Climate Philanthropy and Transformational Change: RFF’s Policy Leadership Series

Notable Quotes

• “Philanthropy, at the end of the day, needs to support organizations that are much more expert with deeply, historically valuable contributions under their belts. And we need to show respect for them. We need to be led by them, and there needs to be just that right conversation—mutually respectful conversation.” (15:08)
• “Climate justice needs to be a priority for several reasons. One, there’s a fundamental moral issue where we’ve gotten it wrong for decades and centuries. Two, if you want to solve the problems, these are agents of change that we want to support.” (23:30)
• “If one looks at the energy transition in the emerging and developing world, or even the rich world, the question is, Is it going in the right direction? Yes. Is it going fast enough? No.” (31:52)
• “The question we always need to ask ourselves is: How is it you could ask one person how it’s going on climate, and they could say, ‘Oh, it’s fantastic. I mean, $130 trillion, cost curves, amazing.’ And then you ask the next equally expert person. They say, ‘Look, we’re falling off a cliff. I mean, this is an Armageddon.’ Which one is right? They both are.” (59:11)

The Full Transcript

Elizabeth Wason: Welcome to the Policy Leadership Series Podcast from Resources for the Future. In every episode, leading global decisionmakers speak to RFF President and CEO Richard G. Newell about big environmental and energy policy issues. In this episode, Richard speaks to the Bezos Earth Fund President and CEO Andrew Steer.

Born out of a $10-billion commitment from Amazon founder Jeff Bezos, the Earth Fund is a philanthropic organization that funds efforts to address climate change and protect the nature. Their conversation took place on June 15.

Richard G. Newell: Let's dive in. Last year, you made a significant move from World Resources Institute to the Bezos Earth Fund. So, first of all, why did you make that switch? What led you to take on this position?

Andrew Steer: Well, it's always good to repot, isn't it? And if you've been there nine years, as I had, best to leave on a high note. But the real reason was—I mean, what a great opportunity and how cool it is that somebody like Jeff Bezos would choose to put $10 billion to be spent as grants this decade—in this decisive decade. And I do believe philanthropy has a pretty special role to play. And so, it was just a great opportunity—same subject matter, but seeing the elephant from a different perspective. And it's been exceedingly interesting, and it's an interesting experience to go from raising funds to actually allocating them. You make a lot of new friends, but actually, it's no easier, surprisingly. It is easy to spend money. It is difficult to spend it in a transformational way.

Richard G. Newell: So, give us some sense of, one year on, what does a typical day or week look like in your current role?

Andrew Steer: Well, they're all different, just like yours are. I think we are spending a lot of time asking the question, How can we get maximal leverage, given that we are privileged to have a more significant scale of resources than most philanthropists? So, we're asking ourselves—what we don't want to do is suddenly become the big new gorilla on the block, and we certainly don't want to duplicate what others are doing so well.

For example, one of the things we've been thinking about is how to make the whole add up to more than the sum of the parts. So, for example, we do climate change and nature. So, for example, for various substantive and other reasons, we wanted to support the Congo Basin. The Congo Basin is pretty seriously threatened right now in terms of its forests. So, if you could spend, say, $130 million to try and help protect that, what do you do?

You could pick the best institution; give them all the money. What we decided to do after thinking about it a great deal and talking to governments, is we said, "Okay, who are the best 10 institutions or at least 10 of the very best institutions, who already have deep roots working in the Congo Basin?" And there are several countries, but we focus on the Democratic Republic of the Congo, the Republic of the Congo, and Gabon. And then we'd say, "Look, tell you what. Let's form a coalition here. We'll give you each, whatever, $15 million or something. And the deal is, you have to deliver what you promise within that thing—what you are doing anyway. But here's the point—you become part of a team that together engages at the head-of-state level, together engages with the multilateral development banks, together engages with the major European bilaterals, so that you create something that could potentially be a coalition for change.”

Because one of the stunning things is, although there's amazing expertise on the Congo Basin, it's all just seeing little bits and pieces. And if you ask the question, Where's the strategy? It's actually extremely hard to find. A truly coherent approach to the Congo Basin as a whole, looking at all the things that you look at, which is what causes the problem, where are the pressures and so on.

