Dan Banik and Vijaya Ramachandran discuss the impacts of a blanket ban on fossil fuel financing on development and poverty reduction in low-income countries.
Vijaya Ramachandran argues that blanket bans on fossil-fuel funds will entrench poverty. By pushing a renewables only model on developing countries, and expressing fear about the future emissions of these countries, including those on the African continent, rich countries such as Norway are promoting colonialism in green.
Vijaya is an economist with extensive experience in public policy and academia, having worked for the World Bank and the UN as well as serving on the faculty of Duke University and Georgetown University. She is currently director for energy and development at the Breakthrough Institute, and a non-resident fellow at the Energy for Growth Hub and the Center for Global Development.
Professor Dan Banik, University of Oslo, Twitter: @danbanik @GlobalDevPod
Banik: Happy New Year Vijaya and welcome to the show.
Ramachandran: Thanks so much Dan, it's a pleasure to be on the show.
Banik: I've really enjoyed reading your work over the years, Vijaya and I wanted to talk to you about something that you've been writing more of late and let's start with the recent UN Climate Change Conference, COP 26 in Glasgow, held in November of last year. And you had a lot of rich countries, the US, Britain, many other countries saying basically they're not going to finance fossil fuel projects. And while there are of course very many people who believe this is actually the right way forward, you've been arguing that rich countries are in practice talking about, or even advancing, a green version of colonialism. You've been particularly critical of countries, including my own country, Norway, and so I want to start there Vijaya, you've been critical of the fact that Norway, together with the Nordics and other Baltic countries has apparently urged the World Bank, and I'm not sure if this is correct but Norway is telling the World Bank to stop financing natural gas projects in Africa and in other parts of the world by 2025, and the message, apparently, is that the bank should only finance clean energy solutions in low income countries. And here, of course, there's talk about green hydrogen and smart microgrid networks. Now, Vijaya, this is the question to you: why is this kind of advice coming from rich countries like Norway (like many other countries) to promote renewable energy in Africa and elsewhere – why is it wrong Vijaya, and why are fossil fuels still necessary?
Ramachandran: Thank you, Dan. So, let me start by talking about Norway. Natural gas prices are at record highs in Europe right now and Norway is making a lot of money expanding its exports of natural gas, it has just agreed to increase its exports by 2 billion cubic meters to alleviate Europe's acute energy shortage. Its neighbors such as the UK and other countries are very grateful for this extra supply of natural gas, particularly during the cold winter months. Norway, as you well know, is the most fossil fuel dependent rich country in the world. Its crude oil and natural gas accounts for 41% of its exports, 14% of its GDP, 14% of its government revenue and 6-7% of employment. It has the largest hydrocarbon reserves in Europe and it's one of the world's largest exporters of natural gas. I find a conversation led by Norway and others to ban the financing of natural gas projects in Sub-Saharan Africa where people are very poor, these are some of the poorest countries in the world, they are greatly lacking in energy, they desperately need access to a wide range of energy sources, I find the conversation to ban financing of natural gas in those countries – while vastly expanding consumption, production and export in donor countries, in rich countries – a version of green colonialism, and that's what I've been speaking and writing about recently.
Banik: Are you then thinking about the kind of hypocrisy that some people say characterizes some of these policies emanating from the rich countries? Because you have, in addition to Norway, you also have of course the UK with some of the biggest fossil fuel subsidies in the EU, the US as you've written about, I think is going to increase its own domestic production. You just mentioned that Norway is indeed one of the most fossil fuel dependent rich countries in the world, and I'm reminded of Branko Milanovic's critique, he wrote this piece, I don't know if you read it, in July 2021. He was arguing that the Norwegian government is extremely active in talking about the threat of climate change in international forums and Norway is virtually the world champion in the adoption of electric cars, we've all somehow managed to make that transition. But Brankos' main point was that while all of this, the production and sales of oil itself that Norway considers itself to be noxious, it is selling like the East India Company did with opium, it's selling oil to these foreigners elsewhere while staying domestically clean, and he said something like “money has no smell”. So, is that what you're pointing to, this hypocrisy, Vijaya, that on the one hand, we're relying on fossil fuels for our welfare, but somehow exporting all the emissions elsewhere, that we're not counting our international, the global footprint, but thinking much more nationally?
