you cannot do that, right? Because it is truly a global public good. We’re truly, you know, interconnected. And so I think what we do need to do now is shift that narrative. And I have to say, you know, from the exposure I’ve had to Brazil’s leadership under the G-20 and, clearly, the message that President Lula, Prime Minister Mottley, and a number of other leaders are giving, it is – it’s an impassioned, but also a passionate – not impassioned because it’s hopeless, but become a passionate call for us to do things differently.

And see that not just as an economic opportunity. Again, I think you probably have gathered from the past few minutes of what I’ve been sharing, I think there is – I think we need to shift it. It is in large part about economics, because this is really what moves the system, but it is also around a moral imperative. If we don’t start to inject that into it you say, well, the economic system demands that I do A or B. But I think COVID has reset people’s minds as to what is possible, right? For better or for worse, right? There’s entire swaths of real estate that are sitting empty. OK, great. What do you do with that? How does that then become mixed housing? How do you move people in so it’s not just about work, work, work, it’s actually about, you know, engagement and interaction.

And work from home is now not the people who are just slacking off because they didn’t want didn’t want to come to the office. You’re actually more productive. And so I do think that we have an opportunity–

Mr. Unger: Or you’re slacking off. (Laughter.)

Dr. Bardouille: Or you’re slacking off, oh all right. Or you’re at the gym. That’s true. (Laughter.) But I think in many instances – you know, otherwise everyone would be called back to the office, which they are in some cases. But I do think that we have a chance now to shift not just the narrative but the mindset of many, many people. And you’re absolutely right. This has got to be – this is really where the incentives come in. It has got to be at the – at the lowest level. It has to be at the level of the electorate. Because if we’re not electing leaders, Lula and others, who really want to shift the system, then how far are you going to go?

And that’s where you need to inspire and empower and motivate people at this level, right, the ones who actually cast votes and who do things on a daily basis, and who consume and who produce and who innovate to see things differently. And I mean that sincerely. That was one of my big takeaways from UNGA. I said, listen, this is just – you know, we cannot just be talking and talking, right? People have got to look deep inside and say, why are we doing this again? Again, it’s about people, and it’s about my children, and it’s about everyone else on the planet. And if we don’t have that humanity, fundamentally, I’m really, really quite concerned. It’s not just about the economic system. The economic system is not going to keep us alive if we don’t have humanity at the core of it. It just – it doesn’t operate on its own. It’s based on something.

Mr. Unger: I do think that the key message is – to your point about insurance companies, but it’s applied to others too – a lot of companies that are the producers and the innovators, you know, small and medium enterprises, big multinational corporations, they can’t afford to be ideological across the board. They have to actually make plans in this world. And they have to think about it. And those are the messengers that actually may expand the tent here over time. And I think there are early adopters that we’re starting to see, early movers, you know?

Mr. Podesta: Well, that’s why the conversation about finance is so critical. Which is that you want – you have to have a vision of the economy that’s going to produce growth, investment, job creation, business formation, or, to your point, it’s going to be very hard sell with the public. And the good news is, to the extent there is good news in the climate space, is the movement from high fossil fuel-based energy systems to low carbon energy systems and industrial processes is filled with opportunity for investment, innovation, job creation, growth. We’re seeing that here in the U.S. as a result of the Inflation Reduction Act, but we’re seeing it in GX in Japan, in what’s going on in Europe, and what President Lula’s trying to do in Brazil. And it’s an opportunity everywhere, including in developing economies.

Mr. Unger: It is. It is now, because of everything that’s happened over the last couple decades, right? And in some ways, if you look out a couple decades, I think that it’s very possible that the same is true for these other elements of resilience that aren’t as connected, in some ways, to decarbonization, but are very much connected to sort of the adaptation prospects in cities and communities everywhere.

Mr. Podesta: Right. And I’ve mentioned some. You know, infrastructure, transportation.

Mr. Unger: Exactly.

Mr. Podesta: The general sense of planning a lived environment where most people are going to – I’ll give you one concrete example.

Mr. Unger: I’ll just pause and tell the audience, I’m going to let John give this concrete example and then I’m going to turn to you for questions. So get your questions ready. (Laughter.)

Mr. Podesta: No, just to – you know, recently, during UNGA week the Quad met –Australia, Japan, U.S., India – and committed to a new cooling initiative that there’s we’re – been so much written about the need for more generation in the electricity sector as a result of AI data centers, et cetera. The biggest challenge globally is going to be cooling. And to do that more efficiently, to do it without polluting chemicals, to do it both in air conditioning and highly efficient fans, is a significant challenge. But again, it’s a significant opportunity to develop high-performing industries, put a lot of people to work, create cutting edge technology.