So, different institutions—some will be very good at setting up protected areas, some will be very good at doing remote sensing, some will be very good at doing first-class economic and social analysis, so to speak. In a way, that's the thing where we think about, is there a possibility of getting system change. And that's an average day.

Richard G. Newell: Yeah, yeah. Solving the issues of the Congo Basin.

Andrew Steer: Yeah. Well, good luck.

Richard G. Newell: I want to come back to the approach that you're taking, strategically, to expending this tremendous resource. Before we get there, I want to ask you something that you alluded to already. In recent talks, you've said that gradualism won't do. In fact, I'll make a direct quote here. For the emissions path needed to address climate change, we're going to need "the most radical reordering of the world economy that we've ever seen." Right? And so let's dig into that a little bit.

Who do you see driving that transformational change? Is this governments, is this corporations, is it investors, is it individuals? Help us, first of all, understand that need for deep transformational change, and put that in context in terms of the different actors and how you see them influencing that.

Andrew Steer: Well, and I know you do a lot of work on this as well, so let's be clear. I certainly don't have wisdom greater than what is in this room. So, I hope we can turn it into a conversation.

But I think one thing we've learned is that it's not one actor—it's not a silver bullet. It's sort of a jigsaw puzzle. And the trick is to bring the different players at the right time, so that you create something that actually, together, works. I mean, I worked for the World Bank for many years. And when I was running the World Bank Program in Indonesia, if the issue was deforestation, we'd know that, basically, it's two words that are causing it—palm oil—that's causing deforestation. I really basically believe government was the most important player. And it still is a very, very important player.

And I would've gone to the relevant ministries, the Ministry of Finance, the Ministry of Forestry, and so on. And we would've had lots of conversations. We would’ve done lots of analytical work. We would've injected that in. We may have had some, but what we know today—and work at RFF has shown this in many sectors—is actually, if you want to address issues of deforestation in Indonesia, you need to see the entire value chain, including what Walmart is doing. Everyone in this room has used palm oil, probably two or three times today already—some a lot more. We are part of that. The purchases of palm oil in Singapore are part of that. The Unilevers are part of that. The Chinese are part of that. The smallholder associations—why? Because smallholder yields have not been rising. If they had been rising, you wouldn't need to encroach so much.,Plus the government.

Plus, those that manage the satellites that actually can hold the 1,000 palm-oil mills in Southeast Asia accountable—which Paul Polman, when he was running Unilever said, "Look, there are a thousand palm oil mills. We are buying from 800 of them. Is there a way of knowing the 200 least honorable in terms of where they're attracting?" The answer is "Yes, you can do that." Government can't tell you that, but scientists can.

So, the answer to your question is actually: that is the new global-governance insight that you and others have been thinking through over the last 10 years. And the question is, Why does, for example, the World Economic Forum now have such a big role? Because it's the only place where you get heads of state, CEOs of companies, heads of multilateral development banks, leaders of NGOs, the best scientists, together in a way that quite frankly doesn’t happen at the United Nations or at the World Bank annual meetings. And so we’ve got to think about, how do we bring that multi-stakeholder thing together? That makes it a lot more complicated, but it's a lot more exciting.

Richard G. Newell: Yeah. So what I hear you saying is that when you take a problem focus—let's say a focus on deforestation—you start to unravel the complexity of that. You pretty quickly realize that it's really all of the above, and each of these different actors has an important role. Particularly if you want transformational change, you can't just pay attention to one part of this system.

Andrew Steer: Right.

Richard G. Newell: It's really the whole thing. I want to bring in some audience questions that we actually got in advance. And there's a related question here on the role that philanthropy should play in all this, right? Because you've got companies, you've got government, you have individuals, you've got investors—also have philanthropy, which you're now leading. So, what role does philanthropy play? And Ariel Ortiz-Bobea, I’ll bring in his specific question: “What do you see as the distinct role of philanthropy relative to the role of for-profit and government sectors in tackling climate change?” And the answer may be different for the Bezos Earth Fund, as distinguished from other climate philanthropies, as well.

