last time we gave a talk together, i talked about it and precluded him from saying something about his own initiatives. okay. so the concept here is that there are some issues which are not necessarily country-specific, but can be global or sectoral in nature. and a good example of that is an initiative which is supported by sc for all, by the world bank called the global gas flaring reduction initiative. it has major oil and gas companies involved. and the point of this is they sn how they reduce the flaring of gas, and as a result of that, from those standards, how do you create practices in the industry that can radically change and transform how this industry operates. and so if you can imagine similar things like that and gas flaring, in building codes, because most of the buildings that are going to economist in 2030 and 2050 haven't been built yet, or in lighting, solar

lighting and initiatives that are being moved forward. so these are the kinds of things that we're trying to do. and so the final word i'll say here, because i'm close to the end of my time, we now need to figure out how to transform this into viable financial channels. and so the issue here, some of the ideas that nigel put on the table are very productive. but here is something that we need to give real thought to. in the end, what we have to do is get money to projects. if we in particular let's think about the small-scale projects. and when we think about those projects, you have to think about how do you guarantee, how do you give investors insurance that they're going to be technically viable? how do you insure there is consistently? how do you assure that there can be serviced? how do you assure that they can repay the loans that they get? how do you assure that the financial intermediaries that might give them loans have capability and adequate capitalization? how do you assure against the currency risk against the

intermediary organizations to some form of lend they're is starting out with? that's the chain that we have to follow. and so the challenge that we're facing here is how do develop the instruments that will mitigate the risk, that will allow capital to flow, and let's remember this, how to ensure that the base is technically sound. and i'll leave you with this thought on the negative side, and i'll come back to a positive. but let's think about the mortgage crisis, all right. one of the things that was great about fannie and freddie was that they were able to securitize mortgages, get a lot of -- get hundreds of billions of dollars of capital into the market to flow. but it was based on a product that wasn't sound. and so if we can't create the sound product at the bottom, it doesn't matter how much capital we get into the system, we don't get the assurance that we want. what we need to do is get the capital, provide the mechanisms to build up the quality and sustain the quality, and as a result of, that be able to create the conditions that allow tens of billions of dollars, 50,

$48 billion a year to be able to flow into increased energy access. it is something that we can get done. rio is going to be critical milestone to demonstrate how countries and on these cross-cutting sector, different groups are stepping up. it is not the end point that is what we have to remember. we have to use rio to drive the point, not to keep us going. thanks for listening. >>. [ applause ] >> good morning. i want to begin by complimenting the center for global development and climate advisers, nancy and nigel for convening this session, and the audience for the extraordinarily astute and insightful and penetrating questions that were asked. i hope the most difficult have already been posed which tim and vijay dealt very well with. i'm reminded listening to carlos that one of the things that i've done in recent years was to --

was to negotiate for investors the purchase of electric generating company in texas, texas's largest, which was the largest private equity investment in history. it was a $45 billion investment. it was a practical, profit-oriented investment. the kinds of numbers we're talking about here, if you're talking about global private capital are not daunting, and in fact if the incentives are correct, and that's what policy is all about, can be very effective. i want to begin by going back to stockholm, the united nations conference on the environment in 1972, which the u.s. delegation was headed by russell train, whom i had dinner with last night who is now 92. what came out of stockholm were two things, in my view. one, the united nations environment program was agreed upon, and two, countries took stock of their environmental commitments and capabilities and

established environment ministries. virtually every country established an environment ministry or its equivalent, many of them cabinet-level agencies. moving forward to rio. the united nation conference on environment and development in 1992 where i headed the united states delegation, the expectations for it were much greater than for rio +20. one cannot but feel the sense of meeting fatigue, of resignation, of lowered expectations going into rio +20. i think it's probably a good idea to lower expectations for a conference, frankly. there are some very specific things, however, and i just went through them i thought in a compelling way that can be achieved there. and it will advance the cause. perhaps not as dramatically as what was achieved and agreed 20 years ago, but nevertheless, effectively to continue the country, the world, the environment moving in a better direction.