And so those four countries committed to that. And on the side, President Biden and Prime Minister Modi created a bilateral arrangement to do clean energy supply chains. We’re in discussion with Brazil to do the same thing. So that you’re looking forward to what do we need to get done, what do we need to build, how are we going to – how are we going to do that together as partners? And then, how are we going to produce the financing that permits, particularly in the developing world, those investments to be made so that people can lead decent lives?

Mr. Unger: Yeah. Let me turn to our audience here in the room. I see a couple hands. And I’m going to take a couple together. There’s this gentleman over here on the right, and there’s a gentleman in the back row there.

Q: I’ll be really quick. Anthony Kennaway. I work for a company called Swiss Re, which is a large reinsurance company.

Mr. Podesta: There you go.

Q: Delighted to hear the conversation – (laughter) – the conversation today. I’ll just add, if I may, a little bit, just a couple of very quick points to that. In fact, your point on the industry being big is a very valid one. In the U.S. alone, we have $2.4 trillion invested against P&C assets and 5.4 trillion in life and health assets. We employ 3 million people. And as an industry, just on P&C last year, we paid $605 billion in the U.S. in claims. Obviously, quite a lot of that would be on climate.

All of that to say that this is, obviously – as an industry, we find this – climate change extremely concerning. We are engaged through the IDF, which you mentioned. You probably know my colleague Ivo Menzinger, for example. And we are trying very much to bring our knowledge to bear. We have a great deal of knowledge. As a company, we insure 8,500 different insurance companies. We see every policy within that. We have an exquisite sight of what climate change is doing.

I’d also add as well that the main cost of claims, and claims increases, at the moment is not necessarily climate change. Actually, it’s inflation, followed by the amount of stuff that we own, what we call value at risk, followed by climate change thereafter. And that’s what’s driving costs. And it’s about – between about 5 to 7 percent per year, every year. During the very low interest rate period, actually, the returns that we could make on the investments that we make was very static. And so ahead of your horrible story about the 40 percent increase, you’ll have found, actually probably your policy stayed relatively static in terms of cost for a long period of time.

But we’re paying a lot of money repairing houses, repairing cars, repairing all the different pieces of property that – you know, that are there. So the industry is doing what it can to provide the service that it provides through the claims that it pays. And like I say, that number was 605 billion (dollars) last year in the United States alone. What we’re really struggling with is making sure that we can work with governments, and having the legislation in place.

For example, building codes that actually that building – when we do build, we build back better. That the buildings that get built in Florida after events take place are actually hurricane proof, or that they’re raised on stilts to deal with storm surge. And I think that that – what we’re really looking for is a collaboration with governments to make sure that we can put the legislation in place and create the conditions where insurance can really do the job that it’s doing in the U.S. and, obviously, elsewhere around the world.

Mr. Unger: Thank you. Thank you for sharing that. And there’s this gentleman in the back right there. Yeah.

Mr. Corrêa: He’s going to present you a quote.

Dr. Bardouille: (Laughs.)

Q: Hi. Paul Miller, Lutheran World Relief, a part of Corus International.

Again, just very pleased about this conversation. Very quickly, I want to be hopeful. Talking about the resilience economy as someone whose body is probably full of microplastics and forever chemicals, I have to – I have to also be realistic. And I want the private sector to be involved in adaptation. At the same time, there’s a dark side of globalization, which is destroying the natural resource base. There are exploitative industries. I lived three years in Brazil, in Pernambuco. I love a churrasco or a good American steak. Yet I’m not sure American and Brazilian meat companies joining together is good for the planet.

The EU now has a deforestation law saying you can’t import products that are a result of deforestation, yet – and we’re seeing the knock-on effects right now in chocolate and cacao. My question is that you haven’t talked about how we can make sure that this other, the non-resilience economy, the exploitative, the cut it, burn it, destroy it economy, which will make adaptation for, particularly rural people, impossible, what can we do more in – not only among governments, but as a world level – to try to tamp down those kinds of situations, which are really making adaptation almost impossible? So it’s maybe more for the ambassador and Pepe. But, again, I really appreciate the conversation.

Mr. Unger: Thank you so much. Let me turn back and just see if anyone wants to jump in thoughts on –

Dr. Bardouille: Happy to jump in quickly. So the fact that you’re still with an insurance company must mean that you have some degree of hope. (Laughter.) I mean otherwise – but, no, thank you for that. And I do appreciate that there’s a huge amount of inflation, because I interrogated the quote. And it’s, like, well, there’s inflation, in large part. But again, as you say, there’s more payouts for more things over time.

