 Hello, welcome to Stanford Sustainable Finance and Investment Seminar. This seminar is hosted by Stanford Precourt Institute for Energy's Sustainable Finance Initiative, which is SFI. And then we explore multiple disciplines of sustainable finance with talks by researchers associated with SFI and also across the campus and our visiting speakers. So we meet every month during the winter and spring quarter. And this seminar turns into a weekly based academic unit granting course during the fall. So stay tuned for coming up event as well. And then as you know, the seminar is open to Stanford staff, faculty, and students. And then when speaker Constance, like today, the seminar is open to the public. So welcome, everyone. Today, we have Dr. Yongjun Baek, who is a researcher at Stanford Center in Seongdo, Korea. Dr. Baek did his PhD in energy, environment, and policy from Korea University. And he was also a researcher at Asia Development Bank Institute and also Tokyo Institute for Technology. And this is our big welcoming, Dr. Yongjun Baek, to the new center that Stanford just opened up in Korea. Let me just give you a little bit more about what the center is doing. So we just opened up last June. This is a very first global research center of Stanford University, opened up a road. And then the center, the research is rounded across based on the smart city research. But we are looking at the smart city from a more broader perspective, not only some technology in science, but also in the consideration of social science. And then we are looking at the sustainable smart city research from mobility, design thinking, and sustainability and entrepreneurship angle. So if you are interested in exploring more about the center, go to korea.stanford.edu. And Dr. Yongjun Baek is joining the center this year. So we are having this seminar to learn more about Dr. Yongjun Baek's research. And it's great to have you, Yongjun. Please take the stage. Thank you very much. Thank you for the great introduction. As So-Yong mentioned, I'm Yongjun Baek. And I'm currently working at the Stanford Center at the Incheon Global Campus. And today, I would like to share some of my research and also not only give a talk on it, but also I'm looking forward to some discussions and maybe some feedback on my research so I can always improve on where I'm going. So today, I'm going to be talking about role-covering scenarios and policies for the power sector in Botswana. And a lot of you might not even know where Botswana is. It's a country in Africa. It's on top of South Africa. If you look at the map right on top of South Africa, there's Botswana. Then you might have a question of why is an Asian guy studying something about Africa? And if I may give you the answer, is that I actually had an opportunity to live there for like 10 years. So throughout my teenage life, I was in Botswana. And my family actually is still in Botswana. And my friends are all there. So it's a very close place to me. And it's like a second home. Change of title. What I meant by that is that even though I'm talking about role-covering scenarios and policies for the power sector in Botswana, I could actually change that country into maybe something bigger, maybe sub-Saharan Africa. Or I could even broaden it much more into maybe mid or low-income developing countries. So I was thinking a lot about the title. What should I say? Should I say Botswana? Or should I say sub-Saharan Africa? Or even should I just be ambitious and say developing countries? The reason I did that is because I haven't looked through every developing countries, but they seem to share common characteristics. For example, especially in the power sector, they have a very low electrification rate, maybe 50, maybe 60 at the most. And even those that have electricity, they do not enjoy the full capacity. There is a power outage frequently. Sometimes when I was living in Botswana, they might turn it off for two, three hours because there was lack of supply. And also not only in the urban area, but in the rural area, they have absolutely no electricity. So they are off-grid. And in that case, what they do is they usually rely on kerosene or diesel generator. So I was thinking, even though I'm talking about Botswana, which is the title of my article, maybe I could have expanded it more into Sub-Saharan Africa or even developing countries. So please bear that in mind. Now, food for thought. This is the big theme that goes through the talk today. This is what I want to be talking about. What is the future of Africa? Where are they going? What should they be doing? And I was thinking maybe there could be three possibilities. And the first one could be traditional development. I am sure a lot of you have already seen this graph before. It's called the Environmental Cousins Curve. What it means is that as the per capita income, so as the economy develops, the environmental degradation will rise, then eventually go down. So most of the developing countries will be on this side. And once you pass this threshold, then you start to think about the environment. If you look at developed countries, they care about the environment. They think about what they're doing. They try to mitigate GST emissions, so on. So what I mean by traditional development here is that if the African countries are left as they are, like for example, business as usual, then