Ramachandran: So, I think my argument is slightly different than that. You know, I do agree with that, that there is this sort of hypocrisy about the domestic environment versus what Norway is exporting, but my point is actually a slightly different one, a different type of hypocrisy, which is that all the leaders of rich countries understand that we need energy for everything. We need energy for electricity in our homes, in our schools, in our hospitals, we need energy for transportation for cooking fuel, we need energy for agriculture, particularly for the production of fertilizer, and most importantly we need energy sources that will address the intermittency of renewables. Everyone understands that in the rich world wind and solar alone are not going to power anybody out of poverty. Any project that largely relies on renewable energy has a fossil fuel back up. There are many types of economic activities where you cannot complete them with renewable power, you cannot really manufacture fertilizer without natural gas, you cannot build roads without wind power, you cannot power homes in schools purely with renewables. That is the hypocrisy I'm pointing out. That rich country leaders understand that; they understand that in their own domestic context, the Norwegian Prime Minister, in an interview with The Financial Times, argued that natural gas is critical in the transition from fossil fuels to all renewables, understanding very well that the technology, doesn't yet exist to be renewables only. Where I think rich countries are most hypocritical is that they are pushing the “renewables only” model on the poorest countries, saying the World Bank, the other multilateral development banks cannot finance any kind of fossil fuel projects starting in 2025, the COP 26 pledge, I think it was even earlier than that, signed by dozens of countries that all extensively use fossil fuels. I think that's where the hypocrisy is. On the one side they are pushing this model that is not workable on poor countries, on the other side, they are themselves expanding exports which is the case of Norway or the case of the US, asking all oil producers globally to expand production, or auctioning a billion barrels of crude oil production in the Gulf of Mexico the week after COP 26. I think that's for me the disconnect – the understanding that in the domestic context people are not willing to pay the price of not having enough energy, but in the international context where there is no political price to be paid at home, you can push this model of renewables only and bans on fossil fuel financing and any other sort of virtue signaling type of activity without any consequences in a political sense.
Banik: Some of these policies are actually affecting us now, and as I speak to you today, I'm in a relatively cold basement of my house and we are all trying to save energy because electricity prices have gone through the roof, and we've never in Norway had this problem, not at least as I can remember in the last 30 years that I've lived here, where we've been thinking about saving energy as much as we're doing now. And some of the public discourse is based on how renewable energy is just insufficient, that if Germany doesn't have a windy day, we are all actually paying much more for the electricity that we use than if it is a good day in Germany. Then there's a lot of dissatisfaction here now on why we've sort of had these undersea cables to the UK, to mainland Europe, to sell some of the excess electricity that we have. So, the point here is that even here one is beginning to doubt whether that transition, that green transition, that we were all looking forward to, whether that is going to go off as smoothly as possible or as smoothly as we'd expected. But of course, you're right that it is a lot easier to preach abroad than to preach at home. And here, of course, there are lots of political debates as you, I'm sure are aware of, there's a lot of disagreement. The Prime Minister, of course, has been reluctant to commit to phase out fossil fuels than some of the green parties have been arguing for.
