Energy Transition in the Global South Gets Another Big Pledge — from Bloomberg

Countries across Africa, Asia and Latin America are seeing power needs rise as economies expand and populations grow, and the path they take to satisfy that hunger could spell climate disaster — or lead the world to a safer and healthier future.

With a $242 million commitment announced Wednesday, Bloomberg Philanthropies became the latest funder to put its resources toward tipping that decision away from traditional, heavily emitting power sources like coal and gas — both of which have entrenched lobbies — in favor of new and cheaper renewable energy options such as wind and solar.

The pledge is part of billionaire, media mogul and former New York city Mayor Mike Bloomberg’s long-running efforts to end the use of coal, including a goal set last year to end coal production in 25 countries. Ten countries will receive funding under this new pledge: Bangladesh, Brazil, Colombia, Kenya, Mozambique, Nigeria, Pakistan, South Africa, Turkey and Vietnam. Bloomberg will announce the remaining 15 countries and additional funding in coming months. It did not announce a timeline for spending the funds.

Bloomberg’s push dates back to 2011, when he began pouring millions into the Sierra Club’s Beyond Coal campaign, with an initial goal of shutting down 30% of the nation’s coal plants by 2020. Since then, nearly 70% of U.S. coal plants and more than half of Europe’s facilities have been shut down, based on Bloomberg’s count. While Beyond Coal played a role, other factors included the life cycles of existing coal plants, tightened regulations, the falling cost of renewables, and the rapid growth of natural gas.

In 2019, Bloomberg took the reins with the launch of Beyond Carbon, branded now as the billionaire’s project, though still in partnership with the Sierra Club and other environmental groups. With a $500 million commitment, Beyond Carbon set a goal of closing every U.S. coal plant, and notably, stopping increased reliance on natural gas. This marked a pivot, as during the Beyond Coal days, Bloomberg sang the praises of natural gas as a bridge fuel. The fracking boom indeed sped the transition from coal, but also made the U.S. the world leader in oil and gas extraction, now poised to release a “carbon bomb” that would put the world on track for catastrophic climate change, according to one new study.

In another pivot, Bloomberg has expanded Beyond Carbon’s focus to energy use abroad, where several other foundations and billionaires have entered the fray recently, as well. The biggest such entry came last November, when the Rockefeller Foundation, IKEA Foundation and Bezos Earth Fund committed $500 million each to a $10.5 billion fund to help countries transition from fossil fuels to clean energy. The aim is to leverage up to $100 billion to close coal-powered plants and set up wind and solar farms.

Add to those joint pledges a number of solo efforts around the globe. “There’s a number of philanthropies that are also investing individually in countries,” said Helen Mountford, president and CEO of ClimateWorks Foundation, one of the partners in Bloomberg’s new initiative. “There’s a number of smaller bits and pieces that are happening that are really important.” (Bloomberg provided background details for this article, but did not respond to a request for an interview.)

All such funding is sorely needed, yet also overshadowed by a much bigger issue: a history of broken promises on energy financing by rich nations to developing countries. In 2009, the world’s most egregious historic emitters, such as the United States and the European Union, pledged $100 billion annually starting in 2020. That deadline came and went. Only last year did major powers introduce a plan to provide that funding, and it still won’t begin until 2023.

With the U.N. secretary-general calling that amount the “bare minimum” and analyses finding trillions are actually needed, the new philanthropic dollars are a valuable, if relatively small, first step toward funding a full-scale transition. It comes six months before climate leaders head to Egypt for COP27, the annual United Nations climate conference, and is part of a broader push by Bloomberg to support an energy transition across Africa, including a recent op-ed coauthored by the billionaire on the continent’s energy future.

The details of the pledge remain vague, but one looming question is how a New York-based grantmaker can avoid the perception — and reality — of parachuting into local contexts with preconceived notions and inflexible expectations. Funding from U.S. and European governments and philanthropy alike has a poor history in that regard, yet such support can also be a welcome force for change if — and only if — funders work in partnership with local governments, organizations and people. With Bloomberg and partners promising to do exactly that, it could serve as either a model or another cautionary tale.