they will eventually follow the same path that the developed countries have already followed. So they'll have to destroy the environment. The environment has to get worse before they are able to pass this threshold and start worrying about the environment and start thinking about improving the environment. Then the second scenario or pathway, I would say, could be income inequality, which means that African countries just remain as it is. And they try to follow the traditional development path. But as we all know, the whole international community is working hard to combat the climate change. They're trying to reduce CO2 emissions. And like EU is trying to put up the EU carbon border tax. So it's getting much harder and harder for these African countries to enjoy the traditional development path. Because not only if they can do it locally, that's no problem, but this is a global world. And you have to trade with the outside world. You have to trade with developed countries. But these countries are pulling up their trade barriers through various means, as I just mentioned. And eventually, if that happens, then the developed countries will continue to advance and continue to use all these advanced technologies they have developed. But African countries cannot enjoy the fruits of these new technologies, for example. And in that case, what happens is that we're going to have this inequality, the gap between the developed countries and developing countries will just keep widening. So that could be a second path. And what could be the third path that we could follow? I would say that could be inclusive transition, meaning that as climate change is a global issue, something that the international community has to come together and to work together. So rather than just ignoring the African countries or, as you've seen during the Paris agreement, they actually came up with this term called term or, I don't know, a concept called common but differentiated responsibility, meaning that developed countries will do their responsibility while developing countries will do the other responsibility. But by separating the responsibility, what I think is that they're trying to, that's just a way of going to the second path, saying that developed countries, they will do as much as they can do while leaving out the rest. Then it's just going to go to the second path, even though they are trying to say that we're trying to include everyone, trying to go through an inclusive transition. So I don't know which path we'll be taking, but I'm sure everyone would agree that we have to take the third path of inclusive transition, but it's no easy task. I mean, we all talk about inclusive transition or just transition, but it's not as easy as it is. So I want, like this is some big theme that I'll like all of us to think about while we have this seminar. Now, if you look at the global emission, as you can see, this is like I divided into regions, but the black line is the Sub-Saharan Africa. I'm not sure if you know, but like in Africa, we usually divide into Sub-Saharan Africa and the Middle East and Northern Africa, because the Middle East or MENA, they call it, the MENA region has like high income. So they usually try to divide it into the Northern Africans, Northern Africa region and Sub-Saharan African regions. So when you look at the Sub-Saharan African region, the global emission hasn't really grown or compared to other regions, the global emission hasn't really increased over time. So people might think, okay, they're not really emitting much. Like they have a very small share. If you look at here, if you look into percentage, in 2018, they had less than 3% contribution to the global COT emission. So people might argue that, okay, they're like below the top priority. I mean, we have much higher emitters, people emitting, I mean, countries emitting much higher like China or US, why not focus on them? Why focus on some countries that are not even really emitting much at the moment? But that could be an argument, but I would say that's just looking at right now. Like you have to think about what's gonna happen in the future. As I mentioned in the second slide, they are gonna develop eventually, they are gonna grow. And what's gonna happen when the developing countries, these African countries actually grow in size? This is a very nice picture that I actually found in the social media, like my friend was posting this, how big is Africa? And as you can see, a lot of the regions actually go into this continent, showing that this continent is massive. And not only in terms of size, but it has abundance of resources, fossil fuels, like various natural gases, diamond. So it's a very big continent and it has a potential to grow. And if you just ignore them because they are like still developing, then it's gonna cause problem in the future. I mean, we might able to reach net zero with the developed countries reducing their CO2 emissions. But what if these countries also follow the traditional pathway? Then what I think is that we're gonna go back to ground zero. We're gonna start again and say, oh, we have to reduce CO2 emissions. So Africa is no small continent and it has a large potential. And as you can see the population, again, I drew it in a black line here. As you can see the population of Africa, African countries are growing rapidly and it's gonna grow much