Ramachandran: Yeah, I think there are some technical issues around this, Dan, that are sort of coming to the forefront, now that you know countries are pushing forward in different ways on renewables, the intermittency issue which you raised is a serious one, wind power has been low in Europe for several months now and that is affecting the amount, of the amount of renewables that are being supplied into the system that the wind is simply not blowing as much as it was previously, and that's affecting supplies of energy and consequently, energy prices so that there is an intermittency problem. Also, cloudy skies can affect our solar power for the same reason. The other issue with renewables that we are yet to sort of solve is the storage issue; it's extremely expensive and sometimes impossible to store, and so these sorts of issues are giving rise to the fact that you do need fossil fuel backups, you need something to smooth out the fluctuations in renewables, and without that you then get price spikes and shortages and so on, which I think to some extent is affecting the situation in Europe, although that is also, I think a quite complex situation with some issues related to pricing and so on. Nonetheless, I think we are realizing in the rich countries that, and we've known this for a while, that this transition has to occur in a manner that is reasonable as technology evolves to cope with our needs and in most rich countries, governments understand that very well and they are making sure that they have enough fossil fuel reserves or fossil fuel backups to supply the energy that is needed for heating for electricity, for homes and for industrial purposes and so on. I would like to see a similar reasonable conversation for poor countries where the energy needs are so much greater, where billions of people don't have access to a cheap and reliable source of electricity or are even able to turn on a light bulb at home, where hospitals and clinics function with very intermittent, very low-quality electricity. I think these are the kinds of things that we need to keep in mind when we push these renewable solutions on poor countries and argue that they should be renewables only, and express fear about their future emissions. To me, that is a version of green colonialism.
Banik: But don't you think that it is a good thing to insist on others learning from our mistakes, that there is a better way forward, that development can be greener, and if it is possible, let's do our bid to make it possible. Is that something you would agree with?
Ramachandran: You know, I would agree with that. I think that there is a better way forward for poorer countries and I would like to point out that several countries in Sub-Saharan Africa are majority renewables already. Kenya is probably leading the pack with 80 to 90% renewable because it has vast quantities of geothermal energy available to it. Poor countries are taking a different path, and those that are yet to industrialize are making use of the renewable technologies that are available. In my view, that's a very good thing, and we do want countries to have a cleaner path to industrialization than has historically been the case. I think what is very counterproductive is to cut off all kinds of other types of energy right now and insist that these countries be 100% renewable. That is effectively what a fossil fuel financing ban would do for poor countries because countries need international guarantors, they need international financing, and cutting off that financing immediately is a terrible idea because while these countries are transitioning to majority, renewable and exploring renewables, they are no, they are not at the point, and nobody is at a point where you could be 100% renewable immediately. I think that is the problem that we are facing currently and that's devastating for poor countries that need energy and vast amounts of energy to alleviate poverty and to lift themselves out of out of very low living standards and sort of very poor-quality energy, into a better place. I think that's where the hypocrisy is that we're asking these countries to do something that we are not willing to do ourselves and that really nobody can do from a technological perspective.
Banik: This is what Paul Collier, in a conversation with me earlier last year, he said this is unethical, what the rich countries are expecting poorer countries to do. I'm wondering here Vijaya, why do you think they're doing so? Why is this advice being given? Why is it that there is so much focus on banning finance for fossil fuel investments? Is it because of this fear, that is often cited, that fossil fuel boom in low-income parts of the world in fast growing regions such as the African continent, that something bad will happen? I was recently in India and there was this widespread feeling among policymakers that there's a lot of hypocrisy and this was particularly related to coal. Many of these so-called rich world debates are viewed in India and elsewhere to be tantamount to scaremongering about Africa and the developing world.
Ramachandran: That's right, I think there is a lot of scaremongering going on. There's sort of a panic that brown and black people will destroy our climate ambitions the climate ambitions of the rich world, to put it bluntly, I think that's what is going on. I think there is a sense that we've used in the rich world, we've used all the carbon we wanted to become rich and now we want the environment to be cleaner. Climate change has become a real crisis because of our use of fossil fuels, and there's a sense that while the rich world has to grapple with this, we do not want poor countries that are yet to develop to sort of ruin the efforts that we're making to become cleaner or to switch to renewables, I find this argument to be very problematic. First of all, I absolutely think that rich world countries are doing very little to curb their fossil fuel emissions. Yes, they are investing in renewable technologies that there has been a transition to renewables, countries are beginning to decouple but at the level of sort of imposing a carbon tax or cutting back on the consumption of red meat, or banning fracking, or banning the production of oil and gas on public lands, none of that has happened. There is a very clear sense amongst politicians in which countries that imposing the burden of cutting back on carbon emissions on their people will lead to a political blowback and a negative fallout in terms of their political ambitions. Rather they have transferred that to poor countries and sort of amplified the scaremongering around Africa, around India and coal. You may remember the flurry of media attention because India wanted to say coal face down, not coal phase out in the final communique of the cop 26. So, I think in some sense politically it's much easier to focus on India or focus on Africa rather than confront the challenges of cutting back on fossil fuel consumption at home. I would say that in the weeks and months after COP, we have actually seen an increase in fossil fuel use in practically every rich country in the world, while this hype about Africa and about poor countries and their future emissions has been sort of amped up. It is scaremongering, it is colonialism at its worst I think, and I fully agree with Paul Collier that this is unethical and immoral and unjust from a perspective of alleviating poverty. It is a deeply unjust way of going about things.