Andrew Steer: I think philanthropy is one player. It's certainly not more important than public money. It's not more important than private money. It has certain characteristics that are useful. You can make decisions quickly. You can take risks knowing you might fail. And if you go to our website, you'll see what we stand for.

And one of the things is, we will take risks knowing that quite often we may fail, if the potential reward is significant enough. And that's something which governments often can't do. Why? Because I was a civil servant. I was director general in the British government for a while. The Daily Mail, or the parliamentary commission, or the Republicans looking at Solyndra—they will go after the one failure you have, and they will crucify you.

Well, philanthropy doesn't have that problem. So, we can take bigger risks. We can act more quickly. But also, we can look at, for example, the whole idea of, if you like, system-wide change. So, if we want to get green cement or green steel or the electrification of heavy vehicles, there's a whole range of issues that need to be done. It could be primary research at MIT. It could be policy research at RFF. It could be 501(c)(4) lobbying work with the US Congress or some state government. It could be monitoring and accountability. So, there probably are six or seven potential entry points. And what philanthropy can do is say, "Look, which are pretty well taken care of? Is there a big gap somewhere?” And what we’re out there trying to identify is, Is there a gap where, if we could fill that gap, maybe playing a helpful convening role, you could unblock that entire process? So, in a way, I think that's what philanthropy can do.

And I mean, I think the whole philanthropic community right now is going through a pretty interesting change. And I think one of the really important things that we don't allow is philanthropy to get too big for their boots. Philanthropy, at the end of the day, needs to support organizations that are much more expert, often with deeply historically valuable contributions under their belts. And we need to show respect for them. We need to be led by them, and there needs to be just that right kind of conversation—mutually respectful conversation.

And some philanthropy is obviously very tempting—start saying, "You must do this, and you need this results framework." Well, okay, good. You do want that, but let's remember where the expertise really lies.

Richard G. Newell: Well, it doesn't surprise me that you bring the same humility that I see you bringing to everything you do—to the Earth Fund. So, that's really appreciated.

You've called this the “decisive decade” that we live in now. And, as you noted earlier, the mandate of the Earth Fund—your mandate over there—is to spend $10 billion by the end of this decade. And so, thinking in terms of sectors and technologies, or some other dimension if you like, what are the critical things that need to happen this decade to get us on the path that we need to be on toward net-zero emissions? And I have a follow-up question: And then, there’s things that may not happen this decade, but we're setting the stage this decade for what might come after. So, unpack that a little bit for us.

Andrew Steer: Well, the unpopular answer to that is, unfortunately, we no longer have the choice of, well, we do energy efficiency but we don't do hard-to-abate sectors. It is amazing if you think about it. I mean, people in this room made incredible contributions, for example, to the marginal abatement cost curve. 15 years ago, the marginal abatement cost curve was an incredibly valuable tool in order to set priorities, in order to get—

I love the way you talk, Richard, because you say there are three issues. How do you make it effective? How do you go cost-effective, and how do you make it fair, so to speak? In a cost-effective way, that's what a marginal abatement cost curve did. It's interesting that we don't use that so much anymore. Why?

Because if you are in the top-right-hand quadrant, in the old days, if you were running a steel mill, you could say, “Well, I could actually pay these guys down here below the zero line and offset it.” You can't offset anymore. I mean, if you're a steel company or you are an airline, it's true that the rate at which you're going to decarbonize is probably less than down here in the consumer goods industry—but you had better have a plan. You’d better be doing the investment today, and research, so that if you are only decarbonizing by one percent a year, next decade you can do it by four percent a year, sort of thing. So in other words, we have to go after all of these things.

Now, some technologies won't work. So, it's still true to say some technologies are less good than others, but in terms of sectors, you no longer have that option.

