How will private-sector investments factor in to the overall success of December's anticipated Paris climate agreement? During today's OnPoint, Ned Helme, president of the Center for Clean Air Policy, discusses the financing framework that will be needed to ensure the goals of a Paris agreement are met. He also talks about the role of coal internationally and how its expanding use in some countries impacts efforts to reduce emissions.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Ned Helme, president of the Center for Clean Air Policy. Ned, thanks for coming back on the show. Nice to see you.
Ned Helme: Thanks, Monica -- always a pleasure.
Monica Trauzzi: Ned, all the major emitters have set targets for reducing emissions ahead of December's Paris meeting. What have you been most surprised by in the country pledges we've seen recently?
Ned Helme: Well, you know, the biggest piece to me is the breadth of activity. One hundred fifty countries, almost 90 percent of the emissions are in. You know, we wanted it back in the Copenhagen days, you know, five, six years ago. We wanted all the countries to join together and rise up and we couldn't do it, and now you're seeing it. Everybody's in. Everybody -- you know, a dime or a dollar, but everybody's in to this deal. And we're seeing some very bold plans. I mean, Brazil has an absolute target tougher than the United States' target. Would you have ever predicted that five years ago? I mean, they're saying 37 percent below 2005 by 2025. Our target is 26 to 26 by 2030 below 2005. So you know, it's a new world out there. India, the one who's dragged its feet the most over all these years, saying 40 percent of our energy will be non-fossil by 2030. That's quadruple how much they have today. I mean, and this is a country that's growing, that's got to use coal and so on -- amazing.
And then you look at the little guys, you know? Morocco -- 32 percent, big renewables, Laos doing all this stuff, local stuff with forestry, 30 percent reduction. It's spread and there's a real sense, a palpable sense that everybody's on board. And I think they're beginning to see this as an opportunity not just to do greenhouse gases but also sustainable development, health, other things. So that's the story line. It really is exciting.
Monica Trauzzi: Much of the success of any climate agreement hinges on financing. Do you believe that developed countries will hit their target of $100 billion by 2020?
Ned Helme: I do. I really do. I mean, we're already at -- according to the CPI, the OECD group that looks at this -- we're at $62 billion in 2014, so I think we'll get to $100 billion. Remember the $100 billion is a combination of private and public, so the public money leverages private investment in things. But there's an even bigger chunk of money out there in the true private sector, the Bank of America, you know, last year the insurance companies, the pension funds, all stepping up and saying, "We're going to put money in this direction if you can show us projects and things to invest in," so very encouraging.
Monica Trauzzi: So that private financing is going to be really instrumental.
Ned Helme: Absolutely.
Monica Trauzzi: What's being done to secure that financing and ensure that it gets to the right place?
Ned Helme: Well, the big piece is you've got the big level commitments. So we're going to see these commitments in Paris. You know, I think December 5th all the big industrial players come forward. I think we'll see some very good stuff. The test will be -- Paris is the start. The French have done a great job. They've laid the groundwork for Paris. I think we'll have a good agreement. But the test will be after Paris how do I translate that plan from Morocco into real investments that those private-sector people can put their money into? You know, that's the key question.
Monica Trauzzi: The Clean Power Plan continues to face criticism here in the United States. How are you expecting the plan and the politics behind it to play in Paris?
Ned Helme: I think it'll be seen very positively. You know, this has changed the perception globally of the president and of the U.S. We're now a positive force. We weren't in the days of Copenhagen six years ago. You know, we were positive at the last minute. We did some good things, the president did some good things, but that whole thinking has shifted and CPP is a big part of it. I mean, people look at it and say: "I get it. They're actually going to make these plants. Coal is going down. Coal prices are going down. This is really happening." So I think it's really helped us.
The other thing that's been important is the U.S. has stepped up and said, "We'll put money on the table." And China two weeks ago said, "We're going to put $4 billion into assistance in developing countries." It matched the U.S., and both countries said, "We're going to help. We really need to do this." And the U.S. has become a force in the negotiations for positive things on finance, which is great.
Monica Trauzzi: I spoke with the World Coal Association's Benjamin Sporton on the show last week, and he's going to be in Paris representing the global coal industry. And you know, he really talked about the fact that coal will continue to play a dominant role in many countries in supporting their energy needs. Does the long-term dominance of coal internationally interfere with efforts to reduce global greenhouse gas emissions?
Ned Helme: I think the game is changing. I mean, the economics are changing, which is the critical piece, and we're seeing the investment patterns changing. So we work in Chile. We work in Pakistan. You know, five years ago when we first worked in Chile we were afraid that they were going to ... a lot of coal because they have no natural fossil fuels and they're growing very fast. Instead what's happened in the five years? Local opposition has stopped a lot of coal plants, and they put huge investments in wind and solar and transmission and energy efficiency. So I think there's been one coal plant built in the last five years in Chile, which is a place where you would have thought that would happen. Same thing in Pakistan -- my guys are in Pakistan today working on a renewables plan. The prime minister won an election on "I'm going to deal with energy problems, I'm going to diversify our base," and they're moving toward significant renewables.
Now there will be coal. You're right. We're not going to see coal disappear tomorrow. I'm not suggesting that. But over time the signals are really we're moving away from coal, we're moving away from fossil fuels, we're moving to renewables, we're moving to distributed generation, we're moving to demand response measures, the kind of thing California's doing. So the game is changing. The paradigm is changing, and I think coal's days are numbered. And you can see it in stock prices. Peabody Coal went from $16 a share in June to $1 in September when the rules came out on the CPP. Now they went back up, but only because they traded in ... get 15 shares and you got one share, so the price is back up. They didn't want to be a $1 stock. But that tells you everything. There's only two major coal companies that aren't in bankruptcy right now in the United States. That's pretty amazing. You would never have predicted that 10 years ago.
Monica Trauzzi: No. Beyond the potential for an international agreement, Paris really seems like it's shaping up to be a significant moment in the climate change story. How do you think that the meeting will generate momentum for next steps?
Ned Helme: Well, I think the key is, you know, the way the French have built this. You've got the announcements from other countries and those kinds of things. You've got a separate effort where private sector's coming in and making their announcements. You've got the cities playing in this. You've got sub-nationals playing. So -- you've got the pope and the religious movement behind this. So a huge set of forces helping us set a real political agreement, OK? And then the next step or the other test of Paris is what do they do in the decisions? What do they suggest is needed? Will they provide the financing to developing countries to translate those good plans into investment strategies, into things I can really put my money in? There's all this money massing, but you know, the private sector doesn't wait around. I've got to have investments. I've got to be able to put my money somewhere. So the next step is really do we give enough assistance to developing countries to put those specific investment plans together, that set of windmills, that new approach to waste? Instead of putting it in dumps, I'll put it in mechanical biological treatment, I'll recycle, and so on. Make those ready to go, just like we've done with renewables. You know, 10 years ago solar was too expensive. Today it's firing off crazy in California, unbelievable the penetration. That same opportunity is out there for developing countries.
So I think the test is do we create after Paris? Paris is the start. Do we create the place where this conversion of these plans and this broad political momentum and financial things are translated into small deals all over the world, you know? And that's our test. I think it can be done.
Monica Trauzzi: This is going to be very interesting to watch. Ned, thank you for coming on the show. Thanks for your time.
Ned Helme: Thank you, it was a pleasure.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
[End of Audio]