Banik: But another way of looking at it, Vijaya, the counter argument is of course, if and let's talk about coal, if India and China don't reduce their reliance on coal, none of the climate change targets are to be realized, so don't you think it is natural to sort of point the finger at some of these big emerging countries and their reliance on fossil fuels?
Ramachandran: I think there's no question that everybody needs to think about reducing their fossil fuel consumption. You know all the rich countries as well as India and China and perhaps even some others in the emerging market category. And I will say that India is making considerable strides towards this goal. Every country has its nationally defined contributions, which it has declared through the COP process and India has made a declaration to switch away from fossil fuels, it has very ambitious solar energy targets to increase its solar energy production to I think 5000-6000 gigawatts in the next several decades. It has ambitions to expand away from coal. I think these sorts of things need to be recognized, I think what's not possible for India to do is to end its coal production tomorrow. You know, that's, I think that's where it's unrealistic. There are several districts in India that depend on coal revenues, there are tax revenues generated from coal that finance public services, there are millions of people employed in the coal sector. This is going to be a very difficult transition for India. It has made several commitments to undertake this transition that must be taken seriously rather than sort of being all hyped up about a particular word in a communique and ignoring all the stuff that they're actually doing and also ignoring how difficult it is to transition away from coal. Something that politicians understand within their own countries in the rich world, how difficult it is to transition away from fossil fuel dependence, but when it comes to India and China, there's a sort of hype to the conversation that I think is not productive, it's certainly not something that India and China appreciate, nor is it contributing to speeding up their efforts to move away from coal, it's simply, I think creates a sense of distrust and a sense that rich countries are behaving in a very hypocritical manner.
Banik: I was in Delhi in November when there was so much world attention on this phrase of phasing down versus phasing out. And there was this, everybody was blaming these two countries, and there was this feeling in Delhi among policymakers I was interacting with, one of disbelief they couldn't really understand why India was copping some of this blame. And in this connection in terms of coal, Vijaya, there are some studies that have been at least talking about some sort of projected boom in a new coal power generation in Africa. And some of these findings have been used to justify this ban on new fossil fuel projects, right, but in a peaceful world development recently Todd Moss and his colleagues, they examined, they had a look at some of these influential studies, at least two in particular that were projecting this deep increase in African coal, and Todd and his colleagues found that Africa is not on the cusp of a coal boom, that there is actually very little evidence to justify this blanket fossil finance ban.
Ramachandran: Yeah, absolutely, absolutely, Dan. There's no coal boom in Africa, that's just simply not true. The only country that has coal production to a significant degree is South Africa, and you know, South Africa, like India, has also announced a nationally defined contribution and is on its way to phasing out or phasing down, whatever expression you want, it's coal production and to trying to figure out how to relocate workers and how to close mines and how to deal with revenue shortfalls and all the issues that arise from transition away from coal. The rest of Sub-Saharan Africa is not engaged in any coal production, and this idea that or any significant amount of coal production and this idea that they are increasing coal production is simply not true. I think again, it speaks to this sort of climate panic, the sense of sort of oh no, people in poor countries are going to sort of ruin our lives. In the case of coal in Africa, that is just simply not the case. I think that the conversation for Africa is about natural gas, which burns twice as clean as coal and is very, very important for an energy transition or an economic growth transition for Africa as it begins the process of industrialization, I think it's going to be really important for Africa to use its natural gas reserves to make fertilizer to liquefied form, to improve transportation, and in particular to transition away from wood, charcoal and dung fuel. The transition to clean bottled cooking gas is extremely important, I think, for Africans, and as you know, Dan, 3.8 million people a year die prematurely from the effects of indoor air pollution caused by burning wood, charcoal, animal dung or coal indoors, and I think the transition to natural gas, and to cooking gas, bottled cooking gas, is extremely important for poor households, and I think these efforts to ban the financing of natural gas projects in Africa are largely detrimental to Africans from a poverty perspective, from a growth perspective and from a health perspective.