now what rio did, i have a number of really indelible memories of rio. i think one of my most compelling is of flying back from a meeting that i had had with president calor and three of his minute stores and laid out the terms under which i would support president bush attending the conference. president calor said heads of state were waiting to see if president bush was coming and that would determine their own decision to come. we had concerns about it. it was going to take place in an election year. tommy ko, a very important diplomat from asia who had an important role at that conference commented later that we should learn from this experience. never have an international united nations conference during a presidential election year in the united states. well, we're doing it again, but somehow rio plus 19 or rio plus 21 doesn't quite do it. well, i started to talk about

the compelling memory i have. it was flying back on prince charles' plane. i had met calor and princess diana in the middle of the night leaning over to me and asking me if i would like to go back and watch "sleeping with the enemy" with her in the back of the plane, which i then did. that kind of blotted out a lot of the other less pleasant of the united states declining to commitment to timetables or having declined the biodiversity convention. who came out of -- what came out of rio 20 years ago was agenda 21, which i'm happy to say is now getting some sailient, some prominence because the tea party has noticed it. they don't like it. they think it involves a succession of sovereignty in the united states. well, it basically is a litany of positive interventions, policies which have guided countless ministries quietly i think, but effectively around

the world in thinking about how to do environmental impact assessment, and how to have a greater transparency in their decision-making effecting in the environment, and a whole range of other such good common sense principles. a statement of principles on forestry. we didn't get a convention on forestry, which the united states and germany particularly drove to get, but we did get a statement of principles. they're a platform. i have to say i'm disappointed that rio +20 will not address the forest issue or the oceans issue or the fresh water issue in ways that i think makes sense, and i think that leaves something further for the united nations to do in the future. we also of course signed there the global convention on climate change, which created a moral, if not a legal obligation to return greenhouse gas emissions to the 1990 level in the year 2000. notably, a number of countries having made very strong commitments at the time have not -- did not succeed in that. but now we are getting some help, well, particularly with

the downturn in the economy in reducing greenhouse gas emissions in the last few years, and improving the efficiency, the intensity of our economies, our energy economies. and we -- we achieved some other things at rio 20 years ago. but probably the most important was the degree of international focus on the issues. there were 165 heads of state in rio, and i heard some charming conversations on the part of some of them. what is this biodiversity thing about? what does it mean? some presidents pay more attention to their environment ministers as they're preparing for their press conference than they ever had before. we had on one end of the spectrum president bush representing the united states. we had president castro of cuba. john major had asked president bush to come in early to listen to his presentation. and that meant that president bush was present for president castro's unmitigated attack on

the principles and economy and history of the united states. i was sitting with president bush, and i remember wondering what does one do when the speech is over? applaud? walk out? i thought, well, i'll just watch my boss. well, he applauded. and the first question he was asked after that, how could you have applauded that attack? it was just a blistering attack on you and your country. he said well, i knew we were given six minutes. i didn't think he could do it. how do you take some of those lessons and move it forward? well, there is a history. i guess i should digress. i chair the board of climates works foundation. it is a substantial organization which is deploying about $180 million a year into three regional foundations and six best practice institutes, best practice with respect to energy efficiency. the regional foundations are in china, in europe, in the united states. we expect to have another

presence in brazil at the end of the year, by the end of the year. and we also have best practice institutes which focus upon energy efficiency policies for appliances, for power, for industry, for agriculture, for land use. we -- and for transportation, for urban development and autos and trucks. we promote policies that promote prosperity. we ask no countries, and we're active in about eight, we ask nothing of any country that is not in its economic self-interest. we are efficiency, and we have some of the best people in the world. one of our institutes, the transportation and development worked with a city in southern china copying cortiba in brazil to promote the conversion of a

ten-lane traffic road serving nine million people in that community to bus rapid transit, which now carries 800,000 people a day, with drastic reductions in pollution and greenhouse gas emissions and more congenial way of life. that is but one of the interventions that we have, and we work very closely with the chinese government and with others to promote efficiency in appliances, in india for example, where we have a foundation, a shakti, a new regional climate foundation. and i want to suggest that you reflect on the history of something that was done for food and agriculture research, seed research primarily some years ago. in 1960, norman borlag was an instrumental scientist in the green research funded ten years by the rockefeller foundation, for ten years by the way without any obvious progress being

noted. a great philanthropic commitment. the international institute for rice was created in the philippines. some six years later the institutes for maize and wheat was created in mexico. in 1972 a suggestion was made, i think by morris strong, who had been the secretary general of the stockholm conference and canadian that the united nations, the world bank actually take over the secretariat and the funding for what then became a series of these institutes designed to promote seed development, food productivity in all parts of the world. secretary general of the -- of the world bank then was robert mcnamara. he embraced this program. and there emerged something called the consult tative group on international agricultural research. my expectation, climates works expectation for the conference in rio is to create a

consultative group on low emissions development. if that is done, climate works will commit to substantial matching funding of the initial outlays made by the world bank and international aid and development organizations. that is a very specific commitment, sense of expectation, and i think a very practical and necessary one that could be of enormous assistance in meeting the secretary general's important goals of energy access to all, significantly more efficiency, and significantly more renewables. i close with a remark that i think i remember more or less accurately from senator moynihan when he said "if i have learned one thing in my career, it is that success of a culture, of a society is about culture, not

policy. ." but but policy can transform culture, can change it for the better. and the two together have worked historically to improve life very considerably for all of us. thank you. [ applause ] >> thank you very much, bill and carlos for those great remark. we now have about 15, 20 minutes to hear from the audience there is a microphone in the back. i'd like to ask that you raise a hand and then when the mic comes to you, you identify yourself for the benefit of our audience. so we have a first question over here. >> thank you. i'm from the turkish industry and business association. we've been talking a lot about what governments can do for policy. and i'm just wondering what the business community can do better to promote these goals better.

