C (9:36)

So thank you very much, Rob. Thank you all for being here and very honored to be here with Lord Stern and my fellow panelists. I will be talking about the macroeconomics of climate change. See how it can also engineer the push that Rob was mentioning in terms of financing the transition. So I think we all know that we are entering the 21st century burdened by the ghost of crisis we were supposed to have solved in the 20th century. War is against again a tool of politics. Currency, trade and finance have been weaponized. Inequality steering apart our social fabric. And the specter of fascism walks among us once more. The Kantian enlightened safeguards built to contain humanity's Herbasian impulses, The rule of law, international treaties, multilateral institutions have been eroded, abandoned or openly mocked. At the same time, we are caught in a Faustian fascination with new forces we barely comprehend. Artificial intelligence, social media, the digital echo chambers that misrepresent and distort truth and accelerate social political fragmentation and geopolitical turbulence. Yet perhaps more tragically, we face the one threat we do understand, the green swan of climate change and still procrastinate collectively, nearly two decades after Lord Stern's seminal warning that climate change represents the greatest market failure in history and that the cost of inaction vastly exceed those of early mitigation. Awareness has never been so high, nor state power so cynic. And yet we know climate change generates existential, irreversible disruption, feeding a vicious circle of social inequalities, the rise of conservative populism and the geopolitical fragmentation that we are witnessing today. So despite all that, we need and somehow are making progress. And in any event, we need urgent and decisive policy responses, especially macroeconomic policies. The topic at hand today that must address all these dimensions simultaneously. So first, the dangerous equation is when climate change worsens inequality and that brings more populism. Climate change is not just an environmental issue. It is a systemic amplifier of inequality and political instability. Heat waves, heat waves, floods and droughts strike hardest at those least able to cope. Low income households, precarious workers, fragile regions and poorer nations. These shocks deepen structural divides that have grown since the 80s with financialization, deindustrialization and the erosion of welfare systems. Inequalities feed resentment, which then turns against elites and against climate policies themselves. Without fairness and redistribution, the transition is seen as yet another injustice, not as a shared necessity. The Yellow Vest movement in France illustrate this vividly. And in many countries the result has been the rise of reactionary populism, anti scientific, identitarian and sovereignist, undermining collective solutions that delegitimize international cooperation precisely when it is most needed. So second, the world remains trapped in a false dilemma between debt and austerity. The crisis of 2008, the great financial crisis and COVID 19 left governments with high levels of debt after extraordinary interventions that prevented depression and social collapse. Yet once the immediate danger passed, many countries are reverting to straight fiscal orthodoxy, treating debt reduction and massive new military spending as the sole priority. While fiscal discipline of course matters. And you know, when you hear this thing from a Brazilian, you might sort of be a bit skeptical. But no, fiscal discipline matters. But the pace and composition of consolidation now threatens to delay the green transition. Resources for adaptation, resilience and decarbonization risk being sacrificed on the altar of short term austerity, despite the fact that public investment is the foundation of long term stability. The paradox is very clear. We mobilize trillions to rescue banks and economies during crises and wars, but still hesitate to mobilize comparable resources to save the planet. Innovative policy action is essential. The greatest danger might not be the financial risk of temporary higher debt, but the systemic risk of failing to use that debt productively for the transition. So, like in wartime, the question is no longer can we afford it? But the question is, can we afford not to do something or to do nothing? And the good news here is that many reports show that we can do it. Example, the work of CTACS and the work of the Ich Leg Group. Third, coming back to Microsoft. Economic policy. They must evolve to confront climate risk and steer long term transformation. To confront climate risks, macroeconomic policy must evolve from managing the Stabilization of short term business cycles to also contribute to steering long term structural transformation. It must stabilize finance and regulate in ways consistent with planetary boundaries while taking good care of political and redistributive consequences of climate policy. So that means thinking in an open, creative and inclusive mindset inspired by the seminal works of Lord Stern here, but also Anthony Atkinson, Acemoglu, Ostrom and naturally Keynes and Schumpeter. So let's start with monetary policy. It must become adaptive. Climate change generates persistent supply shocks that interact with demand and inflation. Central banks can prevent credibility while tolerating temporary inflation deviations linked to transition costs using longer term conversion horizons, tolerance bands and even perfect perhaps a higher target for inflation with forward looking climate scenario analysis, automatic pro cyclical standard inflation targeting tightening in response to Greenflation would only undermine Schumpeterian transformation. Now fiscal policy it also must adapt. Debt sustainability assessment should become dynamic integrating the growth effect of productive climate investment and redistribution while allowing temporary flexibility for mitigation, adaptation and disaster response. What matters is the trajectory of public net worth, assets, resilience and future capacity and not exclusively short term debt ratios. Excessively rigid tightening in response to high debt, undermining fair and effective Keynesian stability is not the way to go. Again, if properly regulated, AI could make targeted pro climate transfers with redistributive taxation consistent with Atkinson's anti inequality framework. It's not only feasible, but it's also manageable in a decentralized way. Above all, the transition must embed social justice, progressive taxation and climate shields for the most vulnerable are the foundation of political legitimacy and success. Social partners, local authorities, citizens must be involved. Participation at the local level is essential. Following Opstrom's insight, scarce climate related budgetary resources should be treated as a common pool of of resources. And rather than assuming that only central authorities can design effective rules and policies, adaptive fiscal policy should recognize the capacity of communities, local governments to create and sustain institutions for the equitable and durable management of shared resources. The democratic transition is not an accessory to climate policies. It is the engine of sustainable transformation. Third and final financial and regulatory policy must align capital allocation with climate goals. We will be talking about that in this panel. Prudential frameworks, capital requirements and disclosure standards should reflect climate risks. Green taxonomies, credible carbon prices and transparency on exposure are essential to steer investment flow flows. Global solidarity levies, carbon border tax and green bonds can mobilize the scale of financing required. And of course national and global cooperation are both needed. Central banks, ministers of finance and economy, environment, social affairs, independent technical Bodies must quantify and use some form of ecological planning for resource allocation. Fourth, a new Bretton Woods 2.0 moment is needed to finance and coordinate global climate action. The current geopolitical context, wars, fragmentation and declining trust makes global cooperation harder but even more urgent. We cannot wait for a perfect universal agreement. A pragmatic approach is needed. Plurilateral coalitions of the willing countries, new financing mechanisms and global tax initiatives to fund the transition. Financing the climate action in the most vulnerable country is not charity. It's a moral, economic and geopolitical necessity. It demands a deep transformation of the international financial system. Expanded guarantees to de risk investment in middle and low income countries. We will be talking about that as well. Larger official development assistance and refocusing the multilateral development banks on low carbon transition finance. Bretton Woods 2.0 should, in my opinion, establish a world climate agency coordinating with the imf, World bank and development banks, the BIS and OECD to provide a coherent framework, credible instruments and fair burden sharing. Global solidarity levies on aviation, shipping, financial transactions or fossil assets could form a new fiscal base for climate justice between the north and the South. In parallel, initiatives such as The Glasgow Financial Alliance 4 net zero can catalyze private capital, provided that policy frameworks ensure transparency, predictability and credible carbon pricing. Fifth, and to conclude, ultimately politics, not necessarily just economics, is what is missing. Inaction is a choice, it's not a constraint. It reflects the dominance of short term interest and the fear of confronting entrenched power. To break this paralysis, we must rebuild a macroeconomic architecture that links stabilization, ecological transformation and social justice. Nothing is written in stone. Awareness has never been greater. The science is absolutely clear. The instruments exist. What remains uncertain is our collective will to use them. The green swan is looming. The question is whether we confront this together or let it become the harbinger of a crisis from which there will be, unfortunately, no recovery. So let me finish with some words of hope. In my country, in Brazil, there is. I mean, Brazil is supposedly the land of optimism, although it's debatable today. But there is a say that goes like this. In the end, everything turns out well. And if it hasn't yet, it's because it's not the end. Thank you very much.

