B (2:56)

29 I'm going to struggle to add to that impression because I think there's some astute observations there. I do think the COP has over the last few years moved from being predominantly a political negotiation around the guardrails of how, or rather the direction setting at a national, state level around how we tackle the climate crisis. Then a lot of that's still going on, but it's, it's almost the nucleus of a broader gathering of people who are playing in different aspects of the climate transition and looking at different kinds of ways of tackling everything from the activist community to investors to innovators to technology firms. And that spectrum is actually a good thing in some ways, a natural, because it allows for serendipity. Like put 65,000 people who all kind of want to work on the same thing from very different points of view, sometimes violently in disagreements, sometimes very well aligned. Put them all in one place long enough and a few good things will come out of it, not necessarily the things that will make the headline. It's, you know, a particular technology finds an application. It's a new way of framing an argument to a particular interest group. And, and, and, and so I, I do think that a natural consequence of COP moving more into the central view of people who pay attention to global events is it becomes too big to encompass in like, here's the thing we're going to achieve at cop, and that can feel a little bit like, well, why did we all bother going. And the point is actually hundreds of different things that constitute progress on a range of gnarly and difficult issues probably happened and a bunch of others did not happen. So that's the observation on the big questions of this cop. I was, you know, it's not perfect, but the progress on clarity with the carbon markets is good because it has really, you know, we've really struggled to make purely Voluntary frameworks for the carbon markets work. And I think it helps to be moving more and more into an Article 6 world, whether it's perfect, you know, it's always a journey. And this is an important milestone on the journey. I'm hopeful, from what I'm reading on the finance side, it'll be a promise. It'll be a hard earned promise. I'm hopeful that we can put a number on the table. Whether it's one that we achieve immediately is a different thing. We need to push for that. But I think it's important to always contrast where this dialogue about climate and the global economy and our responsibility to future generations, where that conversation is now versus where it was even five years ago, and say, okay, there's progress, but there's a heck of a lot more we need to do before we bring.

A (5:44)

You in, alyssa, on the G20, because I think there's actually a lot of connection points between this cop and what happened in Brazil. G20, maybe. James, let's go a little deeper on carbon markets for a second, because I kind of nerded out a little bit on this while I was in Baku. You know, there's so much depressing news about official development assistance, right? And the reality of it being cut in many European donor countries, even under the Biden administration, it went down in the US more, more funding went to humanitarian, but we now are facing the prospect of maybe serious cuts in the US as well, on top of what's happened in Europe. So there's some real interest, burgeoning interest, I'd say, around the possibility of carbon markets becoming a way to fund development. And that's why some of these very technical things that were agreed to around Article 6 and the way you define the market for carbon and the way it gets traded globally between countries, it gives some cause for hope. Because if you could get a bigger, more robust and credible carbon market, in theory, if you're doing development work, maybe you're doing agriculture work somewhere in West Africa, you take that agriculture work and you show, well, yes, it has great economic benefits, livelihood benefits for the farmers we're working with, but it also has some carbon benefit too. And so therefore we can get these credits and that can fund some of the work, at least supplement some of what might come through more traditional ODA or philanthropy. So this is something you know quite a bit about. Dean, what is the real prospect for this?

B (7:19)

I think in some ways it's even bigger, Raj, than you outlined. I think there's an aspect of saying, find a way to sprinkle some, you know, some carbon credit magic dust on development programs you were doing anyway. And I think that is important because a lot of them do have a climate benefit and often are measurable and creditable climate benefit. That's important to recognize and keep in mind. I will say it should not blind us to another reality, which is the vast majority of the developing world is in the tropics, and the tropics are where we're feeling the worst climate effects, hence the need for adaptation and resilience funding. But if you look across the things we're going to need to do to get to global net zero, right, whether it's relying on more renewable energy, finding ways to protect and expand our natural carbon sinks, rainforests, mangroves, et cetera, or new technologies for carbon removal, et cetera, et cetera, across that spectrum, once you look at it critically, the resources the world will need to do that are in the tropics. A lot of the competitive advantage for the new carbon economy, if it begins to exist, an economy in which how much you're emitting or how much you're removing from the atmosphere is an economically valuable thing. A lot of that opportunity sits in the tropics and that sits in developing countries.

