Columbia Energy Exchange: Katie Auth on How the 'Modern Energy Minimum' Can Drive Economic Growth

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Show notes (from RSS)

Despite all the advancements we have achieved globally in recent decades, as many as 750 million people still lack access to electricity. Tackling energy poverty requires far more than linking communities to an electric grid. Closing the massive disparity in opportunity for people around the world will require building energy abundance, not just access.

Energy is prosperity, and one way to measure it is by the Modern Energy Minimum. Developed by the Energy for Growth Hub, this benchmark posits that a truly modern life requires at least 1,000 kilowatt-hours per person, per year—10 to 20 times the amount typically used to define electricity access. 

Here at the Center on Global Energy Policy we're partnering with the Rockefeller Foundation to launch a High-Level Panel on Universal Energy Abundance. The panel is dedicated to providing decision-makers with the insights needed to drive industrialization, job creation, and broad-based prosperity across emerging economies. 

So how can we develop and invest in energy infrastructure globally in a way that supports prosperity? What role should governments play? Do the right tools to improve access exist? And how do we navigate the tension between energy growth and climate policy? 

Today on the show, Jason speaks with Katie Auth about energy's role in driving lasting economic change and why the modern energy minimum model could produce a meaningfully better standard of living in developing economies.

Katie is the deputy executive director at the Energy for Growth Hub, which works to end poverty through sustainable development and climate resilience. She's also a non-resident fellow on US-Africa relations at the Carnegie Endowment for International Peace and a member of the Economic Advisory Council for the U.S. Millennium Challenge Corporation. Previously, she spent seven years at the U.S. Agency for International Development, including as senior development finance advisor and acting deputy coordinator of Power Africa.

Credits: Hosted by Jason Bordoff and Bill Loveless. Produced by Mary Catherine O'Connor, Caroline Pitman, and Kyu Lee. Engineering by Gregory Vilfranc.

Transcript

Katie Auth: I just fell in love with energy because it was so crucial to both economic development and climate and it was such a sort of forward facing way of thinking about these problems. Instead of being worried about don't build this, don't build that, don't develop. It was like, yes, let's develop, let's just do it smarter.

Jason Bordoff: Despite all the advancements we have made globally in recent decades, as as many as 750 million people still lack access to electricity, tackling energy poverty globally requires far more than linking communities to an electric grid. However, closing the massive disparity in opportunity for people around the world will require building energy abundance, not just access. Energy is prosperity and one way to measure it is by the modern Energy minimum. Developed by the Energy for Growth Hub. This benchmark posits that a truly modern life requires at least 1,000 kilowatt hours per year per person, roughly 10 to 20 times the amount typically used to define electricity access. Here at the center on Global Energy Policy, we're partnering with the Rockefeller foundation to launch a high level panel on Universal Energy Abundance. The panel is dedicated to providing decision makers with the insights needed to drive industrialization, job creation and broad based prosperity across emerging economies. So how can we develop and invest in energy infrastructure globally in a way that supports prosperity? What role should governments play? Do the right tools exist to improve access? And how do we navigate the tension between energy growth and climate policy? This is Columbia Energy Exchange, a weekly podcast from the center on Global Energy Policy at Columbia University. I'm Jason Bordoff Foreign. The Show I'm very excited to have Katie off. Katie is the Deputy Executive Director at the Energy for Growth Hub, which works to end poverty through sustainable development and climate resilience. She's also a non resident Fellow on US Africa Relations at the Carnegie Endowment for International Peace and a member of the Economic Advisory Council for the US Millennium Challenge Corporation. Previously she spent seven years at usaid, including a Senior Development Finance Advisor and Acting Deputy Coordinator of Power Africa. Katie joined me to talk about energy's role in driving lasting economic change. We discussed the modern energy minimum model and what it would take to enable communities to have a meaningfully better standard of living. We talked about current legislative efforts to stand up international investment models and we explored the tensions between energy for development and climate change. I hope you enjoy our conversation. Katie Oth welcome to Columbia Energy Exchange. For the first time and kind of remarkable the first time we are actually meeting, I think virtually or even in person because I've really admired and enjoyed and learned a lot from your work for a long time.

Katie Auth: Well, Sam, back to you. Yeah, thanks for having me, Jason. This is great.

Jason Bordoff: Thanks. And, you know, in this podcast is, what, 11 or 12 years old? I can't remember. But this conversation feels like very much the spirit of it when it first started, which was I really enjoy talking to smart people and learning from them and asking lots of questions because I'm curious. And if I was in DC, we might be having a drink. And if you were, or I would ask you to have one and try to just talk. And often it turns out a lot of other people enjoy listening to those conversations. So that's really the spirit of this conversation. So thanks for making time for it and for the work that you guys all do. And maybe that's where we can start with, just for people who may be less familiar with what you do and what the Energy for Growth Hub is, maybe you could talk a little bit about it and the areas of focus for you.