A (23:03)

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D (23:06)

You about another awesome LSE podcast that.

C (23:08)

We think you'd enjoy.

A (23:10)

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D (23:19)

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A (23:22)

Come check us out. Just search for lseiq wherever you get your podcasts. Now, back to the event.

D (23:30)

Thank you. Checking the microphone working. Okay, a bit of a wave from the back. Yes, thank you. Thank you very much. Thank you so much, Luis. That was wonderful in its breadth and its depth, all the way from Ellen Olmstrom and Joseph Schumpeter to the practicalities of international gatherings. And yes, we like the hope. What we're going to do now is to go across the panel here. There are four of them. Luis is one, and Mathilde and Chris and Sharon were introduced by Rob at the beginning. So I won't do that again. We want to leave time for the audience to ask some questions. So if I could ask you to keep the answers to four or five minutes, given that we're close to seven o' clock already. I'm going to start with a round of questions about identifying the challenges. And then the second round of questions will be about the responses and the opportunities the responses and the opportunities that come with the wise responses to those challenges. So I'm going to start with Mathilde. And as you know, Mathilde mentioned is from the oecd. So we're going to start with. Given the difficult geopolitical situation, to put it mildly, that Luis articulated so clearly, what can the international institutions do to help foster progress? How can you identify those challenges in a way that allows you to think through the responses that we'll discuss a little bit later? Now, I know you will focus on the oecd. That is indeed what you do. And of course, the OECD sits at the centre of so many things, but perhaps also looking out beyond the OECD as well. Mathilde, over to you.

A (25:37)

Thank you. Maybe I will tell you the story of what happened at the OECD on climate action in the last 10 years. Because for me, it's very striking where we are now. In the last 10 years, we have fought to what we call mainstream climate issues in all the different committees of the oecd, you know, in macroeconomic discussions, in labor market discussions, in dust discussions, etc. So we are fighting for mainstreaming. And we managed to do that. And we arrived at a point where all our colleagues, because I am in the Environment Directorate, all the. Our colleagues finally integrated the climate dimension in their work. So doing exactly what you were calling for just in your speech. But then, okay, change happened. And it's amazing. Like, it took us 10 years to get to where we were one year ago. And in a few months it kind of collapsed because, you know, the experts on tax on or the experts on whatever education, labor market, et cetera, all of a sudden they say, oh, I will have so much political trouble if I continue to integrate the climate dimension in my work. So it's not the core of my work. So let's go back to before where I could speak quietly about my issues with my expertise without worrying so much about climate. And it goes very quickly, you know, this kind of setback, I would say. And in the governance of DoECD, for example, we are one of these Bretton woods institutions, I would say, you know, we have been set up at a time where we were supposedly like minded countries around the table that would influence each other through peer pressure. But now we are not so much like minded and every single everything can be blocked and everything is being blocked as we speak. You know, in terms of having, for example, a fantastic paper on trade and climate, which is, which matters a lot, this is being blocked, we cannot publish it. You know, so we are at a time where really the multilateralism is threatened because we cannot agree on anything at the OECD, but at the G20 also, you know, so it's really a fundamental threat to militarism. But to advance on climate we need multilateralism. So the only thing that, you know, at a time where we need really integrated policies, we are disintegrating these policies because everybody is trying to save its core agenda. And what we're trying to do to face this challenge at the UC is we try to focus on, okay, data and evidence. We have always been, or try to be, you know, evidence based policy making. But these days it doesn't work because some do not care about fact, data and evidence and truth, you know, but still we need to continue, continue, continue to showing. You say that no, we have the awareness, we, we need to continue showing how things are working or not working, which policies are working or not working. And that's what we try to do. And what we are trying to do also is to change the narrative, to make it a positive narrative. Climate is good for growth, it's good for prosperity, it's good for development. And we are showcasing that with data and model serious ones try to change really the narrative towards a very positive one. And I think that's a good, maybe the political circumstances has forced us to go towards this more positive narrative. And it's a good thing.

D (29:22)

Very good.

A (29:23)

Because it's, as you said, that's the, and I think your upcoming book is on that. You know, that's really like the major economic opportunity of our times. And we have to do it. So that's what we do. And, and of course, also to work, because we cannot reach any more consensus at the global level. We need, as you said, to work with coalitions of willing countries or willing institutions, willing banks, et cetera, and also work with specific countries that want to go in the right direction.

D (29:59)

Very good. As you've really identified the major problem which a major problem which Mia Motley, the prime Minister of Barbados, summed up at the annual meetings just over a week ago, the mood has changed, but the facts have not. And the response that you've begun to describe will be developed as we go along is staying with the evidence, staying with the facts, staying with the analysis. You have to try rational argument. It certainly beats irrational argument, and I'm sure that's what we're going to explore. Thank you for the reference to my book being launched at the LSC on November 5th next week. It's called the Growth Story of the 21st the Economics and Opportunity of Climate Action. We'll come to Chris in a minute because he has a book in very much the same spirit, which I hope you all have already already read. But we're going to turn to Sharon now. And Sharon is at the heart of the coalition of finance ministers on climate action now with 100 members. And Sharon and Sharon, if you could help us with how you see the problems and the challenges within finance ministries and how they're taking on the challenges of aligning policies with climate action also in this current, quite difficult political environment. So over to you, Sharon.

