 Eno Talk at the workshop. And Peter is Professor of International Relations at the University of Sussex. He has also a long history at the University of East Anglia, University of Oxford, and other institutions. He has focused on a lot of issues related to environment and development. And that's why both Jacob and I thought that Peter would be the perfect person to kick off this workshop. He's focusing a lot on energy and climate change, on environmental justice, on a political economy of energy transitions, what non-state actors you've written a book about. So there's a lot of different aspects that come together, which we think makes Peter a perfect person to kick off this workshop. So Peter, I will hand it over to you to talk about the political economy of incumbency beyond fossil fuels capitalism. For sure. Thank you very much. So thanks both to Harrow and Jacob for inviting me here and to Lund and SEI for organizing this event. And actually, it's a real pleasure to be at SEI. I've never actually been. I've been to Stockholm once many, many years ago, but never made it to SEI. Despite the fact at one point in my career, I worked for Climate Network Europe in Brussels, working on climate change issues. And that outfit was funded by SEI, but never successfully made it here. So great to be here. So what I want to talk about today, since I'm not unlike most of you in the room, I suspect, a specialist on fossil fuel subsidies. But as Harrow has just said, I've worked more broadly on issues of energy transitions, low-carbon energy transitions in particular, and the politics and political economy of climate change. So what I want to do really in this opening 25 minutes or so is just sort of situate this debate that we're going to be having, this discussion over the next couple of days, in a broader political context, and relate it to these broader issues and debates around the political economy of energy transitions. Given that I've been doing some work in the last few years around those transitions in places like Kenya, India, South Africa, and Argentina, but also on part of what's called the STEP Center, which is an ESRC-funded research center based at the University of Sussex. And STEP stands for Social, Technological, and Environmental Pathways to Sustainability. And in that center, we've been doing some work over the last couple of years on the politics of green transformations. And so again, that relates quite nicely to some of the things that we're going to be talking about today. So for me, the debate about fossil fuel subsidy reform is one site of this broader struggle, if you like, involving a whole range of different forces, actors, institutions, militating foreign against different energy pathways. And so to explain these two slightly random pictures, there's a danger for me in this discussion that we try to sort of prune some of the branches, if you like, of the tree. But beneath it, we need to somehow address root and branch, and they are very long roots, spreading very far and wide, the broader nature of power that underpins the fossil fuel economy. And so I was thinking, which is the most appropriate image? And we can discuss later on which is more appropriate. The other one might be of an octopus with numerous tentacles spreading far and wide, and with enormous suction power holding the global economy to get together. So really, my talk will be divided in two parts. First of all, I want to think about the nature of incumbency. So I'm guessing here a lot of you are familiar with literatures on transitions and this notion of incumbency, but we'll talk about the incumbent power, the existing regime and order, if you like, largely at the moment, still organized around fossil fuels. But then laterally talk about where are the moments of change? And clearly, the momentum around fossil fuel subsidies is one such moment where that momentum is occurring. So firstly, though, think about incumbent power. I guess the obvious starting point is to note that there is an incumbent regime that, despite everything we know about climate change, about the urgency of action, we knew this well before Paris. But Paris has put emphasis on it again. The need to try and keep warming below 1.5 to 2 degrees requires drastic transformative action across a whole range of sectors. And yet governments, as some of these images convey, continue to invest heavily in fossil fuels of one sort or another, whether it's coal, oil, or gas, and indeed, are going for more and more extreme forms of extraction, whether it's tar sands, fracking, or whatever. So the system is still moving very much in the wrong direction, with the age of fossil fuels, despite what some people are saying, is very far from being over. And not only is it standing still, but it's expanding. So you can see this graphic around increased numbers of coal-fired power stations. You can see South Africa, India, China, but also nearer to home in other parts of Europe. So it's not that this incumbent regime is standing still, or in retreat in lots of ways, is actively expanding if we think about this in broader global terms. And of course, it's reflected in the sorts of things we're talking about today. Now, you all know better than I that these figures are contested. It depends on how you define them. But the figures are enormous, the amount of money that goes into fossil fuel subsidies is the 5.3 trillion that the IMF talks about. You can break this down per day, per hour, per minute. But I guess the key point over here, and this is where, which reflects the power relations that I'm talking about, is the amount that goes towards fossil fuel energy as opposed to renewable energy in terms of subsidies, which I think the new climate economy report that some of you here were responsible for, said 69% goes towards fossil fuels and just 9% towards renewable energy at the moment. So the obvious question is from a political point of view, why is all this still happening in spite of everything we know about climate change? And also in spite of the falling costs of renewable energy, particularly solar perhaps, why are we still locked into this state of affairs? And here's just a few, perhaps slightly obvious, but nevertheless important answers to that question. And one is about the relationship between states and the fossil fuel economy. As we know, governments own around 50% of the world's production of fossil fuels. 