Administrator Samantha Power on “The End of Climate Shocks”

ADMINISTRATOR SAMANTHA POWER: Thank you, Dean [James] Steinberg, for that introduction and for your lifelong dedication to public service and to education. We miss you in government but your students and colleagues are incredibly lucky to have you here thinking about how to apply ideas to the toughest problems in the world. 

I also want to acknowledge, though he’s not here, Mike Bloomberg because he has been a trailblazer in advancing climate action around the world. This Center’s mission to advance innovation for the public good is particularly urgent now, as the world is gripped, as Jim spoke to, by near-constant so-called climate shocks.  

We have been seeing that term – climate shocks – a lot in recent years. And in a way it’s curious: because standing before you today, I don’t think there’s anything that I could say about the climate disasters that the world is facing that would come as any kind of shock. 

Superlatives like “hottest” and “costliest” and “deadliest” no longer really elicit surprise. Many have become numb to the images of orange skies choked with wildfire smoke; cities turned into rivers; roads and doorknobs literally melting in the scorching heat. 

Yet despite the fact that we know that these disasters will continue – despite the fact that we all expect them to get much worse – the world is still not investing in preparing our communities for these disasters at anywhere near the scale that we need. Even the more chronic, slow-moving disasters – like droughts that extend from months to years to decades, or coastlines that sink inch-by-inch into the sea – even those are catching us flat-footed somehow.

Indeed, although these occurrences have lost the power to shock our psyches, they are in fact massively shocking our systems, destroying crops and infrastructure and livelihoods. We know what is coming; yet we are not adequately preparing ourselves.

Now, it’s important to note that over the last five years, we have seen rapid growth in global climate investment – total climate investments have more than doubled, in fact. But the vast majority of this growth came from supporting efforts to transition to renewable energy and to reduce emissions – a vital cause, not though, from investments in equipping countries and communities to avoid the most harmful impacts of hotter temperatures. 

We all know that we waited far too long to begin aggressively cutting fossil fuel emissions, and we all know that we still have a really long way to go. But our fight to reduce emissions showed us that however belatedly, progress can be accelerated – it can be accelerated by identifying priority needs, spurring innovation on affordable solutions, and dramatically scaling finance in the Global South. 

So that is a kind of playbook, a playbook again that was deployed too late, and where we still have a very long way to go in terms of implementation, but nonetheless the elements of what can instruct about how to handle the big challenge for building climate resilience. So today, I am here to discuss why there is such a gap between what is needed and what is being done to prepare countries and communities to withstand new climate perils. And then I want to outline how we can apply the lessons we learned too late in curbing emissions to jumpstart progress on building resilience. 

The urgent appeal that I hear the most when I talk with leaders around the world is: “Please help us protect ourselves against the weather, please help.” 

And some of the most awkward conversations I have had have been with world leaders or community leaders, during climate-related emergencies who remind me of just how paltry a share of global emissions their countries produced. Who then thank me for the humanitarian relief that the American people are providing – which has been exceptional – and then who say, “we would really prefer not to need your aid. We’d prefer to equip our communities to manage what we know is going to keep happening.”

So if that is the message, the demand signal, if we have all this knowledge about what lies ahead, why is the world – why are all of us failing to adequately answer these appeals? 

And many of you, I’m sure, have your own way of answering that question. Early on, these efforts didn’t get as much attention as the urgent quest to reduce emissions – particularly because that urgent request was not being pursued with that said urgency. Some saw the pursuit of the mobilization of resources around climate resilience as kind of giving up on saving the planet. I think it took a little bit of time to achieve broad recognition that one effort cannot come at the expense of the other. We also live in a world with zero sum of resources, in many instances. 

At the same time, here in the United States, what is commonly called “climate adaptation” is caught up in the broader societal and political divisions on resourcing the battle against climate change generally. And this, despite the fact, that there is actually broad bipartisan support for the elements of what we are talking about here today: giving farmers the tools to predict weather patterns, building watersheds to buffer against landslides and floods, giving technical advice to governments to build infrastructure differently so that it is not washed away during the next disaster, equipping communities to manage scarce resources together so as to reduce the risk of conflict. So those are just some of the elements. And again, we have broad bipartisan support for those elements.

If we don’t invest in these ways moreover, it is going to undermine all of our other investments which bipartisan majorities have rallied behind. Already, climate shocks have thrown millions into hunger and reversed progress in combating diseases from malaria to dengue fever to cholera. In Africa, climate disasters are already slowing economic growth between five and 15 percent a year. 

Even for those though who understand and are mobilized and want to act, in truth, this domain, the domain of building climate resilience, the scope and severity and geographical breadth of the need to build that resilience can just overwhelm, it can feel paralyzing. Because the amount of funding required to help developing countries build resilience to the changing climate is 10-18 times higher than current investment flows, it is sometimes just hard to know even where to start.

But as I mentioned earlier, one of the places we can start is by studying why governments, citizens, and businesses have come around – most of them, if belatedly – to transitioning to renewable energy sources. After all, for decades, that, too, seemed so large and so expensive a challenge that many thought it impossible. Should we invest in natural gas as a transition fuel, or focus on renewable energy sources like solar and wind? Was it smart to invest in biofuels, or to develop electric cars that don't need fuel at all? So many of those questions to which there were so many answers. And analysis at times lead to paralysis.

But at a certain point, scientists, economists, and business leaders conducted research to show us where to concentrate our resources for maximum impact. In 2007, for instance, McKinsey released a groundbreaking cost curve that showed which solutions delivered the highest greenhouse gas reductions per dollar. They found that among the most immediate and affordable changes that we could make were to make cars more fuel efficient and for each of us and businesses, to replace inefficient light bulbs. 