E (31:34)

Sharon, great. Thank you for the introduction and for the question. First, I would say ministries of finance have always juggled multiple policy priorities and in fact, the role of climate action is being brought more to the forefront as countries move from what I have to say, ambition to action and need finance ministries to help coordinate and implement initiatives such as their NDCs that Rob mentioned, national adaptation plans, more internal implementation of country platforms, industrial policies, fiscal pricing mechanisms and otherwise. And as Luis and others have noted, material climate impact have implications for macroeconomic stability. Growth in public financing, and therefore climate action is not only within Finance Ministry core mandates, but we also, frankly, no longer have the luxury, so to speak, of treating climate as its own siloed policy issue. And so one, it's interesting that Michelle also used the word mainstream climate, because finance ministries, I think one of the key challenges is also to continue to mainstream climate through their core mandates and specific responsibilities, so similar to what you mentioned at oecd. So one challenge, for example, is making sure, that macro modeling that accounts for transition and fiscal risk, green budgeting that accounts for climate and nature impacts and fiscal planning, as well as of course aligning green and economic incentives and taxes and subsidies. So you mentioned the coalition finance ministers for climate action. I think this coalition is a coalition of the willing. And that's sort of when you get to the crux of how we can move forward. I think there is an opportunity there where we don't let the perfect be the enemy of the good. We may not have the luxury of relying on existing traditional multilateral engagement mechanisms. Luis mentioned that some of those mechanisms may be faltering and we may, we may organize coalitions of the willing around different segments, different industries, different climate policy issues. And to me it is about taking action where we can and making progress wherever we can without being tied up to prior nomenclatures and multilateralism, to be completely candid. And I think this really reflects an enhanced understanding that there are huge economic costs to climate change. Under current climate policy. Global GDP could be up to 15% lower by 2050 compared to a world without climate change. And according to Mina Green, the first half of 2025, for example, global climate catastrophes cost over 160 billion just just first half this year US dollars. And in emerging markets and developing economies, less than 10% of disaster related losses are insured. And thus the fiscal cost of recovery really divert resources from other needs and growth for focused investments. So I think ministries of finance are both focused on enhancing their supply of analytical tools and capabilities, but they're also particularly concerned about the potential impacts of physical climate change on GDP and on revenues and on expenses. And Here even the G20 right recently recognized the importance in their declaration and disaster risk reduction. And back to again what others have mentioned, we really need to look at adaptation, for example, as a former risk management and how investing now helps avoid higher costs and levels of spending debt and contingent liabilities in the future. UNECCA's chief economist, for example, has noted that for every dollar spent on resilience, it's expected yield 10 to $14 in avoided losses and lower disaster costs. And so here we have implementing tools such as insurance schemes, catastrophe bonds, debt for adaptation swaps, which can really help manage risk and enable orderly recovery. There's also the challenge, and again Luis mentioned this as well, of ensuring reforms are effective socially just politically acceptable. And so when governments, including finance ministries are implemented, there's really a best practice of implementing you in a tailored targeted, phased in policy packages where you have support and a clear and stable investment environment and make sure that there are some compensating measures to address distributional impact. And again, back to the opportunities point, your book, but also what Rob mentioned is kind of an approach that we're all taking here and discussing tonight. I think finance ministries, and this was highlighted in last week's annual meetings at the World bank and imf, are really seeing opportunities in terms of economic diversification, expansion of renewables and the like. For example, McKinsey has an estimate that for climate resilience technologies, these markets can, you know, be worth upwards of a trillion dollars in the next five years. So by 2030. And at a recent ministerial event, finance ministers from Croatia, Uganda, Egypt, Mexico and others really stressed that climate policy is now core to economic policy, unlocking new markets and productivity gains. And I'll just spend a minute on EMDEs, because I know that's sort of one focus of CTECs. So, as we've discussed, debt sustainability is an issue across the board, even advanced economies. But EMDEs, really, their finance ministries are highlighting a big need for blended finance, right, as they seek to address climate that often requires additional funding to implement domestic policies. You know, some studies estimate that only around 10% of global climate finance goes to EMDEs and less than 5% goes to adaptation, which unfortunately tends to impact EMDEs more severely than advanced economies. And so really these financing needs, they run to up to 2 to 3 trillion dollars per year in the next decade. So it's a huge need which is about five to six times kind of an increase in investment flows compared to today. And finally, I will say we're also seeing regional differences. So East Asian and Pacific jurisdictions are so far able to mobilize a little bit better greater amounts of domestic resources, while other jurisdictions like Sub Saharan Africa are more dependent on external financing. So basically, you know, in some the climate action policy tools and best practices, finance ministries have been applying them across all jurisdictions. But the relative challenges, and I think impacts will differ often depending on one, domestic human and technical capabilities, two, current and growing debt burdens, and then three, the ability to enable sustainable finance via domestic markets.

D (38:17)

Thank you. Thank you so much, Sharon. And you can see the discussion has moved investment and the finance and investment absolutely to centre stage and particularly in emerging markets and developing economies. And I think investment and finance will stay at centre stage throughout the discussion. Just one footnote on estimates of potential damage by mid century, we're quite likely to be pretty close to 2 degrees centigrade, sadly. And by that point we could well have hit some tipping points. In climate systems, whether it's collapse of the Amazon, the loss of the coral reefs, the thawing of permafrost, and all those estimates of potential damage that we see at the moment are usually without those tipping points. So it could look, sorry, to be less, it could be more dire, but we're talking about how to get out of that. So, Chris, you've lived the politics of all this. You've lived the analytics of investment and growth. You were asked the question about the impact on the economy of the net zero policies and you gave a strong and clear answer that the impact of good policies is strong growth. But you've lived in those political difficulties and could you help us understand what it's like to try to manage that kind of political pushback? And we'll come to some of the take that discussion forward in the second round. But you've lived it and in a way that is a much more direct experience than the rest of us.