A (8:41)

And just to be clear, I think you tell me if I'm wrong. I think you're talking about very affordable land, much of which gets a lot of solar gain. So you have the potential to generate, you know, a lot of solar panel in the tropics. I think you're also talking probably about rainforests and other biodiversity that exists in the tropics and the ability to protect that and use that as a way to, to mitigate the climate, climate change. You're probably talking about labor as well. You know, people who are available to work in agriculture and other things. Yeah, just. Is that, is that sort of. Am I on the right track with how you're thinking about it?

B (9:14)

Yes, you, you, you nailed like. Yeah, all of that and more. So the geology of certain parts of the, of places like Africa particularly suited some of the activity we need to undertake. It is true that a lot of the more creditable climate activity of the future, particularly as we look towards removal as a part of what we'll need to do, will lend itself to large labor forces with access to biomass and various ways of processing it. It's also true that the renewable energy piece here is not just about there being lots of inexpensive land, it's just the intensity of the available renewable resource. Right. 60% of the world's best solar resources are in Africa. So as solar panels get cheaper than Africa has the cheapest green electrons on planet Earth.

A (10:00)

First saw it at the World bank, which shows you kind of where you get the most solar power on the world map. And it's really fascinating to see the place that it's sort of like variations of the color red. The darkest, deepest red is in Chile, in northern Chile where they're, they're using that to produce green hydrogen because they're relatively close to the ocean, so they can get it out on tankers. And it's a really interesting opportunity. But then besides that one really dark, dark, deep red point in Chile, most of the rest of the red is in the continent of Africa. And significant opportunities across the continent really for generating solar power. It's a, it's a pretty remarkable map to see.

B (10:41)

Yeah. The only thing I'll end with is if you think about what that means for the future of any industry for which energy costs are a major driver of competitiveness or any carbon technology that requires a lot of energy, it tells you, and it's not just solar, there's a lot of other things. It tells you that the opportunity in developing countries more generally is really big on a planet where carbon is valued and there is a return for it. So there is, yes, let's back the things we were doing anyway for development, but let's also explore new pathways for competitiveness where you're really mobilizing the populations of the places left behind by the global economy as the climate workforce that will fix this problem not for free, but as their path into middle class, you know, middle income, prosperity and beyond.

A (11:31)

Yeah, as Germany is finding out, you know, they're shutting down factories, et cetera. You know, having access to cheap energy is pretty critical to manufacturing. And if Africa can become cost competitive on energy and on labor, obviously there's a lot of things missing and needed infrastructure, etc. But there's, there's real opportunity there.

C (11:54)

What we see is that the rising global average temperature, but also these more extreme weather patterns, they impact agricultural yields. There's going to be a real need now to optimize what we call climate smart agriculture resilient agricultural practices. How do we make sure these things are feasible, that they're implementable and that they're giving farmers more access to the tools that they're going to need to adapt and become more climate resilient. In a special edition of the Devex Climate plus podcast, hear from CropLife International's Emily Reese and Lori Goodwin about how Agricultural innovation and science can be key drivers in tackling climate change and building resilience in our food systems. Listen to Climate plus wherever you get your podcasts.

A (12:48)

Alyssa, I'm curious, you know, tell us about G20. What, what was that like? You know, I talked about COP and the, the kind of Trump overhang. What was it like for you to be in, in Brazil?

C (13:00)