70% of all in gas production is through companies that are wholly or partly state-owned. So states themselves, the very actors that we're wanting to act on climate change are heavily locked into the ownership and use and consumption of fossil fuels. So in many ways, the subsidies we're talking about today are a form of state aid to the private sector, precisely because governments still take the view that they're crucial to the achievement of their own objectives around energy security, around energy access. And there's another sort of murkier, if you like, political economy behind that, which is around clientelism and the use of those subsidies to build political constituencies with support that keep governments in power. And much of the work that people in this room have done shows that fairly clearly. And it's been harder, thus far at least, for renewable energies or lower carbon energy actors to make that case that they can deliver on those key core state objectives in quite the same way. Link to that, of course, is a long literature and experience of what's often referred to as the resource, Kurtz, the shared interests in elites and fossil fuel companies, particularly the focus has been on oil, obviously, in protecting themselves from popular pressures for meaningful change by living off the rents from extracting resources. Now, you know, in some parts of the world, people talk about this as neo-extractivism. In Latin America, it's talked about as a progressive thing. How can you use the rents from resources for progressive social purposes? It's not always a negative thing. But the effect politically is often to insulate elites from popular pressures for reform. And that makes the ongoing exploitation of those resources very attractive for state elites. Related to that, then, is this point about, can we imagine, as we try to decarbonise energy systems in particular, that those elites will give up some of that control? It's harder, perhaps, for them to secure a rent from decentralized renewable energy systems of one sort or another. I suspect we'll hear this in a lot of the case studies that we're going to be discussing over the next couple of days. But a lot of the battle around energy policy is, you know, who gets to make that policy? Who is it that gets to capture the rent? So I think you have some work we've been involved with in Kenya. A lot of that discussion there is around can the counties, given that there's been changes in the constitution and the degree of devolution, can they start to have more of a voice in energy policy? But national level elites are reluctant to let go of that control. It's easier for them to take a cut of contracts coming through around larger scale energy projects. And so there is this sort of bias towards larger energy systems, which perhaps militates against some types of renewable energy, at least. And so potentially you get these conflicts of interest of saying, states are the key actors. We need green entrepreneurial states to invest in research and development to take on some of the risks of innovation. We need them to be the key actors on climate change. And yet still very much, they're locked into the fossil fuel economy in many ways. So it's not just about the executive part of government, if you like. It's also this extended state that I'm talking about here. Traditionally, people might have talked about it in terms of a military industrial complex, but it seeps into universities that are heavily reliant on money from fossil fuels as well. So we're talking about a broader complex of state power that's quite closely intertwined with the fossil fuel economy. Here's just one representation of it from the World Development Movement, a group in the UK now called Global Justice Now. This is focused on the UK, but you could do a similar type of analysis in many other settings. It's what they call the fossil fuel web of power. And intricate, often personal links, the social networks, which link financing of fossil fuel industries to government and the ways in which these things intertwine and intermesh quite intimately. So these dimensions of power I'm talking about overlap and reinforce one another in different ways. So beyond the national level, of course, there's also the international side of all of this, not only in terms of how different societies and the sorts of politics that we're gonna be talking about at case study level over the next day or so play out, but also they're not on consequences. And this is what I mean by the boomerang effects that the energy policy choices made in some parts of the world have massive implications elsewhere. So how I mentioned some earlier work on precisely these sorts of issues, energy justice questions. Who is it that pays for ongoing energy choices that countries make that locked them into extractivist paradigms? Someone somewhere will find their land being used to access coal or oil. Communities will be being displaced, et cetera. There's ongoing social and environmental spillover effects obviously of these sorts of choices and how do we hold countries to account for that? And that of course then plays into the global governance of fossil fuels if you like and I've deliberately put up the ungovernance because there's vast areas of the global architecture of institutions that we have that are not addressing these questions head on. So many of you represent organizations that are taking on this agenda and are pushing for progressive change. But there's many parts of the UN system and of international organizations more generally that are reluctant to get too involved in dealing with some of the policies and mechanisms which sustain support for fossil fuels. And then of course there's the material side it's not just about the politics that we're talking about today either at national level or international level it's also about production, finance and culture the sort of material basis of fossil