Rachel Kyte is Chief Executive Officer of the Sustainable Energy for All (SE4All) initiative, and Special Representative of the UN Secretary-General for Sustainable Energy for All.
A leading advocate for sustainable development, Ms. Kyte is focused on affordable, reliable and sustainable energy as the key to combating both poverty and climate change. Ms. Kyte drives SE4All’s work to mobilize action towards its 2030 goals of ensuring universal access to modern energy services; doubling the global rate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix. As Special Representative for the Secretary General she is the point person in the UN for action towards the recently agreed global goal on sustainable energy.
Ms Kyte served until December 2015 as World Bank Group Vice President and Special Envoy for Climate Change, leading the Bank Group’s efforts to campaign for an ambitious agreement at the 21st Convention of the Parties of the UNFCCC (COP 21). She was previously World Bank Vice President for Sustainable Development and was the International Finance Corporation Vice President for Business Advisory Services.
1. What do you hope to achieve as the new CEO of SE4All?
First, I am excited to be able to take on the responsibility – together with all of the partners within SE4All: countries, cities, companies, civil society organisations – of driving towards our goals. We need to show demonstrable progress against SE4All’s goals in the short and medium term to build and maintain momentum towards an orderly, energy transition. The goals of SE4All were, for the most part, subsumed by the universally agreed upon Sustainable Development Goals in September of last year. Then in December, the international community came together again in Paris. There they agreed on the future direction of the global economy as a result of the need to combat climate change.
Put together we need to manage an energy transition that brings sustainable energy to all, and decouples our growth and development from carbon. As CEO, I see my job in helping all our partners to go further faster as they lead and manage that energy transition.
At the same time, as Special Representative of the Secretary General for Sustainable Energy for All, it is important to play back to the international community and to the intergovernmental process, what works, what doesn’t and the sense of what is possible – especially with sustained long term political will and support.
2. What are your views on the Paris climate agreement and its impact on Asia?
I think the extraordinary leadership and the coming together of countries, businesses, city leaders, civil society, and others to translate scientific evidence into smart agreements, means that there can be no “business as usual” for future development.
Paris means that we have to add urgency in our pursuit of low carbon pathways for economic development and growth. How we generate, transmit, distribute clean energy; how we build cities and move around them; how we produce secure supplies of nutritious food for all who live in these cities; and how we store and manage the water needed – all of these have to be designed with the ultimate goal of net zero carbon in mind.
Economic decision making has to internalize this challenge and we need long term signals that the political will exists to drive us faster in this direction. The agreements in Paris on markets, on pricing carbon, on the long term goal were all essential building blocks in the transition necessary.
But a long term goal doesn’t mean we shouldn’t start today. The longer we wait to put in place policies and financing we need for our infrastructure, and land use that will help us get to where we need to be; the more expensive and disruptive the transition will be. We cannot afford to lock ourselves into carbon-intensive, and therefore risky and more expensive (in the long run) options.
Already we can see the financial markets beginning to internalize what a universal agreement on an ambition to curb emissions to arrive well below 2 degrees means. The inevitability of reducing carbon emissions and what this means for carbon intensive industrial processes and energy option will be effected in the way long term investors regard carbon assets.
While the risk of carbon intensity becomes better understood and finds itself on the agenda of the G20, the Financial Stability Board and the board room tables of long term investors and financiers, the opportunity of clean, affordable options also becomes cleaner. In some respects, Paris means that finance and policy need to catch up with technological advances. When renewable energy, especially solar and wind, are cost competitive or cheaper than fossil fuel alternatives, the regulatory playing fields need to be designed for that in mind.
From an energy perspective, Paris calls for a quick ushering in of renewables into the energy mix and investment in the smart grids needed for reliable, affordable clean power to be the norm. Paris also shines a bright light on the need for a revolution in efficiency, especially in the largest energy consumers. This is not impossible to do. As we look across the developed and fast industrializing economies, we can see great variance in the degree of efficiency achieved in different sectors of the economy. We also know that where efficiency is valued and championed through performance standards, incentives and nudging, by the top of government, efficiency gains can be achieved. The question Paris poses to the leaders of the large energy consumers is – why wouldn't you pursue policies to become the most efficient economy there is? Why wouldn’t you seek to compete on this basis? Efficiency is the energy source ignored. There is much to be done and Asia should lead the way.
More generally what Paris means for Asia is an underlining of what we already know: there is an extraordinary opportunity for Asian economies to master the efficiency agenda and drive low carbon inclusive models of growth. At the same time, Asia can nurture new businesses and new business models, as well as new financial products, to ensure that clean energy is available to all. Asian government leaders have an opportunity to put in place policy that creates a level playing field for clean energy sources and sets standards for efficiency. This can help ensure that the shift in the energy mix and the extension of availability on energy happens in such a way that growth is not interrupted and communities are not left behind.
Already we can see leadership in the Asian region – from off-grid solar in Bangladesh, to grid-connected solar in Philippines and the potential of geothermal in Indonesia, as it becomes competitive with more traditional sources as and fossil fuel subsidies are reformed. Cities from Singapore to Tianjin in China are pursuing energy efficiency and green city policies, with Melbourne`s climate control policy also showing the way.