Katie Auth: Sure. So the Energy for Growth Hub is a small think tank, and we're based in Washington, D.C. but we have people working for us and with us all over the world. And we are focused on global energy poverty. And we were really founded by our executive director, Todd Moss, to do two things. One is to sort of bridge the gap between so much brilliant academic research and the work of deeply wonky energy practitioners that's taking place all around the world. But so little of that research ever makes it into the bloodstreams of big organizations like the World bank or other development funders. There's a huge gap. Those worlds don't really talk to each other. And big development finance institutions are hungry for insights and knowledge, but they're not absorbing academic research or literature. And so we try to serve as a bridge between those two ecosystems. And then the other thing that we really try to push for is more focus from development finance organizations and from policymakers writ large on energy for economic development around the world. So. So energy access is crucially important, but it's far from the full story. And we really want to be pushing people to think more about how do we invest in energy infrastructure for job creation at scale, for industrialization, for manufacturing, for really these bigger changes that are going to drive lasting economic change.

Jason Bordoff: And that's great. And I want to come back to that distinction between how much energy the world needs and how one defines electricity access. You guys have done some good work quantifying that. And. And how did you come to this work? From working on climate, working on energy, working on development, working for McKinsey. I don't talk a little bit about your background.

Katie Auth: I've never worked for McKinsey, but so I, I wasn't originally an energy person. I actually started out, I knew I wanted to focus on foreign policy. I was incredibly interested in modernizing the way that US policymakers approached Africa. I lived in Senegal for a little while. I was really interested in the ways that international development policy had both succeeded and failed over time. And I thought that US policy had a very outdated perspective on developing economies. It was very focused on, you know, health and security and humanitarian response, all of which is crucial. But we were sort of missing this bigger picture about the economic future. And then in parallel to that, I was really obviously interested in climate change. And I went to grad school for resource conservation in the Arctic, actually. So I was very far away from, from African issues and then ended up getting a job at a small think tank in Washington, D.C. where they were working on renewable energy policy and developing economies. This was sort of my first real job as an adult coming out of grad school. And I just fell in love with energy because it was so crucial to both economic development and climate. And it was such a sort of forward facing way of thinking about these problems instead of being worried about don't build this, don't build that, don't develop. It was like, yes, let's develop, let's just do it smarter. And then I ended up working for the Power Africa Initiative when President Obama launched that in 2014. So spent a long time at USAID, focused on energy investment and then joined the Hub, which has been a great opportunity to take everything I learned while I was in the US Government and sort of now I have the time to reflect on it and think about it and read and write and sort of take it to the next step.

Jason Bordoff: And I want to come back to what you sort of started with because I don't know that it's well appreciated. It's what you and Todd have done really important work, I think, highlighting when people talk about these kinds of issues, I think there's often a conversation and groups organized like sustainable energy for all. There are 750 million people who have no electricity access and that is sort of the problem to solve. And what I heard you say is it is a problem to solve, but there's a bigger way to think about the role of energy in economic development and maybe you could help everyone understand how you think about that.

Katie Auth: Yeah. So I think for most people who aren't living with energy poverty, they take the Energy they consume every day. Very much for granted. In the US we're thinking a lot about affordability and rising costs, but we're never worried that the power system is just going to fall apart or that we're not going to have lights when we turn them on. That is not the case for not only the 750 people who have no electricity at all around the world, but there's actually close to an estimated 3 billion people who they might have access to the electricity grid, but the power is incredibly unreliable. It goes out, it comes back on, or it's incredibly expensive, or they live in places where they don't have the appliances to actually consume electricity. So they might have access to it, but it's not a workable solution. We're pushing to broaden the frame of what energy poverty means and think about more than the people who need first time access, but this much bigger population of people for whom energy quality and reliability and cost is still a huge binding constraint on their capacity to, to work and to live full lives.

Jason Bordoff: And you used the phrase a moment ago, you know, they may not have reliable electricity even if they have access. And of course the volume of energy, the amount, and we'll come to some of the modeling work you guys have done in a moment, goes beyond electricity. Right. The energy that the world needs includes most of the world is not electrified yet. The energy system. So you're talking about a lot of molecules as well in terms of the total amount of energy that is needed in lower income countries.

Katie Auth: Yeah, exactly. And the energy for growth hub really focuses on the power sector specifically. So we don't focus a lot of time and attention on other forms of energy. But you're right. And in a lot of these countries, even beyond the power sector, they don't have access to clean cooking, for example. So a lot of people are burning wood and other forms of biomass for cooking, which has huge health ramifications. And so even moving from that to an LPG stove is a huge step forward in many ways. And then obviously transportation, there's so many things, but electricity is really where we see sort of the, the quickest opportunities for, for lasting change.

Jason Bordoff: And you guys have put together a helpful way to think about the amount of energy that modern life and some meaningful amount of prosperity really requires, which as I recall is 10 to 20 times the amount of elect that's typically defined with achieving access. But just so A, explain that and B, just so I understand what you just said, that sounds really big. Wow, 10 to 20 times. And that doesn't even include things outside electricity.

Katie Auth: Yes, exactly. So what you're referring to is called the modern energy minimum. And this idea was born out of a recognition that the development community has a metric for measuring basically what it means to have quote, unquote access to electricity. This is defined by the UN and by sustainable energy for all. And iea, it means that you're connected, but it means that you consume 50 to 100 kilowatt hours of electricity a year, which for reference is basically nothing.

Jason Bordoff: It's like charging cell phones or turning on the phone.

