This week on Cleaning Up, we welcome back Rachel Kyte, the UK’s Special Representative for Climate Change, for a deep dive into the shifting landscape of global climate diplomacy ahead of COP30 in Belém, Brazil.
Rachel brings decades of experience — from leading Sustainable Energy for All under Ban Ki-Moon to senior roles at the World Bank and IFC — to unpack how countries, investors, and institutions are navigating the new era of implementation.
Together, Michael and Rachel explore:
Rachel also reflects on public attitudes, the politicization of climate action, and the need for pragmatic cooperation over rhetoric.
Leadership Circle:
Cleaning Up is supported by the Leadership Circle, and its founding members: Actis, Alcazar Energy, Davidson Kempner, EcoPragma Capital, EDP of Portugal, Eurelectric, the Gilardini Foundation, KKR, National Grid, Octopus Energy, Quadrature Climate Foundation, SDCL and Wärtsilä. For more information on the Leadership Circle, please visit https://www.cleaningup.live.
Links and more:
Michael Liebreich
What they will say is: ‘To protect them from the heat waves, to protect them from the sea level rise, to protect them from the shocks to the food system. Everybody needs to act right now. Everybody is not acting. Why should we be?’
Rachel Kyte
That's actually not true. China has just come out with its nationally determined contribution. Because it's always like China, China, China, right? The idea that China is not moving through this transition as quickly as possible is false. The idea that India is not trying to move through its transition as quickly as possible… We are not the only country out there doing this in some kind of self flagellation. This is common sense. It's competitiveness. It's about trade, about investment, it's about security, and it's about clean air. And what are we going to do? Go back to burning coal? Why would that be a smart thing to do?
ML
Hello, I'm Michael Liebreich, and this is Cleaning Up. When Donald Trump won his second term as President of the United States, we all knew one thing, he would pull the country out of the Paris Agreement, but almost every other aspect of climate diplomacy was up in the air. Would other countries carry on regardless? Would they even double down? After all, last month, as Donald Trump was telling the UN General Assembly that climate change was a con, President Xi Jinping of China was announcing the country's first ever commitment to actually reduce emissions. And what about the process itself? We are less than two months away from COP30 in Belem, Brazil, and one of the unspoken items on the agenda is clearly whether the whole system needs a pragmatic reset. My guest today knows more about multilateral action on climate change than frankly, anyone else I know. She's been an activist, a banker, she's led a multilateral agency, she's been a leading academic, and she's now the UK special representative for climate change. Please welcome Rachel Kyte back for her second appearance on Cleaning Up.
ML
Rachel, thank you so much for taking time out of your travel schedule to join us here on Cleaning Up.
RK
Michael, it is lovely to see you.
ML
And in fact, it's to join us again on Cleaning Up. You were our second guest. Technically, you were the first guest on Cleaning Up, because when I did the first episode, which was with Cameron Hepburn, it was actually called Coming Clean. And then I thought, ‘No, that's a terrible name, and I changed it.’ Nobody noticed. So you are, I say that you are our pioneering guest.
RK
Oh, that's very kind. Yeah, that was, that was back in the day, right?
ML
That was during covid. And if anybody watching this wants a really good laugh, they could look at it, because I have this ridiculous beard.
RK
Oh, is that right?
ML
Yeah, because it was covid, you know, there was no reason not to. So I had this rather sort of bushy I was like Grizzly Adams, but there you go. Happy times… Well, not happy times, actually. Difficult times, but a long time ago. So now, at the time, you were the Dean of the Fletcher School, but now you've got a new job. So let's start by in your own words, what is your new job?
RK
So for the last year, so after the Labour government came into power in the UK, I was appointed by the foreign secretary and the energy secretary as the UK's special rep for climate, special representative for climate, which means that I'm out there trying to advance UK Foreign Policy with climate at its core, which is what the Labour government put in this manifesto, and what David Lammy, the then Foreign Secretary, sort of instructed me to do. So what does that mean? It means the international part of the energy transition. Obviously, the UK is going through a massive transition domestically, but we need everybody else to go through that transition. So how can we help? And then a significant amount of work on how do we finance these transitions? I also have a twin, Ruth Davis, who is the UK special representative for nature, and she's very focused on how do we put nature at the very heart of foreign policy?
ML
And I've known Ruth for a long time, and I need to get her on the show. That reminds me.
RK
She says hi by the way.
ML
Wonderful. And that's something we'll probably do next year. So you've got COP coming up COP30 in Belem, Brazil, and we'll get into the down and dirty details of that, no doubt But COP is not your only job. So you sort of skimmed over the international bit and the energy transition. So how do you split your time? What percentage of your job at the moment, and what do you think it's going to be during the course of your tenure? What will it be: Cop vs Non-Cop?
RK
Majority non cop. We have a very good negotiation team. I'm not leading the negotiation team. I'm sort of out there trying to create the conditions whereby negotiations would be more likely to succeed. And just to step back: When David Lammy came in as a Foreign Secretary, he said, ‘Look, we need to listen more and speak less.’ And this is about sort of a reset of where the UK is in the world post Brexit, with all kinds of other wars and conflicts going on. And with a new Labour government, with a sort of more internationalist view. And what I found is actually my job description in terms of what I do is being shaped by listening to other countries and what they need from us, what they want from us, and how they want to partner with us. And so it's very much a trade and investment agenda. It is very much around every country struggling to move its way through an energy transition as smoothly and as fast as possible. And the reasons for that — we can get into — and can we, as a country that has moved through its transition, not all the way, we haven't done everything perfectly, but we've done a lot of things that other countries want to do. You know, can we help? And that's the technical assistance and institutional support and partnership. It's not just overseas development assistance. That's just one very small piece of it. And then it's about us investing in other countries and, of course, attracting inward investment into the UK.