>> great. it's a good question. we're going to do just as we did from our first session, which is to collect three or four questions. right here in the aisle. >> hi. no, ma'am nation federal world resource institute in washington, d.c. my question, some of the comments mr. pascual made earlier on the role of small projects in providing energy access in particular. it seems that the sefa initiative has really focused on mobilizing the private sector, which i think is important. but i also see a mismatch perhaps with the size and scale of those projects and players. you give some comments about how derisking smaller projects could be done. but i'd also like to hear about the thoughts on the particular role of small and medium enterprises in providing energy access, particularly in rural communities with decentralized renewable energy technologies. >> thank you. >> thanks. lisa freedman again from climate wire.

it was interesting to hear the specific commitment from climate works. for mr. pascual, what will we see from the u.s.? what specific commitments will the u.s. make in rio? >> thank you. [ laughter ] >> let's take a couple more questions while carlos thinks about that. as he said, in fairness to him, he is leading the energy issue and not coordinating all of the government's work on rio. so we have realistic expectations what he can say. a couple other questions right here. >> sorry to ask another question, but are we going to have a commitment on actually phasing out subsidies to fossil fuels? i mean enough already. i think this is one of the things that is really stopping a level playing field. >> great. michelle? last question. >> okay. i didn't want to do this. but since two of my predecessors have also asked a second question, i have a question about hydro. the international hydro

association says the hydro potential in africa is twice the energy needs of africa. and it's not a new -- a known risky unscaled technology like renewables. why don't we hear more about hydro? >> great. >> carlos? >> great questions. and i'll try to go through them quickly, because in fact on just about each individual one of those, we can have a little seminar to talk about them. and in fact that's part of what we need to do to continue to develop these. in terms of the kinds of commitments that are helpful-you not hear me? how about now. better? okay. in terms of the kinds of things that the business community can do, one of the things that's been absolutely critical is getting insights from the business community on standards and performance that you had been putting forward that are absolutely key to then integrating into a global dialogue, and then for countries to be able to pick up on these and integrate them into their discussion. i mentioned sort of in running the issue of building codes.

we obviously have lead standards that start in the united states, have gone global. johnson controls have been working on this extensively. i need to learn more about the best practices groups that you're developing under climate works. but here is an area that is absolutely fundamental. and if you think about india and china and the extent to which their energy use is building-based, residential based. and then if you put it in the perspective that most of the buildings they're going to have in 2030, 2050 haven't been built, and if you can get an adoption of codes that are developed in conjunction with the private sector, and if it's done in a way that can be financeable, you can change the whole equation, whole equation, can change that infrastructure equation we will be facing, 20, 30 years down the road. i think if you take similar

approaches and look at the steel industry if the steel industry can come to an understanding what kind of measures they can propo propose, i imagine these are many of the kind of things you are working on in climate works. it's related as well to the question of financing. let me jump over to that question for a second. one of the big challenges that we have in finances it is a lot easier to get money into large scale projects. it's a lot easier to manage the, the political risk insurance, it is a lot easier to be able to work directly on the project to, to be -- able to -- to give people a sense or investors a sense of the financial or technical viability of the projects, it is a lot easier to deal with specific interests like gar uaranteeing the power purchase agreements. when you are dealing with small scale projects the challenge becomes multiplied.

many different groups in the room, i know the world bank can talk about specific projects, let's say, small scale, solar projects that have been integrated with cell phone systems that allow prepurchase mechanisms where you can then on the basis of that have power which is actually sent to your small little hut or, in a village, and you have the ability to actually use wireless technology to read the meters. really interesting projects that are developing along those scales. the question is how do you -- how do you create that into a viable business model. in the end you are going to have to figure out, international providers of that technology are not going to come into that level of the market. you are going to have to figure out how how do you create partnerships, and build up ska pa -- capacity and maintain them technically sound over time.