That's why we run something together with World Resources Institute and others called the System Change Lab. And we ask the question, How many things need to happen? And there are six big sector things: energy, transport, food, and so on. Within each of those, there are four or five or six. So, there's about 50 transformations that are needed this decade. And so, what the System Change Lab tries to do is monitor them—not doing original work always but a situation room whereby you ask the question, Where are they? And how close are they to tipping points? And what are the constraints? And why is it that some issues suddenly rise on the agenda so rapidly? Plastics: Suddenly everybody wanted to do it. It's fallen off a little recently. Suddenly some of the hard-to-abates are absolutely there, while some of the more obvious things like energy-efficient buildings—not going anywhere close to the pace that's needed. Ask the question, Why is that? What's the special sauce that we have in the sectors such as light vehicles, electrification that's going so well. So that's what we do. And then we identify of those 50. Maybe there's eight of them that we have a role to play.

Richard G. Newell: So what you're saying is that, given where we are with addressing the climate challenge, we don't have the luxury of putting off certain challenges to some future decade? We need to be really focused on all of them, even though they may be at different stages, right? So, the power sector may be further along in terms of the available technologies, but that doesn't mean that we can ignore the industrial sector while we're focused on the power sector?

Andrew Steer: Exactly. And Bill Gates will always say, if you want to know someone’s really serious on climate change, don't ask them for the cost of green power. Ask them for the cost of green cement. Why? Because that's where the cutting edge will be. You know what I mean?

Now, by the way, it may well be people in this room and on the line have a different view, and I may be wrong.

Richard G. Newell: I want to turn to a related issue which, over the past decade, there's been an increasing recognition about structural inequality around the world. And also then, particularly in the United States, and that's of course deeply connected to our economic structure. So, climate action—if it's to be both successful in reducing emissions and also successful in addressing issues of economic fairness—needs to be grappling with both of these challenges at the same time, each of which is monumental in and of its own. So, could you talk a little bit about how philanthropy can help support the achievement of those two very important and difficult objectives?

Andrew Steer: By the way, to say something nice about you and RFF: Cecilia Martinez, who was the chief advisor on climate and environmental justice at the White House has now joined the Bezos Earth Fund. She came and spoke with you, I think. And she came back, and she spoke to me, and she said it is fantastic that we are now having really serious analysis of something that is so important and is so empowered with emotion and momentum that actually sometimes has been lacking in that.

Like you, we take this very seriously. We think that Justice40 is a brilliant idea. As I think you pointed out, there are lots of questions that one might assume that the mighty federal government in the United States would know when they commit to 40 percent going to benefit disadvantaged areas. They might know exactly where the disadvantaged areas are. They might know how to measure and monitor benefits. They might know which levers to pull to make it work. But we are a federal, pretty decentralized system, and actually, it's stunning how challenging it is, actually, to implement something like that. So, what we've done is we've now put $300 million through environmental justice groups who are on the front line—some of them working in the federal level and some of them working on data issues, but most are on the front line—basically creating demand for and capacity to deliver federal money. Because you won't get the money in a poor area unless you have those that know how to apply for it, unless you have BIPOC-led energy-efficiency installers or solar-panel people or whatever.

So, there's a huge capacity-building job, and there's a huge demand-creation job. We regard this as very important. And like you, we share the view that climate justice needs to be a priority for several reasons. One, there's a fundamental moral issue, where we've got it wrong for decades and centuries. Two, if you want to solve the problems, these are agents of change that we want to support.

Richard G. Newell: Touching a little bit more on an international context: These issues are of concern, not just in advanced economies like the United States, but also in developing economies. You spent many years in the UK government at the World Bank. As you think about how, particularly in a developing-country context, we both meet the needs of growing populations, growing economies, at the same time that we address climate change. And not just climate change—you're also focused on nature at the Earth Fund. So, how do we improve the natural surroundings and also the carbon-storing abilities of these countries? Are there other issues that come up when you've seen, again—how do we advance both of those balls in those contexts?

Andrew Steer: There aren't many win-win-wins out there, but there are some. And landscape restoration in Africa is one, and we're going to be putting serious resources into that under something called AFR100—100 million hectares to be restored by 2030—and the Great Green Wall. And using COP27, which obviously the Egyptians and the African nature of the COP is to focus on resilience and so on. And as your team has shown so well, taking molecules from up there that are actually hurting us, hurting our economy, killing people, bringing them down to Earth in the form of trees and bushes and crops and soils. And they bring new life, they can increase yields, they bring food security, they create resilience in the soil. They provide a better future. That is a message that is resonating extremely well with African leaders right now.