Katie Auth: It's charging a cell phone. Maybe you have a light in your home. So there are two problems with this. One, that's a huge step forward for people. We want everyone obviously to get that first ladder into electricity access, but it's not nearly enough to power meaningful income gains or anything like that. The other problem is that it also only measures energy poverty in the context of what a household is consuming. So it measures families living at home, what they're consuming there. It doesn't think about the wider economy, which is really where a lot of those income impacts are going to come from. So our modern energy minimum bumps it up, bumps that threshold of consumption up to 1,000 kilowatt hours divided between some at home and a lot more being consumed in the broader economy at each job.

Jason Bordoff: Come up with a thousand. How should we think about that? Yeah, is that like profligate, wasteful? You know, SUVs and suburbs? And why is that a number that big or not quite so big?

Katie Auth: Oh, like what could a thousand kilowatt hours get you in the real world?

Jason Bordoff: Yeah, yeah. I'm just saying. I know, I think, I know the answer to this question. But the idea that like, well, more energy is better and then everybody thinks about how wasteful we in reality are in the US and so you hear a number like a thousand, which I don't think includes lots and lots of wasteful. It's still a pretty small number relative to even what a country like Malaysia uses. Nevertheless, the United States. But, but just explain where a thousand comes from and how we should think about how big that is.

Katie Auth: So if you think about, if you correlate income per capita with energy consumption per capita, there's a very close correlation between those two things. And so you see countries sort of on this trend line up. 1,000 kilowatt hours is pretty much right in line with what a middle income country, where an income, middle income country stands. So that's a nice way to think about it. We're not proposing that we push for everybody to be consuming as much as Americans do. We're pushing really to think about how do we get to the next middle

Jason Bordoff: income threshold of electricity and examples of middle income. I would imagine a country even like India is using more than a thou. Maybe I'm wrong. But when you say middle income, what countries are you? What, what, what's roughly a thousand kilowatt hours?

Katie Auth: So I wish I had it in front of me, but I don't want to speak out of Turin and name a country name that I'm not sure about. But yeah, you're talking about countries like Indonesia, maybe like a country that has some industry.

Jason Bordoff: And in terms of what, just to give a sense of like what that is, that is the kind of number you get to. I think if you have some amount of industry, mechanization of agriculture, you have an air conditioner, you have a refrigerator. This is not, this is not 10 bedroom suburban homes and SUVs.

Katie Auth: Yeah, exactly. So that's really the important thing about the modern energy minimum is only about a third of that energy is being consumed within the home. The rest of it is being consumed in hospitals, manufacturing, industrialization. So in order to reach the modern energy minimum, a country has to have both individual people connected to power, but it also has to have power that's going towards some level of industry and economic activity.

Jason Bordoff: And why is that concept, in your view, important for people to understand? How does it affect the conversation about global aid and development and multilateral finance for energy, about climate change, what you just described?

Katie Auth: I think there's a couple things. Number one, I think we want people to sort of be more ambitious, more audacious in how we imagine a global future of energy. And we want to put the expectation out there that we should be driving toward a world not where we only ensure that everybody has a light at home, but where we're really pushing for people to be able to have the power they need to start a business, to run a competitive garment manufacturing firm if they want to. It's really about unlocking potential. So one, we're pushing everybody to think bigger and to not assume our work is done once we get everybody connected to a cell phone charger and a light bulb. The other thing that I think is really important is in countries where we do take electricity for granted, like the US and we do care, or at least some people care about climate, I think it's easy for us to get sort of stuck in our own context. And we assume that the goal should be efficiency, reducing consumption, transitioning as quickly as possible to clean tech. All of which in the US context makes total sense. And what we want to do is just remind people that there's an entire world in which billions of people are living a very different reality. And that in that context, yes, we should be pushing for cleaner solutions, but we also need to be pushing for much greater energy consumption across the board and sort of pushing for the argument that that doesn't need to cut against climate action, that those things have to go together.

Jason Bordoff: In fact, yeah, I want to come back to sort of how to reconcile this with the need to decarbonize the planet very quickly, which obviously we are not yet doing. And what you just said, which is you kind of answered the question I was going to ask before I asked it. But just to stay on the topic for a moment, you know, the sense of urgency that we do need to do something about climate change. So if you were having a conversation about U.S. energy policy where frankly for a very long time we have not done as much as we should to increase energy efficiency and that's often like the forgotten fuel and low hanging fruit that gets left on the cutting room floor. So the idea that you would someone who is trying to rapidly bring emissions down and you would say the policy goal is to use more energy sort of hits some people the wrong way. We don't want to use more energy, Right. No, but about efficiency and how do we. And I think what I hear you saying is like that is probably true in advanced economies and actually energy intensity of those economies has gradually gone down over time. But for vast swaths of the world that look different than New York or Berkeley, California and may not always be top of mind for people having conversations in places like that. Energy is prosperity like full stop there is it is, it is. That is the reality. And in fact the idea that we would not being wasteful and we can figure out where the lines are with, with that kind of term, with that concern. But if you want people to have a meaningfully better standard of living, it necessarily means they are using a lot more energy.