Thank you for raising the point around the extractive economy. And I think if it hasn’t been clear from what I’ve been saying for the past half an hour, I’ve been using words like “sustainable production and consumption patterns.” Why is it that we’re producing and consuming what – how do we measure growth? Absolutely on adaptation, and perhaps I’ll let the ambassador speak to that. But if I could jump in quickly on mitigation. All those electric vehicles, all those solar panels have components.

And they come, in many cases, with blood on them, right? Look at cobalt. Look at any number of critical minerals that are produced – extracted, sorry. Let me not say produced. Extracted in countries that, for many, many reasons, do not have the environmental, social, or governance standards that they need to have. And I would argue that there’s possibly reasons that it’s kept that way, because it might be convenient. So, you know, we can have a long conversation about that.

But I would argue that when we talk about the just energy transition, and I alluded to, you know, 600 million people on the planet who don’t have access to basic modern energy services. If we continue along this path, again, particularly on the African continent where we extract the critical minerals needed for this energy transition globally – and the continent is not benefiting. There’s no domestic value addition. Worse than no domestic value addition, you have three-, four- and five-year-olds digging cobalt out of the ground with their bare hands, right? Not to mention that you’re not going to school, but where is the human dignity in that? Where are the basic human rights in that?

It is not lost on me that I have an electric vehicle and I have a cellphone that probably have blood on them, right? So we’re all part of this. And this is where, again, I say it starts at the beginning. Which is, why is it that we’re producing and consuming what it is that we are? Why is it – do we – how do we make – it’s not make the supply chains more resilient. It’s, how do you make the system more truly sustainable? And that begins with social. It includes environmental and economic, right? So it’s not just maximizing for one. It is optimizing the equation.

And it is possible. You know, I don’t want to monopolize because I’m sure there’s many other questions. But thank you for raising that. And I do think that that’s what needs to shift. It’s not just extraction from the planet. It is extraction from people who, for generations, have contributed to wealth elsewhere.

Mr. Corrêa: Yeah, since it was slightly directed to me.

Dr. Bardouille: Apologies. (Laughs.) Next time, I’ll let you take it. (Laughter.)

Mr. Corrêa: So, no, I agree with you. But I think that we have to be careful in that – in that discussion. On one side, I agree with you fully. And somehow the idea of the blood diamonds go to blood cobalt or whatever, that we can expand. But what I really wanted to mention to you is that when, for instance, the European Union has a position like the one that, in principle, their desire is to make sure that there is not going to be deforestation. I think that this has to be done much more with the spirit of cooperation than with the spirit of punishment. Because the truth is that the developing countries that are going to suffer more of this kind of legislation are the ones that have less capacity, less financial resources to solve the problems at home.

So if you do that with Brazil, JBS is the largest exporter of meat in the world. So probably the company is going to find a way to solve it. But in other countries, it’s going to be much more difficult. So I think that we should not engage in that discussion as punishment, but more as cooperation. So if you gave – for instance, the case of the European Union – if you gave some years, with support, to make sure that you have, I don’t know, five years for an industry to adapt to be able to export to the – to the European Union, I think this would be much more constructive and much better received. And I’m sure that if the U.S. is going to do something like that they will be much more sensitive.

Dr. Bardouille: And I – can I just say, I agree with that, right? It’s not just punishment. There’s also a sense of, you know, you want to be careful that we’re not applying standards from a position of superiority, but from a position of, hey, we need to get on this path. And, again, if we’re the consumers, let us not just signal the market, but let us also support the market.

Mr. Unger: There are also connections back to some of the issues we were talking about earlier with, like, insuring things. There are incentives potentially that are on the cusp of making their way into insurance schemes to actually incentivize people to invest in resilience. That’s not just people; it’s businesses. So if businesses need insurance to operate or to get the investments that they need internationally to operate, and they have an incentive to act differently in some resilience-building way for the community around them and for their workers, that makes a difference as well.

John, were you going to jump in, and then I’ll take –

Mr. Podesta: Yeah. You raised, Noam, earlier the role of technology in transparency, verification, the role of private sector in terms of providing solutions, so that there’s traceability. And it applies in both the markets that you were describing. It applies in the – in the minerals markets, we were discussing. But that’s a place again where their investment and solutions are really beginning to form so that you can trace back the origin of the products. And I think companies are constantly making pledges about what they intend their supply chains to look like. You need the ability to monitor and verify those against the real world as well. But I think we’re seeing solutions develop in that space.