ML
I was going to say, and finance, because what I want to just take a second to review, why are you the right person at the right time in this role? And you know, when you and I first met, you will have been at the World Bank,
RK
I think it was the IFC (International Finance Corporation) when we first met
ML
It may have been at IFC, exactly. So do you want to give a review of your extraordinary curriculum vitae please? But quick, you know the short version.
RK
Yes, we'll skip over DJing and activism and all of that. So I worked at the International Finance Corporation for a number of years. Built their ESG policy framework out — the performance standards, which became the Equator Principles in the day when people did lots of project finance. Moved over to the World Bank to help Bob Zoellick, the then president, get an energy strategy through, which was the first time we started to circumscribe the conditions under which we would lend for fossil fuels. Stayed at the World Bank through the Paris Agreement and tried to put the finance package together for Paris. Then went to work for the UN to take on an initiative of Ban Ki-Moon moon called Sustainable Energy for All and turn it into an international organization. Then I had pre teens and needed to stop traveling for a few years, moved into academia, worked at The Fletcher School and then started teaching at Oxford. And then, advised different capital pools on how to do what we've been talking about, and then ended up with this government.
ML
Okay, so that's a very modest and very neutral because I did sort of frame it as your CV
RK
Yeah but that's the main points, right? Those are the killer facts.
ML
They are. But in the — I don't know what to call it — the development finance world, you are a towering figure for the work that you did, I'm guessing at IFC, maybe that was the sort of training ground, but World Bank. And then when I really worked quite closely with you was SE For All — Sustainable Energy for All — and Ban Ki-Moon has been a guest on the show, Damilola Ogunbiyi was a guest on the show. And that was really pulling together all of the — I think Ban Ki-Moon called it the Red Thread of Energy, without which none of the whether it's sustainable development goals or whether it's the work of, you can name your agency, I don't even know what they do. UNIDO, UNDP, UNICEF. None of that works without energy. And that was Sustainable Energy For All. I was on the high level group, which was where we would have worked quite closely together. So you are project finance, development, energy, climate. That's it. You personify it.
RK
Oh, dear. Well, I mean, so I should shuffle off, really, because we haven't made as much progress as I think we could have done and would have done. And I think there's very interesting structural reasons for that. There's very interesting reasons around perception of risk in emerging markets, and then there's very real structural reasons about why people won't take risk on some of the lowest income people in the world. But I'm starting to see now capital stacks and funds and different pieces of capital flowing into even the hardest to reach places. I was at the General Assembly last week and went to a dinner to celebrate the financial close of the Hard to Reach fund which has managed to attract mainstream banking and banking capital from very conservative banks into a fund which will fund electrification and solar energy for some of the most marginalized people in different countries in Africa. So finally, people are starting to see where the risk really is. And if you go hand in hand with an IFC or with a BII or whatever, in fact, that's not that risky.
ML
Now we have a rule here. No acronyms
RK
International Finance Corporation, the private sector arm of the World Bank Group. And BII, which is the UK's development finance arm.
ML
There's probably no sector in the world that is as good at acronyms.
RK
Yeah, the British government is really good at it as well.
ML
Oh, so you're in the Venn diagram. The middle of the Venn diagram.
RK
I get briefs and I read it, and I'm like, ‘Okay, I don't know what that means. I don't know what that means, and I don't know what that means.’ For months, when I came into the job, people would talk to me about PCM, and I thought, ‘It's a disease, what is it?’ Private capital mobilization. I'm like, well, just say it, I've been working in this field for ever.
ML
You haven't just been working in it. I mean, blended finance, you probably invented the phrase. And so here we are blending finance. It is happening and it's happening at scale. Now it's not happening at the scale required to bend the curve the way it needs to be on climate, but you've been so heavily associated with that trend, right?
RK
Yeah, and it's quite interesting how we reinvent the problem and then try to reinvent the solution constantly. So I remember this would be in the early 2000s in the IFC, where IFC didn't really want to take the risk of doing some of the frontier stuff, on the first wave of investment in solar and capital markets, etc. Sorry, in emerging markets. And I remember we had a program there called PVMTI. Don’t ask me what it stands for. But you know, something to do with solar photovoltaics.
ML
That breaks the rules of the acronym klaxon. I think you’re the first person who's actually failed to explain.
RK
I know, and I can't even remember the acronym, but the point was that we were taking highly concessional finance from the GEF, from the Global Environment Facility. And then we were using that to ameliorate the risk for IFC. And then we were attracting other investment into that. And we took 50 million, I think, from the GEF and we invested in a bunch of solar. A lot of it didn't work, it was too early, really. And then we wrote up the story of failure. That publication became a hot topic, because everybody wants to know what not to do, right? And talking about failure is important. Anyway, the point of this story is that, I sit in meetings now and people are saying, well it'd be very difficult. I mean, we were doing this 20-25 years ago. So I think it's the familiarity with it. And one of the things I've learned is the less bespoke things are, and the more you can standardize things, the more you can actually sort of get to scale, and the more that somebody who's an investment professional, who doesn't know every detail of the survival rate of this tree, or the possibility of this province in this country being at war or whatever. If they can just recognize that this is an instrument that they could invest in, then you can start getting to scale and start bringing in big capital.
