 Welcome to the Davos agenda impact session on accelerating clean energy transitions. My name is David Victor and I have the pleasure of moderating this session. Thank you everyone for your flexibility as the schedule has been adjusted due to other changes in the Davos agenda today. I think everybody knows that we face an enormous set of challenges around transition of the energy system to make it much more sustainable. Those challenges hinge on redirecting investment. This is not cheap. It's going to involve trillions of dollars and a lot of success is going to hinge on the emerging markets and developing countries which are really the focus of our discussion today. Depending on how you measure it, they're going to be central to half or more of the total expected global effort for cleaning and accelerating the energy transition. We have a terrific panel for the first half hour. We're going to have a discussion with our panel and then after that we'll break into another half hour for forum members. We have a terrific panel to begin the discussion today. We have Diego Mesa who is Minister of Mines and Energy from Columbia. We have Abby Simpson who is the EU Commissioner for Energy. We have Fatih Barol who is the Executive Director of the International Energy Agency in Paris. And we have Joe Taylor who is President and CEO of the Ontario Teachers Pension Plan in Canada. And so we're going to begin with a few minutes' response to some initial questions and then widen the discussion out from there. And I want to begin with you, Diego Mesa. Your country has enormously aggressive renewable energy, clean energy goals. You've also been enormously successful in meeting those goals. And I'm curious as to what your experience has been around which policy frameworks really matter the most and how have you been successful in attracting private capital to that mission? Good morning, David. Thank you for the introduction. It's a pleasure to be here again with you. And I thank Davos and the World Economic Forum for this invitation. To go right into the question, David, in the case of Colombia, I think when I think about what investors are looking for, first, obviously, we need the natural potential. And Colombia has that. Solar radiation in Colombia is about 60% higher than in the rest of the world. Wind blows in some parts of Colombia twice the speed of the world average. And we also have stable legal systems, stable democracies, stable economy. So a lot of the ingredients were there. When we came into this administration in 2018, what we were lacking was a framework for variable renewables for energy efficiency. And we work exactly on those policies. I think I said this in other forums. But we do believe that we need to have fiscal incentives that are tied to investment. So rather than having, for example, tax holidays, what we did in 2018 was to build a framework that we had, for example, 50% uplift on investment on variable renewable energy efficiency. So if you were to invest $100 on either those technologies, you could deduct from your corporate income tax $150. We've also focused on eliminating red tape, making environmental licensing process much more expedited. And we complemented this with other measures that we were thinking to abstract investment into capital-intensive industries. So for example, we reduced the corporate income tax rate from 33% to 30%. We also made VAT paid on capital goods creditable towards corporate income tax. So it became an advanced payment. So and that was complemented with other two policy bold moves that I think are worth mentioning for a country like Colombia that didn't have a significant portion of its power matrix made up of renewables. The first one, options. So we were very clever in our option design to make sure that we created a platform that was competitive, both for power generation, but also for the buyers of power, the distributed companies. That worked quite well in 2019. I must say after a first fail experiment that shed some light in how the product and the option mechanism had to be built. And the second one that was inevitable and we were criticized internally that turned out to work quite well was the renewable purchase obligation. So we did introduce that and part of the reason for that is Colombia is rich in water and hydra resources. So the main criticism at the time was that with mostly wind and solar, we're going to increase the price of electricity, the price of energy. And exactly opposite happened. And the reason was because we are endowed with both solar and wind power. So I think the combination of three policies having fiscal incentives that are tied to investment, having sophisticated option design that is competitive for the two sides of the market and having their renewable purchase obligation actually paved the way for being successful. And obviously we're thinking about the future. So we'll continue with auctions this year. We have a new option for renewables. We just launched the first auction in Latin America for storage of electricity at large scale using large scale batteries. That's going to be a compliment. We'll close the auction mid-April. But the idea is to continue to have periodic auctions like that. And we also launched an auction to bring energy to off-grade areas in Colombia, so the most remote rural areas. So I think that's how we've seen and how we've been able to attract investment into this sector. Excellent. Well, thank you very much. That's enormously helpful. So I want to go next to Katharine Simpson. Diego Mesa has just outlined all the things that are going on in Colombia to accelerate the clean energy transition. The European Union has been in the lead reliably on this. You're now in the lead with the European Green Deal. And so I'm just curious from your experience, which regulatory and policy frameworks do you see as now most important for really driving the clean energy transition? Thank you, David. Good afternoon from Brussels. Well, indeed, we do understand that the scale of the change needed to achieve climate neutrality by 2050 is massive. And even in short term, in the next decade, to achieve the reduction of greenhouse gases