And, by the way, in this country, also—why is it that the farming community and rural America is not interested in climate change? It’s because they don't understand. We haven't done a very good job at saying, We don't want zero carbon. We want more carbon, but the carbon should be in the soil. Who are the managers of carbon? They are the farmers, and we've lost half of all the carbon in the soil, so to speak.

So, I think there is a very strong narrative, and I've got a feeling that this is where obviously the adaptation and the mitigation agenda come together pretty well in nature-based solutions. And the work that you've done and many others have done, I think has played a very important role in getting what happened at COP26, where for the first time, nature and climate were understood as two sides of the same coin. And in many regards, the nature agenda in Glasgow was in some ways more exciting, more vibrant, than the more traditional, energy-type agenda.

Richard G. Newell: Yeah, absolutely.

Elizabeth Wason: Each episode of RFF’s Policy Leadership Series Podcast is made possible by listeners like you. This series provides thoughtful conversations with leading experts to better connect and inform our community on the latest environmental and economics issues.

And you can help us by supporting RFF. Join us in our mission to improve environmental, energy, and natural resource decisions through impartial economics research and policy engagement. Learn more about contributing to RFF today by visiting rff.org/support.

Richard G. Newell: You mentioned both the role of—and actually increasing acceptance and appreciating the value in African countries. Say a little bit more about the importance of inclusive decisionmaking, either in that context or in a US-type context.

And I want to add to that a related question, which actually came in from Whizy Kim at Vox, which is, specifically, “What responsibility does climate philanthropy have to address environmental injustice, particularly in BIPOC communities (Black, Indigenous, and people of color)?”

You started touching on some of the work that you're already doing at the Bezos Earth Fund. Say a little bit about what responsibility does philanthropy have in addressing that, and also the role of inclusive decisionmaking, in what you are doing.

Andrew Steer: Well, yes to all of those things. Those of us from a technocratic background find it difficult not to give solutions, because we believe that good analysis will lead to the best policy: hand over the paper and please implement it. Even as a philanthropist, it's tempting to say, “Look, we really think this idea is a good idea, would you?” And the answer is, in some circumstances, if you're dealing with senators or what have you, that's fine. If you are dealing with the communities that have been marginalized and not included in decisionmaking, that is not the approach.

So, you actually need an approach that’s a little bit different. One has to take longer in a very constructive, positive way to get to yes, because it is really important that we listen. And some of us are not professionally trained at listening—especially those of us that have had highly successful careers and highly successful analytical backgrounds, because deep down, we really believe the analysis we've done is the right one.

And so, this is an extremely important spiritual process for us to go through, actually, and I find it extremely exciting. And if you look at, internationally, the way that, now working with Indigenous people, this, finally, a kind of “aha” moment. For decades, we've known that we need to include—but quite frankly, we haven't had the right touch.

Now, you're starting to see building of capacity and groups seizing the initiative. We were part, in Glasgow, of a $1-billion-dollar commitment to Indigenous groups. And that's right—we need to do it. We need to do it very differently from the way that certain institutions have traditionally done their work.

Richard G. Newell: We've been working in New York State. You mentioned Justice40 at the federal level, earlier, and New York State has a closely related policy, but at the state level—we have a project there where we're deeply engaged with environmental justice communities. And one of the ways that has influenced the research directly is by the scenarios that we're looking at, and that we're modeling the impact of—those are actually being developed by these communities, as opposed to the government or us saying, “These are the scenarios, the different policies, that we want to model and evaluate.” That's been more of a bottom-up process, where they've helped to define those scenarios. So, it's just one example of how you can have more inclusive not just decisionmaking, but also more inclusive analysis and research.

So, earlier on, you started touching on what I see as the approach that the Earth Fund is using toward its investments. And you bring deep experience from the World Bank and from your other vantage points in investment. Now you're investing philanthropic funds—$10 billion. It seems like there must be countless worthy projects. So, say a little bit more about the approach you're using.