more. So as you know, population means the more mouth to feed and the economy has to grow. And once again, more people means more like using up the resources, electricity and what that eventually leads to higher CO2 emissions. So, and also as you can see here, the urban population has been growing as well. Why is it growing? Because people are moving towards the urban centers to have a better like to increase their living standards to enjoy the, I guess, what the urban centers are giving. For example, Korea also has a similar issue where like Seoul is the capital and a lot of people are like just pouring into the capital and the greater area around Seoul. So the urban population increasing like this is not really a good sign, but that's a top for another time. But what I wanna show here right now is that not only the population is growing, but also the urban population is growing and the urban population is likely to have a lot of electricity consumptions going on. And just simple equation, like more electricity consumption leads to more CO2 emissions if you use fossil fuels for generation. And as you can see here, Africa's current energy mix is like this and it hasn't changed in the past 30 years because they didn't really have any other options I would say. And also, as I mentioned previously, they have a very abundant resources and they have a lot of all reserves, natural gas, coal also, they have abundance of them. So for them, it's very logical to use up these resources. Why would they not use it? I mean, it's available. So they're gonna be using them and it's likely that this energy mix is not gonna change unless we do something. I mean, African countries are trying their best to come up with these renewable energy plans and trying to move away from the fossil fuel but it's not as easy as you say. So I'll show you in the upcoming slides but so even though they try to pull up the renewable, the share of the renewable energy, it's not gonna happen in the new future from what I see. So the energy mix is likely to remain like this and not only the energy mix is gonna remain but its consumption is gonna rise. So I'm sure you get the point that I'm trying to drive here that eventually if you leave them alone, if you leave Africa as it is and let them take on the traditional pathway, traditional development pathway, and CO2 is gonna rise and we will have to again go through the same process of trying to mitigate the CO2 emissions. Again, a lot of fossil fuel projects that's going on around Africa, Egypt, South Sudan, Uganda. I mean, not only did they use these for themselves but these are actually exported. So fossil fuel is actually a big part of the African country's economy. So it's not only for them to consume but it's for them to survive. It's for them to export these fossil fuels out to develop countries. In fact, because of the COVID-19 situation there, GDP has actually declined greatly because they couldn't trade or they could not export these fossil fuels out. Here, as I said, the fossil fuel revenue for them, it's massive, a lot of countries have like rely heavily on fossil fuel, Nigeria, for example, it's massive for their revenue but there are some countries that do not rely on fossil fuel, for example, Botswana and which is one of the reasons I chose Botswana because their energy mix is quite simple. So it's easy to see a transition. I mean, I am gonna show you later how I did the scenario analysis but Botswana relies mostly on coal. So it's quite easy for them to make a transition if they plan to. But other African countries is not as easy as we see. They're relying heavily on fossil fuel and it's part of their livelihood. So please bear in mind. Now, Botswana is the case study that I did and to give you a bit of background, the capitalists get wrong. As you can see, the population is quite small. The land size is quite big, which is about 5.8 times of South Korea but the population is only about 2.3 million. So it's a very small country in terms of population. But as you can see, they rely heavily on like resources, like diamonds. From my memory, they're one of the biggest, actually the biggest diamond exporters. They have a big diamond mine. So they rely heavily on mining and also in farming, like meat exports. So as you can see, this country relies heavily on mining and mining also eats a lot of electricity and a lot of fossil fuel. So now the easiest question that I wanted to bring up in this article was three things. Like first is energy security. I mean, Botswana is relying heavily on South Africa. The South Africa used to have, they have a nuclear power generator. So they have a lot of electricity and they used to export it to neighboring countries. But eventually they reduced their export because they couldn't handle the demand, like the local demand. So they reduced the export and that had an impact on Botswana's energy security. So the first thing I wanted to look into is how can they secure the energy security, which is to diversify the energy mix, not rely heavily on exports, imports and coal. And second is adequate and stable supply of electricity, peak demand control. As I said, like when I was living there, they're frequently like our shortages and they had to turn off the electricity. I had to live without like two, three hours without electricity from time to time. And also like 47% of the population