COP28: Watching Sausage Being Made Not for the Faint Hearted

Highlights of the Observations of Several Energy and Climate Experts Attending COP28 Including Pros and Cons of Climate Finance Models

In a bylined article titled “May Day at COP28” appearing online in the politically conservative American Thinker, nuclear engineer Joseph Somsel offered his personal views after the first week of being on the ground in Dubai for the COP 28 climate conference.

Casting a skeptical eye on some of the more idealistic ideas floating around, he groused that the real action taking place at the conference was behind closed doors. This is where the sausage making of any resulting climate change strategy agreement is being ground out and he observes that watching it is not for the faint hearted.

Blue Zone v. Green Zone – It’s Not Flag Football

At COP28 the conference’s “Blue Zone attendees — nation state delegates, UN officials, invited NGOs, and other “stakeholders” – will hammer out the conference’s work products. Everyone else, including the general public, had access to the “Green Zone.” Here a broad cross section of people, NGOs, and businesses have set up shop in a kind of carnival atmosphere. Somsel wrote;

“The actual working meetings began on November 30th, but that was for the “Blue Zone” attendees only—national delegates, UN officials, insider NGOs, and other “stakeholders.” The public attendees are limited to the “Green Zone” and barred from entering the Blue Zone, where the real action happened, and the serious decisions were being made.”

The question implied in this discussion of the separation of powers, those who have it and those who don’t, is whether the well-intentioned folks in the Green Zone were just talking to themselves or if they can actually make a difference at COP28.

So far a week into the meeting, with NGOs from all parts of the world participating, the sessions there have been populated by proclamations large and small about what to do about climate change, and, specifically, how to leverage nuclear energy to make a difference in that effort. In some cases it looks like progress is being made.

Nuclear Energy for Net Zero

Some light has emerged from the Green Zone including the work of the Net Zero coalition whose members signed on to a statement of support for the use of the technology to decarbonize industry, transportation, and consumer users of electricity and process heat. So far 120 companies have signed on to the statement. US NGOs also were on the floor of the Green Zone posting reports back to their respective websites.

More significantly, there was the “Declaration to Triple Nuclear Energy” by the United States and twenty-one other countries during COP28. These are the key nation states that are most likely to shape the outcome of COP28.

And US U.S. Climate Envoy John Kerry said on 12/5/23, “The United States will work with other governments to speed up efforts to make nuclear fusion a new source of carbon-free energy.”

“We are edging ever-closer to a fusion-powered reality. And at the same time, yes, significant scientific and engineering challenges exist,” Kerry said, in Dubai. “Careful thought and thoughtful policy is going to be critical to navigate this.”

The American Nuclear Society, which sent several of its key leaders to attend COP28, said in a prepared statement, “On behalf of America’s nuclear professionals, we applaud the historic commitment made today by the U.S. and 21 other countries to tripling global nuclear energy production by 2050,”

ANS Executive Director/CEO Craig Piercy note, “This is real, tangible climate action in meeting the world’s clean energy needs. Tripling the world’s nuclear energy supplies by 2050 is the catalyst required to halt rising temperatures and achieve a sustainable future while lifting millions out of poverty.”

Along the same lines, at COP28 Maria Korsnick, president and CEO of Nuclear Energy Institute, said in a press statement, “There could not be more at stake—the lives and livelihoods of millions of people around the globe are counting on us to meet rising grid demands, decarbonize economies, and ensure a clean energy transition that minimizes the devastating impacts of climate change.”

In a separate action, the Export-Import Bank of the US (EXIM) approved a resolution to fund applications for the export of U.S small modular reactor (SMR) systems and components. The accompanying EXIM financing toolkit can be found here. It offers the agency’s “world class expertise in analyzing technical, legal, and financial risks in the international nuclear sector. Small Modular Reactors (SMRs)”

Searching for Better Models of Climate Finance

Getting back to the question of mechanisms and results related to global climate finance,  Somsel noted, with some justification, that the global meeting had a nasty habit of attracting “sharks” from developing nations intent “grabbing some easy money” from international climate action funds. Other observers of the conference have asked whether these funds are the right solution or even exist. Some “sharks” could go home hungry.

The question of what is the right way to organize the billions of dollars of funding needed to support decarbonization and to mitigate the effects of climate change was addressed recently in a comment posted on Linkedin by Andrew Paterson, Principal at Environmental Business International. He asked rhetorically, “Why isn’t there enough “Climate Finance?”

“Four Models of Climate Finance”
by Andrew Paterson, Environmental Business International

The reason, he says, is that that the UN and IFCC do not offer a real investment model. He calls it a “redistribution welfare model,” and labeled it as a “failure” because it is based on the premise that rich countries need to give to poor ones.

This is an echo of Somsel’s metaphor of “sharks” at COP28 swimming in the COP28 conference’s deep water currents searching for schools of greenbacks.

Paterson goes on to write that the “Redistribution-Welfare model by UN has rich countries forking over $100 billion a year to the UN. The global institution then spreads the money around to poor countries and with “little accountability for results and a track record of abysmal management.”

Somsel would probably agree. He is not optimistic about the future of climate finance. He warns that if the UN were to have its way, in its most fevered dreams, “it would gain control of the giant financial resources of pension funds, 401K funds, and similar investor pools to “redirect from profitable investments to those with lower returns but higher priority for United Nations “stakeholders.”

It is noteworthy that the asset managers at major funds like Blackrock and Vanguard have pointedly pulled back from directing their billions in investments to projects aligned with “ESG values.” ESG stands for environment, social, and governance values. and, despite risks of “greenwashing,” will likely continue to have some influence some investor choices.

Another global finance model that Paterson says produces poor results is he labels as  the  “Sino-Dominance Borg Model” (via the Belt-Route Initiative). He describes it as one where China tells poor countries resistance is futile and where “China takes over a poor country’s resources (classic exploitation), imports Chinese workers and equipment, extracts resources, and bribes locals.”

He added that Russia uses the export of nuclear power plants as an instrument of foreign policy buying 60-80 years of energy security and influence building multi-unit power stations composed of 1000 MW PWRs in countries like Turkey, Egypt, Bangladesh, and India.

Paterson’s preferred model is one which he calls “a negotiated Public Private Partnership model where industrial partners bring capital, tech and expertise while the public sector agency takes manageable risk and articulates a publicly acceptable development arc.”

Paterson says, a combination of the finance ministers of the G20 nations, and the global investment banks, “have the skill sets and mechanisms to support the developing world.”

The American Nuclear Society pointed out in its press statement at COP28 that it thinks this is the right approach.

“The Declaration to Triple Nuclear Energy also recognizes the key role of carbon-free nuclear energy in halting climate change – and calls on international financial institutions to craft nuclear-inclusive lending policies. A rapid, large-scale deployment of new reactors around the world can only happen with the end of financing bans against nuclear energy projects by multilateral banks like the World Bank.”

Courage is Fear Faced with Resolution

In the end, the various critiques of the climate change conferences, pro and con, remind one of the admonition that people who do not want to watch how sausage is made should not observe how state legislatures, or climate conferences, make decisions.

It is a messy, unnerving, and very inefficient method to solve the existential threat of climate change. Yet, from a realist perspective, that’s what we’ve got for now. The world needs the courage of aligning nations to address global interests. We only have one planet and none of us wants to wind up in a future where we are all crispy critters.

This is why from the perspective of the world of nuclear energy, the declaration of tripling nuclear power globally by 2050, and other measures like it, from some of the key principals in the COP28 Blue Zone, is a basis for optimism . So keep watching because the conference still has another week to go before it issues its final declaration.

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