Mr. Unger: Yeah. Let me turn back to the audience and take – there’s – oh, here. Let’s take this side here, on the aisle there’s a question. Just the second person up on the aisle, yeah. Just next to you. Yeah, right there. And then we’ll come over here.

Q: Thank you for today’s wonderful discussion.

It’s all about tension between reality and idealism. And people are the problems and people are solutions. So my question is, how can young professionals, who are young professionals who are digitally native, capable of understanding good information, participate in such a policy solution and better inform public of our power to promote social equality and climate change issues?

Mr. Unger: Thank you. Thank you. And let’s take one more question over here on the end of the aisle here.

Q: Hello. My name is Dan Preston. I’m a professor at Indiana University and expert in blended finance.

I was hoping to hear more about financing adaptation today, and I didn’t hear much. So my question today is more about what instruments and mechanisms are missing for the developing world in trying to mobilize private finance for adaptation? In my research, it’s much easier to mobilize for the climate – you know, the power transition. Adaptation is really challenging. And there’s a lot of these new products, but aren’t really delivering. And I was hoping you could share some of the new mechanisms that you think would work better for developing countries. Thank you.

Mr. Unger: Thank you for that question. So there’s two different questions, one on sort of how can young people who are digital natives really engage in this, and probably help the rest of us who are not digital natives? (Laughter.) And also, this question on financing, which is incredibly important. And I interpret it to be very much about how can the public sector do more at scale to reduce the cost of the capital and to reduce the risk that’s associated with the private sector engagement that we need, especially in this resilience space? So –

Dr. Bardouille: Everybody’s looking at me. So you see the gray hair coming out now. Firstly, digitally native is a new term to me, which will tell you something. No, no, no. I mean, I hope that I’m digitally proficient. Look, I think that’s an extremely important question. And it – for me – and, again, I’m kind of going to get on the soapbox now. I think it ties into what it is that we prioritize and what we value in today’s world. And so I have concerns about young people spending obscene amounts of time in worlds that are not theirs, right, on social media, through essentially what is escapism. And again, there’s no judgment implied here. We all need a little bit of entertainment.

But I think that when that becomes escapism, where you’re following people who you don’t know, who are saying things that cannot be verified, right, in some instances they’re actually influencing you in the right way, in other instances it’s just nonsense, right? I would argue that what we now need to push through those channels – because they’re not going anywhere, right, they’re now part of the fabric of society – is the type of information that could potentially change the world in a positive way. So I would say away from the escapism. And not just good news stories, but really good examples of what works, and inspiration that helps get people excited. I’ll leave it there, because I don’t have any solutions to it. But it would be great to have your perspectives.

And then just quickly on blended finance, I see some colleagues from that space in the room, so it’d be great to have you jump in as well and make this a little bit more interactive. But from my perspective, what hasn’t been focused enough on is the domestic private capital, which needs to come in particularly when it comes to infrastructure. I always find it curious that Barbados, for example, has a very liquid market. There’s a lot of money sitting in banks. It’s not doing a lot. And what’s really sad is that when you think about where investments need to happen, which is fundamentally an infrastructure – not just in coastal defenses and all the kind of, you know, downside risk management mitigation infrastructure, but in upgrades of infrastructure that actually benefits society and the economy.

If that is expected to happen through FDI, through foreign direct investment, then, firstly, I would ask the question, why should foreign capital come into a market that has a lot of liquid – (laughs) – that’s very liquid, that has a lot of cash sitting around? And, secondly, in countries – going back to the extractive sort of concept – in countries that have a history of not owning their own assets and not owning their own future, do you want to continue to encourage that to happen? How do you develop partnerships where you’re actually incentivizing that capital that’s maybe, you know, tending to sit in a safe place and not necessarily want to do much? How do you incentivize and excite that capital to come in?

Now, are there enough instruments? I think so, to some degree. But there are others that are missing. And I think what is missing for me is a real focus on what does domestic capital need to come in? Not just, how do we de-risk for the others, how do we de-risk the MDBs, how do we make sure that there’s adequate, you know, local currency financing. These are all instruments that, for me, are coming from the outside in, as opposed to from the inside out.

Do we understand enough what it would take to unlock the capital that’s sitting in the Nigerian pension funds that, instead of putting it in, you know, bank accounts in Switzerland, how do we use it to work – and pension funds – there’s no judgment. Again, pension funds need to go where they feel safest. But if a Nigerian pension fund doesn’t feel safe in Nigeria, like, why should anyone else? And they know the market best. And frankly, they’re probably just used to taking a lot less risk. So I think a lot of this is about, you know, how do you not just change the risk perception, but how do you help, you know, those who are sitting on capital to understand the market? So this is potentially the charm of challenge with adaptation. Do we understand enough, you know, about the market?