has no access to electricity. And third is, as I mentioned, the COT emissions, which they have like it's NDC now, but they submitted it to reduce it to 15% by 2030. So the aim was to secure these three points. How can Botswana plan their energy mix that they can actually secure their energy security and have an adequate and stable supply of electricity and also at the same time reduce COT emissions? These are some of the energy policies that Botswana had to have. And as you can see, they have been trying to promote renewable energy. It's not that they have been relying solely on fossil fuel. Not only Botswana, a lot of African countries also have plans for renewable energy to increase the share of renewable energy in their energy mix. But it's not as easy as said and done. But so they tried various methods. They tried to increase the PV market, solar energy or tried to use off grid method. And they even had a biomass energy strategy, which sort of didn't really work out, but they had plans, they had plans for it. So the electricity supply, as I mentioned before, this is a good dated back, but still the import and the internal generation ratio it's not, hasn't really changed much from back then. And this is the map. As you can see, Botswana relies heavily on this South African generation and their exports. But their export has been reduced because South Africa cannot keep up with the internal demand. So they've been reducing it and the cost has been rising. So Botswana had to actually find a way to like secure the energy security by increasing their internal generation. But at the same time, they had to be used to issue emission. So what I tried to, what I did was first I used the econometric estimation of the electric demand and the dynamic forecasting based on the estimation until 2030 and use the scenario and cost analysis and produce results and policy implications for the Botswana government based on my results. The model that I use is called LEAP. It's Long Range Energy Alternative Planning System. Energy modelers would have heard, it's very easy tool to use, but I'm sure not everyone knows this. If I just briefly go through it, it's a very, very useful, easy, but very useful and powerful tool for modeling the energy mix and not only exploring but also forecasting what is, how is it gonna be in the future? And also it uses a linear optimization. So it matches the demand and supply based on what parameters you give. Usually it's done by cost and so they calculate what is the fixed cost? What is the operating cost? All these costs are calculated and tried to match the demand with the lowest cost possible. And cost analysis is how much each energy is gonna be costing if you're gonna be, eventually it's gonna give you an energy mix and you can see how much the total of this energy mix is gonna cost. So one thing I did was that LEAP model itself has internally it has forecasting method or tool within it, it's built inside. So by using the demographic data and various macroeconomic data, you can actually forecast within LEAP. But the, I guess the shortfall is that you can only calculate it from a base space here. So you cannot really see the historical data. So what I did was I used the econometric method to pull in the past data. So historical energy demand to increase the forecasting reliability, the reliability of the forecast results. So that's why I say external input, meaning that I actually calculated the demand, then input it into the LEAP model which actually increased the reliability of my results. And as you can see, LEAP model can do various things now in the demand analysis, but you can also change different, you can input different, I guess, energy technologies if you want and also calculate the resources, whether you have to export to import these resources. And then these based on how much you have used up, it can calculate the environmental externalities. Usually we can to CO2 emissions. And based on all these data, it can give you a cost-benefit analysis as a final result. It's a very useful tool. If you're interested in energy modeling, I'll suggest you start with this model, which is very easy to understand and very easy to use. This is just an equation that I used to forecast. So I'll just pass it. So this is the focus result. As I mentioned, here the dotted lines are the blue and yellow dotted lines are the historical demand, like the import and generation and the black line, black line is the historical demand. As you can see the generation, the import has been dropping rapidly around 2010. So Botswana had to force themselves to increase their generation, but it doesn't meet, as you can see, it doesn't meet the demand. So there's a shortfall. And that's what I meant by like, how can they secure the energy security? If this is happening, if the import is dropping then eventually we'll have to assume that there's gonna be no imports at a certain point. So Botswana has to generate everything by themselves. And what kind of energy make should they take to meet the red line is the demand, the future demand. What should they do to meet the future energy demand? So I put up a very simple scenario. Business as usual is based on the Botswana's national plan. Whatever they said, they said they're gonna be putting up some, what is it? Solar PV, they're gonna use concentrated solar panels and biomass. So business as usual