at least by 55% needs a lot from our side. And we do believe that there are three necessary things. At first, political willingness, ambition that we do have. We have also political support by our voters. Then we need technological solutions and we are investing heavily into research and innovation. And of course, we need additional financing. And in this regard, we do know also that it means massively improving our energy efficiency and it means phasing out coal and other fossil fuels. And last year, even because of the COVID crisis, we didn't change our priorities and despite the challenges, it is a matter of fact that we quickly realized that COVID is presenting us with the once in a lifetime challenge. And we put the clean transition at the heart of our lands for recovery. Last July, European leaders agreed on an unprecedented financial package. So we will have our long-term budget, but on top of that, there is a recovery program, 750 billion euros. And we have agreed that each national recovery plan has to include at least 37% of our expenditure dedicated to climate-related expenditure. At the same time, this is not enough. Public financing is not enough. We have to convince also our banks and the insurers and pension funds and investment funds that they need to invest to. And that's why we decided that we will make it easier for them to do sustainable investments and the European Union taxonomy creates the world's first ever classification system for environmentally sustainable economic activities. And this will give a re-boost to sustainable investments and it will actually provide a basis for your green parts and eco-eco labels. And of course, we need also regulatory framework that supports our climate ambition. And this year, this June, the commission will adopt a comprehensive feature that includes emissions trading and effort sharing and energy taxation and also the carbon border mechanism so that we can convince our trading partners to follow our lead. And in my area of responsibility, we will revise the renewable energy and energy efficiency directives, including their targets so that all our member states will invest into efficiency. Chiefest energy is the one that we don't use and into renewables. We do expect that after 10 years, after one decade, the share of the renewables in our energy mix must be at least 40%. So these are the steps that we are taking and then of course, we will not make a change only alone. So the role of the energy dialogues and international cooperation is extremely important for us. Thank you. Terrific, thank you very much for that. So I want to go next to Fatih Barol. Fatih, we've just heard about a lot of things going on in Colombia, in the EU. You sit at the International Energy Agency, you have a view of what's happening globally. I'm just curious from your vantage point, what do you see in the emerging and developing economies as the biggest opportunities and the biggest risks? David, we had a small technical issue with Fatih's line, so he's reconnecting and he can move on and come back to him. Well, let's go next to Joe Taylor. So Joe Taylor, your organization moves capital around and deploys capital. And you've just heard about massive policy changes that are underway and you're a massive policy changes that have been underway in Colombia, enormously successful. And so I'm curious, you're a pension fund based in Canada, but you deploy capital globally and what kinds of financial solutions do you see as most important for improving cross-border capital flows in the direction of the energy transition? Well, good morning, David. And good afternoon and evening to other people joining this panel. Maybe I should just introduce who we are. We basically look after about 330,000 teachers and educators in the province of Ontario. We have assets of around 200 billion Canadian, about 160 billion US. So we're a largest institution. We're certainly not the largest, but we're very active globally, as you said, David. And we do invest in Europe. We do invest in Colombia and other sort of some of the features that you've heard. So I guess if I take a slant of, as is in the sort of doing section of trying to influence change in and around clean energy and climate improvement, we sort of look at it through two lenses, I think it's probably easiest to say. So the first one is, we have a large portfolio as it is and therefore as active investors and owners, we do push every company to transition in the longer term to clean energy. And why is this important? Because actually through that engagement, rather than divestment, I think we can particularly push these companies to do a better job and actually provide some additional help and services in and around the world where they may not be immediately available. You know, I think one of the challenging questions we face is particularly around fossil fuel companies. You know, we see that as a transition in terms of being able to have adequate fuel available to the present to where we want to go in the future for some of these cleaner energy sustainable fuel sources. And I think we are committed to being engaged, but what does that mean? Let me give you a first example. So, you know, we made a commitment recently to having a zero carbon footprint across all of our activities by 2050. So what does that involve? Well, you know, we actually got to talk to every company we invest in and say, how are you measuring your carbon footprint and what are you actually doing in terms of concrete steps to actually improving what you do to put you in a better position? So a good example of this would be, you know, we're investors in five airports around Europe. You know, we work very hard with those airports to actually move them very much towards a carbon neutral footprint, moving to carbon zero. Obviously, there's been a bit of hiatus in their activities through the COVID-19 pandemic, which has seen a big change in traffic going through them. The other challenge we have is, you know, we don't often invest on our own. So what we need to do is also persuade other investors to come to a like-minded position to ourselves. And where that gets interesting