ML
So one of the really interesting things that I've been noticing, or that's been coming across my desk, is this difference between the real risk in a lot of global south countries or emerging growth markets particularly, and the difference between the perceived risk by the private players and the actual risks. So we've got in the Leadership Circle, we've got Actis, we've got Alcazar energy, we've got Cygnum Capital, and they're all making this point. And I've just been over at Climate Week where Copenhagen Infrastructure Partners were again, making this point, particularly when you come to Brazil and Mexico and India, even Pakistan and Bangladesh. And I wonder whether one of the problems is that a lot of the private sector bankers and investors started their careers, the ones that are on the investment committee now, they started their careers around the 1998 sovereign debt crisis. And so they just think all of these countries are uninvestable, essentially, and they get no allocation in the big pension funds and so on. And you know, here we are, whatever it is, 28 years, 27 years later, it's totally different. There’s local capital formation and complex economies that are far more advanced. Obviously the BRICS are playing a completely different role. So capital coming in from places that in 1998 were unthinkable. And we're really in a different world. And one of the problems that strikes me is that there's probably 500 people who are allocating assets in Western institutions, who have not figured that out. Am I being a bit harsh?
RK
No, I think you're absolutely right. And there's three things going on which give me hope at the moment. First is: there's been a significant push for far too long, it has taken far too long to get the MDBs to share their data on their performance, so you can start to see what the real risk is based on the experience of those who invest in emerging markets. Another acronym, it’s called the GEMs database, and that's now at least partially public. And there's more that they could do to make it easier to share. And then you can actually sort of start building up a picture of what's really going on. The second thing is that this allocation, this is a vibrant conversation now. I mean in the context of London, between the City and the Treasury and Foreign Commonwealth Development Office and others, because that allocation has to increase. And there are things that the government can do to send signals that this is sort of needed, wanted, or, you know, even potentially down the line, rewarded. So I think that there is a conversation there, which has moved into an area where I would call sort of pragmatic. And then the third thing is really working with investors, right? So especially insurance companies, when they're investors, and getting them comfortable with certain pools of capital. So I sit on the board of the Private Infrastructure Development Group. And you know, one of the parts of the group is the Early Africa Infrastructure Facility.
ML
To clarify, that is about six governments that put together this group to funnel more money to exactly these sorts of infrastructure and emerging markets?
RK
Yeah, and what's been interesting about that is taking private investors and working them through the numbers of a pool of capital where you've got development finance, you've got multilateral institutions, and sort of say to them, ‘Look, this is the performance of this pool. This is a safe place for you to come.’ What I learned is it takes, for the first time, institutional investors in an emerging market, it will take them ages to go through all the data and really get comfortable. But then when they come in and they see the results, then they're in. Then they'll come in again. So we've got to find a way for everybody to be able to do that.
ML
I don't know how avid of a fan you are of Cleaning Up, whether you saw the episode with Carine Smith Ihenacho of The Norwegian Oil Fund. It was really, I didn't mean it, but it ended up being all about that allocation question, because here you have a country, an institution, a person, so committed to climate action — with, by the way, one and a half trillion dollars — and yet the institutional frameworks were just allocating all the money to the things that are perpetuating the problem and not to the three things we need to do: basically new technologies, global south and infrastructure. And they were almost prevented from doing that. That has to be the conversation, right?
RK
Yeah, I was going to say, I mean infrastructure. For an asset owner, for a pension fund, except for a sovereign fund, to go into infrastructure itself has been a barrier that only a few have crossed, and in very small ways. And then the question of geography as well. So there we have to unpick this little by little, but with more South-South trade than North-North trade, at the moment, you know, where are you going to make your money? I mean, it's going to be in emerging markets.
ML
So let's do a little sort of stock take of — we've talked quite a bit of theory about climate finance, and we managed to skate around most of the acronyms, but not all. So let's do the stock take. You came on the show, this was five years ago, and I challenged you with a tweet that you'd sent in 2019.
RK
Was this a tweet about West Ham?
ML
No, this wasn’t one of your West Ham tweets. No, it was, ‘we have a decade to ensure clean, affordable, reliable energy for all. And we can.’ And I challenged you when you came on the show, which was July 2020. Now we are halfway through the decade. So I suppose, first of all, are you still optimistic? Where are we? And in what ways is the second half… This is a real economy question, we'll get onto the diplomacy bit in a while. But in the bit of your job that's the real economy, are you still optimistic? How are we doing? Does the second half of the decade look different from the first? We'll touch on a few of those.
RK
Well, so if we break it down into two pieces, then one is the piece around access. So this is getting electricity to those who don't have any or have very little or can't participate in the economy. The core SE for All mandate, in a sense. And you know the Sustainable Development Goal 7.1 right? Without which you cannot have prosperity, without which you can't have an effective health service, without which you can't really grow as a family, or as a community. So on that we were making progress, not enough. That progress got set back by the consternation after the Russian invasion — after covid — the Russian invasion of Ukraine, the inflation crisis, the supply chain crisis that came on that. But I mean, what I'm pleased to see now, is that this has come back as a sort of political priority, this time driven by African countries themselves, and the international organizations kind of waking up to the fact that this is kind of fundamental. And so I think it's wholly owned by African leaders, which helps. And I focus on Africa because the vast majority of the people who don't have access are in about 16 countries in Sub-Saharan Africa.
ML
It should be said that since those early days of Sustainable Energy for All, SE for All, I call it the Kandeh Yumkella years, hundreds of millions of people do have access to energy, and we're really starting to get into the nuance. There's an episode I did on my project, or the project that I've been helping with in Sierra Leone, where you start to say, ‘Yeah, but access, having somebody have a solar roof, it's good, and the kids can do their homework and those sorts of things. But now we really need to go across healthcare and across the light industry and agriculture. Pakistan doing solar irrigation using solar panels… So that is happening, isn’t it?