is they are using all the energy mix they have and call, which is mostly what they depend on. But what happens if the investment cost of other renewable technologies are reduced? So this is the scenario that I put up. So P3 to P7 is very straightforward. It means it's being reduced by 30% up to 70%. This was based on the, I think, the international organizations, they came up with various forecasts that the renewable energy technologies are likely to drop in between the range of 30 to 70%. So I used that to come up with a scenario and said what would happen to Botswana's energy mix if the investment costs actually drops by 30 to 70%. So this is the result that Nick gave me. And as you can see in BAU scenario, there isn't much change. That as you can see, mostly it's core and at the bottom you can see the solar, the grid pattern is the solar because Botswana national plan by themselves, they actually mentioned that they're gonna be putting up about, I think it was 100 megawatts or so of solar energy. So that's why when you go to BAU, this is gonna be, this is just, this is how the national plan is. Well, when actually, when the price of the renewable technologies drop by 70%, as you can see, eventually the cost of solar energy increases, sorry, the cost of solar energy decreases, meaning that it becomes cost competitive compared to core. And it can actually replace core to a certain extent by 2030. So 70% drop is an extreme, I'll say an extreme case or the extreme end, but it shows that it can actually replace a lot of the core dependent energy mix. So the results shows that as CO2 emission, as you can see, obviously, because the more solar is coming in, the CO2 emission is gonna be dropping. And P7 scenario has the lowest mitigation of CO2 emissions. And in terms of annual investment, this shows that when does it break? So when does the solar PD start replacing core? And depending on the price, it will start for when the price of the renewable technology is dropped up to 50%, it's not cost competitive within that short timeframe. So there isn't much replacement of core, but when it drops by 60 and 70%, they eventually start replacing it by 2026. And if it drops by 70%, it starts replacing as early as 2022. The more interesting result that I want to share is that coal actually remains, I actually calculated the levelized cost of electricity and the core remains as the cheapest resource for electricity generation. So for Botswana, even though renewable technology drops by 70%, the price drops by 70%, coal still remains the cheapest source of electricity generation, which is about 0.114 per kilowatt hour. And but for P7, it comes all like, I guess it comes quite close if it drops by P7, but unfortunately that's, it doesn't really reach the grid parity by 2030. So that as you can see, I calculated the LCOE and the timeframe is too short. It's not enough for them to, for their cost of electricity to meet by 2030, which means that the price has to come down extremely low for them to even start replacing core or the government decides to subsidize the solar PV for them to, for the market to actually start implementing it. And the reason I, the reason is that the electricity market is too small and the future electricity consumption is gradual and actually the government plans to construct more coal power plants. So all these things coming together actually reduces the price of coal and it remains the cost competitiveness of coal. So unless the government decides to sort of like put more weight on solar PV, it's likely that coal will remain as the dominant energy source in Botswana. But even though it's, even though the coal remains with the high cost competitiveness, I suggested that even though there is a chance for them to increase the solar PV. So the future cost is likely to drop. And if, as I mentioned, if the government decides to subsidize it and meet that gap between the, between coal and solar PV, it is still competitive in the market. So the government, it's really on depending on the government's will like the political will to promote the solar PV and try to introduce it as early as possible. That was the policy implication that I could give to the Botswana government. As you can see renewable projects in Africa is, they are working on it. They are working on it, but the Southern Africa, as you can see, has the highest, highest power generation of in terms of renewable projects, but that's mostly in South Africa. South Africa, it's sort of like, you have to separate South Africa when you want to talk about other parts of Sub-Saharan Africa, because South Africa is really, they have a nuclear power generation and they're really doing well with renewable energy. So they're very leading country. So it'll be unfair to put them into the same categories as other Sub-Saharan African countries, but they are working on it. Problem is that it is still very small and the share of renewable energy and the total energy mix is very, very small. And they really have to work on it if they want to contribute to the mitigation efforts of COT emissions. And as I mentioned, the price has been dropping rapidly, solar PV is very cheap right now, but the cost itself is, I guess it's one factor, but it's not the only factor because installing them and maintaining them is another story. And when I was in Botswana, they actually had a pilot project like