What I heard you starting to say earlier is it seems like it's a problem-centered approach: identifying the right actors, the set of institutions that have an important role to play in solving that issue, and then ensuring they're connected, that the whole is greater than the sum of the parts. Say a little bit more about that and where you're focusing in order to leverage the most impact from your funds.

Andrew Steer: I mean, I do think there's the issue of scale, which has to be in [WE2] the back of one's mind all the time. So, for example, if one looks at the energy transition in the emerging and developing world or even the rich world. The question is, Is it going in the right direction? Yes. Is it going fast enough? No.

So, the question is, Is there something one could do? So we, together with the Rockefeller Foundation and the IKEA Foundation, created something called the Global Energy Alliance for People and Planet. And that will have about $1.5 billion of grant financing. The idea is, with that amount able to allocate pretty quickly, one can create an entire alliance, including the multilateral development banks, including the development finance corporations, including even private sector and, obviously, governments around the world as we have done. And then the idea would be, okay, how could we unlock a faster pace of change?

I mean, it's interesting. We convened something in Bellagio, and we had several of the multilateral banks there. And one of the multilateral banks said, "Well, look, you don't need to start from scratch, by the way, because we have plans for energy for all of the African countries." And luckily, Damilola was there (Damilola, who's head of Sustainable Energy for All from Nigeria). She said, "Well, there are plans in every African country. In my country, Nigeria, there are 19 plans, and your multilateral development bank is responsible for one of them. And it's totally incoherent."

And the question then is, the suggestion from certain banks and funds is, "You've got $1.5 billion dollars. You want to make things better. Give the money to us; give us a trust fund. We'll use it well." Well, if they were using it perfectly well, wouldn't we be making more progress than we are today?

And the answer is, we actually haven’t changed the way we do business very much. We actually don’t work together. You don’t have the African Bank and the World Bank and the German government and the United Nations. You don’t have the president of banks going in and saying to the president of a country, “Could we convene here? Could we actually look at something?”

Now, and we’re starting to have, for example, in South Africa, the so-called “just economic transition”—the idea of decommissioning coal plants and replacing them—starting to see a new way of doing business. So, five countries or four countries in the European Union went and made a commitment of $8.5 billion dollars. Very good as a start. We now need to deeply enrich that. We need to have a different way of doing business. And if we are going to really support Indonesia, as people like John Kerry would really like us to do in Vietnam and Philippines and others, to do the transition, the true energy transition that is required, which includes decommissioning coal much more rapidly than you’d think of normally. We need a really innovative approach.

Philanthropy, if it's got scale, can get right in the middle of that and can be helpful because it can de-risk; it can move on the design side. In South Africa, we’re working with the government on the just transition, they're going to decommission one plant. Well, there are only, almost 700 workers there. Yeah, but who is actually going to think about alternative livelihoods? So, they're finding out that particular niche that could unlock. I mean, it's very hard to do, and I certainly do not want for one second to come across as some white knight, but we have one modest role that can be helpful, I think.

Richard G. Newell: And what I heard you say earlier is that, in terms of the investments you're making, when you get engaged in a problem-solving issue like that, if you see a direct investment being required to unlock movement, then you'll do that at the Earth Fund? Or if it's researcher analysis, or information gathering, or policy action. So, you're willing and able to step in, depending upon where you see the most important hurdles and leverage points.

Andrew Steer: Exactly. The only thing we won't do is do anything that would give us a return—a financial return. So, we wouldn't take an equity position. But we can do lots of things. We could do advanced-market commitments. We could do guarantees. We could do various things.

Richard G. Newell: Very interesting. And if you think about different projects or proposals that have that X factor for your team, how do you measure and quantify that?

Andrew Steer: I was hoping you'd help us out on that, Richard. That's very hard to do. It's easy to measure traditional projects. It's very difficult to capture the systemic effect. I mean, one insight talking with, for example, people that work at the Global Environment Facility, where they're really trying to figure out how to be part of this system-wide change. It's a very good example of—I don't know in the numbers, exactly, but in its history—maybe 3,000 projects are being done by the Global Environment Facility, by the GEF. Of those, I’m making this up, but 2,500 are rated as a success.