fuel civilization if you like. It's partly about the tight networks that link together production, the financial flows either on the private side or export credit agencies, et cetera. And the challenge is that then poses in terms of interstate action trying to break the individual chains which sustain this system. It's partly about how can you redirect the massive amounts of finance as I've already showed that go into the fossil fuel economy. That's a bigger project. You're probably aware that UNEP has been looking at this over the last few years and recently published a report thinking about that very question. How do you realign the global financial system with the imperatives of sustainability? What might that look like? So in their report it's how much progress is being made or what tools, triggers, levers, mechanisms might you use to try and steer it in a more sustainable direction. I'll come back to that when I talk about sites of change going forward. But it's also an often neglected aspect of this perhaps particularly where I sit in politics, international relations is the cultural aspect that the fossil fuel economy and there's been numerous controversies around this in the UK where I come from about the sponsorship of the arts and art and not oil, BP sponsorship of many art exhibitions in the UK and that's where this picture comes from the art and oil campaigns. So there's both in terms of the media sponsorship, sponsorship of arts, access to public domains. There's a broader struggle to be had around the legitimation of particular energy sources in the global economy. And what that does is normalise particular infrastructures, energy systems and ways of doing things. And it's something that also I think has to be addressed in this broader move towards decarbonisation. Again, taking this, putting this in a slightly broader historical context, many people writing in sort of international political economy will talk about the neat fit between the nature of fossil fuels, the properties of them, their materiality if you like and the way that the global economy is currently organised. And that's a massive challenge if we're seriously thinking about moving away from that and trying to see a bigger role for renewable energy. The fact that we have a more globalised export-led economy means that we are dependent on cheap energy for transporting goods over large distances. There's an element of infrastructural lock-in organised around central grids. Again, that biases particular types of energy. The preference is for large projects and in investments over decentralised solutions. Going back to what I was saying before about the multiple possibility of extracting rents. So if you think of the work of Timothy Mitchell, some of you may be aware of his work, looking at that relationship between fossil fuels and democracy more broadly. So these are some of the bigger challenges and things that we need to think about. Because thus far, I mean this goes back to arguments that Matt Patterson and I are making some years ago in a book called Climate Capitalism. Thus far at least it's been easier for fossil fuel actors and interests to argue that their sectors have a privileged role, that they're the only ones that can really deliver core state priorities around growth and security, et cetera. That in more critical political economy terms, they represent the interests of capital in general. That they serve all other sectors more effectively and therefore they are a special interest that sits above other interests. This is what I mean by the, you have different fractions of capital competing to say that they deserve state support, that they're crucial to growth strategies, but it's easier and it has been thus far for fossil fuel interests to argue that theirs are the interests of capital in general. And that's a key argument that we have to win. Somehow you have to show there's a bigger coalition of winners from a low carbon economy that can compete with those sorts of claims. And so it explains why, it's just going back even further now and I'll start to come back to the present and the sites have changed, but just sort of to wrap up on this part, you can see the intertwined histories of capitalism and fossil fuels, that fossil fuels and shifts in their use from one source to another have been absolutely central to industrial revolution, Fordism, globalization, all these big reorganizations of the economy. And I'm talking about that because that's precisely what we're talking about being required right now. A rewiring, a reorganization, people talk about it as a new industrial revolution that's required to try and tackle climate change and to decarbonize the economy. And the challenge it strikes me is that when we've had those things, and I'm thinking of the work of people like Carlota Perez, I don't know if people know her work on financial capital, technological revolutions, how it's this restlessness on the part of finance capital that they're not getting enough of a return from the existing order and that they push for a new way of doing things, a reorganization of technologies and systems. That's when you get this big change. But it always comes about when there's a new, something that's even more profitable, more convenient, there's more cost-effectiveness, more efficiencies, greater profitability. And it's still harder at the moment for renewable energies and non-fossil fuel energies to compete on those terms. And so this is, for me, this is the strategic question. How can you convince enough powerful actors within the current system that they have more to gain from a lower carbon economy than from the existing way of doing things? Very, very briefly, because you're the experts on this, not me, on the case of fossil fuels, what does the experience so far of fossil fuel subsidy reform suggest in the light of everything I've said? One of the things I think is, given the nature of the reliance of many states on the fossil fuel economy, is to think about the sensitivity of the social base of state power. So, as you know, examples of flashpoints in Nigeria and Bolivia and many other countries when there's been an attempt