When it comes to blunting the harms being inflicted by the world’s changing climate now, the problem of identifying the highest priority solutions is even more complex, because they differ by place: adapting to increasing floods requires very different solutions than adapting to crippling heat waves, for example. 

So, nearly two decades ago, USAID teamed up with NASA to create a program called SERVIR, which helps countries understand the very particular risks that extreme weather variability poses for them. Today, SERVIR uses satellite imagery across 50 countries to deliver advanced projections and real-time data on everything from floods to forest fires to potential breeding grounds for crop-destroying locusts. And it offers tools to predict longer-term trends in things like crop yields and droughts. 

This kind of forecasting can guide immediate, lifesaving action. In Malawi, for instance, SERVIR worked with communities to integrate satellite data into their local flood early warning systems. Recently in January 2022, two cyclones, Ana and Gombe, hit Malawi. SERVIR had supported alert systems, those alert systems then sent texts and emails to residents in affected communities with more than two weeks of warning. People were able to evacuate and take their valuables with them. Malawi’s Department of Disaster Management Affairs announced that early action prompted by these alerts prevented $40 million in monetary losses and, even more importantly, saved many, many lives.  

Today, I can announce that USAID is going to commit an additional $11 million, this year, to SERVIR. This data will not just help guide immediate lifesaving action, but it will forecast long-term needs to help countries prioritize solutions – an essential effort as countries now draft their National Adaptation Plans. USAID is supporting our partners in drafting and implementing these Plans – and factoring their resilience needs into all budget and policy work, from infrastructure planning to capital budgets. 

To inform these efforts, countries are improving their ability to anticipate not only the climate risks that they face, but also the knock-on-risks – the knock-on-effects of those climate risks that in previous years may not have been top of mind. I’ll give you a great example. Take the horrific floods that left a third of Pakistan underwater in 2022. I visited the country, it was like nothing I’d ever seen. You fly out in a helicopter, you look down, you’re sure you’re over ocean, but you’re in fact 300 miles from the coast. That is what flooding that covers a third of the country looks like. In the wake of the disaster, our local partners were already anticipating that the water was going to be a breeding ground for mosquitoes – which would of course then go on to spread malaria. They proved right: the year before the floods, total cases during the high season for malaria in Pakistan were around 193,000. The year after these floods, in the same time span, they climbed to 1.2 million – and that is the knock-on-effect of a climate-related emergency. 

But because health officials anticipated the spike in malaria cases when the floods began, the Global Fund was able to take quick action to procure and distribute insecticide-treated nets and to enable Pakistan to provide free malaria diagnostic and treatment through mobile health units. So now, USAID is supporting a pioneering malaria early warning tool, called EPIDEMIA, to track climate data to better predict malaria outbreaks. We are prototyping this system in Ethiopia and hoping to replicate it in other countries as well. 

Ultimately, we need more investment in this kind of global data collection and analysis – the first step to build climate resilient communities and reduce the harms to property, infrastructure, livelihoods, and lives.

Now once countries have drawn on data to identify their most important needs for themselves, policymakers have to work with the private sector to spur innovation on affordable solutions to meet those needs. 

At the beginning of the push to bring down emissions, many of the most impactful solutions were prohibitively expensive – or simply didn’t exist yet, we all remember those days. So the U.S. invested in foundational research in technologies like battery storage and offered subsidies to companies to help overcome the risks of developing climate technologies. And in 2022, thanks to President Biden’s leadership, Congress passed the Inflation Reduction Act, the largest climate legislation in history, which offered incentives to further drive down costs.

And while we still, of course, have a long way to go, costs are coming down: in the last decade, the price of a residential solar system has been cut by over 80 percent. External analysts project that the Inflation Reduction Act is going to further drive down the cost of certain clean energy technologies by as much as 25 percent, helping speed deployment of these technologies, not just here in the United States, but all around the globe. 

Innovation to strengthen climate resilience however, is currently lagging. And we need to change that. Take drought-resilient agriculture. Drought is now touching more than a quarter of humanity – levels that are only projected to rise. These droughts wreak havoc on the world’s smallholder farmers, scorching the crops and killing large swaths of the livestock they depend on. And because those smallholder farmers are crucial for feeding not just their communities, but entire continents, increasing levels of drought can have catastrophic implications for global food security.

Through Feed the Future, our nation’s landmark global hunger initiative, we have invested in foundational research with university partners to develop new drought-tolerant seeds and growing techniques. We have given grants to agriculture companies and to universities to develop seeds for staple crops like corn and rice that can better withstand drier climates. And through the Vision for Adapted Crops and Soils – so called VACS –  we are extending that work alongside the State Department and African researchers to create more resilient versions of indigenous crops like cowpea and millet as well.

But simply developing improved seeds is not enough – we need to help get those seeds in the hands of farmers who are facing a crisis on their fields. Last year, as much of the African continent was pummeled by drought and high food prices, we worked with the Gates Foundation and over 80 local seed companies to get these drought-tolerant seeds into the hands of seven million farm families, covering 20 million acres. Even in tough climate conditions, those seeds boosted crop yields by an average of 25 percent, helping cut food costs for around 44 million people, while generating an additional $1.5 billion in continent-wide GDP. 

Drought resilient seeds are just the beginning. Ultimately, we know that many of the most important innovations come from the communities on the front lines of the climate crisis, who know their needs. Yet research from these locales is severely underfunded. Today, I am pleased to announce $5 million, an initial investment, to support the work of young researchers focused on local climate issues in Africa, the Pacific, Latin America and the Caribbean, administered through the University of Arizona. 

We already see a lot of exciting resilience innovation from companies around the world: Solar systems that create drinkable water from condensation in the air. Pavements that absorb water during floods. Heat resistant vaccines that don’t need refrigeration. 