They are a success. So, you have a success here, success here, success here. But if you talk to the senior people, and you say, “Where have we really moved the needle?” It’s actually hard to find that, and that's the trick. It's having those successes, and having them in a way whereby the whole system, if you like, flips. And that's very difficult to measure—partly because, of course, you're just one player out of many. If you do one project on your own, it's easy to take credit for it. Maybe that could be a branch of research that we and you could work on together.

Richard G. Newell: Well, I have some empathy that, as somebody who leads a research institution and is trying to identify impact, but not to use that as an excuse for not being intentional about how you do that, can be very challenging, but really important.

I want to pivot to something actually pretty closely related, a question from the online audience. I don't have the person's name, but they ask specifically, “What are some of the most critical partners for the foundation in making progress on US climate policy?”

Andrew Steer: Well, I think the United States is richly endowed with fantastic NGOs, ranging from the top analytical and policy groups like yourselves through to activists. So, I think one has to survey the whole group, and including, by the way—I'm sure you are thinking about this right now, just as when Mr. Trump became president, there was a bit of a pivot, wasn't there, to the subnational level. Who knows? We may need to do that, too. City mayors and—so, I think there's just a whole range.

Richard G. Newell: Yeah. This issue you brought up—I’ve seen a very important role for philanthropy in, let’s say, evening out the ebb and flow and gyrations in politics. When you have shifts in government that can, absolutely should, and does, lead to many different kinds of shifts, but having philanthropy there, being a stable force, whether the intention is from federal to state, or from executive to congressional, in terms of the gap-filling that you alluded to earlier, can play a very important role over time.

I want to pivot now to—you mentioned Davos—and you also mentioned the COP. You were at Davos. Are there any things that you saw there in terms of momentum, or changes in collaboration or connection, that you see moving things forward on climate?

Andrew Steer: I think most obviously in Glasgow, it ended on a real high. There really was a sense of great achievement, even though the negotiations weren't so great, but $130 trillion of assets under management committed to net zero, 2,000 companies committed to net zero. These race-to-zeros, pretty exciting stuff actually came out of a feeling of real momentum, whereby, I'd say, maybe the financial sector for the first time in history is perceived potentially to be a source driving solutions rather than a source of honoring the past. All changed. A sense of “my goodness me.” Only six months later, and look at what's happened, for obvious reasons, and even climate finance, and certainly official development assistance is down because of Ukraine. 100 million people being pushed into poverty this year by price rises because of Ukraine and Russia.

We are now investing in fossil fuels again. A feeling of besiegement and, at the same time, incredible commitment. Remarkable commitment, actually, by the—and obviously Davos is pretty self-selecting—but a real commitment to keep going, so to speak.

I do think there is going to be a bit of a cathartic moment with the corporate and the financial sector in the next 18 months. I think a lot of people like us, certainly myself—I don't know whether the rest in this room would've been the same. Over the last five years, a lot of us have been saying, "My goodness me, governments aren't always doing the right thing." It's nice that there is a growing cadre of CEOs of major companies and financial institutions that actually are leading. And I think now, we're unpeeling some of these commitments, and we're realizing that actually, the whole net-zero thing is a lot more complicated.

And whilst I wouldn’t cast aspersions at all on the board meetings that were held last year to make these decisions, I just don’t think, maybe, they were all informed as much as they should have been. So, I think there’s going to be a bit of a very healthy reopening of this, and organizations like the Science Based Targets initiative have got an important role to play. The Carbon Disclosure Project is doing important work, and so on.

But I do think the whole net-zero thing, which your team works on—we are going to have to sort it out. And how much is implicitly assumed to be offset in 2050, when you have made a commitment of net zero, is a pretty important issue.

Richard G. Newell: Yeah.

Andrew Steer: Now obviously, the answer usually from corporate is, “Well, we don’t know yet, because we don't know what technologies there will be. We're going to do our best." Which is fine. Kennedy didn't know how he was going to get to the moon, but he got there. So, I think that's fair enough, but we do need to hold each other accountable as we go along.

