Michael Bloomberg plans a $242 million investment in clean energy

More than 750 million people around the world lack electricity, and energy poverty is a powerful driver of economic and health inequality. Although Mr. Bloomberg’s investment is intended to combat climate change, Ms. Ogunbiyi said the funds could also help tackle a range of crises caused or worsened by lack of electricity, including food shortages and health care. poor medical.

“It is important to understand that this is a crisis in itself,” he said. “People who don’t have access to electricity or a clean kitchen are not an inconvenience. It is the difference between life and death for many people, and should be treated as an emergency.”

Total investments in clean energy in developing countries were less than $150 billion in 2020, according to a June 2021 International Energy Agency report, which warned that, by the end of the decade, such financing needed to be higher. to $1 trillion per year to put the world on track to reach net-zero emissions by 2050.

Ms. Ogunbiyi said that as Sustainable Energy for All and other organizations work with the 10 countries to create energy transition plans or update existing ones, they will encourage country leaders to sign “no new coal” commitments.

The idea behind the kind of investment Mr. Bloomberg is making is that a philanthropic organization like his takes the most risk early on in a project that decision-makers might be skeptical about, and if it works, the project will become attractive to conventional investors. later, said Rachel Kyte, dean of the Fletcher School at Tufts University and former executive director of Sustainable Energy for All.

Even if the Bloomberg money can lower the financial barriers, the political barriers remain formidable. The fossil fuel industry’s deep opposition to renewable energy development “is a big hurdle,” said Tom Sanzillo, director of financial analysis at the Institute for Energy Economics and Financial Analysis.

But what financing like Mr. Bloomberg’s can do is create the foundation on which a transition to renewable energy from fossil fuels becomes the smartest financial decision for companies. That means increasing the risk involved in developing fossil fuels, Sanzillo said. It also means lowering the risk involved in developing renewable energy.

“I think market forces are generally on Bloomberg’s side,” Sanzillo said. “If I had done this 10 years ago, I probably would have said it might not work. I think you have a better wind at your back here.”

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