Welcome to zero. I am akshatarati. This week the countries quitting fossil fuels. Last week I was in New York for Climate Week. It was hot and muggy and busy. The United Nations General Assembly was also taking place, which meant traffic in Manhattan was at a total standstill as cavalcades of diplomats shuttled from one discussion to the next, blocking roads. I of course, traveled the Low Emissions Way on two feet covered in sweat between events. There were
six hundred events in Climate Week. By one count the mere mortal that I was, I made it just to a dozen, and pretty much no topic was off limits. There were discussions about all the usual big questions do we need carbon removal? Do we need geoengineering? Where are we going to get the money? But there are also community cleanups and musical performances and runs for climate birding.
Even I could go on. One thing that stood out to me, though, was that the conversations tended not to be about what we must do, but how do we do it?
And how do we do it?
Bigger at scale, be bolder. One of those big, bold propositions is a fossil fuel non Proliferation Treaty. Just like nuclear non proliferation, the idea is getting countries to agree to stop expanding fossil fuel production. So far, thirteen countries are on board. The biggest is Columbia, and on the stage at a rooftop restaurant in Times Square, I got a chance to speak with Columbia's Environment Minister, Susannah Muhammad has been an outspoken proponent of this treaty and was
full of energy and new ideas. Joining her on stage was Brazil's chief climate negotiator, Lilium Chagas. Brazil has not joined the treaty, at least not yet, but these two countries have so much else in common. They're both significant oil producers, and two years ago they both elected populist, left leaning presidents who campaigned on climate and conservation promises, and now they're both under pressure to deliver. In the conversation,
as you'll hear, we also broke some news. Columbia is setting out a forty billion dollar economic transition plan to help replace revenues from oil and build green sectors like tourism and clean energy that will make up for the shortfall.
Susanna hopes that it will include ten billion dollars in support from international financial institutions and developed countries with Susannah and Lilium about the big ambitions Columbia and Brazil have and the many sticky business as usual and seemingly intractable barriers that they both need to overcome. And by the way, for the shappiered listeners, my voice sounds a little bit different in the recording that follows, but I can assure you it's me. It has to do with the equipment
used to make the recording at the live event. Colombia's number one export is oil, and so it was major news when at COP twenty eight last year, Columbia's President Gustavo Petro announced that the country would be joining a coalition of countries to sign the Fossil Fuel Non Proliferation Treaty. Now, what are the economic steps that Columbia has taken since to deliver on this commitment.
Well, the first thing is to explain that we have taken all steps possible and we are very clear that this transition is impossible. To do it alone. We have to replace ten percent of GDP on exports of oil and coal. We are the fifth largest exporter of coal, and we know that in fifteen years our markets will be closing because of the energy transition and because our oil. First, we are not super rich in reserves, so we have a very bad.
Dependency on something that we are not very rich in reserves.
And second, our oil is very heavy oil, which would be also you know, it takes a specific price on the market to be able for it to be profitable because it's not the most easy oil to extract. So our markets are quite restricted, and we already know, we have the scenarios that if Columbia continues on this dependency, we are going to have an economic problem. We are already experiencing an economic problem. So we have to get out of that dependency and we have to do it
fast because of economic and because of climate realities. So for us, after we did the scenarios, the scenarios of how to get out of those two aspects, because we always talk about emissions, but we talk about production. And so every time you invest in an asset for productions thirty years that you have to nobody will invest that amount of capital for five years. And so what we know is that the expansion of the frontier fossil feels
keep amplifying. That means that the reality of the missions will not go down.
So what we have done in concrete terms.
Is we already have put together a portfolio of investment for the Colombian transition, climate and ecological transition, which means what would be the other sectors of the economy that potentially could replace this export foil and gas. But the amount of money we need an investment for that transition, for that economic transition, and the time we have is very short the money and very short the time.
This is one key pitfall. Second, we have already.
