For the first time since the Industrial Revolution, investment in renewable energy worldwide surpassed that of fossil fuels last year. That economic transformation leaves John Morton feeling optimistic about the worldwide response to climate change. Morton led the Overseas Private Investment Corp. as its chief operating office before transitioning to the White House as its senior director of energy and climate change in early 2016.
OPIC, the U.S. government’s international development finance institution, helps private American companies invest in emerging markets with loans, political risk insurance and equity investment funds. OPIC made $3.7 billion worth of investments in fiscal year 2016, including $1.4 billion for energy projects of all types. In 2008, they began growing their portfolio of renewable energy investments from $10 million to more than $1 billion by 2011.
The private sector’s role in financing renewable energy projects was a central theme of the inaugural FT Investing for Good conference, held Wednesday in New York City. Judith Rodin, president of the Rockefeller Foundation, and Jim Sorenson, founder of the Sorenson Impact Foundation, joined over a dozen speakers on innovative finance, new investment tools and climate change.
Devex spoke with Morton on the sidelines of the event about the growth of the renewable energy sector and preparations for the new U.S. presidential administration.
What do your last few weeks at the White House look like? Are there any particular projects you want to get wrapped up?
We continue to be busy. Obviously the business of the country continues, and so much of the job is to coordinate the interagency work that is going on on energy and climate. And of course the international energy markets continue to be active. … So we are busy and continuing to work through the last day.
I think that what I want to get done before we leave is to make sure we have left our documents, our information, in good shape for the incoming team — making sure they are in a position to hit the ground running and they have all the information in a well-organized fashion. We are spending a lot of time making sure our ducks are in a row.
Have you had conversations yet with the appropriate point-people on the Donald Trump administration’s transition team working on climate change?
The transition team work has begun within the [National Security Council] and we expect to have those conversations within the coming weeks with our counterparts.
On climate change issues, specifically?
That is our understanding.
You talked a bit today about the importance of the Trump administration hopefully recognizing the benefits of continuing to work on climate change. Are there certain policies or developments you would want to particularly emphasize that require continued attention?
What we have seen in the last few years is that the transition to a low-carbon economy is now inevitable, it is expediting, and it is a private-sector driven transition, largely. Last year there was more investment into renewable energy, globally, than we saw into fossil fuel. We saw faster job growth in the clean economy sector than in the fossil energy sectors, and those are trends that are being driven by private market incentives. Our expectation would be that those would continue, driven by private markets and investors.
How has the conversation on climate change evolved since you started with OPIC in the mid-2000s and then went on to the White House? Do you have to do much work convincing people this is a problem they should be paying attention to?
Project developers in these sectors don’t need to be convinced because they see the opportunity. Conventional institutional investors are probably a little bit slower, and understandably slow, to move into any new market. But I think the good news in the last 12-24 months is we have seen significant uptick in the number of companies that are saying two things. One is, “we recognize the downside risk of climate change from an investment standpoint,” and two, “we recognize the upside potential of cleaner investments.” Because of climate change, we recognize there is a significant opportunity for us to take advantage of and in both cases we are beginning to see conservative - not politically conservative, but constitutionally conservative, investors - begin to shift their thinking and think about investing.
Where do you see the most growth in the renewable sector?
The answer is, it depends. I know that is not a very satisfying answer. Geothermal resources in the Rift Valley of Africa are plentiful, but it really depends upon where you are. Solar and wind get most of the headlines because of how widespread their use can be, and certainly those are sectors I would expect to see grow rapidly and exponentially in the coming years.
But the growth is not limited to one particular area, geographically speaking?
Absolutely. One thing I mentioned was that with the commitments under the Paris agreement, well over 100 countries have formally joined, showing that countries, rich and poor, developing developed, Africa, Asia, USA., etc., have committed themselves to low-carbon, developed pathways. How they achieve those, specifically, are really national decisions. But what is clear is that the pace of change is expediting and the economic opportunities embedded in that transition are similarly expediting.
Amy Lieberman is a reporter for Devex, based out of New York, where she covers global development around the city and out of the United Nations. She has previously worked as a freelancer, reporting on the environment, social justice issues, immigration and development. Her coverage has appeared in The Guardian, The Atlantic, Slate and The Los Angeles Times, among other outlets. She received her M.A. in politics and government from Columbia Journalism School in 2014.
Subscribe to Devex Newswire
Top international development headlines emailed to you every day