RK
Yeah, so it's definitely happening, and it's beginning to scale. And you've got more equity coming into the space, you've got more debt, you've got more working capital. It's still very hard for many of the entrepreneurs in this space. But like, for example, the UK Government. So I was just in Addis Ababa at the Africa Climate Summit, and there, trying to bring together three communities around an aspect of this. So one of the aspects is clean cooking. The UK has put an enormous amount of effort and money into clean cooking technology over the last decade or more, and so we are partnering now with school systems around East Africa, with people who work on carbon markets and the potential for revenue streams for the new e-cooking technology. But also then working with all the people who are looking at school feeding as an essential way to get food to young African children. And when you bring those three communities together, you actually have an opportunity for scale. So where are we in the transition? So first of all, as you and Kingsmill Bond and others constantly point out, and BNEF, there is something profound happening in the renewable energy space that's reflected in the investment flows. It's reflected in the amount of the installation of renewable energy around the world. It's also reflected in the plans that countries are putting forward. But at the same time, we are sort of in an interregnum. So we have got a fossil fuel economy that is hanging on in a world where insecurity means that people really want to be sure that the green electrons are there before they shut down the dirty electrons. And so I think some of the commitments that are being made about phasing out, phasing down, or transitioning away, which is the agreed language, from fossil fuels, some countries are going to slow that down a little bit, just because of the insecurity of the geopolitics, the access to the kit that you need for renewable energy and access to finance. But at the same time, we're past the tipping point of renewable energy. This is coming, and where I think we're really now, in the last few months, because of you and others, at a point where we're starting to talk about what really drives this, which is the demand that comes from electrification. So you know, as you start to see countries really powering down on EVs buses, light vehicles, so the cleaning up of transportation. When you start to see all of the other things that can come on the back of renewable energy in the grid, then you start to see an exponential rate of progress. However, we always, and I don't really understand why, but everybody wants to talk about generation. Power generation is obviously essential. But you can't generate power, or you can't make money from investing in the generation of power if you don't have a grid that can evacuate it, if you don't have transformers, and if you don't have interconnectors. And so I think, for the British government, focusing very much on getting that in place — the energy infrastructure — because then, commercially, energy generation is more and more available in more and more countries. We don't have to use massive amounts of development assistance for grid-connected energy generation in many, many countries now, if the infrastructure is really in place, and that includes the soft infrastructure, which is the regulation, the institutions, the utilities, all of that. And that's where countries are coming to us and asking for help.
ML
Is it unfair to say we've been a little bit asleep at the wheel on that stuff, because every scenario, every climate scenario, every future scenario for energy, irrespective of who produces it, says we're going to be using more electricity. And investment in the grid, while we had this huge surge of investment in renewables, and now nuclear is coming back and as you say, everybody wants to focus on the supply side. And yet investment in the grid until very recently, basically until the UK got huge constraint costs and sort of stared down the barrel of the gun in terms of the ability of the grid to function with this much renewables, we saw almost no increase in the investment. So now we're seeing it, but we are playing catch up now.
RK
Yeah. So as I travel around India, the Philippines, Korea, Indonesia, the whole of the ASEAN power grid, the Caribbean one, everybody wants help on how do we build an offshore wind industry and have a grid that allows us to do that? In particular, you know, where you're going to build a regional grid like ASEAN or in the Caribbean, etc. How do we institutionalize that? What do we need in terms of institutions? What do we need in terms of legislation? What do we need in terms of independent oversight? So the incoming requests for assistance are first of all, gratifying, but secondly, we need to be able to step up to that. The second bit that we're getting now is more and more requests for civil nuclear energy governance. Because we're considered to be a country that A) has nuclear energy, B) is committed to it, and C) has done a fairly good job of regulating it so far.
ML
So on the grid stuff and the institutions around it, I was going to say that the UK is pretty good at that stuff. Not just the fact that we're the leading country for installations of offshore wind in the world, but we've also got this fantastic thing called the City of London, and all of its water carriers and fellow travelers. I'm sure that sounds very disparaging. I mean, these are awesome companies… all the consultancies, the accountants, all the lawyers and so on. So that must be quite fun, because you're in a position of enormous strength responding to that. The nuclear one, I think, was less clear. I mean, we're making a big deal about the Rolls Royce SMR and a few others, you know, the spherical tokamak, if you want to get into fusion. But it's unclear that we're really able to build any nuclear cost effectively.
RK
Well, so that conversation is going on and it's extremely active. And I think what's driving it is… well, so we've always talked about an energy trilemma, right? So, security, affordability, sustainability. Well, the security piece of the trilemma is at the top at the moment. That's what's concentrating every country's mind. And so, having a nuclear capability within their energy sector is attractive for that reason. But I think what's really happening is, I mean, the conversations that I'm having with countries, with their energy ministers, their finance ministers, etc, is: ‘look, we need fast and affordable energy.’ Because what people, what countries really don't want to do is miss out on the AI revolution, and for that, they want dependable power right now. Nuclear is not the fast solution, especially if you don't have any regulations, any legislation, or any safety record. So they're coming to us and sort of saying, ‘Look, you know, you're a country that manages your nuclear capability safely. You've got your nuclear independent regulators and oversight and all the rest of it. You've got law. How did you do that?’ So it's the same question they're asking us on offshore wind they're asking us on nuclear as well. Now, whether any of those countries are able to actually pursue a nuclear future with modular reactors or not, I don't know. There's plenty of people running around the world trying to say, ‘you need an SMR, and you could have one tomorrow.’ Well, the first generation is gonna be expensive. You can't have it tomorrow. And in the meantime, you're really going to need to have battery storage. You're going to need to build out your renewable energy, and you have to maximize the assets you've already got, right? And everybody wants a data center. Everybody wants a data center.