Mr. Unger: Thanks for that. Let me bring in the others, just because we’re short on time in response to this last question.

Dr. Bardouille: Yes. Sorry about that, yeah.

Mr. Unger: Ambassador.

Mr. Corrêa: Well, I think that the issue is very much linked to something that people are expecting, which is that we can join a little better some agendas that have been a bit too much separated. I think that it’s very much linked to the SDGs. And it’s very much linked, for instance, to unsustainable patterns of production and consumption, which is something that I believe that the younger people could connect very much to that. But my feeling – but that’s a very personal experience – is that I think that our generation – not yours, because you’re much younger – (laughter) – but our generation, we had the sense of doing things for the – it was a bigger group of people, we were thinking of more people. Individualism today is so extreme that is very difficult for us even to understand how through – maybe through individualism, you’re going to get maybe to some very interesting new ideas.

So I say that I expect you to have a better answer than us. And you also, because we want to hear from you all what we have to do, not us telling you, but anyway. But the fact is that we’ve been thinking a lot about that in the G-20 because we saw the circumstance that we have now, a country like Brazil or a country like India or like Indonesia, that we are not considered the kinds of countries that should receive aid. They should invest. But we have to pay very much to get the capital. How can we lower this capital?

So we really need to have this discussion about the key countries that we need for mitigation, which are these middle-income countries. And you were mentioning Nigeria. I mean, we have to lift people out of poverty. This is essential. Then we enter into the SDGs. So this is our – if not, we’re not elected. And if we’re not elected, democracy fails. I mean, so I think that we have to start thinking very much on these key countries. How do you find solutions for these key countries? And then, be more generous to the other countries that really need to be supported, like in your case.

Mr. Unger: Thank you.

Mr. Podesta: I’ll be brief. Just throw out a couple of thoughts, particularly in response to the last question. I think this is absolutely critical to the finance conversation. So we’re spending a lot of time, André and I, running around the world talking about what is referred to in the negotiations as the NCQG, the New Cumulative Quantified Goal. A lot of the discussions about the – what the quantum is, how much the contributing parties will put in to support developing economies to be able to deal with both mitigation and adaptation.

But I think we need to spend as much time on the qualitative side of that as well, because if the proposition – and if you have no fiscal space and the proposition is that you – even if you have some concession on the financing, but you still have to borrow at 14, 15, 16 percent, it’s not much of a proposition being handed, at the national level and then I think that filters down to the cost of capital for private sector companies who are trying to operate in those places.

There are some innovations coming. I think USAID and the GC – the Green Climate Fund capitalized a green guarantee company that is intended to be an actor in this blended finance space, to be able to guarantee against currency risk, political risk, et cetera. Investments in in some hard to invest countries. So, I mean, I think there’s some innovations there. But ultimately, I think the whole system needs to be able to standardize so that more deal flow can happen. And I think there has to be a recognition, spurred on by the evolution of the multilateral – we’re here during bank week – through the multilateral development banks, of the focus in this space.

I’ll end by giving a pat on the back to President Banga. I think he’s done a lot in the – in the tenure since he’s been there, both to increase ambition of the Bank, to take the goal of – and target for climate finance from 25 percent to 45 percent, but also to make sure that that’s 50 percent on the adaptation side, 50 percent on mitigation. And then to change the internal processes to make sure that, again, those dollars are flowing. He set up that private sector lab to generate ideas about how you unlock more private capital into the developing world markets. And I – so I think there’s progress happening, but it needs to be – like everything in climate, scope and scale and timing are really critical. So I’ll end with that.

Mr. Unger: Yeah. No, that’s a – that’s a great set of points. And you also mentioned it is bank week. We have a lot of global dignitaries going in convoys around town, and we have to let these wonderful speakers go. But this has been an excellent conversation. And we want to keep this kind of conversation going at CSIS. And I’m sorry I couldn’t – we couldn’t take all of the questions in the room. But the conversation is going to continue because these issues are going to continue to be with us in a very big way, and in an increasingly prominent way. And that’s good to hear.

So I do want to make sure that I thank – the Embassy of Denmark actually supported CSIS in the work that leads – that includes this event. And I want to thank them for their support. I also want to thank my colleague, Madeleine McLean, who helped to coordinate this event. And as always, I want to thank our conferencing and audio and visual support teams here at CSIS for enabling this livestream and this kind of event to happen. Most importantly, please join me in thanking our wonderful speakers for today’s discussion. (Applause.)

(END.)