But developing new technologies like these is inherently risky, so it can be tough for innovators to find investors – particularly when their solutions are designed for low-resource environments. So donor governments have to play a role in offering catalytic grants that help companies prove their concepts and get past that earliest, riskiest stage of innovation. 

At USAID, we just gave a grant to a company called Floodbase, this a groundbreaking data company that is helping extend insurance to rural Africa, where insurance providers have had a hard time succeeding. Premiums and potential payouts are relatively small and the cost of conducting physical inspections to set premiums and assess damage after a disaster – that can be prohibitive for companies. 

So Floodbase is collecting satellite data on water flows and working with a company called Africa Risk Capital Limited to offer insurance based on this real-time data, instead of those costlier physical inspections, to determine premiums and get farmers quick payouts after flood damage. With quick insurance payouts, farmers don’t have to do things like selling vital livestock to make ends meet, which can be incredibly destructive to their long-term earning potential, instead those farmers quickly get access to the resources that they need to replant and rebuild. 

Floodbase is using this USAID grant to prove their concept in Mozambique and Malawi. The hope is that once they have proof of concept, they can draw in private investors to quickly scale across Africa.

The more we can harness ideas and capital from around the world to help jumpstart innovations like these, the faster that we can build affordable solutions to keep climate disasters from shocking our systems. 

And finally, once we have identified priority needs, and spurred innovation and affordable solutions to meet those needs, we need to dramatically scale both public and private investment in the Global South so that people there are able to take advantage of these solutions. 

While total needs are difficult to quantify, some recent estimates suggest that developing nations need an estimated $215 billion a year to adapt to a changing climate. Even in good economic times, that would be a tough amount of money for governments to mobilize. After years of COVID and high inflation – and yes, climate disasters – 70 low- and middle-income countries are in, or approaching, debt distress right now, with ballooning payments that siphon off resources that they might otherwise be able to use to safeguard their communities. 

The multilateral development banks [MDBs] can play a critical role in helping to address these dual crises – debt and climate. So the Biden Administration has prioritized essential reforms at the MDBs that are now in train: already, as many of you know, the World Bank has unlocked $50 billion and the Asian Development Bank $100 billion in new lending from their existing capital over the next decade. And at COP28, in large part thanks to U.S. leadership, ten banks committed to expand their lending capacity and further step up financing for adapting to the worst effects of climate change. 

With financing, too, there is plenty of room for innovation that can help meet the needs of countries facing dual crises from climate and debt. The World Bank and four other MDBs have recently announced an important effort to help countries pause debt payments in the wake of climate disasters – so that countries can invest in rebuilding, rather than servicing debt. But thus far, these pauses have only been for small island developing states. These banks should use their experience with this policy to consider expanding it to every country whose debt burden interferes with their ability to respond to climate disasters. 

And MDBs should build on the success of “debt for nature” swaps, where countries conserve essential ecosystems while also restructuring significant amounts of national debt. We have seen great results implementing these swaps through collaboration between USAID, Treasury, and State, and the Development Finance Corporation, which is becoming a major player in environmental protection, the drive to renewables, and adaptation. Going forward, banks can build on this progress with “debt for adaptation” swaps. Barbados is in the process of finalizing a first-of-its kind debt-for-adaptation swap with the European Investment Bank and Inter-American Development Bank that will relieve a portion of Barbados’ debt in exchange for investments in water and sewage infrastructure that can make the island more resilient to the next storm.   

But for this financing to meet the most urgent needs, local leaders have to be able to access it – because they have the best sense of how to address those needs. And right now, this often requires navigating lengthy, convoluted processes that small countries and local organizations have neither the staff, nor the bandwidth, nor resources to be able to manage. So as part of the G20 convenings this year, the U.S. Treasury Department is going toco-chair an independent review of the four major international climate funds’ processes and propose changes to streamline access to funding.

In the meantime, USAID is working in the field, directly with local leaders to build up their capacity to access this finance. In the Pacific Islands, USAID’s so-called Climate Ready program offered resources and project management training to help island governments – often so understaffed – to shape successful finance proposals. This $24 million dollar program called Climate Ready, helped connect local leaders to over $500 million in financing for resilience. Today, I am pleased to announce that we are launching a similar program called Caribbean RESET to help local leaders develop viable project proposals and jump through bureaucratic hoops so as to obtain the funding that they need to protect their people.  

Even as we race to get countries and leaders more public capital to invest in climate resilience, which is what I’ve just been talking about, we know that there will be no way to meet the scale of need when it comes to climate resilience without drawing in substantial investment from the private sector – where the operating environments often present risks that keep foreign investment away. 

Now, again, let’s remember, we faced a parallel challenge in our efforts to crowd in renewable energy investments. We have worked with our partner countries around the world to help them create the regulatory environments and incentive structures that reduce risks for private investors. And we have connected potential investors with sources of public funding, from USAID and others, that can take on some of the risks in investing in emerging economies. 

These efforts are helping drive vital progress: Over the past ten years, USAID programs have helped increase investment in clean energy generation by $330 billion in more than 45 countries. In the developing world last year – thanks to efforts by many organizations, governments, individuals – fully 80 percent of all new energy capacity added was from renewable sources. That’s an extraordinary statistic. 

Now, we are using a similar approach to scale investments in building resilience. 

In a landmark report that BCG [Boston Consulting Group] released last month analyzing the state of business investment in resilience, they found that a pipeline of opportunities is emerging that can yield attractive, long-term returns for private investors. But, again, high risks still keep out many companies and investors. Today, just two percent of tracked private finance in the climate domain is going to investments in climate resilience.

So we are supporting governments to design resilience projects with openness, transparency, and community buy-in – because doing so is both better for communities and, in the end, is going to be far less risky for investors. 

