Advancing American Clean Energy Leadership at COP28

November 30 marked the start of the 28th annual meeting of the Conference of the Parties (COP28), where a historic 97,000 participants registered and over 80,000 convened in Dubai, UAE to collaborate on solutions to reducing global emissions.

The outcome of the first global stocktake has received mixed feedback; regardless there were several developments from COP28 that should be celebrated.

First, the U.S., UK and Canada, along with more than 20 other countries, launched an ambitious call to triple nuclear energy capacity by 2050.

To triple nuclear capacity from now until 2050, the world will have to build around 30 large reactors each year, even more, if replacing retiring capacity is necessary or if smaller reactors take off.

ClearPath partnered with the World Nuclear Association on a number of events, including one where ClearPath CSO Jeremy Harrell spoke of the increasing bipartisan support for advanced nuclear and America’s position to lead global deployment.

Second, at COP28, conservatives took a leadership stake by driving discussions centered around an all-of-the-above approach to clean energy solutions.

In fact, there were a record number of Congressional Republicans at COP28, solidifying their ambitions to be part of the dialogue and present positive solutions. ClearPath collaborated with the bipartisan delegation by hosting several panels and joining them at others. Our CEO Rich Powell and Senator Lisa Murkowski (R-AK) hosted a fireside chat highlighting American policies that have catalyzed a range of technologies. Senator Murkowski emphasized the impact the Energy Act of 2020 had on authorizing advanced nuclear, but called for restructured permitting to ensure projects face reasonable timelines for attracting private investment.

ClearPath discussed permitting with Congressional leadership including Representative John Curtis (R-UT), Representative Garret Graves (R-LA), Representative Tim Walberg (R-MI) and Representative Scott Peters (D-CA). Powell led the conversation around the time-sensitive need for bipartisan legislation to address the broken permitting system.

L to R: ClearPath CEO Rich Powell, Representative Garret Graves (R-LA), Representative Scott Peters (D-CA), Representative John Curtis (R-UT), and Representative Tim Walberg (R-MI).

Alongside participation with conservative leadership, ClearPath highlighted pragmatic solutions to fill the white space of clean energy deployment. Compared to previous years, carbon management and nuclear energy were previously shunned; however, at this year’s conference, the final agreement calls for the acceleration of carbon capture and nuclear technologies. ClearPath’s participation in events helped underscore the importance of these vital technologies.

Speaking of technologies, that brings up a third key theme of COP28 — carbon management. In an event with Axios, ClearPath CEO Rich Powell referenced the Intergovernmental Panel on Climate Change (IPCC) report which specified the need for carbon removal technologies to stabilize global temperatures, while also noting the technology’s unique ability to retrofit existing infrastructure and preserve jobs.

L to R: Rich Powell (CEO, ClearPath); Nicholas Johnston (Publisher, Axios)

Photo Credit: Arthur Abraham/ Haiku D Photography on behalf of Axios

By collaborating with a diverse range of stakeholders with big ideas on solving the climate challenge, ClearPath left COP28 with a great deal of optimism. It was a pivotal opportunity to elevate nuclear energy, carbon management and conservative leadership. Ensuring American leadership remains prominent on the international stage is crucial for securing a future with both a prospering environment and economy.

Gloomy Energy Diplomacy Paints Need for Bright American Leadership

Monsoon rains lashed a hazy coastline as energy ministers gathered in Goa, India, for the G20 Energy Transitions Ministers’ Meeting last month for the latest rounds of deliberations, quarrels, and announcements about the world’s clean energy and climate future. Modest progress was made among the parties to acknowledge and advance the role of critical technologies like hydrogen and carbon capture utilization and storage (CCUS); however, other conversations predictably broke down casting a gloomy picture for global clean energy deployment.

Russia and Saudi Arabia shoved back an agreement to triple renewable generation capacity by 2030, and China blocked cooperation on critical raw materials. Officials failed to agree on language criticizing Russia’s invasion of Ukraine that threw energy markets and supply chains into turmoil. Ultimately, the negotiations closed without an agreed joint communique ahead of the G-20 leaders meeting next month, instead settling for a non-binding “outcome document and chair summary.”

As intermittent blackouts shut out the lights in my hotel room in Goa, the plodding diplomatic progress of the G-20 ministers’ meeting stood in stark contrast to the immediate opportunities that exist to deliver energy security for the U.S., India, and other like-minded countries and address the global climate challenge.