How Bloomberg hopes to help spark the transition

The grantmaker, which distributed $1.66 billion last year, is pursuing this new initiative through five focus areas. Unsurprisingly for a Bloomberg project, data and research is the first priority listed. It’s not the first time the funder has worked in this space. For instance, the foundation funded a report on India’s effort to grow its renewable energy production five-fold by 2030.

Another element is policy and diplomacy. Again, it’s something Bloomberg has done before. Last year, the funder produced a report that laid out a path on policy and other areas to grow Indonesia’s solar power capacity. To make progress on possible replacements, another component is backing clean energy pilot projects. One hope is to run experiments in blended finance, or mixtures of public and private capital, that could finance new energy systems, according to Mountford.

Bloomberg also plans to do public engagement and education. One element might be dispelling the myth that renewables are more expensive, Mountford said. Disinformation, too, will likely be a target. Perhaps we’ll see locally tailored TV ads or other communications tearing down misleading claims from the coal industry, a measure the Sierra Club undertook as part of its Beyond Coal campaign.

Bloomberg also plans to support buy-outs of existing coal plants. Wind and solar are the most affordable energy option in nearly all the chosen countries, even before accounting for the myriad health benefits of ceasing fossil fuel burning. Yet they currently have 100GW of coal power plant capacity combined — roughly the amount of solar power in the U.S. today — and 75GW of coal capacity under construction, according to Bloomberg.

Mountford highlighted that the campaign is targeting “emitters of the future” in the hope that they can jump straight to clean technologies. These are nations that have barely contributed to climate change but are already seeing some of its most catastrophic results. “This goes beyond some of the countries that many have focused on in the past, which have been the really big emitters like the U.S. and Europe, and China and India,” she said. “It’s exciting that it’s focusing on these countries.”

Beyond ClimateWorks, the partners for the campaign include Sustainable Energy for All, International Solar Alliance, Student Energy and the United Nations, with others to be named. Another potential participant is BloombergNEF, a research and data unit centered on the world’s energy transition, which produced the funder’s reports on Indonesia and India.

Such connections are a sign of the complicated interdependence of Bloomberg Philanthropies and the web of enterprises that helped Mike Bloomberg amass both his status and an estimated $82 billion fortune. Since his days as mayor, Bloomberg has used his positions and connections across government, business, media and the nonprofit world to exercise enormous power.

It’s also worth noting that, while editorially independent, Bloomberg Media is playing a leading role in climate data and news, including a news desk that’s produced some of the most important climate coverage of recent years, such as an investigation that concluded the Nature Conservancy had been selling “meaningless” carbon offsets.

A billionaire aims to spark change in the Global South. What could go wrong?

How can a philanthropy headquartered in New York City (Bloomberg), with partners headquartered in San Francisco, California (ClimateWorks), Vienna, Austria (Sustainable Energy for All) and Calgary, Canada (Student Energy) expect to avoid the all-too-common scenario of North American and European wonks pouring money into ill-suited efforts in developing countries?

According to Mountford, local partners in each country will be core to the plan. They will help design the strategy and determine what interventions are appropriate for each country, she said. One initial partner is in the Global South — the International Solar Alliance, based in Gurugram, India — and others are still to be named.

“It really is locally led, in terms of the approach that’s going to be used in each country and actually delivering it,” she said. “That’s absolutely important to make sure that the solutions are relevant, are durable… and that the skills and capacity [are] developed locally to be able to continue to move this agenda forward.”

Of course, that is easier said than done. One perennial concern of local groups is the power imbalance when an outside funder brings in enormous new resources. Mike Bloomberg has a reputation as a donor who prefers data-driven, top-down strategies, and steers grantees in those directions, whether it’s the Sierra Club or Everytown for Gun Safety. How Bloomberg and its partners handle the challenge of deferring to local leaders on energy policy will determine the success of this initiative.

The funding could also pave the way for much more money to flow in, according to Mountford. The effort’s test runs and research could inform government action, though that’s not all. “There’s a real interest from the private finance sector to actually invest more, but they don’t necessarily know how or what to invest in, or where to go,” she said.

More money is dearly needed. If Bloomberg, Bezos, Rockefeller, IKEA and company can bring those resources, it will be a victory. But given the history of such efforts, if they can model doing so through authentic partnerships with local organizations, it will be a whole lot more valuable.

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