Katie Auth: Yes. And a lot of people don't and I don't fault them for this. I mean not many people have traveled to really low income countries. It's not a context that a lot of Americans think about on a daily basis. But I think as a result, sort of people have no idea what the depths of energy poverty actually look like. So one of the Energy for Growth hub's most famous infographics is this very simple sort of bar chart where Todd purchased a refrigerator back in 20, 2017 or something, I forget. And he realized that his refrigerator over the course of a year was going to consume more electricity than a person in Kenya would over their entire daily life. And so that's just like one example of how big the disparity is. And I think it's hard sometimes for people living in the States or in Europe to sort of wrap their minds around that. It's such a huge gap.

Jason Bordoff: And when you hear people, I assume sometimes you might say that view imposes Western values on low income and developing countries. We wear sweaters indoors and, you know, put, set the air conditioner to 65 degrees Fahrenheit, that, that we have a view of prosperity that maybe others in the world view differently. And that's a good thing, not a bad thing. Is that kind of. Do you hear that and how do you respond to that?

Katie Auth: We do hear that sometimes. I think I have a couple responses. One is, if you look at polling in African countries or across any of these economies in Southeast Asia, Africa, electricity is by far constantly at the top of the policy priority list. It's top of mind for policymakers, for citizens in this country. If you look at the surveys they do of business owners or people who would like to start businesses in these countries, electricity is often ranked as one of the top three barriers to them actually being able to do the work they want to do. So this is sort of not me imposing something on these people. I think you can see that in the data and when you speak to them and talk to these policymakers. I also think it's really important to sort of separate the priorities in a country like the US and the priorities in a country like Nigeria or Ghana, wherever. Because I think, yes, the US Is wasteful in many ways with our energy. I'm not challenging that or debating that, but that has very little to do with what's on, going, going on in other countries. And so we have to be able to separate that. And I think also, I mean, I want to live in a world where actually nobody's ability to have a job, create a job, earn money, have a good life, go to school, is constrained by energy. And so I would actually love to live in the United States where power is clean and cheap enough that we can use it in all sorts of ways to drive innovation and same thing for emerging economies.

Jason Bordoff: Yeah. And I think maybe it is, tell me if I'm wrong, but I don't think quite the focus of the work you and Todd do, but we have some Great people here at the Energy center and at Columbia doing work on energy poverty in the United States, which is a larger issue than I think many realize. And the estimates from the methodology my colleague Diana Hernandez has developed is somewhere between 10 to 13% of Americans are foregoing basic needs to pay for energy services. And around 40% of Americans are kind of one economic shock away from that reality, which is. Those are pretty big numbers.

Katie Auth: Yeah. And I know, I mean, you're in New York, I'm in D.C. now, but I used to live up in New England. And affording heating oil for New England homes in the winter is a huge issue. And I think that was an interesting thing in the energy poverty conversations globally was during the start of the Ukraine war, when suddenly you were seeing massive concern about fuel in European countries. It was sort of this really powerful reminder that energy poverty is not an issue that's only for poor people to worry about or only for poor countries. And I think that did a lot of good in sort of driving a more cohesive agenda and getting people to realize that this is not just about poor African economies. This is a much bigger problem.

Jason Bordoff: Yeah, well, I think a lot. Not that I wish an energy crisis on countries, but the current energy shock we're living through, I think is reminding people about the fragility of access to affordable energy, even in today's world and in advanced economies. I mean, everything you just said sort of resonated with. I don't know if you happen to hear the conversation, but I had Raj Shah, the head of the Rockefeller foundation, on this podcast a few weeks ago, I think, you know, and hopeful, hopefully we can work with you guys because you've been on the cutting edge of this work, this high level panel on what we had termed universal energy abundance. Maybe that's the right way to frame the concept. Again, go beyond energy access and go beyond the minimum. That was the idea. And it started with Raj reaching out to me, I don't know, a year, a year and a half ago. And really saying what you just said, which is the economic development mission of Rockefeller, we want to anchor that in the need to deliver vastly more amounts of energy to the world to power prosperity. And I think that's kind of consistent with what you said a moment ago.

Katie Auth: Yeah. And Rockefeller has been an amazing partner of ours in this. So I'm excited to see sort of where you guys take that conversation with them.

Jason Bordoff: Yeah, I'm excited to work with you on it. You and your colleagues have also advocated for the use of energy security compacts modeled on like things like the Millennium Challenge Corporation, how it enters into compacts with recipient countries. And I think there's legislation that's been sponsored by senators like Chris Coons who focus a lot on, on Africa. What, what are the core elements of an energy security pact or the legislation right now in Washington?