they tested whether solar PV is applicable in Botswana they actually had a very small power plant, I think it was like one megawatt something, but problem was they built it, but it was not maintained. So eventually it sort of like got forgotten and later I heard that people came and stole the parts and so in Africa, it's not only about like installation costs, but it's also maintenance and how they're gonna keep it running because as you know, like renewable energy, it's not about just building it, but maintaining it, it's more difficult. So even though the prices keep reducing, there are a lot of things for them to work on before it actually becomes a major part of the energy mix. Then like we looked at the supply side of the African countries, then we'll have to look into the demand side. And as you can see still about 42% is 42% in Africa is without electricity excess and they're mostly rural people, we're living in the rural areas. And as I mentioned before, North Africa, we usually separated from the Sub-Saharan Africa because as you can see, North Africa has 98 electrification rates compared to the other parts, other regions of Africa which has, I guess, average of 40 or so. So as you can see, it's quite different. Like the situation is quite different from North Africa and other regions of Africa. So I had to look in another article, I had to look through the demand side of the energy. And this, I had a look into the residential energy use in Kenya and as you can see, there's still a high dependency on biomass and there's really nothing they can do because they don't have the money, they don't have the resources and if they wanna buy something, they'll have to go out to the urban centers to even buy kerosene or some diesel for their diesel power generators. So there's a lot of opportunity costs of time to fetch firewood and children are used for household support instead of schooling and the harmful smoke that comes out from them using these biomass actually affects their health and a lot of them dies from this. And there's so many, I guess, negative externalities, environmental externalities from them using biomass. So I was looking into what are the factors that could affect them to use more modern energy, not electricity, but maybe climb up the energy ladder. And if you look at the rural household fuel choice, this is the fuel choice they have. For lighting, they have solar energy, kerosene, battery and fuel word and some have grid electricity, but mostly they don't and the grid electricity is usually those areas close to the urban center. Also cooking, they use LPG, kerosene, charcoal and fuel word. Even though they have fuel choice of so many fuel choice, majority of them still continue to use fuel word. Or kerosene for lighting. So I'm not gonna go through the whole process, but just give you the policy implication. So I looked at the factors that might be affecting their cooking fuels and lighting fuels. And as you can see, it's to do with their household income and whether they have a higher education or higher energy expenditure. So the results shows that they're highly influenced by the household income, wealth and educational level of the household and improving the household stove. I'm not sure if you heard about those projects where they're trying to change them to more cleaner stove, cooking stove. There are a lot of projects that are going, they're doing to improve the situation and trying to dissuade them from using fuel because of the negative effects that it has. And household tend to prefer solar generation and choose kerosene if not affordable. So this is the, mostly this is the case for rural households without electricity. And giving them, I even thought about like, why don't we give them off grid but off grid power generation, but it's not, it's just that it's not affordable for them. Even though you give them off grid power generation, you can build it, but as I mentioned previously, it's hard to maintain it. And trying to maintain the off grid power generation for these rural areas, it's too much, it's cost too much and it's not effective. So it's better for them to climb up the energy ladder step by step until the infrastructure gets improved. So this is another article that I tried to look into whether financial inclusion can be an effective mitigation measure by seeing if the financial inclusion financial inclusion of these rural households have an impact on the environmental goodness curve. And what we found out, me and my colleague found out is that it does have a mitigation measure, it can be used as a mitigation measure, meaning that the higher the financial inclusion, the higher it gets, it has, it follows the pattern of environmental goodness curve. So when policymakers design their policies, they should consider the synergy effect of financial inclusion in designing development and climate change policies. So these are the two policy implications that I had. Postmakers should consider financial inclusion as both development and climate change policy measure, meaning that at an early stage, the credit market will develop as the focus is improving on the financial axis. So at the current stage, at the early stage, the rural households do not even have basic financial access. So at the first stage, what they'll do, try to do is to improve the final access and financial access and provide the basic