Finalized the subsidies on gasoline in Colombia, and we moved this year to take out the subsidies on diesel, which immediately had a strike on the transport sector. So we came back to fifty percent and we are negotiating the other fifty percent. And we have a green taxonomy which is quite sophisticated, I mean Colombia and the banking system already and tell an investor where to invest and how that investment helps the transition, and where to invest where
it doesn't help the transition. But even with all of those measures, we know that it's not enough to be able to make this transition.
Yeah, I mean it's an important point that if you're going to move away from fossil fuels, you're going to require investment in these green industries. There's building renewable energy, building tourism, but also bringing in green bonds. Now, when Resident Petro announced the commitment, you know, he pushed back very strongly around this idea that was being put forward that this is economic suicide if you're going to stop exploiting more fossil fuels and you wanted to bring in
green energy exports instead of fossil fuel experts. But it has been quite a difficult road. Right. Last year, investments across all sectors of Columbia by twenty four percent. The growth in GDP was only about one percent, and the country has had to deal with not just climate impacts such as wildfires, but also power shortages, water shortages, and now it's even important natural gas because there's a shortage.
So if it's going to be this difficult, how do you think the government can stay the course?
Yes, well, I have to say we didn't have power shortages. Actually, our system was quite resilient and we were able to pass it. But now we have again alarms because the climate situation, because we are depending on hydro power for electricity, so again the climate circle comes back. We don't have enough rain, we don't have enough hydro power. Then you get a problem and then you need fuels to the
thermo power. So it is a tricky situation. We only took the decisions to stop signing exploration contracts two years ago, but we have more than two hundred exploration contracts that we already sign and that are actually in implementation, and we will be seeing our reserves compared to the level of the transition. Of course, the economic situation is not because of these decisions alone. It has a very systematic situation. After COVID inflation globally on foot was also a very
important issue. But of course what you are describing could be the future if we don't have an international platform to make a transition where everybody has equal ground for the transition.
What I mean by.
That is, first, while in the rest of the world, especially the developed world, access to capital is between one to three percent, Colombia has to pay ten percent in.
Average for access to capital.
It's super expensive even for our level of mac economic rating.
As soon as we mentioned.
That we were going to stop exploration in order to be able to start non proliferating fossil fuels and actually put a limit. So we make the transition because what we're doing now is double investment. We are continuously exploring and exploiting more fossil fuels and at the same time investing in the renewal. So what we're doing is maxifying the amount of energy but not replacing.
This is not happening in the world. Immediately.
We have all the markets and the credit rating agency is super nervous to almost take out again our last investment rating that we have, which will make our situation worse. And then finally, we are a very highly indebted country. Right now we cannot take one more single pestl in dept. Because we were indebted by COVID and because of access to capital is so expensive.
Fifty percent of that day dept.
We paid in interest and right now is larger than the defense budget, while we're paying annually on external debt or larger than the education budget. So we have very limited capacity to invest from the physical capacity. That's why President Petrol has put forward some transformation measures on the financial system that are critical so that we are serious about transition.
We cannot go to cops and say.
That we're going to cut emissions while the economic system goes on the other hand with the same rules as it has been before. Because everybody that is ambitious and that really wants to make this transition because of economic and environmental reasons gets punished by the financial system, by the market.
It doesn't get rewarded.
And so your question is how sustainable is This is not sustainable if we don't put a platform originally, but it's not sustainable not only for economy, it will not be sustainable for the planet. That's why we have called for a Non Proliferation of Fossil Fuels Treaty, which we don't have a text of the treaty.
Yet, is a group of countries.
We're looking thirty countries with complementary economies that can actually negotiate an economic regime that allows in reality for the transition with key partners. We want to create an island. Actually all the states are islands. Who started this, an island of country that can show the US another way, and that then that regime becomes more attractive than the situation we have now, which is actually the real political truth.
Nobody will put their economy at risk.
First, and I mean we don't honestly, in the international ward we kept saying, oh, you're so ambitionous, so congratulations. I mean it's not enough. We need reforms because otherwise this will.
Not be sustainable.
In two years the government changes and there will be potentially a backlash with our government. Would we say no, We're going to explode oil and gas for other thirty years because our wise, how can we sustain our economy, our people?