to try and deal with support to fossil fuels. There's a lot of popular resistance to that. I'll come back later on to talk about that in terms of the just transition. I know there's one or two people here from South Africa where that phrase is used quite a lot to talk about the just transition, dealing with the losers of shifts away from a fossil fuel economy. But it strikes me as absolutely vital to deal with that. What I think it also suggests, though, is that it's gonna be hard for us to think about one-size-fits-all solutions to dealing with fossil fuel subsidies. You have to go with the grain of political economies and how they're organized in different parts of the world. And this isn't just about the global south. Examples here from the UK attempts to deal with fuel tax. This was in the late 90s, early 2000s because the politics of tax in places like the UK and, of course, the US is so toxic that it's very, very difficult to make a good case for reducing those forms of support on environmental grounds. Now, let me move into the second part of my talk quite quickly. So that's perhaps the more pessimistic story about the levels of lock in the scale of complexity that we're trying to deal with here. But let me try and now point out a few areas where I think there might be evidence of change in this broader terrain that I'm describing that frames some of our discussions over the next day or so. You can argue, it has been argued, people argued this in the wake of the Paris Agreement, they were arguing it before, that we are reaching some sort of political tipping point, that this is a key moment, a key conjuncture, if you like, in the demise of this global fossil fuel regime. They argue that on the ground of falling oil prices or peak oil, if you go for that hypothesis, evidence that even countries that have been heavily locked into fossil fuels thus far are starting to diversify their energy mixes. The big wave of pressure around divestment, fossil fuel divestment from pension funds in universities, et cetera, the wave of shareholder activism that's been targeted at some of the biggest players in this sector, think of BP, Exxon, et cetera. The falling costs of renewable energy, perhaps particularly solar, the pressure from the climate regime, you saw some of the reactions to the Paris Agreement where people in the coal industry saying that they felt that they no longer had a social license to operate, that it was the end game for their industries, et cetera, hugely exaggerated, I think, in light of what I've said so far, but nevertheless, this is some of the discourse. The shifting perceptions on the part of investors that I'll come back to at the moment, the subsidies, reforms that we're talking about today, but also the social movements, the climate justice movement, those movements seeking to keep fossil fuels in the ground. So the configuration of those things might be creating the political opportunity to really advance this in a more progressive direction. And alongside that, there are signs of hope, the ways in which industrial policy is back on the agenda. My colleague, Marianna Matsukatu, talks about it in terms of the green entrepreneurial state, that much as everyone's talking about the private sector, this still will be largely state-led in lots of ways in terms of initial investments in R&D, using tax breaks, subsidies, whatever it might be, taking on risks, targeting technologies that will benefit poorer people, in particular, things that are not of interest to the private sector, but using a whole suite of different state policies to try and move the economy in a lower carbon direction. And that's true also at the global level, going back to the work that UNEP and others are doing that are referred to before, about rewiring the economy along lower carbon lines. And that might mean using sometimes unpopular policy tools, well, trade organizations certainly doesn't like them sometimes, local content requirements, infant industry protection, the use of tax and subsidies to try and support those sectors and industries that will steer us in a lower carbon direction. But going back to what I was saying before, I think it's also about how can you engage very powerful fractions of capital or business interests in this project of decarbonization so that you do unsettle the incumbent regime. And I think that's where some of the key momentum lies. You know, in international relations, people often talk about this historical moment as a finance-led regime of accumulation, if you like, that financial actors are dominant, that they've managed to persuade governments that their interests are vital to their growth strategies. So can you use the power of those financial actors to try and bring about shifts to a lower carbon economy? And again, looking back at historical examples, how and when and why has that been possible and can we learn from that? In the current moment where we think about divestment, pressure to disclose, exposure to climate change, et cetera, that companies have in terms of their assets. And obviously the stranded assets argument is one clear manifestation of this, or we're talking about as much as 80% of coal, oil and gas reserves now being unburnable or stranded. This is an obvious manifestation of where this logic can take us. And I'll remain hopeful that that's one important way of dealing with this. But what I would say, as well as, and I'm gonna wrap up with this in a way, as well as engaging in that elite politics, trying to persuade governments to do things differently, trying to shape investor perceptions of where their money should be placed. And in a way, as we put it in the book on climate capitalism, trying to reposition investments in fossil fuels as a liability and not an asset, that strikes me ultimately as the key aim. If you can persuade investors that the more they invest in fossil fuels, the more they're locking themselves into something which might be more regulated in the future that will be subject to more tax, that will not have a social license to operate. And the more you can make attractive investments in renewable energies, the greater the chances are we'll