Yeah, I mean, I think a lot of similar themes. Trump was definitely kind of the, the hidden figure in the room for a lot of these negotiations and discussions. I will say, just to, to kind of build on the climate piece. It was very, very clear that COP and G20 were happening at the same time. You know, I think both in terms of just the overall atmosphere of what we're waiting and looking for, but also in the remarks of world leaders to each other. I mean, we had the, you know, over in Baku, we're getting statements about, okay, G20 leaders, you need to move on this. And then we have President Lula of Brazil saying, okay, leaders, move on it in Baku. You know, so there was this definite kind of back and forth with these two global foras happening at the same time. But yeah, I mean, at this, you know, I will also say, I think this was a particularly interesting G20 because so many development issues were on the table. You know, we had maybe perhaps the most prominent development issue was hunger. You know, and President Lula of, again, Brazil opened the G20 summit with a global alliance against hunger and Poverty, which is an aim or a program to kind of link and connect countries with the resources and finances that they need to implement policies that work. Other big issues that were discussed in the development space was the reform of multilateral development banks, taxing the super rich, which we can get into. And also just again, to put a pin on climate, climate finance, climate action, what countries are doing. But I will caveat that a lot of that conversation went back to Baku. Right. Kind of. What were leaders deciding? What will they decide? Who's given their targets, who hasn't? So lots going on there and a lot of different discussions.

A (14:41)

And for us, yeah, and my reading of this is that both in Baku and in Brazil, the, the multilateral development banks like the World bank were center stage in part because of the political overhang, where there's a sense that, hey, we can't really count on countries to step up, but we have these MDBs, they're already capitalized and that system needs to be squeezed to do a lot more and especially to figure out how to better crowd in private money and so it was interesting to see, you know, in Brazil, the role the mdbs played, how central they were there and as also how central they were in Baku. Everybody's talking about sort of the capital stack, you know, and like, how do you use the, the tools of the MDBs to generate a lot more money at the top of that stack from and at the bottom from private sector investors and equity, you know, investing, you know, with risky capital into things that, that could fail. But then pension funds and others willing to put their money into things that are much safer because the multilateral development banks have de risked them, they provided guarantees, they've taken a lot of the initial project risk away and so you could theoretically crowd in a lot more money. James, this is an area you know something about, you know, do you feel similarly, like MDBs are now the center of the development conversation in a way they might not have been several years ago?

B (16:04)

I think that there is renewed energy and recognition that we need to shake these structures up and there are now concrete ideas on ways that we can use this capital. What limited capital is available to deploy in this way. I think I'm really appreciating the rigor of new thinking around how we can deploy it towards these aims. That said, I think there's also a recognition, growing recognition that they will be a relatively modest but catalytic portion of the massive capital stack that's needed to get traction against any of these issues.

A (16:41)

I mean, do you see in your work, because you're trying to build African unicorns in the climate space, you're trying to invest in companies that can grow and become significant. Are you seeing the development finance institutions? Are they playing in your market? Are they investing in you or in your companies? Do you see the ifc? Are you seeing this burgeoning idea of a capital stack, different forms of capital coming together to support your work?

B (17:06)

I think the experience has been interesting. I think there's been a lot of interest and support, verbal and moral, from the traditional DFI folks. People in those institutions saying, this is a good idea, it makes sense, it needs to be done. And often a frustration from those same people that they don't have the instruments or the flexibility to come into the types of structures that are needed for this. They have a few very blunt tools and there's a real struggle with, okay, there's good to be done. And the tools we have push us into doing very predictable, very safe or very standardized things. Some of them are not safe. There is some risk being taken some of these institutions. But I do think There's a mismatch of the product. So to answer your question, very little of the funding that we have managed to raise or that our enterprises are going after is currently coming from the DFI space. Not because there's not a recognition of the value, but because in a way they're bringing tools that are ill suited to the moment. And that's why I'm excited to hear this talk of recasting these vehicles because it's desperately needed.

A (18:14)

I mean, let's just go a little deeper there for a second because tell me if I'm wrong. I think probably what you're saying is they're coming to you with debt when you've got businesses that want equity and that probably they're also coming to you and saying, oh, these companies you're investing in, they're too small. Like we can't do a deal at that scale. We need to fund in, you know, a larger fund or a larger business. So somebody's got to fund these smaller startups to get to the point where they could take on larger amounts of.