F (40:01)

So yeah, Nick, I'm probably a rare breed in that. I was a former Conservative minister, a member of Parliament for 14 years. During that time I was energy minister in Theresa May's cabinet and had that opportunity to sign the net zero legislation in into place. That sort of meant that the UK became the first G7 country to commit to net zero, built on the 2008 Climate Change act that Ed Miliband had signed into law both those pieces of legislation at the time in 2008 when the Labour government under Gordon Brown introduced it, it was a commitment to reduce emissions by 60% on 1990 levels. The conservatives in opposition said, actually we will support this, but only if you raise the bar to 80% emissions reduction. And then coming forward another 11 years afterwards, I sort of said, we looked at the Committee on Climate Change on the back of Paris and the sort of UN 2018 report that sort of recommended that net zero was the trajectory, Net Zero by 2050 was the trajectory to keep on a 1.5 degrees pathway. Now, neither the Climate Change act nor that net zero legislation would today be possible. The Conservative Party has now sort of abandoned its support for net zero in the face of a rising reform threat. And we've seen that sort of window move on, not just politically, but economically as well. And the paradox is, is that the more convincing the economic case becomes, actually the harder it seems to be to make that case and have the sort of cut through. And I would say when it comes to politics, it's all about communication. I look back now at some of the lessons that I think you should have learned at the time it was all about emissions reduction. Everyone was declaring a climate crisis. All the local authorities were coming to a Net Zero by 2030. Places like Brighton were saying we can do it by 2025. And I was getting a lot of pushback where people were saying this net zero stuff is it's a condition conservative center right sort of construct doesn't go far enough. We need absolute real zero as soon as possible. And if you told me then that now net zero is now seen as some kind of extreme sort of left wing, sort of semi communist construct, I simply wouldn't have believed you. And that's the reality that they're facing. There may be certain terminologies like adaptation that today seem very reasonable and grounded and recognize the that fact, fact that we're probably no longer living in a 1.5 degrees world. And we're going to have to actually understand that we're going to have to adapt. These were the cops of the late 90s and early 2000s. You had this battle saying we can't have focusing on adaptation, we need to focus on mitigation. And now that's all gone. So understanding that the language must change is something someone like John Kerry has taken forward. So you're saying the new ESG has to be about efficiency, security, growth, but also recognizing that we've got to be able to understand that this is a game of chess, that you've got to be able to not just play one move, but think several moves ahead. So today, for instance, Petrovac has gone into administration nothing to do with necessarily climate, apart from the fact that these challenges to oil and gas companies are going to arise ever more often as the North Sea basin literally sort of declines and we're scraping the bottom of a metaphorical barrel that we will see the old industries of the past face economic challenge and collapse. And who's getting blamed? The proponents of net zero. When in fact the reality is it is just raw economics that these companies are no longer sustainable, quite literally financially sustainable. We saw it in South Wales with Port Talbot. The other industries have been propped up by governments for decades. And actually net zero and the transition has meant that it saved several thousand jobs, all the jobs that have been lost if it wasn't for the fact that we've now got some of the industries moving across to green transition opportunities. And so trying to map out that is really important. The government's come forward now with a jobs plan isn't just talking metaphorically about old green job. It's actually pointing to what they actually are in reality. And that granular approach is where we all need to head. Cops are important multilateral events. But the high level nature of cop sometimes obfuscates the fact that we do need to get down to the details. Time's moved on now and it comes down to this challenge of what do we want to keep, what do we need to adapt. Adapting is not a failure. Adapting is recognizing that you've got to be agile on your feet. You've got to recognize that times will change. Net zero is the science. We keep to net zero. We shouldn't abandon those core principles. Otherwise more generally we look disingenuous. But at the same time being able to recognize, I think, as Lewis said, local context, how to frame these in ways that people don't necessarily think that anything to do with climate is probably the greatest challenge of our times now.

D (45:04)

Thank you. Thank you very much, Chris. And thank you for fighting the fight. I mean, you get scars in this area and you carry the scars and you carry also the practicality and the spirit of carrying on. And I do like the John Kerry new version of ESG Efficiency, security and growth. And it's right. It's absolutely right. Now, Luis, you've already set out some of the challenges of in a very clear and direct way of combining fiscal and monetary policy in the face of the investment and the finance investment that we need. Could you just say a word or two to begin our discussion of how you or to build on our discussion because it's already begun on how you scale up finance, particularly for the emerging markets, markets and developing economies. That's the EMDEs for those of you don't live the jargon every day. Emerging markets and developing economies.

C (46:04)

Sure. So taking some of the remarks by Matilde, Sharon and Chris on board, you're right. The challenge is really to be able to mobilize the part of global savings that exist and make these guys consider investing in my word, which is our word of emerging markets and developing economies. The big challenge is to have very large amounts of financial climate flows into these embeds because otherwise they would simply for development purpose. And it's fair in the minds of everyone there and leaderships governments to just develop to grow. But if they grow with the same carbon footprint that we did ourselves, this is going to be a disaster. And Nick, you were mentioning that we are already in the brink of hitting a much higher than the much higher temperature than the Paris Accord. So really the major challenge is to create the framework and of course macroeconomic policies in Many countries will help, but you need to consider, okay, what exactly is preventing these flows to going into the developing woods? And you know, we know from the old classical international market literature that these flows do not just spontaneously, naturally get into financing the developing world. So we have been working and Nick and many other people have been sort of steering up this work about, okay, what is it that is considered too risky? Investors and I think Sharon will touch upon some of the topics and some of the scripts too risky in the developing world to be sort of worth considering scaling up their effort there. And we know some of the reasons, you know, basically there is this high risk perception of developing countries being less safe, less institutional, worse robust than countries in Europe and more advanced economies. There is the idea that the regulatory framework, you know, this is a kind of technical word, but look at the regulatory formats that command bank investment. It's the framework that we call its battle tree. I worked at the, the bis, the bank for International Settlement, a bunch of committees there that are precisely the ones responsible for setting risk categories, procedures for bank to safely invest in the developing world. Mind you, the Basel III framework is a very good thing. It was supposed precisely to protect us against the folly of irrational extreme exuberance of the financial system that ended up in the global financial crisis. So you need a framework that says, look, you need capital, you need the prudential rules, you need liquidity rules. But what you sort of have to consider is how not to sort of abandon the framework, but how to make it work so that it doesn't exaggerate the risk of investing in the developing world. For example, guarantees, guarantees, when they are backed by a multilateral development bank, they should be counted precisely as a mitigating factor for a private investor. The private investor will sort of say, look, you know, if you don't count this guarantee offered by the World bank, the idb, the Asian Development bank, as fully mitigating my risk as an investor, I would not take the responsibility, the fiduciary responsibility to put my stakeholders money into this kind of. So you have to revert this, you have to recalibrate this kind of thing. Credit rating agencies, we know the mess that they created by their irresponsible behavior and procyclical behavior in the building of the global financial crisis. I'm not saying that we don't need some kind of risk assessment and ratings of projects, but the way it is done certainly is not conducive of having an incentive precisely for people like the Global Financial alliance for Net Zero institutional investors. Those Guys who hold a significant amount of financial assets, eventually the ratings are not sort of properly mapped, defined and reworked in terms of not penalizing systematically the developing country without real reasons. It's just because it is a developing world. You need certainly to have a discussion, an educated discussion on what is it, what is it that makes a rating so unfavorable to the developing world. So in other words, you need all these elements, particularly, for example, you need to homogenize the taxonomy of. There is some stuff that the emerging world needs to do as well. It's not like just that it will happen by forcing institutional investors into investing green projects there. You need to of course, improve your macro policies. You need to sort of homogenize your taxonomies of green projects in a global way. But if you do these things in a coordinated way, if you do the work with, let's say, the various groups that are working in this, and there are many, the NGFs for the Central banks you're mentioning the Circle of Ministers of Finance, the G20, the group that works under NICS leadership, the independent high level expert group doing numbers. And look, this is what is needed in terms of external financing and working on the solutions precisely to propose alternative ways to measure risk. It's not neglecting risk, it's making them compatible with a true genuine assessment of climate risk in the developing world and making sure that this is sort of transparently communicated to the community of banks and institutional events. So if we do that, and it's going to take some time, but we are working on it, I think you will be able to have some scaling up results as soon as we have this framework in place.