and then when you start bundling the projects together you come back to the question i mentioned before how do you ensure that the bundles of projects are absolutely sound so that if you then bring them back into an, a financial intermediary you are not selling a product which is filled with junk or half filled with junk that could create a financial crisis for you later on. so, one of the challenges that we are trying how to work through is -- how, how do you work back through the system and take the kinds of financial instruments that may exist. in technical assistance on the projects to ensure, technical feasibility, aid for example has a development credit authority that can provide partial guarantees between small scale projects and, intermediary in country investors how can that be combined as part of the package and then extending that back into the broader financial community where opec can play a

very important role for example in the past year they provided $1 billion of renewable energy finance. so, that might get you renewable energy finance, large scale projects. we need to get more renewable finance to intermediaries that can push it down. the challenge we are working through. an ongoing challenge. one thing the u.n. foundation will be doing is funding a number of side sessions that we will have with a range of different potential financial part ner partners. where do we need the intervention and how do we put the interventions in place. in terms of the u.s. commitment, what you will see out of u.s. commitment particularly in energy in rio concerns lines i am talking about right now, i am not going to say what the u.s. commitn't is, wment its, why el you go to rio, right?

think from this perspective how can we mobilize technical assistance available at critical points of intervention. whether in the small scale projects. whets whether in some forms of guarantees in the financing system, assurance on-grid power that you have utilities that are viable and able to function, that you have, that have tariff rates that can compensate the technology. all those kinds of things in which we can work with countries together. whether provide sag part to ngos on the ground that can play an important role in creating marketing networks, and another important type of contribution we can make and all those kinds of things will be packaged together. but here's the, note that i would close on. i think that to be effective, one of the things that we have to do is to put them together in packages that actually work. rather than just simply having statements of commitments that

say, we are going to do some things here. and not understanding how the pieces come together. i haven't answered your question on hydro. a huge hydro potential in africa, southern africa. some people have a glint in the eye about the drc, potentially, powering all of africa. this guy, vijay ira used to run the, the power, was it power sector, all energy sector for africa at world bank. it is a topic maybe we can come back to. i think there is a huge amount of phone shall there, especially with some change happening in south africa now and being a bigger market that could essentially be the demand focus that helps provide financial security necessary for financing in the hydro sector. >> i would like you to answer the questions that you thought most relevant to you. if you could add to your remarks something about how you having

lived through the original rio would advise this president if you were serving in the was to think about the question about whether he should go and to think about how to define u.s. contribution at rio. you have a special window into that decision making process. i think the audience would benefit from your analysis of how that decision would be, viewed by the white house. >> well, there is no question that if the president decides to go to rio he will be attacked for ignoring the problem of jobs at home in order to engage in an international talkfest which is not likely to produce concrete achievement he's can campaign on in the near term. that's the way it was phrased, to first president bush, and indeed posed to president obama. and there is a lot of truth unthau in that. it will become an issue in the campaign, i am quite sure if he goes. a lot of people will be disappointed if he doesn't go. i remember another president said to me it is vital to the success of the conference and

brazilian/united states relations that president bush come. and he said i prop is we will do everything not to embarrassing the president, make this work recognizing he is in the middle of a campaign. he is going to have to sort those things out. he has a constituency that will want him to go to rio and want him to continue to play a role, significant role as he did at copenhagen on the world stage where environmental policies and priorities are discussed and furthered. on the question coming back to the bitzness question, what can businesses do? i am reminded of a conversation i once had with the president of mexico about their intervention in the then g.a.p., now world trade organization to try to prohibit the u.s. which was trying to -- basically ban tuna for sale in the united states. if it was not dolphin safe. because of the way in which it was, the tuna were set upon, following dolphin. and he immediately got the point and he said -- i will fix that.

and he withdrew the application. he said under no circumstances do i want to gin win in the gatd see mexican tuna unable to carry the label in american supermarkets dolphin safe. that really was the genius of the four stewardship council, created some years ago and marine stewardship council both of which labelling, nongulf mental organizations in fact one of the most successful regulations in the united states is lead building certification, not regulation, major developer in california, built the stadium in l.a., told me, you cannot get lending for significant building from a bank in california if it is not lead certified. well that tells you something. and my own hiss stotory of crea energy star computer and energy star program growing. in the beginning advisory, informational. they had significant impact.

if you look at unilever today or wal-mart have made notable commitments to sustainable fisheries and exclusively and throughout their supply chain. the president of wal-mart, ceo of wal-mart, said clearly we took stock of world fisheries and concluded if something is not done there are important species that we will not be selling in five years that we now sell profitably because there just won't be enough. well that, i think, that perception and the degree to which it has permeated the culture has significantly affected particularly consumer facing companies. in the united states, much dichlidichl i -- much of the developing world and elsewhere that is beginning to transform business culture and having an appreciable effect on sustainable purchase, purchases of sustainable products on organic -- harvesting, techniques. nonchemical techniques and the