We are using our own set of innovative blended finance tools to take on some of the risks of investing in these emerging markets.  

In just a few days, a company unlike any other is going to launch on the London Stock Exchange: the Green Guarantee Company. This is the first ever privately-run company offering investment grade guarantees for climate investments in the least developed countries, launched with $10 million in seed funding from the United States, and additional contributions from partners from the United Kingdom, Nigeria, Norway, and the Green Climate Fund. This Green Guarantee Company invests money alongside private sector partners while committing to covering any losses.

Because providing these investment grade guarantees vastly increases the number of investors that can support these projects, the Green Guarantee Company is projected to catalyze $1 billion in new investment to least developed countries for climate action. 

This is just one example of the kind of blended finance tool that USAID, the DFC, and our partner organizations can offer.

Forward-looking companies are also increasingly investing in building climate resilience into their own supply chains. Just weeks ago at the World Economic Forum, the number one risk to business that CEOs identified was extreme weather. They found that companies have a great deal to gain by recognizing this risk as real before it is actually realized: for every dollar that companies invest in resilient operations and supply chains, they are saving a median of $5 in avoided revenue losses and costs.

So increasingly, companies are seeing the wisdom of investing in resilience, and working with us to become first movers. Last year at COP27, I announced the PREPARE Call to Action, a call to private sector leaders to invest in resilience. Ten companies joined the initial call with investments and in-kind services that have mobilized more than $600 million.

AUDIENCE MEMBER: [off-mic] 27,000 people have been killed. You know what would cause a lot of climate shock – is a bombardment of Gaza, that is an article from The Guardian. If you want to do something about climate change and climate shock, speak out. 

ADMINISTRATOR POWER: Thank you.

AUDIENCE MEMBER: 26,000 people, 26, many under rubble, many injured. Mainly maimed or having [inaudible] without anesthesia. This has got to stop. This has got to stop and it’s only escalating.

ADMINISTRATOR POWER: Let me just say – [cross talk]

ADMINISTRATOR POWER: Thank you. What I would propose, when we sit down to do the questions, that I start by responding to your comments, particularly again, on the suffering that is occurring again in Gaza, and the work that we are trying to do to address that suffering at USAID. Thank you.

This year at COP28, we were able to triple the size of that cohort in a single year. Today, Danone is investing in regenerative agriculture that helps dairy farmers in its supply chain keep their animals healthy and productive in changing weather. Visa is working with Oxfam to scale a project called B-ready, which will use early warning data from impending disasters to provide advance humanitarian assistance payments before a disaster so people have the resources they need to protect themselves and their assets. A tech company called Xylem is working with industrial manufacturers to adopt technologies that require less water. These are just a few examples of the actions that these thirty companies and organizations are taking – with combined new commitments of investments and in-kind services now amounting to more than $2.3 billion. So those, again, are some of the kinds of innovations in financing that we are going to need, but we are going to need public and private sector actors to step up together.

Ultimately, for climate disasters to no longer shock our systems, we need people and organizations across our systems to prepare for them. 

More companies can join the PREPARE Call to Action – and become a part of the growing global movement for resilience. I, indeed, invite interested companies and investors to engage with us, and with our missions around the world to see how we can work together. 

Foundations can invest too: at COP last month, a group of nearly 20 foundations committed to increase their support for building resilience. 

International finance institutions must continue on their reform paths to become more responsive, more innovative, more accessible to the communities they were built to serve.  

Governments in the Global South can build climate resilience considerations into their entire budget and policymaking processes – while donor governments can do much more to provide information, innovation, and financing that makes it possible for them to take decisive action. 

And individual citizens, particularly young people like the students here today – you can be a part of the work to develop solutions. There is old wisdom out there about innovation that the hardest part is identifying the right problems to solve in the first place. Well, maybe the kind of perverse silver lining of beginning your careers in this time of monumental global need is that there are problems for the taking. You are not going to have trouble identifying problems to try to solve. And you, especially with the training you’re getting here, just might find an important answer. 

As daunting as this era of climate disasters can feel, human history is full of examples of transforming shocks into manageable events.

During the Industrial Revolution, as humans moved en masse to cities, communities were plagued by frequent, large-scale, catastrophic urban fires. But we didn’t just accept this as the new normal. 

Activists and policymakers created fire codes that mandated safe escape routes. Builders used fire retardant materials like concrete and stone, and scientists worked to create even more advanced materials to stop fires in their tracks. Urban planners installed fire hydrants on city corners. Communities agreed to fund fire stations that were ready to respond, so that a fire that started in a barn wouldn’t envelop an entire metropolis.  

In the face of growing dangers, we didn’t remain in a state of perpetual shock. We made cities safer. We kept each other healthy. We boosted the standard of living. 

In other words, we did what humans do best: we adapted. And today, we can and we must come together to adapt once again.

Thank you. 

MS. PEGGY COLLINS: Good morning, everyone. I'm Peggy Collins, bureau chief for Bloomberg News here in Washington. And I'm delighted to have the opportunity to dig into some of the elements of that speech with you, Administrator Power. Thank you so much. We will leave some time for questions from the audience, but I think we should start, as you mentioned, with a question about Gaza.

ADMINISTRATOR POWER: Yeah. I mean, let me, again, thank our guest for raising the issue she raised. USAID is one of the world's lead responders to the humanitarian crisis unfolding in Gaza. It is a devastating situation where not enough resources are getting in, via the Rafah crossing or the Kerem Shalom crossing. And we are working 24/7 to try to dramatically expand the flow of food, medicine, shelter – I mean, so much is needed. But, you know, you have families right now that are living in unimaginable conditions.