D (53:07)

Thank you. Thank you very much, Luis. Let's continue that story. Can I ask the panelists now? Because I'm very keen to open up the questions around in about 12, 13 minutes time. So this time round, if we could keep the answers to two, three minutes so that we do get the. There's a strong LSE tradition, indeed a requirement that we allow time for questions from the audience. And that's as it should be. So, Mathilde, what can the internationally institutions do to scale up the kind of finance, the blending of public and finance, the blending of the different instruments and so on? What can the international institutions do to push that along?

A (53:48)

I think I will answer you with three big blocks of action. The first one is that the international Financial architecture, as we call it. So it's what the Indian G20% presidency said that they need to be the MDBs, the Multilateral Development banks. They need to be bigger, bolder and better. That means, you know, for them, for example, to improve the coherence, the accessibility, the responsiveness to the EMD's needs to also to have specific mobilization mandates, have specific targets in terms of mobilization of private finance, the incentive structures slightly different to of course optimize the use of concessional or unknown concessional finance, etc. So there is all this agenda, EMDB agenda for them to be better. The second block is what you were mentioning. What is the homework for the EMDs themselves? They need to improve their enabling environment. So they need to do a lot of things. You mentioned many of them, you develop deep and green their financial systems, their capital markets, et cetera, using the taxonomies, green finance roadmaps, having better, more reliable information, et cetera. So there is all this second block that's the homework of the emds and there is a lot of homework to do. And the third block that I think is super important and I will cover a large part of what you said is it's the homework for the Global north. What you need to change in our regulations to make it more prone to finance climate action in EMDs. And here you mentioned of course the financial regulation, the Basel 3, et cetera. But there are other topics that are less discussed but I think very important. Also if you think about corporate governance standards, they need to be adjusted to be fit for purpose and to be implemented in a way to really align with climate action. Of course, all the disclosure standards. But you have other topics also. Like if you look at, you know, cross border trade financing, the export credit rules, they might need some adjustments also, you know, not to favor this financing emds which if you look at investment treaties, we need also to adjust the investment treaties so that they don't benefit too much, they don't confer too much benefits to fossil fuels, which is the case these days. So there is a whole architecture of standards, including a lot of OECD standards that needs to be adjusted to make sure that they fully align with climate action. And that's the homework of the Global North. So I think there are really a trilogy, you know, the architecture, the international financial architecture with the MDB's reform that is discussed a lot at the G20, including the enabling environment in the emerging economies and our standards, our homework, you know, change the rules of the game at the financial system globally.

D (56:59)

Thank you, Sharon. Top priorities for finance ministries in the coming years.

E (57:07)

Great, thank you. I think there are actually the two topics that we spent a lot of time talking about already, one is addressing debt sustainability and the interaction with addressing climate, and second is scaling up private finance. So on the former, as we've been discussing, there are specific tools that are very innovative, like debt for climate, debt for adaptation swaps. That will be interesting to see more about, but also kind of more nuanced is an increased understanding of, as we were talking about previously, how investments into climate actually pay dividends on the back end and improperly accounting for that instead of it being a vicious cycle where more debt is taken on board by EMDEs in order to address climate risk, that in fact there's a recognition that this pays dividends on the back end, both from a mitigation adaptation perspective, from avoided losses and economic opportunity. So the latter is more nuanced, but it goes to a lot of what we were talking about in terms of credit rating agency assessment and other like, how do you really account for debt sustainability? That is a big issue for the coalition of finance ministers, particularly as we now are about 60, 40, 70, 30, I would say EMDEs versus advanced economy members. The second in terms of scaling up private finance, again, what does an enabling environment mean? And the coalition is a private, practical, peer to peer exchange type of entity that's more about the doing and the operationalizing, less about the commitments and the reports. But what are the best practices? What are the toolkits that finance ministries can take on board and implement all of these actions domestically. And here we're talking a lot about how do you best utilize blended finance, how do you de risk for the private sector? And in my prior life, I would say the regulatory capital environment that Luis mentioned really resonates in terms of not that you don't properly account for the risk, but make sure that the risk actually is addressed in a more nuanced way when it comes to investing in EMDs and in climate and making sure the regulatory capital properly incentivizes and does not overly kind of disincentivize, I suppose, those types of investments. But two things, like addressing FX risk is also an issue and for jurisdictions that just will never have the domestic capital markets kind of ability, small, very small, you know, island states and the like, how do you address the FX risk? That's always kind of an interesting question and there's a lot of innovative tools being done there as well. So these two aspects really flip sides of the same coin I think of financing are going to be priorities for finance ministries going forward.

D (60:14)

Thank you, thank you so much, Sharon. Thank you. For all the work that the coalition is doing in helping the finance ministries learn from each other and build sort of coherent strategies.

E (60:24)

Well, thank you for being one of our key advisors.

D (60:28)

So thank you, Joe. So, Chris, how can business and finance and government work together to establish these credible pathways to create the environment for investment and of course to bring through the finance that can take it forward?