B (18:40)

Debt capital and even the framing of what it means to help startups. As you know, there's a, there's a default when you're deploying DFI or public money into, into investing in the private sector that it's some, some slight variation on a very standard 2 and 20 fund manager model where your job is to identify good deals, deploy money into them, keep your overhead as low as possible and wait for returns. What you hear consistently is the way we're going to, you know, open up new sectors, help entrepreneurs really break ground is investing in supporting them in a relatively more hands on way and with more flexible time horizons that 2 and 20 on a 5 and 10 year horizon plus 1 plus 1 year, those standard terms just don't work. And you're left with a choice of do I pretend that I can deliver against this structure and you, the investor, pretend that you believe me, or do we try and come up with something that actually, you know, the question I usually ask is how many, let's look at Africa. How many DFI backed African investment vehicles have hit their hurdle in the last 20 years with using the structures that are still being pushed out there? And the answer is very, very few. And we do need to be able to go back to the drawing board. Yes, it's about debt versus equity, but it's also about what is the structure that we are backing to go out there and do these transactions and build business.

A (20:11)

And just for people following us who aren't as familiar with those terms. Essentially the 2 and 20 model is a pretty standard model in the world of investments, where the investment Fund charges you 2% of the capital you put in as a management fee every year, and that's how they run the fund. And then they get 20% of essentially the profits at the end. And that's how they get, you know, they get the incentive to drive profits out of that fund. And as you say, there's typically some set number of years that the fund has a life, you know, five to 10 years, and maybe it can be extended a little. But essentially the investors expect to get their money back at the end of that. And I get your point that these are very different markets. And if you're trying to build a market from zero, it's not like an established mature market. You got to be willing to. To be more flexible. And maybe it's a longer time horizon, you know, maybe you're taking a lot more risk as a result. Maybe you're putting a lot more effort up front. Technical assistance. So, yeah, I guess it makes sense that we can't just expect. We take a model that works in really mature markets. We cut and paste it, and it's just some somehow suddenly going to work. Yeah, makes a lot of sense to me. Maybe we could just go back to. I know we've limited time to. Alyssa on G20. One of the things that. That I'd love to get your take on too, James, is a piece of news that came out of the G20 was this global alliance to fight hunger. And I guess I wonder, is it an unabashedly good thing? Is there any other side to this? Because I worry when I hear about and we do our reporting and all these global convenings, there's always some announcement. You need to have an announcement. There's always an instinct to create a new institution. I look at the cop and you now have loss and damage fund. You have the Adaptation fund, of course, you have the Green Climate Fund. You have the Jeff, you have the Sith. Like there are so many funds and each one has a slightly different twist on what they're doing. None of them are raising to their goals, you know, and they're all going to the same donors. And they were all sort of set up by the same donors. Now we have in Brazil, they're setting up this global alliance. I'm just curious if you picked up anything along those lines, Alyssa, and what else you could tell us about that global alliance?

C (22:24)

For sure. So I actually think this is a really, really important point that you've just brought up, Raj. And this is the reason why people are so excited about this particular initiative. So the whole purpose of this global alliance is actually not to be a fund. It's to link countries that are, and programs and organizations that are already doing work in this space to be less fragmented. So I think you're right. We, we've had things like this before. We've had a number of different initiatives and alliances and funds and that kind of thing. So let's see what actually happens. I do think that what the Brazilians have been pushing so forcefully for in this regard is to close some of those silos that currently exist. Now, for example, there's particular organizations that are already doing work, let's say, on school feeding. But Nigeria, I think was one of the countries that came out with a commitment that they want to double the number of children that are reached by school feeding. Now what the alliance aims to do is to provide kind of the, a number of. There's different pillars, there's resourcing in terms of knowledge, in terms of finances and in terms of coordination. Right. So the hope is that a country like Nigeria could draw on members of the alliance, whether they're countries that have done really good school feeding programs or a development bank that can help bolster that money so that they can then flow that out and expand it. So the whole purpose of it is to be kind of a link building source and not a fund. Now said there will be a team. They'll be headquartered in Rome under the fao, United Nations Food and Agricultural Organization. They'll have a number of different other offices. I think Brasilia has been mentioned as one, Addis Ababa is mentioned as one and DC another. So that'll have a bit of a startup cost, a 2 to 3 million dollars a year secretariat cost. And countries are now putting in money here and there to support. So there is some element of putting money into this greater alliance. Right. But I do think, you know, the reason that people are happy is because they're hoping it'll decrease the silos and increase, you know, the number of kind of non overlapping initiatives, if that makes sense.