Businesses from Mahindra in India, to the State Grid Corporation of China, to Bronzeoak in the Philippines, are moving into a space where competitiveness is understood as being related to efficiency and where new business models and new technologies can bring solutions and future growth and shareholder value.
3. What is the role of cities in climate change, and how does the World Resources Institute’s Building Efficiency Accelerator as part of SE4All support this?
We will not arrive at a zero net emissions economy at some point after 2050 – which is the implication of the Paris agreement – without leadership from cities and their elected leaders and managers. Effectively, we need to engineer, plan, build and live in cities differently if we are reach our climate and development goals.
The way we lay out transport systems will dictate the efficiency and productivity of the city. What we build, where and with what materials, will determine a large part of the carbon footprint of the city, the livability and the competitiveness of the city. How we power the transport and buildings will do the same.
Mobility, energy and building solutions together will mean that we will achieve inclusive, livable, clean, competitive cities. Business location decisions are already affected by air quality and ability for the workforce to get to work. This will intensify as climate impacts increase. The show of force of city leaders in Paris was one of the most remarkable new dimensions of climate agreements.
In SE4All we have a huge stake in how livable, clean cities can be built or managed. That is why we support the WRI Building Efficiency Accelerator. It offers support to city leaders in two ways. Countries can have a light touch engagement, where the Accelerator will assess and identify energy efficiency priorities and how they can be improved for what impact. If cities want more, the Accelerator offers a deep dive, where it does a detailed review of all relevant policy and practice in order to make very specific recommendations and provide a blue print for discussion as the city pursues an efficiency agenda.
When efficiency is set as an objective against which governments and departments of city governments are measured, it is remarkable how quickly results can be achieved. For Asian leaders today, efficiency should be an issue upon which to campaign because it will not only ensure the competitiveness of the city moving forward, it will ensure the health and wellness in of the people living in that city.
That said, as CEO I am asking questions of the Accelerators. Where we have proven technology and business models, I would like to see scale come into focus. Clean and efficient street lighting for example, has been adopted from Madrid to Buenos Aires. Every major Asian city should roll that out now – it’s affordable, proven and improves city living. There are other examples and we need to increase awareness of what can be done immediately, while more complex problems are worked on.
4. What are SE4All’s main objectives for Asia, given that it will have more economic growth than any other region by 2050?
First, Asia needs to close its energy access gap and do so affordably with clean energy. This is a goal for 2030, but can and must be achieved earlier than that if the region’s inhabitants are to enjoy the other goals we have agreed – in healthcare and education for example.
While we see that new business models for mini-, micro- and off-grid solutions mean that renewables are cost-competitive and reach even the most isolated and marginalised communities, there is an infrastructure financing gap and it is not getting smaller. Significant work needs to be done with operators, investors and governments to find the connections that will allow investment in the smart modern energy infrastructure that Asia needs more quickly. We have to find new and inventive ways to try to close that gap. Many countries, developed and developing, have underinvested in infrastructure in the past. This has to become a domestic financial priority as well.
Second, our focus is on efficiency – the other renewable energy source. There needs to be substantial progress, in the near term, especially in the largest energy consuming economies, towards the goal of doubling the rate of efficiency. Increasingly, energy productivity will be a measure of long term economic stability and growth.
Chinese leadership in its hosting of the G20 where this is an issue, and the Clean Energy Ministerial in San Francisco are moments where Asian governments can take the lead in this efforts. In SE4All, we will concentrate on where the fastest gains can be made in order to show that, while difficult, progress is possible.
5. Looking ahead at 2016, what in your opinion will be the top three energy issues?
I think it is incredibly important to maintain momentum in 2016, after a year of milestone agreements in 2015. It is essential to continue to find creative ways to close the access gap in those countries where it is hindering growth and development. It is essential that we translate political commitment into action on efficiency at the city and country level, and also at the level of companies.
When countries and companies commit to significant targets, this has a knock on effect in the financial markets. Understanding that global political agreement is being translated by companies into change in operational direction. That change in operational direction provides opportunities for financial companies to develop new services and products, as well as look at risks in their own portfolios.
We are also at an incredible moment in time given low oil prices. Now is the time to reset prices and ensure level playing fields that don’t penalize new clean technologies and their new business models. Removing existing harmful fossil fuel subsidies, while it requires deft political skills, is an essential step in managing the economy for the long term goals.
There are some issues fundamental to our goals of access to clean, affordable, reliable power. I hope that SE4ALL can help spur the conversations forward where they may have become stuck or where they may not even begun.
Carbon capture, storage and use may be critical for some Asian economies, but how that will be financed seems an unfinished conversation. Where will we find the grant funding and concessional finance to ensure that the most marginalised and most remote communities have access to power where traditional and new business models may continue to struggle to operate?
If we are to leave no one behind, also part of what we agreed in September and December last year, putting the last mile first will be essential. And finally, how can we quicken the pace of efficiency when oil prices are low?
There is much to do, but our goals are clear and we agreed unanimously on them. This has never happened before. People should hold governments to account, while businesses and governments will need to work together as never before. And we have no time to lose. I hope SE4ALL can be the platform that spurs action and supports leaders from every sector of society to do more, faster.