Banik: I'm glad you mentioned charcoal, I've been studying this in Malawi for the last few years. I'm actually writing up a piece now, almost done, yeah. And Malawi like many other countries in Sub-Saharan Africa has a lot of difficulty in generating power. There's just not enough electricity, 10-11% of the population is covered by the grid, but the main problem is unreliable electricity, there's always a power cut and charcoal usage has just exploded and of course there's deforestation that goes with it. But the main problem, the main challenge, is that there is no alternative. There's no electricity, and there is no cooking gas, even though it is becoming somewhat more available in some of the urban areas, but not to the same extent as, say, LPG, these gas cylinders are used in India, that that would be wonderful for Malawi. Anyway, so there's no electricity, solar power capacity is limited, it is also considered to be unreliable, and so people then say what should we do?
Ramachandran: Yes, exactly
Banik: deforestation is the only way out, we can't think about future generations, we have to survive today.
Ramachandran: Exactly, they do have to survive today, and I think this is the issue that everybody needs to keep in mind when they talk about African countries needing to use green hydrogen and smart grids and other such complex technologies. These are simply not viable for very poor countries, and they are not available to them, and survival is an immediate issue. You know, from the perspective of Malawi, Dan, I will say Africa is sitting on 4.2 trillion cubic meters of natural gas. There are natural gas reserves all-over Sub-Saharan Africa, including in Mozambique, in Nigeria several other countries. If these natural gas sources are tapped and lines are built, we can solve some of the electricity shortages in Africa, we can provide liquefied natural gas to households across east and southern Africa. We can address issues related to agricultural productivity and fertilizer inputs. I think these are the kinds of things like development finance banks need to be able to do. They need to be able to build these resources and invest in natural gas infrastructure to bring electricity to people’s homes and to people’s lives, so they are not dying from indoor air pollution. I want to point out that Norway has been one of the countries proposing a ban on the financing of natural gas projects in Sub-Saharan Africa, Norway also has a gender equity minister, I would like to know what that minister thinks of not being able to supply women in poor households with cooking gas that is far safer for their lives, than burning charcoal or burning animal dung indoors. These are the sorts of, I think, sort of problems that these kinds of bans have created that have not been thought through. India has made a huge push towards bottled cooking gas and it has made a huge difference in the lives and in the health status of women and children. I don't understand why which countries are not willing to look at these things and make reasonable kinds of proposals to development finance banks to supply electricity to poor countries like Malawi, and to alleviate the kinds of health problems that arise from the use of biomass.
Banik: Vijaya, let's move on to actually discussing what Africans want themselves, because I've been also studying Kenya and this very well-known protest movement against a coal fired power plant in Lamu, where the local citizens of course didn't want that kind of coal fired, right, dirty fuel-based energy. They wanted renewables because they felt that coal was bad, that wind and solar power is what the government in Kenya should be pushing for. So that was one side of the story. And then, of course, President Museveni from Uganda wrote this op-ed piece in the Wall Street Journal, saying basically, that solar and wind force poverty on Africa, letting us use reliable energy, doesn't mean a climate disaster, Africa can't sacrifice its future prosperity for western climate goals, the continent should balance its energy mix, not rush straight towards renewables, and so I would imagine many Africans believe and argue like you have that maybe this ban on fossil fuels will further entrench poverty. The question is why are these voices, differing voices, not always in unison, why are these voices then not being heard in these international debates? Is it because there's little attention given to African agency?