B (24:37)

I think it's good to understand that it's not about another pool of money. I think that there are multiple scarce resources in the context. And I think not creating another poem is a good thing. I think a couple of the other concerns I have about the tendency for announcements is there's a really constrained resource which is developing country decision maker attention and Awareness and every time, and I think this sounds great, and if it delivers on making things simpler and more streamlined and the real focus of how are you delivering the things that people who are working on this issue need in a well packaged a way as possible, then that will be great. Unfortunately, what tends to happen is if you're sitting there and you've got a docket of a range of issues you're trying to address in Abuja, and you now have a growing Alphabet soup of institutions, each of which to themselves have a very clear view of what they're supposed to do. But that's opaque unless you are in the room helping create them. The more fragmented the space is, the more time and energy you actually just spending figuring out, wow, I just made this pitch or I just reached out for this thing to the wrong organization. I have to figure out the right one. And I think the other thing is the journey of setting up each new institution I've seen very often and in my previous life in the consulting world. There's the announcement, there's the process of hiring a chief executive and a team, getting them settled and functioning. You're 18 months in, you're running out of your founding seed money, you haven't delivered anything because you were just setting up the team. And everyone says, that thing didn't work, let's go do something else. And so how do we hack that? How do we make sure that on the day after this alliance is announced, value is being delivered in some way, shape or form? And I worry that defaulting to let's set up X number of offices with new dedicated staff, while well intentioned, can often end up just replicating a journey. And we can name organizations over the last few years that have been exciting announcements. Team is rolled out 18, 24 months later. People are like, that thing didn't do anything. But it wasn't realistic to expect people who just started their jobs three months earlier to have delivered something and then you're on to the next step.

A (26:59)

Yeah, I think it's a very fair critique of the way the international system works. And a lot of it is just the politics of having the G20 presidency, you know, and you have this demand and desire to like announce something and show you're doing something. Now this could be a great initiative, as you say. I remember going to Brasilia many years ago and meeting with the head of their Development Cooperation Agency. And essentially Brazil's model for a long time has been south south cooperation, where they send their technical experts in agriculture and education to places like Angola or Mozambique and a lot of Portuguese speaking countries and they, they work together and they say here's how we did it. So they're not really bringing a lot of money. They didn't have a big budget, but they were bringing their expertise in a way they felt was super relevant in particular contexts. And it sounds like this alliance has a really similar ethos to that. So I get that it sounds like it's fairly lightweight. You know, it's, it's not layering and in fact it aligns to what, what they were talking about around the MDBs at this G20. In reading your reporting, Melissa, it sounds like they're the, they're telling the MDBs like focus more on country level strategies and then coordinate among yourselves to exactly ameliorate the thing. James is talking about like coming to the country with a million different ideas and priorities and it should be the countries that are, that are in charge. So like my bottom line here is I feel like we need to be more demand driven. And if you're demand driven, it's all about, well, the people that you're ultimately trying to support. Probably countries listen to what they want and there's way too much of a supply driven approach still in the international system. Getting that mix right is not easy. But that's, I think a lot of what ideally groups like the G20 would come out with is high level political support for a big issue like hunger. That's great. But then how do we figure out how to be demand driven in the way we deliver?

C (28:52)

Yeah, and I think that that's also kind of the focus here too is what do countries want to achieve. And now to sign on to this alliance or to, to say that you're endorsing or supporting it, you actually have to do quite a bit of work. For example, I mentioned the Nigeria example, but there's others, Bangladesh has already said that, okay, their priority is they want to reach more pregnant women with malnutrition supports. They set a number. I believe it's 6 million or 6. Yeah, some they set a particular target number and then once they have that established from the government level, that's when they begin the work. So the point is that countries shouldn't just be joining on because they think it sounds good. They should actually come with a particular policy commitment in mind. We'll see. But I think so far, Even before the G20 actually started, there was something called the Social Summit, which was the first for this G20 for Brazil and it actually will continue. South Africa's already said that they will do the Social Summit next year, but it was a multi day event of civil society government officials, all sorts of folks from, from across the space, the civil society space, and they already started announcing these commitments. So that was on Friday and the G20 began on Monday. So there, there does seem like there's momentum. It's the fact that. Can it be continued? In speaking with Brazilian officials, they have told me that they, until the secretariat actually gets set up, they're going to be the ones that are continuing the matchmaking work. So they're guessing that probably interim work will happen with Brazil at the head until probably May. But they were quite clear that they don't want it to fall off now that the Brazilian G20 presidency has ended or will end on the 30th of November. They'll continue that until it's taken forward by a secretariat.

