Remarks by World Bank Senior Managing Director, Axel van Trotsenburg, at the Scaling Up to Phase Down Event

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Remarks by World Bank Senior Managing Director, Axel van Trotsenburg, at the Scaling Up to Phase Down: Solutions to Finance the Energy Transition in Developing Countries Event

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00:00 Thank you for joining us today to share perspectives on how to help the world

00:05 take critical

00:06 large scale action

00:08 that will determine how this generation

00:11 and future ones experience this planet.

00:14 A secure,

00:15 resilient,

00:16 and clean energy future requires a major transformation

00:20 of our economies,

00:22 industries,

00:23 and daily lives

00:25 for all countries.

00:27 Developing countries face immense challenges

00:30 and a triple penalty

00:32 in their clean energy transition.

00:35 Without access to more affordable sources of capital,

00:38 they often pay more for electricity,

00:41 often cannot access clean energy projects,

00:44 and can remain locked into fossil fuel projects.

00:48 In this vicious circle,

00:51 the poverty trap is becoming an energy trap

00:54 that is becoming a climate trap,

00:57 failing to act.

00:58 With urgency risk locking the world into a past with dangerous consequences

01:04 for climate

01:06 and development,

01:07 all hands must be on deck to support developing countries

01:11 through their energy transition.

01:13 The World Bank's approach

01:16 to the energy transition.

01:18 In a report called Scaling Up

01:20 to Face Down

01:22 maps out 6 steps to support developing countries scale up

01:26 affordable,

01:27 clean energy,

01:28 and face down coal,

01:30 today's discussion is how to translate this vision

01:33 into action

01:34 to tackle the key obstacles

01:36 and step up the progress.

01:38 If we want to give countries a fighting chance,

01:42 we need consistency,

01:44 concerted action,

01:45 and resources.

01:47 Let's take the example of coal.

01:49 To reach net zero emissions by 2050,

01:53 we need to decommission over 100 gigawatts per year,

01:57 the equivalent of decommissioning

02:00 one coal generator unit

02:03 per day.

02:03 There are still over 2100 gigawatts of coal-fired power plants worldwide.

02:11 Currently the world is headed in the opposite direction

02:14 with coal fired generation reaching an all-time high last year.

02:19 This needs to change

02:21 immediately.

02:23 But the transition is more complex than many people realize.

02:27 Coal is deeply embedded in the economies and social fabric of some countries.

02:33 Therefore,

02:34 the transition must be just and

02:36 equitable and help affected workers and communities

02:40 re-envision their post-coal jobs and livelihoods.

02:44 At the same time,

02:45 the retirement of coal generators could leave

02:49 $1 trillion in stranded costs that need to be managed.

02:53 The benefits of transitioning away from coal

02:57 will be globally shared,

02:59 so the cost should be shared globally too.

03:02 60% of the $1 trillion dollars needed per year for cleaning up electricity

03:08 must come from the private sector.

03:10 But investors will only come in if governments establish

03:14 strong foundations to scale up their energy transformation.

03:18 The World Bank and other partners play a critical role

03:22 in supporting developing countries with

03:24 more affordable financing to overcome barriers

03:28 at each stage of the energy transition.

03:31 The higher the barriers,

03:33 the more concessional support is needed.

03:36 Developing countries cannot overcome the barriers to energy transition alone.

03:41 The world needs to come together to catalyze affordable finance,

03:45 to strengthen economies,

03:47 and unlock clean energy for all.

03:50 We look forward

03:51 to a rich and productive discussion

03:54 with our panelists today.

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transcript

Thank you for joining us today to share perspectives on how to help the world take critical large scale action that will determine how this generation and future ones experience this planet. A secure, resilient, and clean energy future requires a major transformation of our economies, industries, and daily lives for all countries. Developing countries face immense challenges and a triple penalty in their clean energy transition. Without access to more affordable sources of capital, they often pay more for electricity, often cannot access clean energy projects, and can remain locked into fossil fuel projects. In this vicious circle, the poverty trap is becoming an energy trap that is becoming a climate trap, failing to act. With urgency risk locking the world into a past with dangerous consequences for climate and development, all hands must be on deck to support developing countries through their energy transition. The World Bank's approach to the energy transition. In a report called Scaling Up to Face Down maps out 6 steps to support developing countries scale up affordable, clean energy, and face down coal, today's discussion is how to translate this vision into action to tackle the key obstacles and step up the progress. If we want to give countries a fighting chance, we need consistency, concerted action, and resources. Let's take the example of coal. To reach net zero emissions by 2050, we need to decommission over 100 gigawatts per year, the equivalent of decommissioning one coal generator unit per day. There are still over 2100 gigawatts of coal-fired power plants worldwide. Currently the world is headed in the opposite direction with coal fired generation reaching an all-time high last year. This needs to change immediately. But the transition is more complex than many people realize. Coal is deeply embedded in the economies and social fabric of some countries. Therefore, the transition must be just and equitable and help affected workers and communities re-envision their post-coal jobs and livelihoods. At the same time, the retirement of coal generators could leave $1 trillion in stranded costs that need to be managed. The benefits of transitioning away from coal will be globally shared, so the cost should be shared globally too. 60% of the $1 trillion dollars needed per year for cleaning up electricity must come from the private sector. But investors will only come in if governments establish strong foundations to scale up their energy transformation. The World Bank and other partners play a critical role in supporting developing countries with more affordable financing to overcome barriers at each stage of the energy transition. The higher the barriers, the more concessional support is needed. Developing countries cannot overcome the barriers to energy transition alone. The world needs to come together to catalyze affordable finance, to strengthen economies, and unlock clean energy for all. We look forward to a rich and productive discussion with our panelists today.

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