Katie Auth: So energy security compacts was an idea we put forward first a couple of years ago. And really it was designed to do two things. One is sort of conceptual and one is very structural. So the conceptual piece is to say in this political context that the US is living through right now, we want to make the case, backed up by clear evidence and specific examples, that investing in energy security in lower income countries is pivotal both for their economic development, but also is directly in the US Security interest. And so we laid out a bunch of examples where that's clearly the case. And one example that really resonated with a lot of policymakers was that if you think about the African countries that are very mineral rich and the US wants to partner with them to expand their production of critical minerals and diversify those supply streams, that's a very energy intensive process. And right now a lot of countries are actually having to cut back their minerals industries or activities because of a lack of electricity. Zambia is a great example that's gotten a lot of attention. South Africa is another. And so that's one example of where the US investing in energy solutions for Zambia is great for them and great for us as well. The structural piece is to say, okay, how would the US do that? And we came up with a proposal to basically build long term, 5 to 10 year compacts or agreements with countries where we agree with them on a set of specific investments that we and they are going to make in their energy sectors. And it really builds on the work that the Millennium Challenge Corporation does. It does a big analysis, a constraints analysis at the beginning looks at, okay, what are the key factors that are actually preventing the energy system from thriving and performing and how can we address those? And then the other thing that we hope will be different than other things the US has tried to do in the past is often the US depends on investment from the Development Finance Corporation, for example, which provides loans. So the US might say to a country, we commit to making an investment in a private sector project if and when that project becomes viable in five or 10 years. And that doesn't mean a whole lot to the countries who want assistance. Now the Millennium Challenge Corporation has the ability to provide real funding for hard infrastructure, for public grid systems, for all of the stuff that enables the private sector to come in and build out generations. So we use MCC as sort of the financial anchor for these pacts. And yeah, it's going well. It has legislation drafted and introduced both in the House and in the Senate, and it's moving through the process. So we've seen really strong bipartisan support for it.

Jason Bordoff: Tremendous. I want to ask you, you said a moment ago, you know, this agenda does not need to be in tension with the need to rapidly decarbonize and address climate change. And I just want to come back to that because obviously some people hear that you're talking about massive amounts of energy. And on the one hand, tell me if you agree with this characterization. I think on one side, I sometimes hear, so solar is the cheapest form of energy in the world. Costs have come down. We can do everything we need to do with renewables. And why are we talking about oil, gas or coal? And I, I think there's. When you talk about numbers as big as what you are talking about for a modern energy minimum, not to mention the molecules you would need for the rest of the economy, there's a tension with scaling clean energy that quickly. And when you are spending time in developing economies, as I know you are, you know, you hear people say that, like, of course we need a Runway that includes natural gas. And, you know, maybe you guys want to stop using it faster because you created this problem and you're the ones who caused the historic emissions. So I think it is also the case that. And Chris Wright wrote a piece in the Economist. I remember when he first took office as Secretary of Energy, sort of talking about a lot of things. I agreed with the billions of poor people who are in the world, how much energy it takes to make their lives better. It is hard to do that with zero carbon energy alone. There is a role for fossil fuels. And he sort of concluded by saying, so I'm happy to accept the trade off of climate change for all of that prosperity. And there's an argument that, like, if you care about poor people, you just can't worry so much about climate change. And yeah, you got it. You need fossil fuels. And so I'm wondering how you think about the tension between the reality of the math on how much energy it really takes and what that does mean for climate change. And can we do all of this without any oil or gas or coal at all? And on the other side that maybe sometimes that argument is, I don't know, distorted or, or not fully appreciated, that climate change is an urgent problem and we can't ignore it. And by the way, if we do ignore it, the parts of the world we're talk talking about are going to be the parts of the world most negatively impacted by some of it. So how do you think about that tension?

Katie Auth: Oh, man. So this is like. Yeah, it's the tension at the heart of this work. So a couple things I think I like to push people whenever I'm in this conversation or encourage people to really separate out. Okay, which countries are we talking about? And let's think about the specific challenges that each of these countries are facing. A country that is super coal dependent, like an Indonesia or a South Africa is going to have both different priorities domestically and warrants a different response from the United States than a country like Liberia. And so just being open about that, I think, unfortunately, and just to be

Jason Bordoff: clear, that's because they're kind of in on coal already or coal is a very significant share of the economy in terms of jobs created. So it is also harder to think about moving to other fuels.

Katie Auth: Both of the all of the above. Plus Liberia is dramatically poorer. And so I think morally and diplomatically there's a question about. It's. It's a different case when Liberia is struggling to procure the power they need to keep a hospital running versus someone seeking to do cheaper power for industry. So I think the really unfortunate thing is that this conversation has gotten so politicized. I would argue really on both sides. And I sort of straddle this messy middle position between someone like a Chris Wright and between the people who are really focused primarily only on climate and really only thinking about climate in the context of a rich world. Because I think that the solution is not, as Chris Wright says, to sort of ignore the climate implications. But I do agree with him that in the near term, probably in the medium term, for a lot of countries, gas will play a significant role. And often that has climate benefits. So if you think about West Africa, West Africa, the grids are so poor that most people have to rely on diesel generators to keep the lights on or to run small businesses. So even if you're replacing diesel generators with gas to power, it's still so much more efficient and cleaner. And it also means that unlike the current administration's approach, which is to sort of make the pro poor argument, but then only think about fossil fuels, I want to say, sure, there should be a role for gas and we should be really clear and thoughtful about when and where that's true and how we support that in A way that is responsible and sort of thoughtful and careful. But there's so much that we should also be doing on clean tech, on solar and wind deployment, on emerging technologies, on geothermal and like we need to do both. And what I get frustrated with is sort of the Trump administration uses the global development argument, but then only wants to think about the fossil fuel aspect of the solution set.