actually is, you know, some of the investors we work with have a much more short-term view of what they're trying to achieve and probably are less thoughtful or less sort of able to sort of influence those businesses to make a transition. I guess the other thing I would say is, you know, we're a very long-term investor, I would say by most standards, you know, we often hold assets for 10 to 20 years. And one of the issues we face there is actually, in most of the areas we'll talk about today, there's a very strong government regulatory angle that we have to understand. And that makes it really important for us to be able to have a dialogue with governments and regulatory bodies to really understand what are their needs and what are companies that we're investing in provide as innovative solutions. And we're very lucky actually because of our scale, we can actually engage with governments to try and have that interactive dialogue. And we can also build platform companies which are really quite material to be able to do something similar. So again, I think examples always help. If I gave you one, we do have a energy platform that develops wind and solar electricity generation. It's called Cubico. It's active in Columbia, but it's also active in many parts of Latin America and Europe. It's got about 80 assets broadly in different stage development worldwide. And to me, that's a great example of a company that's really engaged in trying to talk to governments, understand what the needs are and actually adapt what they provide to provide solutions. So an illustration recently is they were working with the Ministry of Energy in Vietnam to sort of try and understand what situations that country needs to meet its growing electricity demands. So for us, we work very hard with our companies. We work with the co-investors that work with those companies and then we work with governments to actually try and provide innovative solutions to help them with developing their needs to cleaner energy. Well, thank you very much for that. I want to bring in Fatih Barol now. Fatih, you're at the International Energy Agency with a view of the whole planet, not yet other planets, but I'm curious in the focus of today's session, which is really about the emerging and developing economies and the clean energy transition there, what do you see as the biggest opportunities and the biggest risks as these different economies grapple with the enormous investment implications of the clean energy transition? Thank you very much and greetings to all the colleagues from the International Energy Agency. David, if I may, I want to start with a bold, maybe a bit provoking statement. If our aim is to reach net zero emissions, if our aims to address the climate change globally, which I believe is our aim, there is no way. Without hugely accelerating the clean energy investment in emerging countries, we can reach this goal. No way whatsoever. Numbers are there. Whatever we do in Europe is very important. We heard from Madam Commissioner, excellent steps. Japan or soon, the United States and elsewhere, very simple, very simple. Numbers speak for themselves. We speak with numbers. Today, more than two-thirds of the emissions, global emissions, come from the emerging countries. Moreover, more important, in the next 30 years, almost all the growth in global emissions come from these countries, okay? And we all know, many scientists here, they know much better than me, one ton of emissions coming from Jakarta or from California or from Paris or from Delhi, it has the same effect on everybody. Emissions don't have a passport. So if we want to be successful altogether, if we want to be successful in California, if we want to avoid the impact of climate change in California, it is extremely important what happens in Delhi, whatever is in Jakarta, which decisions are being made. Very simple. And not only future emissions, but in many countries, especially Asian emerging countries, there is already emissions locked in an energy infrastructure which is run by coal and other fossil fuels, which are very young in nature, still the investments not paid back. So therefore, I would very much like to all of us to understand that it is important to move in United States, of course in Europe, in Japan and elsewhere, but in the absence of hugely accelerating the clean energy transitions. And therefore investments, clean investments in those countries, we have no chance whatsoever to reach any of the targets, global targets, we are all talking about on a daily basis. This is number one. Number two, investments. We are seeing, we heard from Minister Mesa, the Columbia example, one of the Brad Sposter. In India, we have solar, very good. In Brazil, we have wind, very good. But when you look at the clean energy investments in emerging countries, we need to multiply it almost by a factor of three. And when I look at the numbers, I don't see currently a big increase or big jump in the appetite of the investors who talk about the ESG and so on to invest in those countries. This is the second point. Third point, when we look at globally, capital is available. There is no lack of capital. And therefore, how and there are huge opportunities and the clean energy, not only power generation only, but in the clean energy area in emerging countries opportunities and maybe some of them look at opportunities for investments, but they are not going there. So therefore, David, what we thought, and for me it is the all nerve center of the climate debate today if I have to summarize and make it sharper. So what we have thought, how can we deblock the flow of clean investments in the emerging world? For power sector, but also for industry sector, for transportation sector and others for the new investments, first of all, and also what do we do with the existing junk, but fossil fuel driven investment, iron steel, cement, aluminum, power plants. The 10 gigaton of emissions come from the power plants in Asia today, one third alone. So what we have decided together with our colleagues from the World Economic Forum, Roberto is here, Roberto Boca is here at the World Bank. We are for the annual meeting