Ramachandran: It's an excellent question, Dan. I think it, you know, it sort of highlights the imbalance in power within these development finance agencies, it is rich countries that are the largest shareholders of the World Bank of the regional development banks of the European Investment Bank and so on, and it is their voices that are heard. Africans have been multiple for our raised concerns about the fact that they cannot be renewables, only that they need fossil fuel backups that they need to invest in their vast natural gas reserves to bring electricity to the people. We haven't yet discussed the fact that Africa is 4% of global emissions, and cumulatively less than 1% of global emissions. This is not a continent that is going to be a very large chunk of global emissions anytime in the near future. Yet I think, your points, your question speaks to the fact that rich countries dominate the conversation, and they dominate the conversation at COP, you mentioned Museveni’s op-ed in the in the Wall Street Journal. There's also President Buhari of Nigeria has written about this in an op-ed as well, vice president Osinbajo has written about this. President Chakwera has written about this, arguing that basically, all of them are arguing that these kinds of bans on the financing of natural gas particularly will force Africa to remain poor. It really is to me, a very stark example of how rich countries can ignore African voices or African Heads of State in favor of their own constituencies, their own domestic environmental movements, or their own sort of priorities, which is to signal on the world stage that they care a great deal about carbon emissions, and so they're going to not finance fossil fuel projects in other countries. I think that is sort of the hypocrisy of the current conversation, and it does reflect a very unequal bargaining power and the very sort of unequal way in which development finance agencies are run.
Banik: So, the way in which, of course, some of these arguments are made in rich countries is by pointing to the fact that it's the world's poor that face the brunt of climate change or climate disruption, that they are the ones who are suffering the most and that's why we have to do this. So, there's this climate injustice or climate justice argument. What're your thoughts there? What should the EU, the US, or even the major banks, The World Bank, what should they be thinking about? Is it possible to have economic growth using fossil fuels and at the same time do something about climate change?
Ramachandran: Yeah, at the point of the fact that the poor face the brunt of climate change I could not agree more with that, that is certainly the case. They are facing the consequences of rich countries use of carbon and of fossil fuels for decades if not centuries. Why are poor countries not able to cope with these additional events due to climate change? In large part it's because they are poor, right? The buildings are not resilient, roads are not properly built, schools and homes are not able to withstand the effects of typhoons and hurricanes. A big part of the financing package for poor countries is going to have to be adaptation to climate change and resilient infrastructure and better access to transportation is going to involve a range of energy, including some types of fossil fuels. It doesn't have to be the kind of path that we took, it will involve a higher share of renewables that in the past, but it's going to have to involve certain types of fossil fuels, and in particular for Africa I think natural gas. I think the understanding that poor countries are not able to withstand the effects of climate change because they are poor is a very big part of the story and we need to sort of have the conversation from that perspective. Cutting off their energy sources is not going to make them more resilient to climate change, if anything is going to make the situation worse. So I think if I was a staff member at the World Bank or a shareholder at the World Bank, I would need to think carefully about where the World Bank can invest in renewables and there are opportunities now to do that that there weren’t in the past, and wherever there are opportunities, those must be taken, they must be prioritized, but where also do you need a wider range of energy sources to make poor countries more resilient? And I think Museveni in his op-ed emphasized that point that poor countries need to become richer, that is one of the best ways to cope with climate change. They need to be able to adapt to the increased negative weather events after the disaster shocks and so on, and for that we need a much more reasonable conversation than the one we are currently having.
Banik: So, returning to Norway again, Vijaya, I see in some of your recent writings that you at least allude to the fact that in one way in which these rich countries continue to exert some sort of pressure on poorer countries is by repackaging development aid, and in this context, of course, Norway is often proud of being a very generous donor. We provide considerable amount of financing for different types of development. I was speaking with the current head of NORAD, Norwegian NORAD, and I was asking him there are lots of people questioning whether we are greenwashing aid or greenwashing our policies by providing aid for certain climate change related goals, and he said there are actually things that we're doing that are having an impact such as our efforts at preventing deforestation that has a major effect on emissions, and so there are certain things that Norway is doing despite what we began the conversation with the production of oil etc. is creating a lot of emissions outside the country, that Norway is somewhat, making up for it. I mean, what would you say to the fact that Norway is funding to limit and reverse deforestation and that such initiatives do actually have an impact?