F (60:45)

So, I mean, we've talked about building capacity and capability as being obviously one of the priorities for working with Global south and obviously CTEX exists to help sort of build those international relationships. But equally important, I think even just thinking about Global north countries such as the uk is understanding that lack of capacity and capability amongst business and industry to be able to plan out what they need to do to transition towards a decarbonized economy. And you've got sort of green finance and everyone sort of focusing obviously on scaling up renewables and the economic imperatives that that can bring with it, which is fantastic. Obviously you do far, far more to be able to hit the trebbling for 2030. But transition finance, taking existing assets and decarbonizing them, reducing their emissions, obviously that's more trickier economic value judgment to put across. Even though from a sort of common sense perspective, it makes sense that we should just simply being replacing the old with the new and understanding that is effectively an infrastructure question. And actually in the uk, although there's a lot of folks on clean power, Melvin's Clean Power 2030 mission, actually a lot of it, over half of net zero, getting towards reducing our emissions, is about taking buildings, transport and infrastructure and providing the investment that's needed to be able to decarbonise and reduce its emissions. And that is proving a lot trickier because obviously bringing sort of government together, it doesn't have a mission focusing on the transition and reducing demand, it's got a mission focusing on scaling up supply and renewables. One of the things I've been doing is the UK's Transition Finance Council, that's co chaired by the treasury and the Corporation of London, is actually put together a playbook, a template for actually what you should be doing to get everyone in the same room. Because it's not just about the policy, it's also about the process. And you know, my lessons from being government is that, you know, if you own the process, you also own the policy. And yes, parliamentarian would say that, but sort of ultimately making sure that you people, the right people, are in the right room, giving the right judgments, the right experience to make sure the policy is as best it can be is one of the key challenges that we face and you know, we don't freeze out sort of the SMEs, we don't freeze out 80% of the economy in doing so. But they're not really getting involved in the way they need to be to be able to set out some of the challenges. So this playbook we've put forward, which I'm hoping other countries might look at now, you know, partly through the NGFS and other institutions, is to actually say we should be following a process. And it comes back to my initial point, which is that the time for high level discussions is over. It's got to be about delivery and implementation, and implementation is all about process and making sure that we've got this sort of tripartite process of government, industry and the financial community come together in the same room rather than sort of finger pointing and blaming each other when decisions don't go the right way.

D (63:44)

Right at the beginning, Luis emphasised the importance of coherence and collective action. It in the good sense of collective action. Because without that common sense of purpose, the investment story becomes more difficult. People are looking into the future and wondering what it would hold rather than being a bit more clear about what it can and should hold. Luis, any final thoughts before we throw it open?

C (64:17)

I think we need to, to get a little bit technical, but it's for the good of our discussion. Okay, so we need in terms of external financing, the sort of global savings getting to the emerging developing world. We need about $1.3 trillion by 2035 and we have today about 200. So you need to mobilize these numbers for banks. Banks need to invest more. Institutional investors, pension funds, insurance companies need to invest more. And then you need to sort of, to have the coordination that Nick. So for banks, you really have to sort of make sure that the capital requirements are properly measured. Now this is a technical stuff, but imagine a bank, if, if he wants to invest in a project, he has to put a share of its own capital aside. It's called a risk weight of what you're doing. Now if this is too much for an emerging market economy and for a green project there, it's too costly for the bank, so the bank will not do it. So you need to recalibrate this thing in an adequate way. So I'm not saying throw out Basel 3, you need to sort of look at Basel III and sort of recalibrate this in a sensible way. The second are the insurance, the pension funds and so on and so on. So these guys are not regulated by Basel. They are regulated by other people, right? Insurance companies and so on and so forth. You have there to create again the ratings, but the incentives for them to take assets, assets in the emerging market world long term. And there are ways for them to sort of do this by pulling risk by sort of buying green bonds that can be emitted by, issued by these projects in the green bond is something that is specifically dedicated to the transition. An emerging market can issue a green bond that is perfectly marketable in the world, accept that it's not going to be bought by a Goldman Sachs of this world if it is poorly rated. So this is the, this is the game to sort of reconsider the way in which this risk is properly measured so that you have this huge pool of financial assets more than reaching $200 trillion, investing a tiny little, little fraction of that. If you invest just 0.5% of these pot of $200 trillion, this is sort of good enough to scale up what you were demanding. Finally, one last word. Technology, guys, we have AI. AI should be used to facilitate this project by precisely getting a little bit more granular, sort of going through these taxonomies, harmonizing them, making sure that with the information that IT can process much faster than an insurance company, a bank or a pension fund, AI can help this process. For example, settlement risk, foreign exchange settlement risk, which is an impediment. If you invest in an emerging market, you do have foreign exchange risk, it's not going to be solved. But at least part of the IT with technology and the fast payment systems that the digital technology can allow, you can sort of also mitigate some of the risks. So if you put all this together, you talk to all the actors, you talk to governments, you talk to the G20, you talk to Basel, you talk to the BIS, you talk to the IMF, you talk to the World bank, which is exactly what, you know, people like us do. Well, then you might have insight, a little bit of a solution. It's not going to be solving miraculously everything, but at least you can sort of work in the right direction.

D (68:19)

Thank you. Thank you very much, Luis. Now we're going to open it up. I think you can see from the discussion we've had already why we need a center for economic transition expertise. Because as soon as you get into the investment and finance, you get to the conditions for investment, you get to the policies that can encourage investment, you get the institutions around investment, whether it be climate change committee or the banking structures and so on. And similarly with the finance, the technicalities of finance are all about who takes what risk, how it's managed, how you can reduce the risk, how you can share the risk. And that is inevitably technical. It's also fascinating, but it is overwhelmingly important because this is about investment. Unless we raise the investment in the right places strongly and the next five, 10, 15 years, we will be in deep, deep trouble. So if it's fascinating and it's important, that's exactly what you should be working on, those of you here at the London School of Economics and beyond. But here we are, question time. We have mics on both aisles. Could you please raise your hand? There's lady in the red just in the middle there, and then this gentleman over here. And then there'll be one more in the first round. Could you raise your hands again? I just want to identify the last one in the first round, the lady in the black there. So that's our first three. And could you say who you are, please? Hi, my name is Vera.

F (69:53)

Thank you so much for the talk today. It's absolutely incredible. You spoke a lot about investments. So I want to understand what role you see innovative technologies play in climate action because UK government obviously decided not to renew the Net zero innovation portfolio in June despite success.

D (70:10)

So why do you think that will.