of World Economic Forum in the end of May. We are coming with a report with concrete policy recommendations. How we can deblock this for a flowing investments in emerging countries. We have three areas that we are going to focus. First, those countries, domestic frameworks, how they should revise, change and how they can gain investor confidence and how that they are not going to do it only to save the planet, but for their own economic interests of today and economic interests of tomorrow. This is the one. Second, here, international cooperation, the role of international community. Whether or not we need new financial mechanisms, including the donors around the world, we need to create new international mechanisms in order to facilitate or accelerate the flow of clean energy investments in the emerging countries. And third, we are going to discuss and make some concrete policy recommendations to investors around the world, including institutional investors. Many of them are very loud. In the tweets, statements, press releases, what role for them in order to accelerate the clean energy investment in those countries? We are fortunate that I see at least two of our, we are working with, of course, many bright brains around the world. I see Ken Rogoff here, who is going to be part of our advisory board as well as Hume's chairman, David Victor. And we are not only going to make these recommendations, but we are, each year, we are going to monitor, track the developments of the clean energy investors who says what, vis-a-vis what they are doing and announce the tracking efforts around the world. So I would like to thank, once again, the World Economic Forum, as well as our colleagues from the World Bank, joining us, putting the force together, to address this in my view, the burning issue of the entire global climate debate. Thank you. Thank you very much for that, Fatih, and very much look forward to this report. I want to ask, I know we're going to lose you in a moment, Fatih, and before we lose Diego Mesa, because of all the changes in the schedule, I want to put the question to you. Fatih's laid out a vision for global investment. We have to think about this as a global problem, massive capital needs, massive potential. Joe's talked about where the capital is. Katharine Simpsons talked about this enormous European framework. And yet we have to think about this as a global problem. And so I'm curious from your perspective, what do you need to see from the international institutions with regard to trade and investment policies and so on? Because there's also going to be a lot of tensions here. We're in a new world politically. I was in the U.S. removing support, maybe coming back. Katharine Simpsons talked about border measures as they're going to be very, very controversial with many countries. And so are you worried about whether the international institutions are fit for purpose here? I do think, David, that we need to see a change that we're seeing. I mean, a plot, for example, the recent focus that the IMF has been putting on climate issues and building a greener economy, if you wish. And I think COVID-19 has helped accelerate this. Obviously the International Energy Agency has been leading the pack and has been being able to join forces with the World Bank and the IMF in different reports. But I think that's critical. And the reason is, for example, taking the example of Colombia. Colombia is a country that only produces about 0.4% total global emissions. So we're not a big contributor. However, we're one of the countries that is most affected by climate change. We're exposed to a linear phenomenon. So we do see that obviously we have a responsibility to act and that's why we're doing it. But this has to be a collective effort at a global level. And if we don't have all the financial, international institutions and political international institutions driving this force, that would be impossible to achieve as one planet, as one world. So I do think that we need to continue to strengthen the efforts that we've seen from the IEA, from the World Bank, from the European Union, because this has to be at the forefront of the global agenda, not only from a climate change point of view, but also from an economic point of view. Thank you very much for that. So I just have a couple of minutes left. I want to put the same question to you, Kudri Simpson. Big visions in Europe. They hinge on international institutions. The US is back. I'm not quite sure what to believe of what the US is saying. So what do you need to see from international institutions and are you confident they're going to be able to deliver? Well, we see that multilateralism gives us a stage where we can find like-minded governments. And as you know, well, we presented our green deal before the COVID crisis, before the recession. And despite the fact that it happened already a year and two months ago, we presented it as our close strategy because well, changing our energy mix also brings waste opportunities for our businesses, but also our neighborhood, our trading partners. And by doing so, we will hit several goals. So we are doing something good for our environment and for our globe, but we are also helping our businesses and renewable energy transition also creates more jobs than the traditional sector. So I do hope that leading by example helps also other governments to make their mind and to commit to climate neutrality like several governments have done already. Excellent. Well, thank you very much for that. So we've had, we're just approaching the end of the open session. We've had a scribe drawing a picture of everything we've said. So I'm very interested to see what we're going to learn from the scribe as to all the different topics that we engage with. We put that up on the screen. I think it's up on the screen right now. And I guess I just want to emphasize as we close the crucial importance of the policy and regulatory frameworks and institutional arrangements needed to unlock what are vast quantities of capital out there, but capital that's trying to figure out what really to believe and where to deploy around the clean energy transition.