In addition, of course, the greatest loss of life has come from the war itself and from the bombing, and more than 25,000 civilians have been killed. There is not a single call that President Biden makes, or engagement that anybody in the Biden administration does, that doesn't put the importance of civilian protection and international humanitarian law, at the top of the conversation.

At the same time, of course, you also have families whose loved ones are still in Hamas’ hands, the harrowing experience of not knowing whether a hostage, whether a loved one, is even still alive. We are working, as some of you have been reading in the press just in the last 24 hours, as we have been for many weeks, but really working aggressively now to try to secure a humanitarian pause that would allow a respite from the war – for people inside Gaza who have suffered so much, would allow hostage releases and would allow a dramatic increase in the scale of supplies to get inside Gaza.

So again, civilian life, a human life is sacred. And, again, just as the horror that was inflicted on October 7 galvanized outrage, so too it is – important it is that we mobilize everything we can in terms of diplomatic resources, in terms of humanitarian resources, excuse me, to reach the needs of families. 1.8 million people are estimated to have been displaced, all of us can imagine what it'd be like to be fleeing with our family and not know whether we're going to be able to provide for our kids. So I take it as a great responsibility at USAID, to do everything we can to meet the needs of civilians, even as, again, our diplomats work around the clock to secure the release of hostages and to try to, again, secure an extended humanitarian pause.

MS. COLLINS: Administrator, as you were pointing out in your speech, and have traveled around the world to see the very human impact of climate change, you noted at the top that there has been some good news – that in the past five years total climate investments have actually doubled, though mostly around the efforts to reduce emissions or mitigation. What lessons, though, have you learned from those investments in that success that you can apply to trying to shift some of these investments and raise more capital around building resilience and adaptation, rather than just dealing with the damage?

ADMINISTRATOR POWER: Yeah, I mean, it's a great question. I mean, that's what I tried to do today is to sort of reflect, again, with no sense of self satisfaction or collective satisfaction about the effort against emissions, but still to say, what can we learn? And, you know, when you hear people say, particularly those who are first movers in the private sector in the realm of adaptation, you hear a little bit of a debate, which is, is private sector interest and investment in climate adaptation lagging 10 years behind the private sector's interests and investment in mitigation? Or is it five years behind? Or is it 15 years behind? But there's a recognition, kind of broadly, that the market is going to move in that direction in the way that it has for renewables.

And you're seeing out of President Biden's nearly $400 billion investment through the Inflation Reduction Act, that the invisible hand is working at an even more accelerated pace to bring prices down and spur innovation than the economists had forecast before the Inflation Reduction Act was passed. And I think what BCGs recent report really tries to do is crunch the data, look at those companies who have been first movers in building resilience, show the profit that can be made. People are very uncomfortable, I've found, in the business world talking about making money off climate resilience. So often, if I were on a panel with CEOs who are investing who do see the business case for such investment, they talk more like a USAID Administrator, and I talk more like a CEO in the sense that they talk about their duty, and the sense of obligation. But it's very hard to get businesses to be out there talking about self interest.

They're, again, like profit calculus when it comes to adaptation, I mean, understandably so. It's something that's a little, might sound a little off putting. So thankfully, BCG came along, and sort of did it for the companies that are active in this space. And, you know, they've shown that the valuation as well of these companies is way lower than the revenue that they're earning now, as an order of magnitude, lower than it is going to be just in a matter of two, three, five years. I mean, some companies, they project, and they get into this in the report, their revenues are going to increase by 44 times.

And yet, again, there are broader questions, even if we weren't talking about climate adaptation, we sometimes struggle to excite countries about investment in emerging markets. There's a big debate about whether risk perception is out of step with the risk reality. The Green Guarantee Company, that I mentioned, because one of the lessons of the renewable quest is about derisking. Is fundamentally making it, trying to buffer those early investments before it's become commonly embraced and understood that you can make money and that the return is worth the risk. But the Green Guarantee Company leadership, they're very interested, they say, we think we we have enough of an empirical track record here, we've crunched the data, we believe that if we, in a sense, just provide this transitional guarantee where it's just enough to get a company, or an investor over the cusp, then they have the experience of actually investing in a community, seeing the ROI, the return on investment, then we believe that we can move on to another sector, or to another country, or to another market.

And I think that is what has happened with renewables. Is it was heavily subsidized at the start, and now, yes, we have the Inflation Reduction Act that is continuing to accelerate that, but prices have come down, consumers are leaping at these technologies because they are so much cheaper than they were. And because now, actually, over time, they’re so much cheaper than the dirtier energy sources. And so something like that really has to happen. The products need to become affordable for governments to be able to embed them, but the risk calculus for the investor has to be adjusted, and that's where the public sector has to come along, to be catalytic at this stage. Because you're just seeing a lot of companies who are seeing losses, imagining, knowing, that they need to do what they can to avert losses, because this is maybe a consumer base that they can tap, or maybe already tapping, is at risk.

But adaptation, it's, again, the sense of an unproven proposition, so how do we lower the barriers to entry, get them involved, then the next BCG report, we'll have a much more extensive database of companies to crunch, and we'll start to see the kind of virtuous cycle that we eventually saw on investment in renewables.

MS. COLLINS: So just staying on that idea of risk for another beat here, when you talked about the Global South in your speech, one of the things we've reported on at Bloomberg is that there had been some big climate deals announced just even in past year in places like Indonesia, but we've ultimately seen it hard to get the private investment dollars to really unlock. In part, because once investors get in there, they're realizing, sometimes, that the scope of something like coal dependency is much larger than they expected. So on that idea of risk, you're just talking about the Green Guarantee Company, what else are you doing to help private investors really understand the scope of their risk?

