More than 750 million people worldwide have no electricity, and energy poverty is a powerful driver of economic and health inequality. While Mr Bloomberg’s investment is aimed at combating climate change, Ms Ogunbiyi said the funds could also help address a variety of crises caused or exacerbated by the lack of electricity, including food scarcity and poor medical care.
“It’s important to understand that this is a crisis in itself,” she said. “People who do not have access to electricity or clean cooking is not an inconvenience. It’s the difference between life and death for many people, and it should be treated as an emergency.”
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Total clean energy investment in developing countries was less than $150 billion in 2020, according to a June 2021 International Energy Agency report, which warned that such funding could exceed $1 trillion per decade by the end of the decade. years to get the world on track to reach net-zero emissions by 2050.
Ms Ogunbiyi said that if Renewable Energy for All and other organizations work with the 10 countries to develop energy transition plans or update existing plans, they would encourage the countries’ leaders to sign “no new coal” pledges.
The idea behind the kind of investment Mr. Bloomberg makes is that a philanthropic organization like his takes the greatest risk early on in a project that decision-makers would otherwise be skeptical about, and if it works, the project will become attractive to conventional investors. investors later, said Rachel Kyte, dean of the Fletcher School at Tufts University and former director of Sustainable Energy for All.
Even if Mr Bloomberg’s money can lower financial barriers, the political barriers remain formidable. The fossil fuel industry’s deep opposition to renewable energy development “is a huge obstacle,” said Tom Sanzillo, the director of financial analysis at the Institute for Energy Economics and Financial Analysis.
But what financing like Mr. Bloomberg’s can do is create a foundation on which a transition to renewable energy from fossil fuels becomes the smartest financial decision for companies. That means increasing the risk of fossil fuel development, Mr Sanzillo said. It also means reducing the risk associated with renewable energy development.
“I think market forces are generally on Bloomberg’s side,” said Mr. Sanzillo. “Had he done this ten years ago, I probably would have said it might not work. I think you have a better tailwind here.”