F (70:11)

Leave us in our progress? Thank you.

D (70:16)

So I just didn't catch the centrality of the which technologies.

F (70:20)

So the government decided not to renew the net zero innovation portfolio despite success in investing in climate Tech startups are solving many amazing problems. And with that not being renewed or success announced, why do you think that will leave the UK in its climate action progress?

D (70:40)

You were right with that, Chris.

F (70:41)

Yeah.

D (70:42)

Okay, let's. I think the sound was not very good and I apologize, but let's move on the second one. Gentleman over here.

F (70:56)

Good evening.

B (70:56)

Thank you for the talk.

D (70:58)

My name is Prabh Shlela.

F (70:59)

I'm an international lawyer and I specialize.

B (71:02)

On energy transition projects in Africa. I'd be very curious about your insistence institution's perception of geopolitical and sovereign risk.

F (71:13)

In Africa, because I find it's probably.

B (71:17)

The major obstacle to financings in that region.

C (71:20)

Not without reason.

B (71:22)

Recently there's been upheavals in Madagascar, Morocco.

C (71:25)

Across the Sahel region over the past couple of years.

B (71:28)

So curious about knowing what financial mechanisms or instruments you're looking at in institutions.

F (71:34)

That could help mitigate that risk for investments in the region.

D (71:38)

Thank you. Thank you very much. And then the last of this first round over there, please.

E (71:45)

Yeah, thank you. Hopefully you can hear okay with the microphone, but my name is Isabelle o'. Brien. I'm a student here at lse. I also work part time as a journalist. One question that I have that I was hoping you guys would touch on is the rise of geopolitical turbulence has had an impact impact on the funding of these international institutions. Obviously like as we have a farther right government in my own home country of the U.S. but other countries as well, there's just less funding to go to international institutions and corporations have often stepped up and filled in those gaps. I'm wondering what you have to say to criticisms that taking corporate funding has impacted the work that you guys are doing on climate change and other.

D (72:25)

I guess like the last part was the impact of corporate funding.

E (72:29)

Yeah, the impact of corporate funding and larger criticisms that it's had impacts on the way that international institutions engage on climate change and climate diplomacy.

D (72:39)

Very good, thank you so. Well, we don't have to have all four on all three, but Chris, would you like to start? Yeah.

F (72:47)

So I think that sort of role of technology obviously sort of globally the IAEA said I think we've got 63% of the technology speed right now to be able to deliver for even next year by 2050. There's always that tension obviously of making sure that we do continue to double down on the existing technologies. But that said, we're seeing a huge transformation now where say for instance on solar, the battery technology is coming up through the ranks and obviously long duration energy storage is one example where we know we're to going to be in a very different place with the learning curve that's taking place. And actually the Transition Finance Council will actually our next piece of work is actually on the long duration energy storage at the moment on some of those early TRL levels to make sure they do get the investment. And you know, the government may have cut their funding but I would say that it's not always just the role of government, it's how do we get that sort of early stage funding in place for some of the technologies that we really should also be an enhanced role for the private sector. That's one of the things we're trying to do with the Transition Finance Council is understand where is capital needs to be allocated for those early stage technologies. But I would say from a UK government's perspective, every sector has got a sort of sector transition plan that's being drawn up in that sector transition plan. You've got a finance plan, you've also got a technology roadmap and it's imperative that we map out, I think we don't necessarily sort of put to one side or miss out on those opportunities, particularly after 2030. I think one of the challenges with the Clean Power mission is making sure it's not just about thinking 2030 is the goal. It's also electrification of industry using new technologies that aren't necessarily prepared. So really good question about making sure that the technology does feature within the finance plans and that we do think about these early TRL levels at this particular stage because now's the time to make sure we've made those decisions.

D (74:40)

Thank you very much, Susan. Could I add just one thing on that is also the role of artificial intelligence. I mean there's one piece of luck that we've had is that the need for the green transition has come with the expansion of the AI. And if you think about how so much of this is about managing systems, there are people creating cities where you can move and breathe and the public transport and how that is all going to work, along with the heating and the energy. Looking at the way in which we manage the change in energy, particularly electricity systems, where you're trying to move now supplies across space and time in a much stronger way than you did before. If you look at that's management of systems. If you look at discovery so much of, as Demis Hassabis calls it, a lot of what he's talking about is science at digital speed. And again, the rapidity of discovery of new materials and so on will have a big and indeed the speed of discovery of where the materials that you're going to need actually are in the world. There's so much that AI can do there. And of course on top of that all the story about adaptation and understand, understanding what's, what could happen where. So that those two things have come together that it's not all been luck, but so that's been a one positive piece of luck I think in all this, guys.

C (76:02)

I mean we are all in favor of shifting to new technologies and efforts and investment should sort of. One remark is that we also need to be careful that some of these avenues have constraints. I mean if you bet on electrical batteries, there are some constraints in terms of critical minerals. You won't have enough critical minerals. The resources of the planet are finite. So there is a need also to balance the efforts of what Chris was describing and what everybody has in mind with also some including geopolitical constraints that you need to consider in terms of having a well crafted coordinated strategy with coalitions of the willing and the type of planning that I think we all have in mind.

D (76:46)

Very good. Now the second question about the perceptions, reality and what you do about risk, particularly in Africa. Sharon or Mathilde, did you want to come in on that? I know that Luis does.

A (76:58)

I can say just one small thing that is very important, is that very often for these investments in Africa or in risky context, let's put it this way, way with political risk, uncertainties, etc. Fragilities, the risk is over inflated because we don't have the proper information on these specific investments. And the information usually is aggregated and is incomparable. So there is a, you know, work to do on getting the more. How do you say that? Small data, I mean, data per investment, getting the macro data, you know, so that you could really well estimate the risk and not overestimate it. So that's one element of answer.

D (77:46)

Did you want to go on?

E (77:47)

Sure. So I think that was exactly going to be my first skating point is actually double clicking a little bit more on what the actual risk is versus the perceived risk. And that does require more data, more information, a little bit of education and rethinking of how we assess risk in the first place. But then in actual tools. Right. We've talked about the use of first loss and guarantees investment platforms to neutralize risk. Right. And standardize, to kind of hopefully crowd in more investment at scale. I think these are all things that the private and public sectors, including MDVs, but also governments, are testing. And I think we hope that that will both address some of those perceived risks, but also help scale investment.

D (78:38)

Thank you. As you know, because it's your business and the cost of capital in many of those countries is 20% and above, whereas you need 6, 7% for the profitability of the kinds of investments we have in mind. And a lot of that's macro country debt risk, foreign exchange.