ADMINISTRATOR POWER: Well, I mean, far be it for me to tell the company what's in its interest. That is something that people are paid very well to calculate. But, I think, what we can do, as I indicated with a Green Guarantee example or some of these insurance schemes, again, where USAID or DFC might bear first loss is we try to create a kind of glide path to get them over the threshold. But the second thing we do is we actually listen to them. And they tell us, you know, one of the reasons that we don't want to make an investment here is it – I'm not talking about any particular country or community here – but it’s corruption. You know, another reason it’s impossible, actually, to do investment because the paperwork burdens and the sludge around working with the Ministry of – equivalent to the Ministry of Commerce, or finance, or trade or, you know, or trading investment, whoever the interlocutor is – it's just too bureaucratic, we don't know who to call. So maybe we provide an entree, or maybe we have a tiny little program that's $100,000 worth of embedding a couple advisors, to make it – to just basically look at what the legislative or regulatory changes need to be to actually change that cost benefit for a potential investor.

So, that's where, maybe just stepping back, especially for young people here who might want to get into public service, USAID has missions in 80 [82] countries, programs in 100 countries, we have a staff of about 13,000, the majority of whom work overseas. Our superpower, in many ways, is what are called our Foreign Service Nationals. So three quarters of our staff overseas are nationals of the countries in which we work. So in Uganda, it's Ugandans, if we're in Lebanon, it's Lebanese. And they are professionals, engineers, and economists, and doctors, and former health ministry officials. And they know everybody, and they speak the languages, and they're out there. And so, when, let's say an American company, or even a local company comes to us and says, “we hear you, we know the need is there, we would like to avert losses, at the very least, indeed, when we see a competitor that's been disruptive in some other market or some other country and we're kind of intrigued, but man, like, they're just making it so hard, then we tap that well of expertise among our Foreign Service Nationals, and try to problem solve working side by side with the company.

And I want to be clear, because I had a section in my remarks about public sector investment in the climate resilience, which needs to increase as part of that, rendering public money more accessible to lower income countries and to local organizations. The Green Climate Fund has been really, really hard for local actors and for small island states to access because it's just a very complex, competitive set of processes people have to go to. But I then shifted, and you and I've talked, already, a lot about the private sector, but I am a public official, a government official, by no means are we trying to sort of fob this off on the private sector and say, let the market work, like the market won't work on its own, it's not working right now for adaptation. Or we wouldn't have this statistic that only two percent of climate financing is going to adaptation, that number would be higher. And so the market is not working. So the question is, what can we do to address what amounts to a market failure on behalf of not only humanity, but actually business and the global economy.

I mean, if you look at the, again, the losses that the failure to adapt for supply chains, for communities, for livelihoods, I mean, it's a chronicle foretold. So that's where we have to just be, I think, more creative. And there's so many people I'm learning from, to try myself to think about how USAID can view itself more as much as a hustler, and a catalyzer, and, yes, a grant giver, for sure, using the precious resources that the taxpayer gives us, but always taking on that responsibility to try to turn a public dollar into much more. And that's what the PREPARE initiative, which I was talking about, and really expanding the number of private sector partners who are part of a coalition to drive private sector investment, but who are also coming to us and saying, this is what is standing in the way. And then we take advantage of all of our programming, in economic resilience, in agriculture, in anti corruption, etc. To try to expand the number of countries who see that cost benefit differently.

MS. COLLINS: You also mentioned that there are so many superlatives that are used in this space, hottest being one of them. And my colleague, Zahra Hirji, who's here today from Bloomberg, has written a lot about how last year we saw around the world record heat. Can you talk a little bit more about what the Agency is doing this year to try and deal with that challenge?

ADMINISTRATOR POWER: Thank you for asking. I mean, I should thank the climate and environmental reporters who must just feel like canaries in the coal mine, who for years have been doing the reporting on the warnings, and then lo and behold, we are living with the consequences. And I think, and I’m digressing a little bit, but I think as a former reporter I would just say the reporters are doing a really good job marrying facts and data and statistics, which are hard for readers to consume alone, but marrying them with the human stories, and just what the human – [Audio Break]

MS. COLLINS: And we're back.

ADMINISTRATOR POWER: Oh, we were talking about heat.

MS. COLLINS: And again, there is no fire.

ADMINISTRATOR POWER: Yes, no fire. Where there's heat here, there's not fire. So I think that heat, the developmental effects of heat are only beginning to be broadly understood. I was complimenting the press was what I was doing at that moment. So just to say that again, marrying the human story and the statistics are very important. The statistics on heat, I mean, they're really, really jarring. I mean, in addition to heat requiring more air conditioning for those who live in developed economies, and have the luxury of that, and that then causing more emissions, and keeping us in this doom loop, there are projections that older people around the world, the over sixty-fives, that the rate of heat related deaths could quadruple by the middle of the century, which is not that far away, quadruple over sixty-five.

And, so I think, this is an area that we are beginning to explore. DHS, our domestic kind of counterpart in thinking about resilience and adaptation, convened a heat summit last year – USAID is going to do the same to really get into sort of what some of the best practices are. I met on Friday with a Filipino former paint entrepreneur whose passion project is going around the world painting roofs white, which cools what happens in houses and reflects sun back in a way that's very useful from a greenhouse gas capture standpoint.

The mayor of Freetown has now nicknamed Freetown, Sierra Leone – has named her town Freetown treetown. And has mobilized entire communities to plant 1 million trees, which has brought down temperatures in downtown Freetown, materially, and given people shade, of course, but also employed young people who are keeping track of the trees and their growth. And so, again, solutions are being piloted and pioneered, everywhere. I think we could do a better job harnessing those solutions. But again, the effects on health, agriculture, pretty much every sector that USAID and other development partners had before the pandemic lodged a lot of success in, we were moving toward, not fast enough, but meeting the Sustainable Development Goals. Heat is a game changer in many of those, and so we have to treat it as such.