ML
So yesterday, I filmed an episode with Rob Dunn at a huge data center — 1.2 gigawatts — being built down in Sines in Portugal. And all I can say is, if anybody wants to build a data center, and by the way, that includes Rick Perry of Fermi. Rick, if you're listening to this, they are incredibly complex pieces of infrastructure to build. I mean, there's probably the only two things I can think of that are more complex. That would be nuclear power stations, very big ones, and aircraft carriers, and then you've got big core AI data centers. So if anybody thinks the word fast when it comes to data centers and when it comes to nuclear, it's just in the wrong sentence.
RK
How many kilometers is it from one end to the other? Because they take a huge chunk of land as well.
ML
So what I visited yesterday with Oscar, our producer, is a 29 megawatt data center. That's what's up and running. In fact, I think there was 14 megawatts up and running. And they're building 29, and it was already a huge building. It was a campus in its own right. And then they've got this enormous, 64 hectare area of land which will turn into building after building after building. And it's on the site… they were literally destroying the coal fired power station's chimneys the day before we arrived. So this was formerly a massive, I think, three gigawatt coal fired power station. So that's the sort of scale that you're looking at. Except that, instead of one big coal fired power station, this is going to be all the wiring and all of the cooling to the chips. These things are not fast projects. So anyway, let's move on. Let's not go down the rabbit hole of nuclear. I just want to come back to the countries that you are most concerned with, that are not the US, Europe, China. They're kind of doing their thing, and I suspect that you're interacting with them. But the countries that you would like to see develop fast and well, are generally the kind of, let's call it, ‘rest of world.’ And it strikes me that they are all trying to solve the trilemma, but they've got two different ways they could go. They could either just say: Okay, we spent a decade trying to do climate and clean and all that stuff. But really, what President Trump is saying, what the US is saying, is it's going to be fossil with a bit of clean. Because some of it's cheap, and it keeps the Europeans happy, and the liberal media and China on side.’ So lots of fossil, bit of clean, that's Option A. Option B is: dang this stuff is cheap, and China is prepared not just to give us the cheap solar and the wind and the batteries and the cars, but also the high voltage DC and help us to develop our mines and our food industry and our ports and our roads and so on. And so it's going to be a lot of clean with a little bit of LNG to keep America on side and to keep the lights on at those difficult times, and there's no wind and sun. So that's Option B. Is that what the countries you talk to are facing a sort of choice between? The US petrostate model and the China electro-state model? Is that too simplistic?
RK
No, I mean, you’re characterizing it that way, but I think it's not false. What countries are trying to do is navigate between different poles, represented by China and the United States. But most countries are more in B than A, because that's how they're going to grow. I mean, I think there is clearly a direction of travel in one direction. And the question is, how do you navigate it. And every country's transition is different, like we always say it, but we tend to forget it when we're in negotiating halls. And so the speed of India's transition is dependent upon their ability to maintain growth levels beyond 7%. They’re already attracting international investments into solar, and now they're going to start an offshore wind industry. They've got other things that they can do. Their hydro is there. They've got structural issues about how they take it to the next level. But they're also looking, then, at the clean tech that comes with the next generation of activity, so they can attract foreign direct investment. And of course, that requires, internal rules and internal decisions for sort of mainstream stuff so that you no longer need concessional finance. You don't need the ADB or the IFC to help you. That is the Asia Development Bank and International Finance Corporation to help with that. You do need some concessional finance on some of these, but what they really want to do is open up their own domestic savings into their green energy future. Indonesia has got a different story, right? So they're a different story again. South Africa, different story. Brazil, different story. But they're all headed in the direction of their own energy security. They're managing their dependence on different parts of the world, needing to compete in a world where China is an effective electro-state, and where that is the direction of travel. And yes, dealing with the vagaries of what's coming from Washington, which can switch on a dime.
ML
And as you were describing those sort of different futures, or the different dilemmas that each country faces. I realized that my A vs B… India is definitely facing a different choice from A and B. Because India doesn't have fossil fuel resources, so it definitely needs something. And I'm sure it's under a lot of pressure from the US administration to sort of toe the line on a number of things, and in exchange, have great access to LNG and so on. But they don't have the option of going to China as the alternative, but they do have the option, which they've been reasonably good at, of developing their own solutions, and actually trying to become their own electro state
RK
Yeah, and so they need access to critical minerals. They want to be a manufacturing center for the renewable energy revolution. They have got, certainly, the ability to do that. That becomes very interesting, because people are worried about their over dependence on China. But I think if you go back to the days of having to read Daniel Yergiun, and the whole world's geopolitics was shaped by oil. We're now in a world where geopolitics is still partially shaped by the sort of fat tail of oil and gas, and they're now being shaped by access to the minerals and metals and the kit that you need for renewable energy. And you can see this now in the bilateral conversations between the US and India on why they're buying cheap oil from Russia? Well, because it's cheap. You know the relationships with China, the EU's relationship with China. And then what you see is Africa, Latin America and Southeast Asia sitting there saying, we don't want to have to be completely sort of indebted to one pole or the other. We need to find our own way.
ML
And Bryony has just done a great episode with Arunabha Ghosh
RK
CEEW
ML
Which is, I think we've not done enough on India. And so I'm hoping…
RK
But it's very exciting. What I say is, the further south and east you go, the more exciting this whole revolution feels.