bring about the sort of shift I'm talking about. So you have to go for that elite politics game. But what I think we also have to do, and this I think comes through very strongly in the work on fossil fuel subsidies, is engage in an honest and open debate about winners and losers. And this is what I mean by the just transition. So there's a great book on this by some colleagues in South Africa looking at precisely these issues. But it strikes me these issues are pertinent to all of the countries that we're gonna be talking about over the next couple of days. What's the explicit social compact of transition if you like? There will be winners and losers. Some sectors will be in decline. Some people will lose their jobs. So what's gonna be the retraining, the compensation, the safety nets, the cash transfers, what are the mechanisms by which you can manage that transition in a more socially just and equitable way. And of course there's examples of this around the world from Poland and Germany when you're talking about winding down support for coal industries, retraining, creating new job opportunities for people. Also imposing social obligations. So if you think about in South Africa, right, the renewable energy independent power producers procurement program where you have black economic empowerment criteria where there's an emphasis on trying to make sure that you capture some of the benefits of investments in renewable energy. That there's jobs, that the technology stays there, that the benefits are getting. So it's not just creating a new bubble of investment in renewable energy, but you're actually capturing some of the benefits. So in conclusion, because I think I'm out of time, Harrow's slowly getting out of his chair, which suggests to me that time is up. Either that or he's going for another coffee. So in conclusion, clearly fossil fuel subsidy reform is a critical and important site. I think it's fantastic that we're having this debate in that things are moving positively in the right direction. I do think we need to situate it as part of this broader challenge that I'm talking about. Think about it as one, albeit very important tool that we can focus on. I do think we need to think about these broader social justice dimensions. And some of the work I've read from people in this room shows that in reality, you won't get anywhere unless you deal with those sorts of things more clearly. And I think if we do frame this as a broader challenge of decarbonisation, it's not just about the politics and institutions we're talking about here. It is also about dealing with some of these other material, socio and cultural aspects. It is about getting to the roots of the tree that I started with, rather than just thinking about trimming the branches, if you like. And there are signs of progress, I think, but clearly there's many challenges ahead. But if history tells us anything, it's that such changes or deeper transformations can take decades and sometimes centuries. But as this thing from Greenpeace suggests, it always seems impossible until it's done and we're not done yet. Okay, thank you. Thanks indeed, Peter. And thanks for sketching the challenges ahead of us, which are not just limited to fossil fuel subsidies, but as you say, they're related to carbon lock-in and what Ankhankudya has referred to as carbon entanglement, which is a much broader challenge. Also thanks for pointing out, and I think this is something that will probably come back throughout the two days in the different case studies at the different political economies of fossil fuel subsidies, which might play out differently in different countries. But also thanks for pointing out some of the opportunities and some of the shifts that we're witnessing and some of the discussions about the investment and fossil fuel subsidy reform, as also Thijs will talk about later, the stranded essence discussion, which maybe not discussing too much detail at this workshop, but for example, in the conference in September, we'll definitely go into that in more detail. And then finally, also thanks for pointing out some of the lessons that we can possibly learn from existing transitions, not just in the energy realm, but also in other issue areas. And I'm sure that some of the papers will speak to that as well. We have about 10, 15 minutes for a number of questions. My suggestion is to take a few questions in a row and then Peter can answer the ones that he likes to answer. So I'm sure some of you will have some questions. We have Laura, anyone else? Ron? Okay, let's start with two of you. Financial crisis. We've just sort of come through a whole financial crisis where the banks were considered really too big to fail and the governments came in and they put loads of money behind them. But we hadn't seen that, for example, when say in Finland Nokia's failed or technologies go under. So I just wondered what kind of comparisons or links or lessons or things we should watch out for, basically, from how that sort of has the state interacted with those big financial institutions and what we can learn in terms of their relationship and moving forward with the fossil fuel sector. Ron Steenblik from the OECD. I think your presentation was quite helpful in painting the broader picture. I just thought it was also, it was struck me particularly when you were using some of the slides showing, like say stamps from a long time ago, like with the railroads, that, and this is not a defense of fossil fuels, but I think it's always helpful to think about how they got started. And if you recall, actually fossil fuels saved the whales. We were using whale oil for illumination and people were going further and further out and it was the major threat to the whales. And so actually, ironically at the time, it was seen as a godsend to the protection of the whales. The whole idea of trains and motor cars was actually at the time heralded as a major improvement in urban life because at the time there were lots of very big cards being hauled by horses who were leaving their manure on the street. They often went out of control running over people and cities were considered at the time very