Ramachandran: Yeah, I agree with that. I think Norway has been a good development partner and it has funded a number of things, including projects that have increased the empowerment of women or have improved the quality of their environment and its efforts to prevent or reverse deforestation are or are well regarded. I think overall it has had a good track record in promoting development. I think what needs to happen for Norway and for everybody else in Europe is to think more carefully about this energy transition. You don't want to end up repackaging development aid as climate transfers. You don't want to keep poor countries poor and tell that well, we'll give you some climate aid or some climate transfers, but you know we can't, we can't fund your energy developments to become richer. I think that is the hypocrisy that we want to avoid, and unfortunately, I think not enough thought is going into this. There is so much hype around the fears about carbon emissions and about climate change that it is leading to, I think very counterproductive policies when it comes to poor countries. Norway has had a long track record of investing in poor countries or caring about poor countries, as I mentioned, you have a gender equity Minister who is focused on the empowerment of women. I think that if the development side can be acknowledged and the challenges of development can be acknowledged and put to the front, you will have a more reasonable set of policies around addressing climate change. I am not unsympathetic to the fact that Norway has used its oil reserves and its gas reserves to become rich and to provide its citizens with a high standard of living and to provide social transfer isn't to be the kind of country it is that is, I think, a reasonable thing to do. I think what they need to think about is that other countries also have those priorities, to make that their citizens better off to have better infrastructure, to have better homes and hospitals at schools, and how might you help countries to do that while increasing their use of renewables? We all want that, everybody wants that, including poor countries, but not be dogmatic or unreasonable or counterproductive, ending up keeping poor countries poor. I think that is the challenge for the head of NORAD, for Norway's foreign affairs infrastructure, that's the kind that's the kind of questions they need to be asking themselves.
Banik: Yeah, that is a fair point because sometimes my impression is that we get caught up in these fears of what's going to happen, that time is of the essence, and we only have this one world, and we've made all these mistakes and we shouldn't allow others to make those same mistakes. And there's this feeling that things have to happen very quickly. And I think that that prevents people from thinking more about how the so-called Global South thinks about these issues. I think the very fact that I was able to travel to India for the first time in 2 1/2 years, it just was so nice to be in a different environment that the perspectives were somewhat different, because you get caught up in these echo chambers back home where you think it is the end of the world and there's no other solution, whereas in India and elsewhere there was this feeling I got that now there is a different way forward, not everything, not all hope is lost. And we there is another way forward, and that's why I was asking you earlier, that some of the debates in these important world summits is often one-sided in the sense that the perspectives of developing countries are not heard even though, Vijaya, India and China do have a lot of clout in these forums, don't they?
Ramachandran: So, India and China have some clout. I think it's the the other hundred plus poor countries that don't have very much clout and that that's I think what I worry about a lot. I think India can take a leadership role, India can play a very important role in balancing the conversation on poverty alleviation at climate change reminding everybody that poverty alleviation is still a really really important thing for India and for many other countries. You know, India electricity consumption is a 10th that of the United States, it's still a poor country in many aspects and it has, you know, hundreds of millions of poor people, and I think it could play an important role in reminding everybody about that in a global forum. I think the countries I worry about are the smaller, poorer countries that don't have much of a voice that aren't often recognized, where Heads of State are writing in Western media, but are sort of not being recognized where the World Bank is completely driven by the by the ambitions of the rich countries that want to signal to their domestic constituencies that they're doing something in other countries, not so much at home. I think that's the hypocrisy that I worry about. But I do agree with you, Dan, that you know, being in an Indian setting or being in a setting where poverty concerns are very significant is, you get a very different sense of how we might go about combating climate change, than you do in rich country conversations on the topic.
Banik: So, one of the questions I asked some of the foreign policy mandarins is about India's place in the world. India's soft power or influence in the developing world is basically somewhat, it depends on how India is able to project and articulate the interest on behalf of those hundred countries, that by giving these other countries a voice, India is seen to be doing its job as being one of the leaders of the global South. To what extent do you think India and China have been representing the interests of these other countries? I mean from what you just said, it seemed that they were thinking more of themselves. What will it take for some of these other countries to have their interests better articulated?