ML
Cleaning Up is supported by its Leadership Circle. The members are Actis, Alcazar Energy, Arup, Cygnum Capital, Davidson Kempner, EcoPragma Capital, EDP of Portugal, Eurelectric, the Gilardini Foundation, KKR, National Grid, Octopus Energy, Quadrature Climate Foundation, SDCL and Wärtsilä. For more information on the Leadership Circle, please visit cleaningup.live. If you've enjoyed this episode, please hit like, leave a comment, and also recommend it to friends, family, colleagues and absolutely everyone. To browse the archive of over 200 past episodes, and also to subscribe to our free newsletter, visit cleaningup.live.
ML
Let's talk about these countries that are facing a little bit of an A-B choice, and then you've got the UK. What is the UK's interest in that? Because the right choice for the climate is absolutely clear, and it is to electrify as quick as you can with a little bit of the fossil to keep the lights on right. And I've talked about that a lot in my pragmatic climate reset, but that brings geopolitical risk. So your new boss, you started with David Lammy, you've now got Yvette Cooper. She's got a dilemma, because the more electro-state climate stuff you do, the more you're going to drive countries into China's orbit, which is not something that is necessarily all good.
RK
So two things. First, the reason for being engaged with other countries' energy transitions is, as Ed Miliband, my other boss, says, we're only producing 1% of emissions from our own. If we believe that climate change is a threat to the security of the UK and to British people, we have a vested interest, a strategic interest, in reducing the 99% of emissions that come from other countries. Then we look at who the large emitters are, and that's where we have to have relationships. But these are also the growing powers of the world, and so even if you take energy out of the mix, these are the countries where we need to have strategic partnerships. So the prime minister has signed a strategic partnership with India. We're in discussions with Indonesia, we have a burgeoning relationship with Brazil. We have a deep relationship with South Africa. This is the new geography, right? So that's one point. The second point is that I think that we're also looking at our own growth story, right? And we're struggling with growth. So it's the investment into our own energy infrastructure build out. And we've attracted more than 50 billion into that since July 2024. Many, many countries and firms from overseas want to invest in our energy infrastructure. UAE, India, are all involved at the moment. And so we invest in them. They invest in us. This is a growth and investment story, too.
ML
Tremendous. As you go and talk to those countries that you've listed, the India's and the UAEs… these are powers that have got the, you know, there's a lot of business we can do with them. And then the next generation of deals, the countries that are in CPTPP, you must be absolutely delighted that you are able to have those conversations since Brexit. Because otherwise you'd have been simply a part of a delegation from Brussels being led by somebody who perhaps is not working for the best interest of the UK.
RK
Well, so I'm not going to get into Brexit, because you and I've got history there, but…
ML
The audience needs to know I was a brexiter and you weren't.
RK
And this was before I was in British government as well. So yeah, I was a Remainer. But yeah, I mean this point is often made with ironic or sardonic humor by, for example, the Saudis or others saying, ‘Look, it's easier to deal with you now.’ So I'll just make that as a point of fact. I won't get into the debate. But there's one area where I think we 've just sort of touched on it a little bit, is that we hosted, together with the IEA (International Energy Agency) in April, an energy security summit. And one of the big issues that came out of that was the security of the supply chain for renewable energy. And this is where, obviously, a different… So China sits in a dominant position over many of the component parts. The US has now got a different posture on how it wants to behave. And for the UK, we have a national security interest in making sure that we've got access to that supply chain. We have a strategic interest in making sure that many of the countries, especially in Sub-Saharan Africa, but not only, can capture more of the value, because that's then essential for their development and growth, and we have a national strategic interest in them being able to develop and grow. And so countries are very, very interested in forming a new club, almost so that they can talk about, ‘how do we make sure that these supply chains are secure and available.’ Which means we do have to diversify. It means we do have to invest in capturing the value in other countries, and how do we make sure that they're fair? And I think this is becoming a new frontier of the conversation on energy.
ML
I was very upset I was not invited to that energy security conference, I suspect because I'm on somebody's do not invite list because of being very outspoken on hydrogen, which there's just still too many people think that hydrogen is a part of energy security, when I've decided that hydrogen is the exact opposite.
RK
But I've got your hydrogen ladder laminated in a small card in my wallet, so it's not me that didn’t invite you.
ML
Rachel, does it say on the back of it? ‘And by the way, none of it will be green.’ These issues around security. Is it part of your role to educate the UK public? Are you just on the road talking to the countries that you 're negotiating with and dealing with and helping, or are you also educating the UK public? And where I'm going with this, you can probably spot, you’ve known me long enough, is the UK public, right now, is miles away from agreeing with you, miles away in fact.
RK
And your evidence for that?
ML
Well, 150,000 people rallying in London for extreme positions on immigration, but also the popularity of Reform in the polls, a party that is explicitly going to demolish everything you're working on.
RK
So I am exclusively internationally focused. However, I would say that the evidence and the data that I'm seeing and the people who are working domestically on this, and you heard Ed Miliband at the Labour Party conference recently as well, is that what people want in this country is an affordable electricity bill, right? They want clean air. They want a safe community. They want to be protected from extreme heat, and they want to have flood defenses, all of which they will get with a more secure, cleaner energy system. And more than that I can't say, because that's not my mandate. But I think that the whipping up of a culture war by certain people in many countries — it's not just in the UK — this isn't a conversation around energy. It's an attempt to make climate change, which 194 countries are still all in on, trying to make happen. It's not really a question about energy. It's an attempt to add climate and add energy transitions into a culture war. And we can look at many countries around the world where that's happening, and I don't think that that's where people are, including the British people.