A (30:39)

Makes sense. Well, listen, we got to wrap up here in a second. I'll just throw out one last thing for me, which is it's actually, interestingly, a lot of the same people, these experts who are both of the G20 pushing around the MDB reform and the very same experts are at the Baku pushing around this new fundraising target, the, the new collective quantified goal. And you know, it's interesting to hear them. And so one of the things that's going to come out of this copper, at least we're all waiting to see this week, is that fundraising target. And essentially their report came out and said we need the developed world to come up with a trillion dollars per year. And essentially the total need is 2.4 trillion. But they think 1.4 trillion can come from the developing countries themselves and other sources domestically. So you need globally this trillion. And this is where, you know, these kinds of announcements, the details matter a lot because probably a lot of the debate is going to end up being, well, what constitutes that trillion. So we might end up with a, a big shiny new target, like 1 trillion per year. But how much of that is grant versus how much of that is, you know, loans? How much is. Is crowding in the private sector, like an assumption that will crowd in the private sector, but it's not a guarantee. So maybe we could just end on that one, James, because you know that that space. Well, like what would be, what are you looking out for as that number gets, gets put out maybe sometime later this week.

B (32:05)

So you, you've nailed it in the, in the framing of the question, Raj. It's how does it break down? I think realism and how we Break it down. I do think that all of us need to recognize that there's a political wave, particularly in richer countries right now, pulling away from a lot of the kinds of investments we think many of ourselves and our listeners will think are important, morally required and so on. And the question is, what can we get right now to begin the work and how do we build on that? So the top of mind for me is let's be realistic about what, you know, saying we're going to find a trillion dollars of grant based transfers to the developing world. I would love to believe that something like that is possible. I just don't see that as being in the realm of possibility right now, given where the politics of all these countries are. So what can we structure that does work, that does begin to move the resources we need? I also found the Economist analysis this past week really persuasive about the need to actually interrogate what do we actually need. It's not necessarily true that the right way to think about this is just pure transfer. And also what are the price tags we're working with? Because if, yes, we're going to need 2.4 trillion to go in a climate consistent pathway, but 2 trillion anyway to address these needs, then actually the number to 0 in is the incremental 400 billion in the way that we talk about it. Because all the other stuff was already kind of there's something there about are we updating our understanding and keeping an eye on kind of fighting the idea that there's this hugely unrealistic price tag to tackling climate and bringing climate justice to the world. The numbers are big, but they, they might actually be manageable. And then let's also, as we look at the different instruments out there, be nuanced and realistic about what we can get early and what we can expect later.

A (34:15)

Yeah, I think it's a great point. And maybe we're just entering into a new era around the way we think about the advocacy work of generating more money from donor countries. It's a, it's an uphill battle. So it's about the quality really interrogating, you know, what are the actual gaps and are we getting the money to the right places? The alignment you talked about, Alyssa. So, hey, listen, this has been a big week, these two big events happening at the same time. It's been great to unpack it a little bit with the two of you. Thank you, Alyssa. Milena. Thank you, James Wangi. This has been another episode of this week in global Development. If you aren't a regular listener, please become one. We're on every podcast platform and subscribe to the devex Newswire if you don't. Good to see you all.

B (34:57)

Thank you so much.

C (34:58)

Thanks James.

A (35:02)

This has been this Week in Global Development. If you enjoyed this episode, don't forget to subscribe using the link in the description to get even more coverage and analysis on the most pressing development issues of the day. Become a Devex Pro member by going to devex.com membership and signing up. Thank you for listening and see you next week.

B (35:21)

It.