Jason Bordoff: Yeah, that resonates. And that messy middle sounds a lot like where I think a lot of people at the center on global energy policy feel like they live and spend time. So that definitely resonates. But do you think that, how should we think about, as you said, I think often in the climate community the idea that, you know, with, do it with clean energy, when you look at the math of scaling supply chains that quickly, growing renewables that quickly, I feel like I hear often in lower income countries we want, when you, when you express a view like it really important to expand your use of energy for prosperity. And we have solar and we have wind and don't worry the cost of nuclear is coming down and there's geothermal and they're sort of hearing like, you know, things that maybe will somehow be affordable a decade from now. Hopefully solar and wind for sure are today. But when I've kind of crunched the math, it is actually hard to scale solar that quickly. And so you said a moment ago, being careful and thoughtful about the role of fossil fuels, what does it mean to do that? And do you feel like multilateral institutions are doing that today?

Katie Auth: So on the first part of your question, I think the, the cost argument of renewables being the cheapest option can be very deceptive. And it sort of sounds really great and in some places is true. But I think the thing to think about in especially lower income countries is that they have very old and dilapidated grid systems. The grids are very limited. If you're thinking about integrating solar at massive scales, they're really not. They don't have the infrastructure ready to do that. And so that takes time, it takes capital. We need to work on both of those things. But in the meantime, if you refuse to consider other options in the immediate term, you're basically telling people like weight the minimal emissions that we would save from preventing one gas to power plant in Liberia is more important than you having a hospital that runs 24 hours a day or access to a school with lights. And so I think that that's the, the moral and diplomatic case in terms of what a thoughtful approach to, to natural gas looks like. This is something that I've been thinking about a lot actually because in the Biden administration I think the White House made a good effort at this and put forward sort of guidelines for how to think about investment in gas to power. And I think what we need moving forward is something similar but clearer and simple. I think there has to be whether it's based on a country's per capita income or based on some other factors. Don't let the systems of US policy and financial decision making sort of get bogged down in a really complicated methodology for figuring out whether to do gas in a specific country. So I don't have the answer right now, but I do think there needs to be a clear and simple rationale for yes in this case like the development outcomes outweigh the climate concerns and here we need to be more careful for whatever reason. And I think we can do that.

Jason Bordoff: And you understandably focused on gas which has much less local pollution and if you manage methane, less greenhouse gas emissions. Also is there a role for coal in poor countries or should that just be sort of off limits and is

Katie Auth: a distraction from a US policy perspective? I don't see a significant rationale for supporting coal. I don't. I think there are really overblown actually concerns about the future of coal in, in Africa in particular. I mean if you. We have something called the Coal Death Watch, which is sort of a silly name for a tracker that looks at where are the viable coal projects being built in Africa. They are very few and far between. There's. There's really not a viable future in which the African continent scales up its coal consumption massively. It's really South Africa and Mozambique and that's it that are using coal right now. And in Southeast Asia, I think there's so much really productive work that the US can do with countries like the Philippines and Indonesia to, to build alternatives to coal and to transition away from coal that I wouldn't push the US to to support more deployment.

Jason Bordoff: What is the role of US policy in this work and how would you characterize where it is today? You worked for usaid. That doesn't exist anymore. At the same time dfc, the Development Finance Corporation, you know, has, is being reauthorized with I think an expanded lending cap and has support from this administration is what are the right instruments? Do we have the right tools to work on this, on this issue? Are they being used well or poorly today and in the future? How should government think about whether new institutions need to be created or rebuilt like USAID or something else?

Katie Auth: So, by and large, I think we do have the tools that we need, which is great. As you mentioned, DFC has just been reauthorized with a significantly larger ability to lend around the world. They can lend capital directly to private sector projects. They can provide guarantees. They can take equity stakes in projects for the first time at scale, which is potentially very impactful. The Millennium Challenge Corporation we talked about, they do grants for sort of enabling infrastructure like public grid systems and other hard assets, which is super helpful. What you've really lost in the destruction of USAID was the fact that USAID was the agency focused on market building. So in a lot of the poor economies that we're talking about, the private sector may want to come in and build a solar plant, but they're constrained from doing that in a thousand different ways because of the regulatory environment or because the financial risk is too high or because the utility is bankrupt. And USAID was the agency sort of trying to address those, those underlying risks and factors. That's what we've lost. And so I do think there's a need to figure out in the future whether or not USAID as a specific institution gets recreated or not. What is the role for the US in addressing those market constraints. And I would argue that we should focus on things like helping countries design procurement structures that can procure and deploy renewables and other forms of energy more quickly and more cheaply, and that we can do that, especially if we focus on a smaller set of countries. I think one of the constraints at USAID was that we were providing energy assistance across, you know, more than 100 markets around the world. I think given the realities of how complex these energy systems are and the resources that the US has available to work in this space, I think it would be better for the US to sort of identify the markets where there is a huge opportunity for impact and a government partner that really wants to work with us and, you know, a key national security interest or economic interest and focus there.

Jason Bordoff: And how do you think about the role of US Energy in this? So when you hear, you know, some in the oil and gas industry, for example, or in this administration say we need to dramatically expand, which, by the way, we are already, and we have. We have been US natural gas exports, LNG exports, because there are so many poor people in the world, is that like, that have an element of truth to it, or is that sort of a talking point or an excuse from industry to sort of advocate for the agenda they want or some of both?