ML
But what they will say is to protect them from the heat waves, to protect them from the sea level rise, to protect them from the shocks to the food system. Everybody needs to act right now. Everybody is not acting. Why should we be?
RK
That's actually not true. China's just come out with its nationally determined contribution, because it's always like China, China, China, right? China's just come out with its nationally determined contribution, which is low in ambition, but they will over deliver, as they always will, and so it's a domestic political reason for coming out with a low number. But if you look at what they've already done and what they're committed to doing, and Xi Jinping at the General Assembly said, ‘this is a whole of economy plan.’ Well, he's never said that before. They've never done that before. So the idea that China is not moving to this transition as quickly as possible is false. The idea that India is not trying to move through its transition as quickly as possible. We are not the only country out there doing this in some kind of self flagellation. This is common sense. It's competitiveness. It's about trade, about investment, it's about security, and it's about clean air. And what are we going to do? Go back to burning coal? Why would that be a smart thing to do?
ML
Just to be very clear, I'm just…
RK
I know you're playing devil's advocate.
ML
I’m asking the questions, not because I necessarily disagree with the answers you're giving
RK
No, you're playing devil's advocate. I mean, the point is the people who say that can never point to ‘and therefore we should do this.’
ML
Well, although that's not strictly true, because I have come up with a pragmatic climate reset thesis. Because if you look at China…
RK
Not to revert to fossil fuels.
ML
No, but not to demonize and try and reduce fossil fuel use before we've got the alternative. Look at what China did. They built the electrostate — sort of muscle, sinews, bones — before Xi Jinping said, ‘and now we're going to actually reduce CO2 emissions.’ So don't do it the other way around.
RK
So where I would agree with you on this. I mean, I agree with you on that piece in that in the last 10 years, since the Paris agreement, we've been doing two things right. We've been focusing on building out the green. But in fact, most of that has been driven by the decreases in prices of the technology and sort of the business sector just driving it. And then we've been focused on helping those countries that need to transition away, in particular, from coal quickly. And Mike Bloomberg obviously led that in the US and elsewhere. And I think at times, the climate community has tended to focus on the phasing out, or the transitioning away, before really doubling down on how to invest in the infrastructure that could carry the green electrons. And you cannot ask a country to switch something off without having something that you can switch on, because no government of whichever type or character will be able to do that. And so I think at times we've got the emphasis wrong. So when I travel and what I tell officials in the UK Government is like, ‘I'm going to start with the green investment and the investment in their new infrastructure, before I start talking to them about the technical assistance on how to phase out coal.’ Where, again, we're not asking somebody to do something that we haven't done. We closed our last coal fired power plant last year.
ML
And I think that the point of the shift of emphasis from shutting things down to the pragmatic climate reset is all about just growing the good stuff faster than energy demand. Energy demand is good. It's people doing the things they want to in their lives, and we need to just keep our eye on the ball of growing the green — I don't want to use the word green — but the clean stuff faster. And there's so much more that we can do. That's going to be a different episode, how we might do that. And that's where it's exciting, right?
RK
It is.
ML
But I want to come to COP, because we've got that in 59 days. By the time this episode comes out, it'll be 50 days, possibly into the last 50. I don't want to use Gordon Brown's old terminology of — I think it might have been Gordon Brown and Prince, now King Charles, who said that they've got so many days to save the world. So, Rachel, you've got about 50 days to save the world. What is a good outcome at COP? I mean, the US is not going to be there. It is going to be chaotic. It is going to be a mix of these negotiators negotiating over commas and square brackets, and activists doing media stunts. What does a good outcome actually look like at this point?
RK
So there's a good outcome that the public needs to be told about, and then there's a good outcome, which is changes to how the sausage is made, which, you know, nobody really wants to know how the sausage is made. So for the last 10 years, since Paris, we negotiated Paris, then we negotiated the rule book on how every country has to act, and then we finally got over the line with Article Six on markets last year. So there's nothing really left to negotiate.
ML
I have to interrupt. Article Six that's to do with carbon offsets and trading between countries. We just, we don't need to go into it.
RK
Yeah, so it just took nine years to get to an agreement on market mechanisms, including carbon markets. So all the big stuff's been negotiated now. And what the Brazilians are trying to do with this COP30, with the support of most countries, is change the emphasis to, ‘well, are we implementing any of this?’ So then the question is, in the sausage making machine. Question is, how do you do that? What role does the COP play? And how do you organize a COP not to negotiate stuff for agreement, but to hold countries to account and other actors to account for whether or not they're implementing the things that they said that they would do. And then the story for the public is this is a COP that will take place in the Amazon. So the question of how we invest in nature is upfront. And the Brazilians have got some very big ideas about announceables at COP around forest finance, etc. I think we need to make really big progress on methane, because that buys us time. And we've had all of the commitments over the last few years about everybody, including the oil and gas industry's commitment to doing stuff it's not happening, and including industry insiders will tell you that it isn't, and why. And so we need to make some kind of breakthrough there. And then there is the constant conversation around finance.
ML
In my role as devil's advocate, two things. You use the words ‘holding to account’. You didn't use ‘enable cooperation’. You use holding to account. So this idea of the COP as world government. And are they holding to account on things like the $300 billion per year commitment made in Baku? Because is it just holding to account, essentially, the developed world, to keep the checkbooks open despite the political pushback? And then, when you talk about the public needs to be told about the forestry. For a lot of the public, that is just going to come across as ‘I don't understand why they're talking about forests and bugs and biodiversity. It's got almost nothing to do with climate, which is all about the energy industry and a few other sectors.’ And so now it's just the make work brigade moving on from negotiating about coal to talk about something else, which they're going to over complicate, fly around the world, have lots of meetings and they’re just not listening to the fact that people are fed up with this.
