Held on 24th May 2022, our Afternoon Tea session featured a panel discussion with three distinguished speakers, Erik Berglof, Chief Economist of Asian Infrastructure Investment Bank (AIB), Lauren Sorkin, Executive Director of Resilient Cities Network, and Professor Stiglitz, a full professor at Columbia University and recipient of the Nobel Memorial Prize in Economic Sciences (2001).
The panel discussion highlighted key concerns regarding climate issues and how (emerging) countries can take steps to actively ensure that they move together with the rest of the world in the pursuit of sustainability. You may watch the discussion panel from 29:45 – 1:23:30 from the embedded video below or read on for the summary of the discussion.
To start off, Berglof highlighted that Asia is increasingly recognizing the need to work towards sustainability because countries in Asia are seeing how climate change is affecting their economies and people. He highlighted that AIB contributes in small ways such as through technologies to make sure that no country is left behind. He emphasized that if a company can offer decarbonization opportunities, it would have a huge potential to attract a global value chain investment.
“The climate is not just a burden, it’s also a lot of opportunities.”– Erik Berglof
To add to Berglof, Sorkin also highlighted the importance of having to build resilience to different kinds of shocks and stresses due to climate change. She emphasized that this resilience has to be built over time, and in particular with attention to equity. She also stressed the importance of climate equity and climate justice and the need to democratize the access to solutions and technologies in the process of working towards net zero. Sorkin highlighted that Resilience Network has started to provide these solutions to help countries, especially countries that are building their economies for the first time, to build to be low carbon and safe.
Sorkin then later discussed about the importance of using data to prioritize investment areas. She highlights that this is particularly important in emerging markets as this would give states and provinces the capacity to share solutions and localize them.
In agreement, Professor Stiglitz highlighted that part of being ‘resilient’ is to move to renewables. He added that there have been many debates about whether emerging markets should be given more leeway in meeting climate targets. However, he disagrees, as he believes that it is a disadvantage for an emerging economy to move slowly as investments last for about 30-40 years. Hence, emerging economies have a big advantage as they can immediately develop using the most advanced technologies.
Berglof highlighted that current climate solutions are not developed primarily to serve local conditions. Hence, in Professor Stiglitz’s words, “if countries start using, producing, and learning by doing”, they get a competitive advantage as the knowledge gained in the process will make them better at it.
In response to one of the questions about the equity of clean energy, Sorkin highlighted that there is a difference between the finance for green projects and fossil fuel projects. With governments having subsidized fossil fuels for so long, instead of taxing them, it still remains a cheaper option compared to renewable energy, especially for emerging economies. Hence, she highlighted that we need to change the economics and finance of these green projects in order to ensure that renewables become more affordable to the masses.
In closing, Professor Stiglitz responded to one of the questions on the ground regarding whether emerging economies should wait and play the ‘catch-up’ game of implementing these green technologies 20 years later. Professor Stiglitz replied:
“There is a penalty for waiting, as (you) would be paying a high cost because you are wedded to an outmoded technology, and you lose the learning benefits of getting hitched up earlier to the new technologies.”
Hence, he urges countries should take a quick transition to have a competitive edge.