But it brings us back to the resource question. It’s one thing to come up with a solution and to pioneer it and to know what works in blunting the impact, but then how do we scale it? And that's, again, where more public sector resources, more accessible public sector resources, and enlisting the private sector in believing that there's a business case for these investments is so key.

MS. COLLINS: I want to ask you one last question about the future, and then open it up to some audience questions. Looking ahead to this year, we have a presidential election in this country. From your perspective, what's at stake in this election when it comes to the issue of climate change?

ADMINISTRATOR POWER: Thank you, well, I am not somebody who's going to comment on the election per se, but I will say that we are, in multiple ways, racing against multiple clocks. And, we see this – our imaginations don't really have to stretch very much in thinking about the kinds of places USAID works, or many of you may be from, or like to work in, or care about, because they're ticking clocks in our own country. I mean, whether it's shutting down schools, because of smoke from Canada wildfires, or from California, or the devastation in Hawaii, so recently, or just there's a lot of concern about debt and deficit up on Capitol Hill, one hears a lot about it. The amount of money having to be invested domestically in emergency response, it's just growing and growing and growing. And, the number of climate emergencies that we are experiencing just goes – it's just exponentially increasing rather than increasing on a steep trajectory.

So, that is a ticking clock, the domestic investments in resilience, and in lowering emissions. And then globally, again, the countries where USAID works, so many communities are living on the edge. And climate change and its effects are hitting the most vulnerable communities in the U.S., and internationally, hitting them the hardest. And so, when it comes to avoiding, we're already, all the harms that we've been talking about are here. And, because of the temperature rise that has already occurred, we know that those harms are accelerating. And the question is, how much more are they going to accelerate? How much worse is it going to get?

And so, this, just – Davos, World Economic Forum, felt like COP frankly. I was there trying to hustle up private sector investments, some of these causes. And, every room you went into, or panel you saw, had some nexus with this. The biggest game changing element, alongside technology and AI, that citizens, governments, and businesses can talk about, but how much worse are we going to let it get, that is going to turn on the aggressiveness with which we lower emissions and contain the temperature rise.

And so everything we're talking about here, all my statistics, which are so paralyzing, and so chilling, and harrowing, and all of the harms, and vulnerabilities, and pain, it's a question of how much more of that can we stand. And it's really, really important in democracy to vote your preferences. And it's really important in democracy to look ahead and think about the important – what matters to you, and what mobilizes you. Young people really care about climate change, and now that we see, again, the effects of heat, I don't think there's broad knowledge of the effects of heat, but I do think it is affecting older communities more. And the data, again, is gradually being unearthed to show that.

So it's hard to think, again, about a community or a sector in this country that is not being affected. But this remains a polarizing issue, so I think it's very important, as we talk about this issue, to break it into its digestible components. Talk about how much more affordable a solar panel is over time, how much more affordable a car that is powered on renewable energy is – to talk in terms of bread and butter issues. And then for young people to really make the case that there is something we can do, because I think the biggest challenge with young people in terms of political engagement, but also in terms of civic engagement, is just feeling despair. And, believing that there's – that it's too big a problem. There's nothing they can do and so turning their sights down or elsewhere. And so, it's our job to show that there are pathways that we can make a difference, we can contain the temperature rise, and that we can do something about the effects that are already upon us.

MS. COLLINS: So we'll try to get a couple of questions in from the audience in each go, so one from this side and one from that side.

QUESTION: Hi, Administrator Power. My name is Hannah, I am a student here at SAIS as well as a contract specialist at USAID. My question is that the U.S. funded genocide in Gaza has really left us unable to be moral leaders on climate change, and all the other pressing development and humanitarian issues those of us who work at USAID care so much about. How are you leading us to reckon with and overcome this hypocrisy in U.S. foreign policy? Thank you.

ADMINISTRATOR POWER: Thank you. Well, I think we have to go back to a core challenge in what is happening in Gaza, which is, I've already spoken, again, to the humanitarian consequences, and our mobilization to try to reduce those consequences, the need to get a humanitarian pause where people will not be at risk of getting killed from bombing, will be able to access basic resources and dignity. That's incredibly important. The core challenge is that the people who carried out – an additional challenge, but the root cause, fundamentally, of the war that is causing such humanitarian pain, is that the people who carried out October 7 would do it again, in a heartbeat if they could.

And, at that fundamental fact, makes it impossible for us to look at the situation and say that it can't happen again. When Hamas leadership is at large, those same kinds of attacks, the same kind of hostage taking, the same kind of sexual assault, that can happen again. And so, we have had within USAID, a lot of discussion, and I very much hear and completely respect the views across the Agency. Again, there's a lot of concern as well about the fate of the hostages, huge concern about the fate of Palestinian civilians, this is a devastating war. And the sooner it can come to an end, the better. At the same time, again, it is very important that what happened on October 7 never happen again. And so that is the core challenge.

In terms of what we are doing in other parts of the world, for the same reason that we are doing everything in our power to address humanitarian needs inside Gaza, we should be doing everything in our power to be addressing humanitarian needs in Sudan. To be doing everything in our power to support the cause of democracy, given the march of authoritarians. Doing everything in our power to help countries prepare for climate emergencies.

We have, as public servants, the privilege of being stewards of vast resources to try to make a difference in people's lives. And, I absolutely understand, again, the perspectives of people who wish the United States were doing something differently on Gaza, or on Sudan, but we have jobs to do, and these jobs are a great privilege. And I can say that as somebody who had the chance to serve in government for eight years, advocates fiercely within government, for human dignity, and will continue to do so.