RK
So I think on nature, first of all, there's plenty of evidence that the British public believes that nature should be protected and is important, right? So I think that there's some nuance there, which often gets lost in the political commentary. Now, does every British person understand that if we lose the Amazon, we lose the Congo Basin, we're going to lose our food security? No. Are we going to sit down and start doing lectures on that? No. But that's the reason why it's so important…
ML
My point is. I agree, they deeply love nature. Brits think that they love nature more than anyone else.
RK
Across the political spectrum, right?
ML
Right across the political spectrum. The question, though, is, are they convinced that it should be worked on and regulated within the COP, within the UNFCCC as a climate issue?
RK
No, and that's not what's going to be on offer, we're not going to regulate it through the COP. The big news story from Brazil is a different way to invest in nature, including crowding in pension funds and asset owners, because it makes sense. And the Brazilians are coming up with a mechanism whereby you will be able to achieve a return from investing in well managed forests. And if this happens, this would be a breakthrough for two reasons. One is it would be a model that would allow private money and public money to form in a way that they haven't before at scale. And the second reason is that private money and public money would come from countries all over the world. And historically, in climate negotiations, the countries that caused the problem — and that's a small group of countries that historically caused the problem — and countries who are developing, including Saudi Arabia and China, there is a shield between the two of us, which means that we have to behave in different ways. If we were to build a capital stack where everybody is in, that would sort of be a precedent setting, I think, for the way we finance solutions in the future.
ML
That would definitely be a big move forward. So instead of this kind of, really last century view of, there are rich countries and there're developing countries. Many of them have been horribly held up in their development through colonialism, and therefore with COP there's a meta discussion, which is really about colonial reparations, although that never appears on the agenda. But if we can move beyond that, because the rich countries have got a lot of poor people in them, and some of the poor countries have now got skyscrapers and space programs.
RK
So we can move beyond that in work that's going on around the negotiations. We will not move beyond that in the negotiations. So the negotiations are becoming a less and less big feature of a COP, right? Which brings me to the point that you've made in your analysis of a reset, which is, do you need a COP every year, now that we're into this era of implementation?
ML
Well, so I think I came out on the side of ‘we need a discussion forum.’ I picked you up on these words ‘holding to account.’ I think we need a forum for these conversations, because these are global problems, and we need to discuss them and encourage and share technology and allow finance to flow. Do we need such a big COP? And one of my suggestions was to hold them, except for every five years, do a big one where we make the commitments, and the heads of states turn up the rest of the time. The rest of the time, Can we hold them on islands with no more than 5,000 beds? Never mind the 18,000 in Belem, but really small, really business like, sectoral focused.
RK
So I think what we've got is, if you look at all of the issues, there are commitments that are being made by countries in the context of the negotiations, in the context of their obligations under the Paris Agreement. But nothing gets done by countries alone, right? So then you've got the business community, the finance community, civil society, indigenous peoples, whatever. So it starts to get big. And I think COPs have, up to now, fulfilled multiple purposes, right? They are a place where countries have to negotiate. They are the place where countries have to hold each other to account. That's the point of multilateralism. They are places where new things are getting forged, and they are things where people are coming to celebrate what's worked or what hasn't. And so all of the above. Now, do we need all of that every year? I think that's the question that's on the table. The most important thing for the UK Government is that they're inclusive, that just because you're clamping down on the numbers or physically, you can't accommodate the numbers, you're not excluding voices from being at the COP. And so I think that there is a balance to be made there. The Brazilians have started to sort of consult, I think, on exactly how we could do this there. In the UN there are other conversations going on. Could we have the Rio Trio meet at the same time? That would be biodiversity, desertification and Climate. Do we have to have these negotiate, they're different treaties, but could we all come together once every couple of years? And things like that. So clearly, we set something in motion in 1992 in climate, we reached a crescendo in 2015 with the Paris Agreement. We've got to implement this stuff, and we've got to speed up the implementation. What is the mechanism, and what is the way of working that helps you do that?
ML
So I think these are conversations that will take some time to explore, let alone to resolve.It's been an enormous pleasure as always talking with you. I know that we could solve it, if it was just down to you and me, we would figure it out. We managed it with Brexit, we finally got you there. It's a great pleasure talking to you, Rachel.
RK
Thank you Michael, and thank you for all that you do. Take care.
ML
So that was Rachel Kyte, the UK's special representative for the climate. Now, as usual, we're going to put links in the show notes to resources that we mentioned during our conversation, but I'm not going to list them here, other than mentioning, of course, her first appearance on the show, when she was the Dean of the Fletcher School of Diplomacy. And so I'd like to thank Oscar Boyd, our producer, Jamie Oliver, this time our cameraman as well as our video editor, the team behind Cleaning Up, and our Leadership Circle, who make all of this possible. And of course, you the audience for spending some time with us. Please join us this time next week for another episode of Cleaning Up.
ML
Cleaning Up is supported by its Leadership Circle. The members are Actis, Alcazar Energy, Arup, Cygnum Capital, Davidson Kempner, EcoPragma Capital, EDP of Portugal, Eurelectric, the Gilardini Foundation, KKR, National Grid, Octopus Energy, Quadrature Climate Foundation, SDCL and Wärtsilä. For more information on the Leadership Circle, please visit cleaningup.live. If you've enjoyed this episode, please hit like, leave a comment, and also recommend it to friends, family, colleagues and absolutely everyone. To browse the archive of over 200 past episodes, and also to subscribe to our free newsletter, visit cleaningup.live.