Alongside the G-20 discussions, the Clean Energy Ministerial and Mission Innovation (CEM/MI) held its annual meeting. The CEM/MI is the only regular gathering of energy ministers focused exclusively on clean energy, with the hosting of the Ministerial meetings changing every year among the CEM/MI member governments. These conversations helped bring perspective to rapidly developing nations like India where energy security and reliability are equally imperative to deploying more clean energy. For the early part of this century, the country has exuded optimism and expectation for a brighter future, and it is remarkable to see the growing vibrancy of India’s clean energy policy ecosystem. However, on this trip I also heard true anxiety from friends in India – young urbanites in comfortable jobs, not subsistence farmers – about their future ability to live in the country with increasingly harsh weather conditions. Unfortunately, these worsening conditions and this growing anxiety are not unique to India.

That is why pragmatic American leadership with international partners – like India – is needed at multilateral energy and climate forums like CEM/MI to drive forward better understanding of next-generation technologies. It was very encouraging to see the prominent and deeply technical debates about CCUS technology happen in Goa. A decade ago, this was not the case with many in India and other countries outright dismissing the technology. Hydrogen was another hot topic of promising debate with thoughtful conversations about the pros and cons of green hydrogen versus – pick your color hydrogen – and the crux of ultimately figuring out how demand can meet supply.

Yet, there were notable gaps in the discussions at CEM/MI. The important role of advanced civil nuclear power in the global energy mix was mostly relegated to the far corners of conversation among us subversives who already believe in the technology’s game-changing potential for clean baseload generation. Likewise, there was surprisingly little talk about geothermal energy, hydroelectricity, and long-duration energy storage as essential pieces of the power puzzle. These areas and more should be elevated by U.S. delegates at the next CEM/MI gathering next year in Brazil.

Finally, there’s always the question of financing, with developing countries seeking solutions from developed countries. How can governments and the private sector better partner to design bankable clean energy projects at scale? The U.S. leverages agencies like the Development Finance Corporation (DFC), the Export-Import Bank (EXIM), and the U.S.-Trade and Development Agency (USTDA) to provide tools and lending options to bridge the financing gap in developing countries. But financing is not a silver bullet. In India, for example, the balance sheets of most of the public sector electricity distribution companies are not in good shape and inhibit the amount of clean energy that can be brought to the grid. The U.S. can only do so much to help partners and allies, and sometimes they need to make hard decisions to help themselves so that we can solve shared challenges together.

With every challenge comes opportunity, but you have to see it to seize it. Gatherings like CEM/MI are where problem solvers can exchange learnings and viewpoints to discover opportunities faster than they would on their own, and work toward achieving the international clean energy advancements we need.

Sharpen U.S. Clean Energy Trade & Financing

The dual imperatives of addressing energy security and climate change are inherently international. The world needs more energy, and emissions know no borders. ClearPath sees a future where America and like-minded partners lead the world in addressing climate change by developing and deploying the most innovative, market-competitive clean energy technologies. U.S. emissions are a smaller and smaller part of the global total, now roughly 11%, which emphasizes the need for the U.S. to work effectively with international partners and allies because our efforts at home will not be enough to solve our energy and climate challenges alone.

The U.S. has built a good track record, AND we need to do more.

We must be clear-eyed about the intense global competition the U.S. faces. For instance, since 2000 China has become a dominant player of global energy finance, issuing over $234 billion in loans for energy projects to roughly 68 strategically-significant nations, with about 75% of that directed towards coal, oil, and gas development. For perspective, from 2016-2021, China provided more energy project financing around the world than all major Western-backed Multilateral Development Banks combined. In order to compete effectively, the U.S. needs to make better use of the policy tools we already have, and design new ones.

Energy Finance Commitments by Major Development Finance Institutions, 2016-2021

Official project databases of each development finance institution (DFI); China’s Global Energy Finance (CGEF) Database, 2022. Boston University Global Development Policy Center.

What’s Past is Prologue

Some of the most impactful tools in America’s toolkit are international trade and financing policies, and this is nothing new. Institutions like the U.S. Export Import (EXIM) Bank were established in the wake of World War II, engaging in the reconstruction of Europe and Japan, then evolved in the 1950s and ‘60s to help American exporters gain a foothold in emerging markets and later supported large-scale infrastructure projects in the ‘70s. In 1985, President Ronald Reagan signed the United States’ first free trade agreement into law, the U.S.-Israel Free Trade Agreement, which helped America solidify one of its closest strategic partnerships that now spans nearly every domain including commerce and clean energy technologies.

The world has changed a lot since the Reagan era. The expansion of China’s Belt and Road Initiative and Russia’s 2022 invasion of Ukraine have underscored the need for United States international leadership, not only for our own energy security, but also that of our partners. This can be supported through exports and financing of technologies that reduce reliance on adversarial nations while reducing emissions. Concerted action with our partners and allies through trade and financing can be an essential counterweight to other nations that do not have our best interests, nor the world’s climate, at heart.