Richard G. Newell: Yeah. And the role of emissions accounting and not just historically, but also then in a forward-looking point of view and analysis and assessment and forecasting for how different decisions will affect the path, looking forward. Both emissions and the offsets to those emissions have, I think, gone from something that used to be in the realm of ESG side conversations, to being quite core to many different financial decisions.

Andrew Steer: There's some terrific things. The LEAF Coalition, for example, $1 billion of private corporate money going to compensate—using very high standards, so-called ART TREES standards, in nature-based solutions—voluntary carbon markets. So, there's some very encouraging things out there.

Richard G. Newell: The COP27, which will be in Sharm El-Sheikh, Egypt: What are you hoping to see there? What would success look like in your mind, in terms of the actions that might be taken, ambition, and also involvement of different stakeholders? Do you see a need for increased involvement of certain stakeholders in that process?

Andrew Steer: Well, the big hope for Sharm El-Sheikh—if you remember, on the last two days of COP26, it was decided that the nationally determined contributions were not being raised in ambition enough. And a number of very important countries didn't even submit revised nationally determined contributions. So, the whole point was, We'll give you another year, to Sharm El-Sheikh and you then have to improve.

That is not where we are going to see a lot of progress, unfortunately, simply because of the way the world is turning right now. Lots of very good organizations are working on that. And we are certainly financing really important, work in key economies on this, but truthfully, we're not going to see that. I think what we will see is a continuation of the sectoral progress. In a way, to some extent, progress will be less evident on the country side and maybe more on the sectoral side. And I do think the Africa and the adaptation story is going to be quite important. I hope it is. And that could be very valuable.

Richard G. Newell: And a final question for you, Andrew. I've always found you to be extremely positive and optimistic, despite the daunting challenges and really important and serious challenges that you work on. What is it that drives you, and how do you maintain that fierce optimism and hope?

Andrew Steer: If one doesn't get emotional about this, one is missing something. And if one doesn't grieve when one sees what's happening in some countries and some communities because of climate change, and one doesn't get discouraged about that, then one is not—but at the same time, the leadership that we're seeing from grassroots in Africa is absolutely amazing. We're going to go to Gabon next month. What they're doing there is remarkable. So, there's a huge amount to be enthusiastic about.

The question we always need to ask ourselves is, How is it you could ask one person how it’s going on climate, and they could say, "Oh, it's fantastic. I mean, $130 trillion, cost curves, amazing." And then you ask the next equally expert person. They say, "Look, we're falling off a cliff. I mean, this is Armageddon.” Which one is right? They both are. They're both right.

I was trying to think of an analogy. It's like, the problem is a bus, and it's gathering momentum. The solution is a dog that's chasing the bus, and it's going faster and faster. It's never run this fast before. It's going incredibly fast. So yes, we are making huge progress. Cost curves are coming down. The problem is the bus is accelerating. It's getting worse and worse, and the dog will never catch the bus. And the dog needs its own electric scooter. It needs to do things differently. That's exactly what we're all trying to do. We're trying to think about, What is it that could do that? And that's how it's possible to live in this world of tension between despair and exhilaration.

Richard G. Newell: Well, thank you, Andrew, for your optimism and your humility and for helping to steward some really important resources to help confront the climate challenge.

Andrew Steer: Thank you, Richard. It’s a great honor.

Elizabeth Wason: That was Richard Newell, president and CEO of Resources for the Future, in conversation with Bezos Earth Fund President and CEO Andrew Steer.

If you like what you heard, remember to like or favorite RFF’s Policy Leadership Series Podcast on your podcast platform of choice, where we will release new episodes with leading environmental and energy-policy decisionmakers. You also can find recordings from our Policy Leadership Series events at rff.org/pls and receive updates about RFF events and podcasts at rff.org/subscribe.

The live event was produced by Sarah Tung, Donnie Peterson, and Justine Sullivan. Music is from Blue Dot Sessions. RFF podcasts are managed by me, Elizabeth Wason, and made possible by you, our listeners. You can contribute to RFF today by visiting rff.org/support. Thank you for joining us.