lack of access to energy isn't the cause of poverty, but gaining energy access is vital to most solutions. securing progress on sustainable energy for all this year presents both opportunities and challenges. once a decade, as they will this year, world leaders assemble at a global summit to promoted elusive goal of sustainable development. and based on the idea that economic growth, environmental protection and social justice must proceed simultaneously. these events, as the event this year does, creates an opportunity for imagining, envisioning a set of solutions, for developing a new political narrative and a new set of expectations about what we the world, both governments and the private sector, need to do to promote this agenda. and perhaps rio this year can refresh interest in sustainable development and reimagine solutions that catalyze new partnerships and progress. that is our hope.

but let's be honest. these are challenging times. the lingering effects of the weak economy, the financial instability, the euro crisis, high unemployment, slow economic growth, plus a highly partisan political environment in some countries and elections, including in this country, make this year a particularly challenging time to achieve major breakthroughs on just about any international development issue. little appetite exists in some donor nations, perhaps many donor nations, to ask taxpayers to fund a large-scale global effort, and at the same time nations are struggling to make clima progress on climate change with a new global agreement still years away and likely to be imperfect, even when it is done. despite these challenges, the idea of achieving sustainable energy for all is managing to inspire people in both developed and developing countries, bringing them together. developing nations are gaining interest in renewable energy and energy efficiency as strategies for development, not just as climate solutions. and in the developed world, the success of merging the climate and the development goals

together through this concept is generating new interest and new political running room for action. in short, the political narrative on sustainable energy for all has the potential to research the international development and climate and energy debates in exciting new ways. and even though rio itself may not be this year what rio was 20 years ago, this issue at this moment offers a tremendous opportunity for progress. while the possibility created by this new framing and by the rio summit itself are exciting, the incremental costs of delivering sustainable energy for all is not small. the international energy agency estimates that it could be around $48 billion a year when compared to today's efforts of about $9 billion a year. while many new technologies now exist and good work is under way, including at the world bank, as we just heard, many barriers and financial obstacles exist to getting to this scale. in this age of financial turmoil and austerity, and in this partisan election season, what can be done and what can the

united states specifically offer? the goal of our second session today is to stimulate discussion on this issue. the cdg report available outside provides some policy recommendations in this regard to frame our discussion before i introduce our speakers and discussions for this topic. let me just briefly run through our four principle recommendations. the thesis of the report is that the key contribution the united states can make to help close the -- by helping to close the financing gap, but not primarily through new foreign aid, for which there would be little political appetite, but rather by demonstrating ways to marshall private capital. american policymakers need to see the 2.7 billion people without access to modern energy as potential customers for u.s. companies. we need to replicate the success of mobile phones. between 2000 and 2010, the number of mobile phones in developing countries increased from 215 million to 4.1 billion in ten years. even war-torn afghanistan has

more than one mobile phone per household. and by and large, governments are not subsidizing this technology. rather, private companies and the poor have found ways to work together that are profitable for both. as we heard earlier today, the role of government is to create the investment climate that allows private capital to service this latent consumer demand. ample evidence suggests that this approach, which worked for mobile phones, could be made to work for ending energy poverty rapidly and affordably over the next two decades. consider this. in subsaharan africa and india, mobile phone towers in rural areas are being used to generate solar electricity that can help charge the cell phones that are being serviced by the mobile phone tower. they also charge l.e.d. lights which are becoming increasingly affordable for the poor, as well as rechargeable batteries that can run radios and refrigeration units and other sorts of generators which are vital toes

kapg poverty. the united states has much to offer the globe in terms of creating the conditions that allow for this type of dramatic transformation, given the size of america's venture capital and investment community, the prominence of our financial markets and our exchanges, america's tradition of support for free market and free trade and business-friendly international economic policy. so here are four recommendations that are in our report that are designed not only to meet this need of transforming issues by creating markets and empowering our companies to be part of the solution, but also are trying to thread the needle between the right and the left in this capital about what is possible in the area of international policy. first, the united states should support global adoption of the concrete goals and norms that tim wirth so eloquently spoke about. that are part of the secretary general's energy initiative. these goals themselves are not the solution, but targets against which to measure progress can help catalyze action and help focus attention. second, the united states should join other countries in pledging

that the international community will support nations with the political will to achieve these goals by ensuring that these nations have the ability to implement the policies and programs needed for success. private companies will invest approximately $5 trillion annually in energy infrastructure each year by 2020. compare to that the amount funds needed to ensure that energy decisions work for the poor and climate are modest, only about 1% of that total amount. expanding sustainable energy access is within reach if nations use public policies to create the right investment environment that changes the incentives and the decisions of private investors. the united states must help ensure that nations that are willing to take these steps to put the right policies in place, many of which have political challenges because they involve things like energy pricing, have the support of the international community and technical assistance to identify, adapt, and implement proven best practice global energy policies.