A recent example of the strategic role that American financing can play for clean energy is the development of Poland’s first nuclear plants. The Trump Administration led a key Intergovernmental Agreement (IGA) between the U.S. and Poland to develop Poland’s civil nuclear power program and industrial sector. That agreement clearly articulated America’s intention to leverage the U.S. EXIM Bank and other government financing institutions for Polish reactors. Subsequently, the U.S. Trade and Development Agency (USTDA) funded an initial engineering study for Poland to assess the viability of Pennsylvania-based Westinghouse Electric Company’s AP1000 reactor technology. These efforts culminated in November 2022 when the U.S. Government tabled a comprehensive, competitive technical and financing package, and the Polish Government chose Westinghouse’s reactor, in a deal worth roughly $40 billion. Building on that, in April 2023 EXIM and the U.S. Development Finance Corporation signed an agreement to finance up to $4 billion for another Polish project that could support the U.S. export of GE Hitachi’s small modular reactors. These kinds of projects bring geostrategic, economic, and climate benefits to the people of Poland and the United States, and are made possible by the backing of American financing.

Painstakingly negotiated trade agreements, like the U.S.-Mexico-Canada Agreement (USMCA), are also an important lever to promote high-standards American industrial practices abroad. Among the provisions of USMCA are enforceable requirements for Canada and Mexico to effectively implement their environmental laws, including air quality and emissions, without weakening those laws just to promote their own exports and investment. Other provisions commit the countries to enhancing trade and investment in environmental goods and services, including clean energy technologies, by eliminating tariff and non-tariff barriers. Agreements like these can help create the economic conditions to support clean technology innovation and deployment, while establishing a bulwark against nations that do not adhere to such standards. America’s network of trading partners is a powerful dimension of global leadership and should be continually expanded and improved, in part, to help combat environmental arbitrage.

Exciting Opportunities for Policy Changes

Both the example of Poland’s civil nuclear program and the USMCA – initiated under conservative leadership and implemented in a bipartisan manner – took years to come together. Unfortunately, this type of coordinated effort across U.S. federal agencies is the exception not the norm. Many of the best tools, such as the Development Finance Corporation, are often disconnected from the rest of the government financing tools and clean energy goals. This is not an effective way to compete with rival countries where there is far more strategic alignment across agencies and often their non-market, state-owned enterprises.

That’s why we need to better leverage existing tools and build new ones in order to reach our future clean energy and climate ambitions.

A good example of a needed fix is EXIM’s China Transformational Exports Program (CTEP). This program has a Congressional mandate for EXIM to support U.S. exporters facing competition from China in 10 key Transformational Export Areas. One of those export areas is “renewable energy, energy efficiency, and energy storage.” Conceptually, the program could be a valuable lever for all clean energy technology providers (and the financing needs of foreign customers) facing unfair competition. But unfortunately – to the detriment of our geopolitical, clean energy, and climate goals – limiting this program to renewable energy sources alone leaves out important technologies like advanced nuclear, carbon capture and storage (CCS), and hydrogen. In an all-of-the-above energy competition with China, CTEP deserves a common-sense revision to be more technology neutral when it comes to clean energy if we’re serious about competing and winning on exports and against climate change.

For years the United States led negotiations on a high-standards Environmental Goods Agreement (EGA) to lower trade barriers on clean energy technologies. Although the negotiations were not completed, significant progress was made. For many of the clean energy products previously under consideration for an EGA U.S. tariffs are already very low compared to tariffs American exporters face in foreign countries. Accordingly, an EGA would help open international markets to U.S. clean energy technologies that are being rapidly demonstrated and deployed. An ambitious EGA would reduce the price of U.S. clean energy abroad, helping other countries lower emissions affordably while supporting American jobs. There has been recent bipartisan interest in pursuing a new EGA to help modernize the global trading framework, and the U.S. should seriously consider getting back to the negotiating table.

Clean Energy + Trade = Jobs

These are just a couple examples as to why every tool in our policy toolkit should be available – and sharpened – to address massive global challenges like energy security and climate change. No nation will use a single clean power technology, every country will need to find the right mix given its national circumstances, geography, resource endowments, and pre-existing industry. Our competitors are bringing enormous resources to bear in an effort to dominate these markets, which requires the United States to be more agile and strategic in order to advance our long-term goals. But with the right policies in place, and in coordinated action with partners around the world, our energy and climate future will be bright, at home and abroad.