After the break, what would it take to get Brazil's government to sign up to the Fossil Fuel non Proliferation Treaty. By the way, if you've been enjoying this episode, please take a moment to rate and review the show on Apple and Spotify. It helps other listeners find the show.
Lilliam, Now, when President Lula returned to office, you know, it was hailed as one of the most important elections for the future of the planet. He has pushed back to reduce deforestation of the Amazon and has made a lot of success in that area, but Brazil still hasn't joined the Non Proliferation Treaty. Columbia is the largest economy among the thirteen countries that are part of that treaty. Right now, Brazil has, you know, a lot of green energy.
Already ninety percent of its electricity comes from renewables, but Resident Lula is also pushing for an increase in oil production. So what would it take Brazil to join the treaty.
I don't have a straight an answer because you know, I represent like the foreign affairs view. I think that what's happening in Brazil there is a national debate that involves Congress, governments and civil society and how to take about this transition. What are the features that are there in Brazil that will facilitate the transition, because you know, it's when we are talking about the energy transition, there is no single formula. Each country will find its own
way to contribute to this global effort. So the form law or the policies that Brazil is taking is a massive investment, domestic and international investment in renewable energy. The country has one of the cleanest energy metrics in the world, more than nine percent for electricity and almost fifty percent for the whole of the energy. But as you know, no government will jeopardize energy security for whoever reason because
then there will be no government in place. So what's happening there is like they are provoking a national debate to see how Brazil can accelerate the importance of the renewables in the substitution of the oil.
But if in one way, Brazil should have an easier path forward because if you look at Columbia, fifty percent of their exports come from oil, whereas in the case of Brazil it's only fifteen percent. So the economic case for being able to transition away from fossil fuels, given how clean already Brazil's energy system is, is stronger. And you know, as Minister Monmouth was saying, you need leaders, you need people to take the first step, and the
first step is always hard. So what would it take to get Brazil on board?
Yeah, the I mean trying to explains that the path that Brazil is following is putting more importance to the renewables. For example, the gasoline in Brazil has twenty percent of its content its ethanol, and a recent law there was past that's called the Fuio of the Future, these percentage will grow to thirty percent. Also, there is the cars, the engines of the cars they run as a flex
fuel technology. Brazil is the only country where the consumer, the person choose at the station whether she wants to put gasoline or ethanol, and there is a massive incentive to the clean fuel. It's at least thirty percent cheaper. So that's the way the country is trying to move from one technologist to the other.
Columbia was the tenth country to join. There are now thirteen countries as part of the treaty.
You said you.
Want thirty countries to come together so that you could start to discuss what kind of the text would be of the treaty, because that text will be very important going forward. What kind of conversations have you been having to increase that number from thirteen to thirty? And you know which country is as interested?
Well, there is a we have an unstrategic meeting on the treaty Antigua with all the ministers and we profile a set of countries that we think that will make that island complementary economy. So some countries that have right now oil for example, let's talk about natural gas. So we are having now a shortage of natural gas because it's a temporary shortage of some reserves that have been depleted because unfortunately fossil fuels cannot be harvested.
You know you have them or you don't have them.
And then in twenty twenty nine, because of some exploration and exploitations, we should have another source internal source of gas. So in this inter rent we will have an import of gas which is highly costed because this LNG will increase the cost of gas for the column and economy,
which will have aomic effects. So if we could have a non proliferation of fossil fuel treaty, you could actually make a commitment with a gas producer to export to Columbia a fixed price for ten years, because we are all committed to the transition, so that the economic effects while we do the transition on the demand on gas, which comes mainly from industry trucks would be the other key demand of gas could be replaced by other technologies
in time. So you collectively look for mitigation of the economic consequences of the transition that are not talking about. There are two things that we are not talking about enough, the economic consequences of the transition and also the situation of the oil producers and exporters. The countries that provide the world with fuels and that the economy is totally interlinked. If we don't talk about those two issues and we keep only talking about demand and emissions, probably we will
not be able to make this transition. So this is the type of things now we are talking to those economies, but this is I mean, it is one of these things that is like right now. We will have to take a lot of mental barriers. It's not easy for countries to come. I have said, we have had many meetings.