third, the united states should announce at rio plus 20 its commitment to work with other nations a new -- to develop a new deal flow generator. this is a phrase we came up which is meant to reflect a mechanism that is within an dea. this is a phrase we came up which is meant to reflect a mechanism that is within an existing international institution probably, but would inflect for all investment opportunities a portfolio of projects in key countries. according to the imf long-term investors in the private investigator hold 6 trillion in assets, and commercial banks hold another $72 trillion in assets. many of these private investors, including pension and sovereign wealth funds are eager to invest in sustainable energy solutions. what is missing is not money or funds, but rather an abundance of investment-grade opportunities, a new deal-flow mechanism that is designed to pool together smaller projects, to make them larger scale, more liquid, to manage risks, would do a lot to marry the capital

that is available in the world that is looking for a home on the issue of sustainable energy with projects and people in the developing world. finally, the u.s. government should act swiftly to ensure that u.s. companies have every opportunity to compete to access and profit from these untapped energy markets in developing countries. the business-oriented foreign investment agencies of the united states, including the overseas investment corporation and the export/import bank should be given a new set of tools for the 21st century on energy, including the ability to take equity stakes and profitable projects, the capacity to take on, work more closely with their counterparts on other donor countries and the ability to incubate new business ideas to get them to market. like other opec and services, these costs of these actions could be supported by fees in a way that actually make up making money for u.s. taxpayers. while low cost and some cases revenue-generating, these self-interested growth-oriented

ideas taken together would require significant but a manageable increase in u.s. foreign assistance. today such assistance represents about 2% of foreign aid, which, of course, is less than 1% of the federal budget. doubling these programs in the next couple years to implement the strategies that i have just mentioned would represent an affordable and yet politically realistic contribution by the united states in this area. and we urge the u.s. government to do that in the context of rio. so we are incredibly fortunate to have with us here two incredibly distinguished individuals to reflect on and provide their own perspective on opportunities for u.s. leadership on sustainable energy for all and in specifically with respect to rio. carlos pascual is the u.s. special envoy and coordinator for international energy affairs and the president's nominee to be the first assistant secretary of state for energy resources. previously he served as u.s. ambassador to mexico and

ucrane and as vice president of the foreign policy program at the brookings institution. i have had the pleasure of working with carlos in several of those roles and know him to be the epitome of a diplomat scholar. and i'm excited to hear his new thinking in the role that he is crafting at the state department for secretary clinton. william reilly serves as the chairman of the climate works foundation, the world's largest energy-related philanthropy. he is the partner in ventures specializing in sustainable solutions around the world. previously he served as the administrator of the environmental protection agency under george h.w. bush and in that capacity led the original u.s. delegation to the 1992 earth summit. as his record in distinguished public service demonstrates, bill reilly is among the most respected leaders in the environmental and energy space. so carlos and bill, please join me on the stage. [ applause ]

>> welcome. thank you. >> do you want me to go first? okay. nice to see you again. >> likewise. >> it's a real pleasure to join you, nigel. thank you very much. an honor to be here. bill, thank you. thank you to center for global development. nancy, it's a pleasure to be a part of this session. and thank you to the danish embassy and the danish government for the long active involvement that you've had on these sets of issues. when nigel and i spoke a few weeks ago about participating in the session, one of the things that i said was that i could talk quite a bit about sustainable energy for all if nothing else because i've been latched at the hip with this guy, vijay iyer, down here. and we've been spending a lot of time together. and if nothing else, if you want to take that as a statement from the u.s. government of the importance that we see of international cooperation with the united nations and the world bank on these issues, you're free to do so.

i'm not the person who has been leading the efforts on rio plus 20, because that falls under kerri-ann jones, although obviously we've been working very closely together. and obviously sustainable energy for all has a big, big role to play in the rio plus 20 summit. so i just want to make clear those parameters. i would like to add a few things to the discussion that you've had with vijay iyer on sustainable energy for all and give a little context from the united states' perspective. i think the first thing that is absolutely critical that happened here in secretary general's effort is that this was defined as an effort to leverage private capital and investment to stimulate action and change. it was not defined as a development assistance problem. and the reason that's absolutely critical, as you go back to the figures that nigel was just using, $48 billion a year in investment every year through 2030 in order to be able to