financial services. And as later stage, when the stock market starts to develop, companies will diversify their financial methods by selling stocks and investments will become more influential, meaning that the investors at the later stage will be more attracted to companies with more social responsibilities and stricter investment decision-making processes. So for the rural households, it's not about focusing on the environmental improvement, but it's more like it's to help them develop. It should be used, the policies should be used as an adaptation measure to help the vulnerable people prepare against the impacts of climate change. And also financial inclusion is a prerequisite for attracting private investment to low carbon projects. So private investment is usually leveraged by financial services and it is difficult to obtain private investment with our first establishment of financial infrastructure. So what I mean by that is that it's as it is, because the rural areas and these African countries, they have such weak financial services that they first need to develop the financial services, financial, I guess, institutions and infrastructure for these private investment to come in, which is, again, to help leverage these low carbon projects and to help them develop the renewable energy projects. So government should also support the financial inclusion by setting up regulatory and legal frameworks to ensure a transparent and reliable financial system. So I've shown you the overall picture of how Africa is and showed some case studies of certain countries, Botswana, Kenya, and also the effect of financial inclusion on the environmental-accuseness curve. And I wanna come back to the fruitful thought that I said in the beginning, like where, what is the future of Africa? And it is quite difficult to say because even though I mentioned all these different methods or different ways of improving their lives or improving the power sector, it's not that easy. It's, everyone thinks about it, everyone thinks about different projects that can help, but how are they gonna do it? It's just another story. And how are we gonna achieve inclusive transition is a story that we need to actually discuss and develop ideas on. And some of the barriers that I thought about, like what could be the barriers for inclusive transition in Africa? And from my Kenya paper, I mentioned education, like educating the people and actually letting them know about the issues of climate change and letting them know, showing them that there's a better life or a better way of doing things. For example, changing the cooking stove from fuel, fuel cook stove to more cleaner cook stove. They don't do it because they don't do it because most of them, because they don't even know that it exists. So they just do it as they've been doing it for the whole life or they've been doing it traditionally. So education plays a big role in helping these people come out of that, come out of their traditional ways to more cleaner path. And also infrastructure. As I mentioned, building polygenerators is another story. I mean, you can build polygenerators, but in a lot of cases, the infrastructure just cannot support it. And about two-third of the African infrastructure is unreliable. So even though you can give them enough supply, you can build enough polygenerators, but it doesn't go to where it's needed. So building up the infrastructure could be another issue that Africa needs to solve. Financial institution, from my last paper I showed you, financial inclusion, it's necessary to fund these projects and to help various levels of people and people living in various levels of living standards and also investment. I guess money is another big issue. It's like you can have plans, but the funding and investment, it's not supporting it. So like how you bring the money into the country or how you bring the money to these development projects could be another issue. And technology. Technology is, as we all know, they need these advanced technologies to actually leave frog. So this is the drawing that I drew here, is that they can follow the traditional pathway of degrading the environment and then going over the threshold, but why can't they just leave frog from one side to another? And rather than destroying, why can't they just leave frog to the more cleaner or more environmental friendly ways? And one way could be like technological transfer, but it's not as easy as we say. So I mean, everyone can say that technology should be transferred, but transferring technology to these different countries is not very easy. And there could be a lot more barriers to inclusive transition. Like some countries have political instability. And Somalia, for example, they don't even have a strong government. So that could be an issue. And so they have a lot of problems that Africa has, a lot of barriers they have to overcome in order to actually thrive for inclusive transition. So these are just some of the thoughts that I'm having. And at the moment at the Stanford Center at the Indian Global Campus, we are more looking into various aspects like investment, technology, policy and trying to find a way how we can achieve the inclusive transition. Okay, thank you very much. That's all for me. Any questions? Thank you, Jungun. It was great. I think we have five minutes for the Q and A. We have a question from