dangerous places, very polluted places and trains in themselves were a way to enable people to live outside of the cities and have a more semi-rural life. So when we talk about the infrastructure and the ways it's been developed, ironically, at the time that cities were moving that way and the whole structure of the way we live was being created, it was actually seen as an environmental preferable way of living. So just I think it's always for to avoid hubris, it's good to recall that on any kinds of these cycles we always need to be aware of unintended consequences and the way that then an answer to one problem if we are not constantly aware of the lock-in that'll occur could lead to some other problems in the future. Wanna take these? Sure. Well, let's start with that last one. I mean, I think that's a really important point. I mean, I might challenge a little bit the story about why we shifted towards automobility in cars over mass transit systems. I mean, there was a big push from Ford and GM and car companies to go down that route and there's a way more profitable way of organizing transport than the mass transit systems which served urban poorer people. But I hear what you say. I mean, some of these, the shifts in the past have had either intended or unintended environmental benefits and I think it's also to sort of take that slightly further, we should question the cleanness always of renewable energy. That always comes with trade-offs. We thought a lot of people were advocating biofuels as a positive solution where those have to be cultivated on someone's land, there's issues of displacement, creating price rises around corn. We know some of those impacts. It's all about how you manage those things. You go for electric cars, you have a lithium rush in Bolivia, it creates other socio-environmental conflicts. So my question's about, someone always pays for other people's energy choices is as true of renewables as it is of fossil fuels. It's a question of either overall balance of those things or how you minimize some of those impacts. So I think you're right. I mean, my point about some of the historical parallels was looking at what are the drivers for the shifts in the system, where people think it's no longer, they can make more money elsewhere or there's issues of convenience or cost-effectiveness and how those drivers, and the challenge for us at this time is the primary driver is not necessarily that. It's not always that we've got something better economically. It's that the driver is environment and that's a much, much harder case to make, it strikes me. Because some of the alternatives which are far more destructive environmentally are still very appealing on economic grounds and convenience grounds and political grounds as I was showing in the early part of the talk. I think that's the key challenge. But it's a good point to sort of say, put these things in historical context. There were multiple reasons why those decisions were made at particular times and there's always going to be environmental trade-offs, whichever path where we go down. I think the key thing is, which is a bit like the just transition argument, to try and have an open, honest debate about winners and losers and impacts and how you minimize those or maximize the gains. Laura's the first point about the banks and what we can learn from that. I mean, one thing we learn is that despite claims that no institution is too big to fail, some of them clearly are. And when money is needed to bail out banks, it's nearly always there. And that does encourage risky behavior on the part of financial investors knowing for a while that states will always step in to bail them out. What a more serious note in a way though, I think what it suggests is the need to engage in a proper debate about reform of the financial system. And I think, again, some of the things that UNEP are looking at are really important here in terms of what's the role of central banks in supporting these sorts of transitions that we're talking about. Can we think more seriously again about corporate governance and the responsibilities that directors have, et cetera? Can we tighten up disclosure requirements, et cetera, et cetera? So you sort of hardwire in mechanisms of oversight and accountability and making sure that shareholders assume more rights as they are at the moment saying, well, what's to share or BP? What's your business model in a world in which we're trying to keep warming under 1.5 or 2 degrees? How are you going to diversify? What's your social license to operate in a low-carbon world? Strengthening those sorts of mechanisms within companies. But also at the national level, I know I think here in Sweden and the Netherlands as well, according to that UNEP report, governments are putting in place policies which require financial actors to justify their existence and their contribution to the broader goals of sustainability. So that, again, that state led is setting the direction of change. And it reminds me a little bit of work that Kirsty Hamilton and others were doing a long time ago when they were talking to investors about what would it take for you to shift your investments out of fossil fuels and into renewable energy? And you might remember the key thing was long, loud and legal, right? They want a long-time horizon. So you say this is the direction of change, no changes, no ifs, no buts. So irrespective of changes of political government, we're all wheeled by into this. And that's obviously the rationale behind climate change committees and things like that that are above the day-to-day politicking. But it has to be a loud signal either through subsidies or support or whatever, and it has to be legal. So you clearly lock in the direction of change. And I think those sorts of things are all really important. Right. Sheila and Chris. Hi, it was great to see the mention of state-owned enterprise and it's something that I kind of spent a lot of time thinking about but not actually researching or writing about. And there's a couple of questions I have. There's sort of a link to Laura's question on the finance sector. Sort of two sides, well, there's many sides