Countries are very hesitant, scary. And why it is scary because that has a risk, the perception of risks of your country for wanting to say that you want to start working on non proliferations would create economic problems for your country.
This is the multilateralition.
So here the question is who is governing here the market of the governments, and we are calling for again politics to take control of the situation.
Otherwise this transition will not happen.
Can I comment one aspect that is very interesting. There has been the whole financial international financial structures their structure for a brown economy. So if you were to transition to the green economy, these structures they must shift as well. So it's realistic to think that we are going to have a clean future with financial and economic structures from the past. There was a very interesting information that came in this some of the future discussions here this week.
The amount of money that developing countries pay each year to service their adapt is bigger to the amount of almost three times bigger than what they receive as development help. So we have to really also to force the financial system, the motilateral banks, the rules, the Basilaya rules to shift as well.
Now, finance is a key part of making this transition happen, and as you said, the rules need to change, the financial instructure needs to change. But there are ideas that are starting to work in places. So there is an idea of the just Energy Transition partnership. South Africa has got eight and a half billion dollars, Indonesia has got
twenty billion dollars. Those projects are still in the early days, but they are starting to show how this could be done in the financial system that is there and how we tweak it. Colombia is one of the countries that is talking about having such a partnership. Where are those conversations and what kind of just energy transition partnership would Columbia benefit from and would.
Seek Yes, we are calling a group of partners countries that includes the US Treasury, Germany and other countries that have shown interest to what we call it just Energy Transition Partnership alike because we are learning from the first generation.
We have set a governance system internally that includes nine ministers, and we have created a portfolio investment for the transition that we will launch internally with our private sector and our banks on the second of October, and we want to show how much it costs, what is public financing, what is private financy to make that transition, And we call it alike because it's not on the energy matrix
for us only. It is on the other sectors of the economy that need to emerge for us to replace the fiscal income from the exports of fossil fuels.
So it would be.
One hopefully if we are able to and we have two more very important meeting for that, and hopefully we can have and a first announcement we will start the negotiation at COPS sixteen to demonstrate that it is about partnership, collaboration and a strategy that we could start making this transition. So this is one of the pillars, and we have talked today to multilateral banks, the IMF. Everybody says, oh, Columbia's ambitious, or Columbia.
Is leading this and leading. Yeah.
I mean we have done everything that is on the table and it's still not enough. So we need to demonstrate collectively that this is possible.
Otherwise we are just selling smoke. Yeah at every cope, really really yeah.
So the Just Energy Transition Partnership as it exists in South Africa and Indonesia, they are aimed towards retiring coal power plants earlier than they would have otherwise retired if you just ran them on their economic life. What kind of support is Columbia seeking through this partnership. Is it retiring coal power plants or as you said, trying to find ways to complement the revenue from oil exports. What specifically would you like is.
The portofolio of investment is around.
Develop in some sectors that we think could start replacing the oil revenues. One of them is nature based tourism, which investments should strengthen biodiversity, local communities and territories. And that's also critical for us to consolidate the process, so it is very much integrated. The other one is the
energy transition itself, which includes replacing some power plants. We have seventy five percent of our energy comes from hydropower, but the other twenty five is by power plants, and so is to replace those power plants with renewal energy and increase the capacity of renewal energy because we are having water problems with.
Climate conditions, so we need to increase.