Austin Park and Ted. So if I can read, so I'm curious why the solar LCOE is so high in Botswana? Well, yeah, a lot of people ask me that question because usually like the LCOE, I mean the solar PV LCOE is quite low in other countries, but this is a case study that I did from Botswana. And at the moment they have no solar PV installed. So when they start bringing in from like based on the scenario if they stop bringing in and I calculated up to 2030, there's just not enough time for it to like reach Great Perry and to reduce its LCOE in time. So it's quite, I guess it's quite specific to the country not to I guess the global standard. Yeah, if I can read the rest from Austin like he was asking, is there any difference coming from the lack of access to the cheap capital? Yeah, thanks for your answer. I was just curious, another large fraction of the development costs for renewable plants comes from the cost of capital. So if you have to get some more expensive capital, it costs a lot more to build a project. But I thought that might be a reasonable barrier for Botswana, I wasn't sure, but it is still just kind of shocking to me that the price of solar would be three times close, maybe close to four times as much in Botswana. So yes, that is a problem with the country. And actually I had to, when I was calculating the, when I was calculating, I had to actually use proxy numbers because Botswana didn't have solar PV, like they didn't have the specifications. So what I did is actually I brought it from South Africa. So South Africa had numbers for like various technologies, not only solar PV. So in that case, if you had to install it in Botswana, it's likely that the capital costs will actually increase more than decrease. So the LCOA might even increase higher than what I calculated. Okay, interesting. Thank you. Yeah, maybe one more question from the audience. If you have any, raise your hand. If it's not, I actually have a lot of questions about, you know, like we have limited time. So if I may, I just wanna like ask you one question. I mean, have a lot of questions about the models and then, you know, like all those, you know, like a technology interventions and then how that actually changed the curve in more dramatic ways and so on. But, you know, we can have a separate conversation later, but, you know, it's a really simple, but very interesting picture that you show like a three scenarios. One is, you know, like the very traditional, like a development pathways. And then the second is, you know, like the global inequality and then the third is like inclusive transition. I wonder how, like now that you, like I learned that you have really deep local context like African countries, you know, like, if you can share your opinions on, you know, like, how those interests of like the countries of like a local African countries and also like developed countries outside of those African countries, like their interests are conflicting and if the global is really looking into the inclusive transition, like how this aligning those, you know, conflicting interests is coming along, especially in Botswana or any side of Africa. Well, I said economy inequality and it might give a sign that like the developed countries do not care about developing countries, but they are actually are funding there these various renewable projects and they're trying to help them come up and trying to help them build up their inclusive transition. But the issue is maybe because I took the whole continent, but each country has different situations. And the reason I took Botswana is because it's very stable country and it is known to have like settled in democracy very nicely. It's a model country without like a lot of, without much political instability. It's very politically stable. So even Botswana, the problem is I haven't really seen much support coming into Botswana and usually these companies that come in are focusing on the resources like diamond because as I mentioned, Botswana has a diamond mine which is massive. But I haven't really, I have to look into this more but the only thing I've seen was USA there and I haven't really seen any like projects that are supported or trying to help Botswana develop in a way. So I've seen them like supporting other countries like Kenya or Rwanda or before Botswana. I don't know why, but when I was researching I haven't really seen that these maybe Germany or US are trying to support their transition in a way. So I guess it's difficult to say in a whole continent but you have to look at like country by country. Interesting. Thank you. I try to be mindful of everyone's time. So I have to let Dr. Yongjun Baek go but thank you for joining us today everyone. And also thank you Yongjun Baek for sharing this really amazing case studies on Botswana and Kenya and everyone in African, like you are experiencing African countries, it was amazing. So for like a conversation you can find Yongjun Baek's contact information on korea.stanford.edu. So feel free to reach out. Yeah, so thanks again for joining us today Dr. Baek. Yeah, so we'll let you go now. Thank you very much. And then for those of you who are interested in SFI seminar series we are going to have summer fellowship information session on March 10th. So stay tuned on the SFI website. We'll be posting what's gonna come up for the next seminar series. So thanks for joining.