Ramachandran: You know, I think they are trying to do some of that. I mean, of course, domestic concerns dominate, these are such large countries with so many development challenges within, but I liked Prime Minister Modi speech at COP 26 when he called for a trillion dollars of adaptation finance for the developing world, I think that was a broader call that just India and it was the right call and that that is the kind of amounts of money that we are talking about if we really want poor countries to be able to cope with the legacy emissions from the rich world. So, I think that that was a good step. I think India has been an important kind of player in the conversations around transitioning away from fossil fuels reminding everybody how difficult it is to do this and what some of the challenges are and what kinds of help might be needed. So, I hope in the coming years that that role increases for both India and China. I think Japan to some extent has also been a more reasonable voice om these sorts of issues. And as you know, Dan, next year's COP is going to be in Africa, so I really hope that these issues around adaptation, finance around compensation for loss and damage, which is something that the rich world has really yet to acknowledge is an issue, I think that these things become more prominent that the question of energy for development, the vast amounts of energy that are going to be needed to bring people out of poverty into middle income status or high income status achieves more prominence at COPs that are held away from rich world capital, so it will be very interesting to see what happens this year at the at the next hop.
Banik: A final question Vijaya, and that has to do with what happened after a COP, or actually, what happened during the UN General Assembly in September of last year where President Xi announced that China won't be supporting anymore finance or will not be building any more of these coal fired power plants on the African continent, or actually, they're not going to build it anywhere else. Now, given that Africa, the African continent, still has this huge energy deficit, millions, hundreds of millions of people in Africa don't have access to electricity. And of course, you've just said that renewables alone are not going to get Africa the kind of energy it requires. What should the World Bank be doing in terms of investments? What should which countries be doing in terms of aid and investments? What should African countries be doing to improve their access to electricity.
Ramachandran: Yeah, so first of all, Dan, the coal financing is not a particular concern for me. I don't think coal has much of a future in Africa and I think most African policymakers don't see coal as the future for their countries, other that South Africa which has to face a number of complex challenges around coal, I think it's really not that much of an issue across the continent. The issue is natural gas and the financing of natural gas projects, and that I see as critical for Africa's development. That's where I think Western agencies, aid agencies, development, finance banks need to think carefully, can natural gas serve as a bridge fuel? Can it serve as a transition fuel? Until we get to the point probably a few decades from now, where you can in fact be renewables only where the technologies do exist to store solar or to address it.
Banik: But Vijaya, is it costly the natural gas versus coal? Because coal is often sold to be as a cheap option to say hydro.
Ramachandran: So, I don't think in the African context that is the case, Dan, because the coal reserves are not as significant as the natural gas reserves. So, this is really about what you have, right, as opposed to kind of what might be the cheapest. I really do think that natural gas can be exploited and extracted quite cheaply in Sub-Saharan Africa at that Africa sits off so much natural gas reserves. Coal is not a significant in the African context as natural gas and I think most African governments are of the view that they would rather be exploiting the natural gas reserves, understanding that it burns twice as clean as coal, understanding that it can serve as a very important bridge fuel and use something like fertilizer, for example, pretty much uses only natural gas. That is the element that is used in the production of the key components of fertilizer. So, I think that really is the issue for Sub Saharan Africa, it's not so much exploitation of coal reserves and there are substitutes, I think, for coal in Sub Saharan Africa, the way there are not in other parts of the world, perhaps. And you know that is something that I think several people have pointed to in in criticizing the view that Africa is on the verge of some coal boom that that, I think is simply not the case. It really is about financing natural gas, about financing bridge fuels or fuels that get serve as backups to renewables. Although I'm acknowledging that Africa must invest significantly in its renewables and it is doing so many countries are in fact majority renewable, so I think that's kind of where the conversation is at, and that's I think where development finance banks should be rather than pursuing black advance and making big public announcements about those.
Banik: Vijaya, this was such fun to speak with you today, thank you so much for coming on my show.
Ramachandran: Thank you so much, Dan, it was a pleasure to be on your show.