achieve universal energy access. if you define that as a development aid problem from the outset, you have failed. if you define it as a strategy to be able to leverage and create the conditions for private investment to make it possible to extend energy access to markets where it has not gone in the past, then you can succeed. whether the figure is 1% or 3%, we can debate that. but that $48 billion represents somewhere around i would say 3% of the total private investment that goes into energy infrastructure on an annualized basis. so the challenge that we have here is not to say wow, we need $48 billion a year and that's an absolutely insurmountable sum. the challenge is how do you create and change the incentive structures so that you get more of that capital that would have been otherwise going to different types of projects, being able to make the decision

that the risk and the returns are sufficiently good and sufficiently dependable that you're willing to make the investments in these kinds of sectors. and that in my mind is what sustainable energy for all is about. how do you bring together governments, donors, the international community, the host governments that are involved, the private sector, banks, pension funds, hedge funds, civil society, the kinds of organizations that can continue to be the monitoring groups behind this? how do we bring them together in order to create this value proposition? in the past there have been efforts at coordination to try to achieve greater investment in energy access. but the issue that we have often found, and this was fascinating in some of the discussions that we had in the context of the u.n., and i should -- seeing tim wirth here in front, tim, the u.n. foundation, reed, you guys have been absolutely fantastic in providing substantive -- not just financial support, but the substantive support that has been so necessary on this

effort. one of the things that came out of this discussion is when we had a dialogue with the private sector and we started talking about issues like commitments, the private sector turned off because from their perspective was you guys are talking about charity, and you're talking about the corporate social responsibility account. and what we said is no. we don't want to go to the corporate social responsibility people. what we want to talk to are the people who are responsible for making the serious investments that are going to be in the billions of dollars, the hundreds of millions of dollars, the billions of dollars and how do we trigger the investments that you would be willing to make. so where we came back to in this discussion on sustainable energy for all, and this is what is so valuable about this initiative, is it starts to bring together groups of actors that can put on the table the kinds of actions that they can take on policies that might be advanced by

individual governments, on investments that can be made, on financing possibilities on the role that civil society can play. and you then start putting them together and understanding where are the gaps, how do we fill the gaps, and as a result of that, how do we get better performance? and that's the challenge that we have to face is how to live up to that value proposition. the way that we've tried to approach this in sustainable energy for all, the way that we're thinking about it out of the u.s. government, is that we have to look at it on two tracks. one track, if you're serious about energy access, one track has to be on a country basis. because in the end, it's countries that are going to set the policies, and we got to think about it here at least in two different ways, because they're going to be on-grid investments that are going to be critical. you can't ignore the on-grid investments. and there are going to be off-grid investments that are going to be critical. and what is the policy environment around those? what are the possibilities to invest? what kind of financial instruments do you need?

what kind of financial institutions, what kinds of businesses and what kind of civic groups can support that, and how do we build that around individual countries? so what we're trying to work toward at rio is a situation where it's not the u.n. or any other organization coming out and saying this is what is sustainable energy is about, but some of the countries that want to be the leaders in this initiative are coming out and saying hey, i'm going say this country, because i'm pretty sure they're going to be out there in front -- we, ghana, these are the actions that we're going to be taking in ghana. this is how we're bringing together private sector, civil policy, and how do we join it more effectively, and will you come in and be a partner with us as we take this on further? and the other side of this is what we do on a sectoral basis. and here i would just -- did you talk about the global gas flaring reduction initiative? great. 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.coc 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 to look at how did they set standards on 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 exist 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 assurance that they're going to be technically viable? how do you assure there is consistency? how do you assure that they 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 actually give them loans have capability and add cut capitalization? how do you assure against the currency risk against the intermediary organizations to some form of lend er that they

are 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 billion, $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 sectors, 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 momentum, not as an end point but 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, i must say, 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 evening 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 plus 20. one cannot but feel the sense of meeting fatigue, of resignation, of lowered expectations going into rio plus 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 collor and three of his ministers where i laid out the terms under which i would support president bush attending the conference. president collor made clear that 65 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 koh, 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 collor on "the brittan brittania" where i met prince charles 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 salient, some prominence because the tea party has noticed it. they don't like it. they think it involves a secession 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 make sense. they're a platform. i have to say i'm disappointed that rio plus 20 will not address the forest issue or the oceans issue or the fresh water issue in ways that i think makes sense, and that will leave 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 one 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, of course, 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 them forward? well, there is a history. i guess i should digress. i chair the board of climate 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 talking about energy efficiency, and we have some of the best people in the world in those institute. one of our institutes, the transportation and development worked with a city in southern china copying curitiba in brazil to promote the conversion of a ten-lane traffic road serving 9 million people in that community to bus