Katie Auth: I think it's some of both, I think there are well meaning people in the US LNG industry who, who legitimately see the importance of energy poverty and the good that U.S. gas can play in that. But I, what bothers me is when that starts to sort of, as we talked about before, like that can't be the, the only solution. That is not the only solution. African countries, for example, importing US LNG is really not the most economically viable way to solve their problems. And so I think it's fine to have it be part of a conversation, but I don't want it to become sort of the only thing we are focused on which is I think a big risk right now.

Jason Bordoff: Sorry. Another way for them to get cheap energy, I presume is to buy a lot of stuff from China. And can you talk about the kind of broader geopolitical context in which this agenda plays out? Have you seen China stepping in to fill the gap left by usaid? China's narrative to which there is some truth, but the idea that like it is dramatically lowering the cost of clean energy solutions, energy solutions like solar and that that's helpful to countries like Pakistan or even lower income countries in Africa that want to buy up as much as they can and they'll take it, they'll make different choices than in the US or elsewhere where we say well that's a security risk, so we're going to keep that out and we're going to try to block it, even if it might mean higher costs. Is this sort of strengthening China's position to deliver the energy that the poorest countries in the world need?

Katie Auth: So it's undeniable that China is and has played a huge role in this space. And I think your reference to Pakistan is this really striking data set that emerged at some point in the past year. About you can actually see the imports of Chinese solar PV sort of skyrocketing in countries like Pakistan, South Africa and elsewhere. And what's really interesting about that is by and large those solar panels are not going to sort of utility scale, grid connected solar facilities. They're going to you know, individual, mostly commercial customers who are putting it on their rooftops for either standalone power or for backup to the grid. And it's all bottom up driven so often.

Jason Bordoff: Right. The as I understand the government had sort of worked with China to build coal plants because that's where cheap electricity would come from. And consumers and businesses said the solar stuff works even better.

Katie Auth: Yeah. So it's this fascinating situation of a very bottom up driven sort of move that CNI customers are making in a lot of these countries. And all of that's coming from China. And so I think it is wrapped up in the tensions between the US and China as the US thinks about its diplomatic and investment goals in these countries. I think personally I don't really see a world in which we either can or maybe even want to compete against China for selling solar PV panels to countries. You guys know more about this than I do, but I don't think that's a viable or particularly productive conversation to be having. So I think for me the more interesting conversation is how do we focus in on the clean tech where the US can actually be competitive and even lead. How do we work with countries to diversify their systems so that sure they're going to have solar made PV panels, but they're also going to have, and they're going to need a whole range of other things, some of which the US should and will step in to provide. And so I think for me the priority is driving down the cost of, of the technologies where we are the global leader and not standing in the way of a country using solar because it's made in China. I don't think anybody wins in that scenario.

Jason Bordoff: But what are those technologies that comes up sometimes when you hear concepts of like a green Marshall Plan or something and that the US should be doing that and you're like, well, we're what we're going to, we're going to be the leader in carbon capture technology or advanced nuclear and these are way out in the future and really expensive. Like is that, does that really a viable strategy or is it a way to sort of gloss over the kind of hole the US is in now compared to China on these tech, on energy technologies?

Katie Auth: I think your point is fair. I think those are all long term plays, but I do think we need to be thinking long term and short term. So I don't think that just because, you know, I think if we look at the example of China, the position that we're in right now is because they thought incredibly long term about the future of energy markets and about the technologies that they wanted to dominate and be competitive in. And so I think looking at things from a long term perspective is not a bad thing. It's actually we have to do it, we have to be better at that. But yeah, you're right, it's not a solution that's going to work tomorrow, but it's the reality of the world.

Jason Bordoff: Yeah, I was thinking, I mean, he's a good friend and just brilliant. I was Thinking about the article Brian Deese wrote in Foreign Foreign affairs about that concept and you know, kind of making the case for investment in emerging technologies like hydrogen power and carbon capture and storage. And I bet that is both appealing, but also almost like an acknowledgment of failure that, that, that how far, how far away those things are. And you know, if you show up in Africa and say, well, we don't have the solar panels, you, we're working on green hydrogen or advanced nuclear, I'm not sure people see that as what they need right now.

Katie Auth: Correct. But you know what, we also show up and we talk way too much about new generation. For a lot of these countries, generation assets is not actually what they need. Really. As a, you know, when I was at usaid, the more embarrassing conversation to have with an African official as a US government representative was you'd walk into a room and say, we can provide loans for gas, to power, for solar, for wind. And they'd say, no, no, no, what we really want is transmission infrastructure. And I would have to say, oh, sorry, we can't, we don't do that. So I think there is so much that countries need and want today that the US can deliver. We don't need to wait for SMRs and hydrogen and all of these things. There's stuff we can lead on today.

Jason Bordoff: And the capital, like there's, you know, the global infrastructure funds, global infrastructure partners, Blackstone, I mean, all, all the big infrastructure funds that are looking to deploy capital on transmission lines, on offshore wind, on, on natural gas projects too. But, but as you know, and maybe you could talk a little bit about it, like the barriers to that investment, political risk, currency exchange risk, it's just harder to invest in lower income countries. And as, as a commercial proposition, which is why the capital is not yet flowing there.