The energy capacity of the system, but also to develop an energy export sector on renewables which could include green hydrogen and solar and wind. Through an interconnection with Panama that we are making that cable and will allow us to export energy, renewal energy and hopefully start replacing those incomes. It has a third component on transport because fifty percent of our liquid fuels demand come from transport, so the electrification of transport is another critical issue. And finally is
agriculture and bio economy. Agriculture in terms of decarbonized where we are doing now the land reform, but that requires a grow industry, but in a very specific way. It has to be decarbonized and based on biodiversity and bio economy. Which in our Biodiversity plan we will present at COP sixteen, wants to increase the participation in GDP from zero point eight to three percent by twenty thirty. So all of
this is a huge economic transformation. All of these are aligned to reindustrialization because we don't want to export raw materials and import technology. It has to come with value change and that is a huge task for a country because it means how do you transition the labor force, how you creating sty twos for these new industries, how do you create the public goods and infrastructure in the
regions where you want to do this? A lot of public investment is required, and then private investment can come actually to make investments so stainable. But this public investments is not enough at all. And we expect the JOS Energy Trust is your partnership to align critical financial mechanisms as a package to be able to negotiate a good deal for this Columbian transition.
Right, so it sounds like a more complex but more comprehensive plan to try and help the Columbian economy. Now I want to ask the last two questions on nature you brought up COP sixteen. You have said that protecting nature should become a strategic interest of countries from the global south and correct me if I'm wrong. But you got your start in politics because you start quite to
protect nature in a nature reserve in Bogota from being developed. Right, And so now that Columbia is hosting COPS sixteen and it's in a few weeks time. Typically in nature, conservation and economic development are seen as opposites because you want to extract from nature to get money. Protecting nature will come at a cost as the economic system today exists.
How can you change that paradigm and what can COPS sixteen show to the world that protecting nature doesn't have to come at a cost but actually provide benefits to society.
Well, there is a first aspect which I will cover their values is like if we continue valuing nature as a resource, then you get into that parallem because every time you will have to use nature, then you are depleting it. And that's what systematically the economic system is in depleting nature.
But if the.
Paradigm is more, and that's why we have called the cop Peace with Nature. If the paradigm is more, how can we reproduce society in a way that reproduces nature systematically. I think that is a very interesting question that can get as an ant, not an ant, but an ant an animal.
And it is always get confused by my pronunciations.
Like these ants that get into everywhere with that question, like if you're developing an industry, how are you making peace with nature? If you are in the financial system, how are you making peace with nature? If you are a community on the ground, how are you making peace with nature?
Which will make nature alive?
Meaning it's something where we have a relationship, not an inert object. That's more on the values proper position. And that's why we are launching the Piece with Nature Coalition at COPS sixteen, which would be a multi stakeholder coalition to put that maybe sometimes a comfortable question like an ant that is biting you all the time, but that you can actually make yourself aware of how you're working.
What are you doing now?
The economic system has to realize on the one side, the risks of nature being depleted, which are evident, I mean, but they are not incorporated still the external cost of nature is not incorporated nor internalized. But on the other hand, also the side of the opportunities we are seeing that we can have vibrant economies if we create new materials, new ways of living, new ways.
Of production and consumption.
And there's a whole field of innovation and possibility which should make us very excited, not depressed a little bit.
What happens with climate sometimes that you.
Get depressed, but very excited and mobilize a lot of energy at all levels of society, and at COPS sixteen, we want to represent that principle is whole government, whole of society, all the type of knowledge is working together to restore nature.
And our connection to nature.
And I think from there, the movement itself, people itself are bringing so many solutions that hopefully we want to give them more political relevancy a COPS sixteen, more visibility because the movement is there, is happening, has a lot of hope, and we want to make it politically very relevant and visible.
Thank you for listening to zero and now for the sound of the week. That's the sound of the fastest mode of transportation in New York during the week of the United Nations General Assembly and Climate Week. Two feet in this case, my two feet. If you like this episode, please take a moment to rate or review the show on Apple Podcasts and Spotify. We are also on YouTube these days. Share this episode with a friend or with someone who is looking for the fourteenth member of their club.
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At zero pod at bloomberg dot net. Zero's producer is Mightily Raw, Bloomberg's head of Podcasts is Stage Bowman, and head of Talk is Brendan newdan Our theme music is composed by Wonderly Special. Thanks to Elsie Rooftop for recording the conversation and as always, Kira Bindram and Monique mulina I am Akshatarti back