More than 750 million people worldwide lack electricity, and energy poverty is a powerful driver of economic and health inequality. Although Mr. Bloomberg’s investment is meant to combat climate change, Ms. Ogunbiyi said the funds could also help address a variety of crises caused or worsened by the lack of electricity, among them food scarcity and poor medical care.
“It’s important to understand that this is a crisis on its own,” she said. “People not having access to electricity or clean cooking isn’t an inconvenience. It’s the difference between life and death for a lot of people, and it needs to be treated as an emergency.”
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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 more than $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 would encourage the countries’ leaders to sign “no new coal” pledges.
The idea behind the type of investment Mr. Bloomberg is making is that a philanthropic organization like his takes on the biggest risk early in a project that decision makers might otherwise 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 a former chief executive of Sustainable Energy for All.
Even if Mr. Bloomberg’s money can lower financial barriers, the political barriers remain formidable. The fossil fuel industry’s deep opposition to renewable energy development “is a huge obstacle,” said Tom Sanzillo, the director of financial analysis at the Institute for Energy Economics and Financial Analysis.
But what funding like Mr. Bloomberg’s can do is create foundations upon which a transition to renewable energy from fossil fuels becomes the smartest financial decision for companies. That means increasing the risk involved in fossil fuel development, Mr. Sanzillo said. It also means decreasing the risk involved in renewable energy development.
“I think that, overall, the market forces are on Bloomberg’s side,” Mr. Sanzillo said. “If he’d done this 10 years ago, I probably would’ve said it might not work. I think here you have a better wind at your back.”