Katie Auth: Especially when you think about transmission infrastructure and distribution infrastructure in most of these countries that's all public. So the US's entire investment platform and approach is sort of built on the private sector. So we can provide loans and guarantees only when projects are driven by a private developer. And that's really a pretty fundamental gap. That's why as a USAID official, I would go in and I really had nothing to offer when it came to the grid because I didn't have any tools at my disposal to support public infrastructure. MCC can do that, which is why I think they're so important moving forward. But I think that's a key gap that the US needs to think more about with poorer economies is the public infrastructure piece. There are many countries that are sort of, they've been pushed for years by the World bank and others to privatize their transmission sectors. It's happening very, very slowly. But that's a huge gap that we're not very good at filling.

Jason Bordoff: Yeah, how do we get better? I mean, if you, if you describe this problem often to policy people, the answer may be different from people who are actually putting the capital to work in the private sector. You know, the answers will be we need public private partnerships and blended finance and some set of buzzword concepts that are those the right answers or what actually moves the needle to de risk and accelerate private capital.

Katie Auth: So I would argue that we have, and by we, I mean US government, but also like the development finance community in general. The approach that we've taken for the last 20 years is very reactive and very late stage. So we sort of wait for good projects to come to us and to be bankable and then we say, oh great, we'll throw in a public guarantee so that private sector can do what they do. The problem with that is that there's no pipeline of viable energy infrastructure in these countries. And so if you think about the Development Finance Corporation, even under the Biden administration, when they wanted nothing more than to invest in clean energy projects in poor countries, they really could do very, very little because the projects weren't there. And so I think there's only so much you can solve if your solution is, oh, we'll just put more money on the table, we'll just do more to sweeten the pot for developers. We really need to come in earlier and say, okay, what's the support that we can provide that will actually start generating really early stage projects, helping them get to the point of bankability. And currently we're doing that at a very, very, very, very, very small scale scale.

Jason Bordoff: I sort of was a little dismissive a few minutes ago when like, oh, advanced nuclear is some magical solution down the road. And I don't actually think that's fair. I'm actually pretty optimistic about the advances we've seen in nuclear technology. Even though it is still the case that financing is a challenge. Costs are high in places like the U.S. i don't agree with a decent amount of what this administration does, but it is taking steps in many cases that are constructive to try to move the nuclear agenda forward. But in lower income countries, I guess the World bank finally dropped its ban on financing nuclear projects. You and your organization played some role in that. Many African countries are now kind of jumping on the nuclear bandwagon sometimes proposing projects that are even way big, bigger than their, their needs. So how do you like, separate the signal from the noise and the role of nuclear power in Africa? And is there a role for nuclear in the problem we're discussing?

Katie Auth: Yeah, I think it's, it's a really good question. A couple things. One is that our position in getting the World bank to drop the ban was not to say, oh great, this means that the World bank should be financing nuclear projects everywhere across Africa tomorrow. That's not at all what we're saying. I think my position on nuclear is basically we should be, I hope that smarts become a safe and economically competitive option around the world. I don't know that that will be the case and I don't know the timeline on which that might happen. But in the meantime, for countries that are interested in potentially using nuclear one day, there is so much regulatory and policy work that needs to happen starting now to sort of figure out should we be thinking about nuclear, what institutions do we need to do that, what will we need to comply with? And that's the stuff that the World bank can really start today and they should be. And part of dropping sort of the ex ante ban on even talking about nuclear was about creating space for those conversations with countries that are interested in their nuclear potential. I think the unfortunate piece that you alluded to was you have seen a bunch of countries sort of get really excited about nuclear and sometimes put forward really sort of very unrealistic visions. Countries like Burkina Faso or Burundi like putting forward these massive announcements about nuclear. And I think it has sort of muddled the conversation in the African context, unfortunately. But it is a very real geopolitical issue for the US to consider that a lot of countries, especially in the Sahel and in West Africa, already have incredibly close relationships with Russia around security issues. They're signing nuclear MOUs with Russia. So there are real sort of steps taken that may not result in an asset being built in the near term, but have real implications for both these countries and for US security.

Jason Bordoff: So I started this conversation by reminding people about the origin of this podcast, which is just an excuse for me to talk to super smart people and ask a lot of questions. I'm interested in and learn a lot. So that has, we have exceeded that bar from my standpoint. Hopefully people listening will agree with. It's been a pretty comprehensive conversation. But is there anything we haven't covered that you wanted to.

Katie Auth: No, I don't think so, Jason. Just thank you so much for having me, and I jump at any chance to talk about these issues with smart people. So it's awesome to have the platform.

Jason Bordoff: Yeah. Well, thanks for the work that you and the organization do and Todd and everyone else. And thanks for the work and thanks for making time to be with us today.

Katie Auth: Same to you. Thanks, Jason Foreign.

Jason Bordoff: Thank you again, Katie Oth and thanks to all of you for listening to this episode of Columbia Energy Exchange. The show is brought to you by the center on Global Energy Policy at Columbia University. The show is hosted by me, Jason Bordoff, and by Bill Loveless. Mary Catherine o', Connor, Caroline Pittman and Q. Lee produced the show. Gregory Vilfrank engineered the show. For more information about the podcast or the center on Global Energy Policy, please visit us online at energypolicy Columbia Edu or follow us on social media Columbia. And please, if you feel inclined, give us a rating on Apple or Spotify or wherever you get your podcasts. It really helps us out. Thanks again for listening. We'll see you next week. Sam.