questions about state-owned enterprise, but one is about, if you look at what you mentioned about Carlotta Perez and kind of the force of the finance sector, I mean, how much influence does that part of our economy actually have on state-owned enterprise when they may be operating in a way that's kind of completely, in some ways, isolated, depending on their structure from market forces. Often hearing now also that the ones that will stay in the game, particularly oil and gas, might be nationally-owned oil companies as opposed to the independent private producers. And lastly, this question of actually, but also could state-owned enterprises be more well-placed to navigate the transition because they can operate more on these long, loud and legal, maybe not legal, but longer-term time horizons and can weather storms if they've got government support. So just you're thinking around how much of some of these arguments work when you're talking about state-owned enterprises as opposed to the private companies. Also, thanks for the great kind of overview presentation. Just a comment, really, about, I guess, I think it's important if we're thinking about kind of an overview of the political economy of issues related to fossil fuel subsidies to highlight the fact that there can be a, there's often a big mismatch between the way we talk about this issue, what the goal of fossil fuel subsidy reform is at an international level and what's happening at a national level, and specifically in the context of consumer subsidies. So if you go to any country with large consumer subsidies that's trying to reform them, the two major reasons are, number one, the subsidies are really expensive and they wanna get that money down, and then number two is often you're seeing a shift in the social contract between the government and its population and how it transfers benefits to them. And if we imagine ourselves to be kind of governments in this position, the way we're thinking about the political economy of the change that we wanna create and the challenges that are making that possible or not, are very different. And issues can get dropped that for an international audience are much more important. So for example, if our end point is we want to see climate benefits because of fossil fuel subsidy reform, then we really need to care about how is the money spent instead? So this whole issue of reallocation, if countries are building large volumes of kind of coal-powered kind of generation, then is the savings from gasoline and diesel subsidy reform going into that or not? And how is that kind of figured into political economy? Obviously there are international actors who are trying to influence national actors to reform their subsidies and that kind of mismatch in terms of what are the objectives of each one? It's quite interesting and kind of understanding how those two things relate to each other. Any further questions still? Okay, two more and then we'll pass it back to Peter. You get to give us into a global subsidy initiative. So I have a question which relates a little bit to what Sheila asked, but it's quite broad. You mentioned this big examples of industrial revolutions in the past, to which extent you think they were private sector-driven and to which extent the state can actually do something with respect to future energy transitions? Because we are discussing subsidies which are a policy that governments use or can use in the future for a new energy sector. Whether you think that will be the game changer or possibly not? Thank you for an excellent presentation. I just have a question about when we talk about transition, we always talk about transition away from fossil fuels, but if you listen to much of the debate within the oil industry, it's actually transition within fuels. So there's a lot of talk about transitioning from coal to gas and gas is actually the bridge for perhaps for another, for some sort of future. But also the way that some of the countries or at least some of the companies are thinking about that transition is about also using the technology, for instance, CCS, which will allow actually people to continue to use hydrocarbon while at the same time introducing new technologies like CCS actually to allow the life of this hydrocarbon. So I would say, you know, because I come from, perhaps from slightly different perspective is that there's a huge disconnect between the way you describe transition here and the way the oil industry and the gas industry thinking about that transition. So perhaps I'm just wondering whether this is something that you can also consider. I see we're getting warmed up, so we have Ron and Aaron and then we go back to Peter. Just a small point that I feel I have to make after whenever I hear about gas as the transition fuel, particularly for electricity generation. Just that, again, I think it's helpful to have a historical perspective here. Back in 1979, the members of the International Energy Agency developed this core set of principles and one of them was to ban the use of natural gas for power generation. Why? Because they saw it as this very convenient fuel that was particularly important for cooking and home heating and that it was wasteful because of the low thermal efficiency of power generation. Of course, they weren't thinking in terms of combined cycle power generation, but for electricity and that was better done by coal. So one of the reasons why OECD countries in particular have so many coal-fired power plants is because all the other options pretty much were disqualified. And so it's always amusing to hear that now we're going back to this situation where we were just a few years before that, where in fact natural gas is increasing as a major fuel. But it won't surprise me if in a few years we come back to the situation where people are saying, oh, we shouldn't be using it for power generation and not for climate reasons but because of scarcity. Great. I'm sure you've got enough questions by now, Peter. Another issue to throw on the table about the political economy aspect is something Richard and I talked about a long time ago is thinking about the fossil fuel as not as