C (78:56)

Luis. Well, look, you're right. It's a problem. Two solutions, okay. First, when you are and you belong to a group of countries that have some degree of risk and instability, the best thing to do, One of the solutions was what was saying here, terms of financial instruments. You pull risk, but you have to get together and sort of have a umbrella under which they say the investor will see the group of country as less risky than, let's say, the individual. And you can do this in many, many technical ways. You create, let's say a special purpose vehicle, you create, let's say backed, that can issue financial instruments, green bonds on behalf of this group. And this investment will be eligible, for example, if it is enough guarantees on it as a investment grade type of financial instrument. And this can be purchased by an insurance company, can be purchased by, you know, blackrock and so on and so forth. You have just to, you know, put a bit of pressure on these guys. Second solution, if you're lucky enough to be of course in a poor country with natural capital, meaning forests of the sort of assets, you can sort of design frameworks under which instead of depleting your forest, you sort of construct again a framework under which you are going to see finance not to deplete the forest with let's say an international pool of investors that will so of see profitable for mankind that the forest is not depleted and therefore would sort of issue again a bond through an SPV that will sort of be selling the rights not to deforest and not to deplete and get a nice significant yield for the developing countries. But you know, each case will be.

D (80:52)

Different and we hope to get the tropical forest forever facilitated in cop 13.

C (80:59)

It's one great idea and we'll see.

D (81:03)

We're very close to time now and we still got one more question and I'm supposed to spend a couple of minutes summing up and we still haven't had any questions online. Could you give us one online? In a moment, but I just want to take the last question. The political turbulence, I think Matilda, you are already in international institutions, you already said started right at the beginning to address that. But let me give you five multilateral development banks with zero ownership from the United States since I think that's the spirit of the question. Aiib Asian Infrastructure Investment bank, the European Investment bank, the New Development bank, The so called BRICS bank, the Islamic Development bank and CAF in Latin, Latin America. Five major banks, international institutions with zero U.S. ownership. When somebody steps back, other people can step forward and we're seeing hopeful signs that others will step forward. But Mathilde, very quickly, anything you want to add on that?

A (82:06)

No, I think in terms of the oecd, yes, we are still financed by all our member countries and even if it changes, if we lose, let's say 20% of our budget, we could live without 25% of our budget. We are already like more than half percent finance through voluntary contributions from countries.

D (82:25)

And we could increase this part absolutely on corporate pressures. We've seen a lot of opportunism there, for example around the war in Ukraine when suddenly people started to pretend that energy security came from more fossil fuels. And you know, the laughter in the audience is very clear on that point. If you look at the big international crises of the last 40 or 50 years, there have been around many of them, not all of them, but many of them around the instabilities in the markets for fossil fuels. As and Chris reminded us what John Kerry said, it's efficiency, security, growth. That's what ESG now stands for. Now, one very quick question from online. Yes. So this question is about the carbon price for all speakers. Should the G20 adopt a global minimum carbon price by 2030 and if not, what other instruments could match its impact? Anyone who. I mean, yes, I guess it's, you.

F (83:33)

Know, politics is all about the ask of the possible. And I guess the challenge we've got now is, is how do we make sure we don't overreach, knowing that sort of every action is going to have a reaction. We don't want to have a carbon price. The reality is, you know, is that going to be underpinned by the correct sort of policy mechanisms to be able to deliver. I mean, you know, the Emissions Trading Scheme is in both Europe and the uk is a stable mechanism that's there's evolution rather than revolution and has been able to bring sectors in it and will continue to do so. And CBAM hopefully is going to see significant sort of shifts in a way that we're going to be able to hopefully see the carbon price expand. And I think, you know, making sure at this moment in time we don't throw everything out by overreach is something I wouldn't necessarily say. Don't quote me on saying I don't want a carbon price, I do want a carbon price. But you've got to, to sometimes look at the destination and think it's not walking along a compass point towards your particular direction. You do have to travel around obstacles and challenges and make sure that you get to that destination eventually making the case, proving the case, and I think that case, the carbon price can be proved. It's just that we've got to work to do it together.

D (84:46)

As you've seen in the discussion here, you. This is all about getting the investment going, getting the conditions for investment and financing for the investment. The carbon price is part of that story. But of course, as you've seen from the discussion just now, there's so much more to the story than the carbon price. But don't get us wrong, we're not throwing out that particular baby with the bathwater. That really does matter. But what point has been made across the panel here is so much more around investment finance process are Crucial on the G20 as you know, the UK will be the chair of the G20 the year after next. The United States is chair next year. And the hope many of you, and certainly most of us here will be pushing the UK very hard, I hope, at an open door to make investment and the growth of the world economy around the kind of investments that we've been discussing here. Centre stage in the UK G20 investment. I've got just probably two minutes max to try to sum up. But I think we started at the beginning with the notion that the mood has changed, but the facts have not. And there's a big paradox here. Every time you look at the science, it gets worse. Every time you look at the technology, it looks better from that point of view. This should be the moment when we're driving that acceleration forward. So the challenge to the mood change is to get the arguments out there and get the facts out there, the evidence and show how this can be done. I think that's the first big conclusion that we came to very clearly today. The second is the. And that's really the whole story that I've emphasized all the way through, rightly so, and so is the panel. This is about investment and finance investment for fundamental structural change. We need to invest as a world probably another 2 or 3 percentage points of GDP, rather more in emerging markets and developing countries. More than half, well over half the infrastructure that India will have in the middle of the century will be built between now and then them. This is really, and of course that statement is still more strongly true of much of Africa where the infrastructure is much less. Those choices in large measure will shape the future of us all. And there's so much we can do together. And you know, Mathilde summarized it with the MDB's job and the job of the countries to create the conditions for investment and then the job of those, mostly the rich countries who shape a lot of the regulatory and insurance kind of guarantee kind of structures. Those are the things we have to do to get it all in place. Chris showed us how to handle the politics of all this and Sharon gave the leadership of the financial, the Finance Ministry as a support to all this. And Louis helped us put it all together and integrate across fiscal and monetary and so on. So you can see that this is a story of enormous opportunity. And I think most of us here are very optimistic about what we can do. But I think we're all deeply anxious about what we will do them and human folly can throw away this opportunity. But rationality, good argument, study and policy engagement is what we need to turn that opportunity into something that really happens. Thank you all very much for coming and thank you all for setex.

A (88:35)

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