But, maybe the only thing that is harder about being in government, wrestling with these incredibly tough challenges, wrestling with humility about positions to take or not take, the only thing harder, I found, in my life, is not having the opportunity to be in those debates. And to be on the sidelines watching things that one would wish to see happen differently. And, so again, I consider it an ongoing privilege that we get to continue to work, including in Gaza, to try to ameliorate the suffering there.

MS. COLLINS: I think we have time for one more question from this side.

AUDIENCE QUESTION: Hello, my name is Brianna Stinsman, I'm 2022 Payne Fellow here at SAIS. My question is related to how USAID, the U.S. government in general, is merging artificial intelligence and emerging technology in the area of disaster risk reduction – particularly in small developing island countries, and how we can bring this cross-sector approach to save lives. Thank you.

ADMINISTRATOR POWER: Thank you, we're counting on you to become a Foreign Service Officer, come to USAID and delve into that question. Because, again, across the U.S. government, we are having exactly this kind of debate, but I don't think anybody would say that we are yet optimizing the employ of these new tools for development benefits. I think we are seeing, already, first movers and the risks of these tools in terms of surveilling people and crunching data to assess whether they are enemies of the state, and they really, already, very swift adoption, in terms of repressive functions. And again, I’d imagine that those trends are going to accelerate in places that are undemocratic or interested in employing those tools in those ways.

I got a taste, I think, of the potential. Quite recently I was in the Maldives, and my gosh, I've never been to the Maldives before, but just suc

a sprawling archipelago, and so much vulnerability. And USAID and the Green Climate Fund together have made investments harnessing, basically, large data pools. I can't say, again, we're fully tapping the potential of AI, but I think it's a taste of it, such that what you now have our predictive models that don't just tell you this amount of rainfall on this island with this amount of notice, but actually, and now are turned into text alerts, tell you the road next to this school is going to have three inches of rain for approximately four and a half days. Starting at 3 p.m. cars will be able to drive, you know, again, a day sooner the donkeys will be able to… I mean, this incredible tailoring of geospatial – the canvassing of geospatial data, qualitative surveys and data crunched, and then overlaid with some of the kinds of data I was alluding to in the speech.

It's almost like the old expression news, you can use, much more tailored for a citizen's ability to change their day and their life. Do they move to another side of the island? This amount of time you'll be displaced, but you'll be able to come back at this amount of – I mean, it's a life saving flag. But these islands are so small, that you have to know actually where to go because if it's risky in this part you're just, most of us just, citizens kind of seeing a storm coming but again, taking advantage of digital penetration, and sort of the, the machine learning, and the crunching of these huge data sets. I think that's maybe a taste of where we can go.

We are not resourced as USAID, or as the U.S. government, to be aggressive funders in this space yet, nor are we sufficiently resourced on climate, which places a premium, again, on being catalytic. We would have to be even more catalytic in this space because it is a really, really paltry – important because we're getting some proof of concept. But compared to, we know, like I mentioned earlier, the two biggest game changers: climate change and technology and artificial intelligence. And we need to close the gap. The State Department created a new bureau on cybersecurity and technology that's going to be a very important partner also in diplomacy, in making sure countries do the regulatory things that they need to do, we'll be pushing that as well.

But in terms of funding partners, to integrate AI across every sector that USAID is working in, we have a major doctor and health worker shortage in places, but there's a way to use them. I mean, Atul Gawande is our global health lead, as you may know, and he's out there pounding the pavement to try to understand how AI. Even as we work on trying to train healthcare workers, and mobilize resources, and make sure there isn't a brain drain of doctors and health workers from the Global South, or from some subset of countries in the Global South, these technological tools can enable people to get the diagnosis they need without maybe even seeing a physician, the first instance. Again, it's not first best right now. But then, maybe it's worth then the transportation cost of going to the big city, because you know you can get the treatment you need, where there's more health professionals.

The last thing I'd say, because another thing I want to encourage young people to be a part of is – we need to shift power and decision-making to local communities and to local organizations. It goes without saying, large development agencies are massively weighted toward funding large international organizations, or U.S. based contracting partners organizations – they're terrific partners – but for the gains to be sustainable, we're trying to shift resources toward local organizations. There are many barriers to entry, I was critical of the barriers to entry for the Green Climate Fund, the same could be said for USAID. It's very hard to work with us, the compliance requirements, so we can avoid fraud, waste, and abuse or onerous. It's one thing if you're a huge contracting partner, you have the accountants, the lawyers, but if you're a plucky NGO in Fiji trying to do climate work, like that's going to be really hard.

So, we’re doing a number of things, now's not the time to get into all of that, I've spoken about that a lot. But, to lower the barriers to entry, AI can be incredibly helpful for a local organization, at least in doing a chat GPT first version, potentially, of an application that they then tailor, maybe they do it in their local language. I mean, think about indigenous communities, how can they apply? We're now finally translating our request for proposals into many local languages, but we may not have that indigenous language – maybe machine learning comes along and allows an indigenous community to compete in a way that they never would have had a chance to. That would have just been one extra layer too many in both directions, because we wouldn't have had the capacity to read it, they wouldn't have capacity to tailor the proposal around.

So you know, again, that that's just a small example. But when you think about local empowerment and local agency, it's easy to dwell, and it needs – that the costs and the harms, and the risks need to be top of mind. We cannot lose sight of them. And that's some resourcing about really problem spotting and embedding safeguards into the use of these technologies. But at the same time, we're only scratching the surface in terms of the imagination, and how this can help us not only in so many sectors, but in pursuit of so many reform priorities to make development agencies, like USAID, more fit for purpose in this much faster moving world.

MS. COLLINS: Well, Administrator Power, thank you so much for your time and for sharing your insights today. And thanks for all of you for coming.