an homogeneous sector, but as actually this competition within the sector, especially as the carbon budget sort of tightens. And then, for instance, you have things like the Norwegian Sovereign Wealth Fund divesting from coal. And to what extent is that kind of investment behavior driven by moral concerns? And to what extent is it a strategy to kind of crush coal out of the market and save more carbon space for oil, that kind of thing. So it's a really interesting dynamic as well, looking at the political economy within between fossil fuel competitors, I suppose. Right. I think that's enough questions, so now you can pick and choose. Is it time for coffee, do you say? No, I'll try and touch on most of them, hopefully. So Sheila's question, yeah, state and end prices. I think it's a really, really important point, because in theory you could say there's direct control there. If the state decides to shift direction, you could have that direct power, no negotiation or less negotiation, you would have thought. And yet, if you think about Petrobras and the Brazilian government, you think about NTPC in India. I mean, I remember this is a slightly tangential example, but working with some communities. This was in Andhra Pradesh in India many years ago, and there's a conflict between the community and NTPC. And you ask them about trying to get accountability for a state-owned enterprise, and forget it, there's just so much stake in this. They're so protected by central government, whatever claims you might make around displacement, environmental impacts, you're gonna get nowhere, because so the control and the powers there, if states wanted to use it, but often they don't because they benefit too much from it. And if you think China oil corporation, Petrobras, NTPC, whichever examples you wanna look at, it's very, very difficult. All what often happens is powerful actors like Escom in South Africa get to control the pace of transition. So things like the renewable energy, independent power producers, procurement program I was talking about, they're often the ones that determine the level of market access for the new entrants in the market. So they're given the power of veto effectively. So it's, the powers are there. If you could persuade the state to change direction, it would be immensely beneficial. In reality, the interests are so interlocked that it's sometimes almost harder, I think. So it's a really, it's a really good point. Chris's point about mismatch. Yeah, I think a lot of that comes down to the point I was trying to make about horses for courses that you have to go with the grain of what are the objectives in any one setting, that there's a mismatch. Often the drivers of shifts, whether it's around fossil fuel subsidy reform or any other moves around, you know, budget deficits, state expenditure, no longer being able to afford these instruments of one sort or another. Like in India's cases, often about reducing imports of oil, et cetera. It's energy security type drivers. It's very rarely climate. So even if it comes down as a climate decarbonisation agenda, the only way you'll get buy-in is to frame it in other terms. And I think it's important to be honest and upfront about that. Otherwise you will get that sort of mismatch about which the appropriate levers and policies. So, you know, you need to go with the objectives which makes sense in any one setting if you're gonna get traction. So even if you and I might be thinking climate decarbonisation, let's talk about reducing public deficits or reducing imports in the context in which it makes sense to do. So that would be my sort of strategic way of thinking about and answering that question, but it's a good point. What are the other ones? I mean, I take as given the points, for example, around lobbying between different fossil fuel interests, gas, well, it's gas, nuclear, all of them. Like in the UK context, the biggest threat to renewables isn't necessarily the fossil fuel interest, well, coal and oil. It's gas and nuclear saying, don't bother with renewables, we can deliver this. We're low carbon, we're the ones to go for that. They're from, I hear from people within the UK government and now I'm remembering this as being live stream, so I won't say any more than that. But of course there's that intense competition all the time amongst industries to show that they offer the way forward, that they can provide a return at the best possible price. And again, perhaps going back to this point, about level of money and bailouts and all of that, think about the amount of money the UK government is investing in nuclear energy now and the price guarantees they're offering over massive time frames. I mean, state resources are there when we really want to use them. And again, that relates to the link between nuclear and the security dimension here because there's clearly another agenda going on there as my colleagues, Andy Sterling and others, have shown. The point, the other point about, so I'll take this as the final, final one. Yeah, transitions within fossil fuels. Now I'll take the point you're making, obviously that is the discussion in a lot of places. It's about transition fuels and going from, you know, go to gas first and then to renewals. I guess given the way I started this presentation, my concerns would still be around the lock in, you're still, not only is it delaying, but it's producing an element of lock-in to all of these systems. But I recognize in some places that you'll just never win the argument if you talk about a jump straight to renewables. It has to be this more gradual transition. Carbon capture and storage, I'm a bit more skeptical about that, given how few viable projects there are, how many uncertainties there are about whether it really keeps carbon in the ground, over what time frames, financing for it, et cetera. But I recognize if you're working in the Middle East, it's an important argument to have in your arsenal, if you like, and probably better stop there. I think that's fine. Thanks again, Peter, for a really, really good presentation. And we now have a 20-minute break, and then we reconvene at 11 for the first panel session.