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OPIC To Mobilize $1 Billion To Assist Developing Nations in Combating Climate Change

Agency to open a call for proposals from private equity fund managers; announcement made at UN Climate Change Conference in Cancun

CANCUN, Mexico – Elizabeth Littlefield, President and CEO of the U.S. Overseas Private Investment Corporation (OPIC), announced today that OPIC will provide at least $300 million in financing for new private equity investment funds that could ultimately invest more than $1 billion in renewable resources projects in emerging markets. The announcement was made at the United Nations Climate Change Conference.

OPIC’s mobilization of these funds represents one of the largest initiatives by the U.S. Government to support the international effort to mitigate climate change.

“When President Obama and global leaders negotiated the Copenhagen Accord in December 2009, they included a financial commitment to help developing countries reduce their greenhouse gas emissions and adapt to the effects of climate change. OPIC-supported investment funds represent an important and innovative step toward the realization of that goal,” Ms. Littlefield said.

OPIC will issue a “Global Renewable Resources Call for Proposals” for private fund managers investing in a wide variety of businesses promoting renewable energy and the sustainable utilization of natural resources such as energy, water, and land.

Specifically, the funds will accelerate investment in renewable energy, including solar, wind, hydro, tidal, geothermal power as well as waste and biomass. Investments in agriculture, land, and water may include efficient irrigation, cold storage, transportation, water treatment, sustainable forestry, natural resource preservation, and forest rehabilitation. OPIC will also place particular emphasis on the efficient utilization of natural resources via investments in energy efficiency products, systems and equipment, emissions control, and waste management.

The call for proposals will open for submissions on December 15, and remain open until mid-February. Information about the call may be obtained on the OPIC website, www.opic.gov, on December 15.

Kill Bill Volume 2 and the Cancun COP

Quentin Tarantino’s Kill Bill, Volume 2 is one of my favorite movies.   It penultimate scene – a final confrontation of vengeance  from the wronged Beatrice Kiddo (aka, The Bride, aka, Black Mamba, aka Uma Thurman) and the evil, yet oddly amiable and ambiguous, title character (aka, the great David Carradine) is perhaps the finest in the film.  For those of you unfamiliar, shame on you.  In a nutshell, at the outset of a fight that will certainly require a major furniture allowance, the Bride suddenly executes the most exquisite sequence of strikes on the all of Kung Fu – the Five Point Palm Exploding Heart maneuver.  Bill – to his utmost surprise – finds his greatest disciple has surpassed him (their thousand year old kung fu master played by Hong Kong action master, Gordon Liu, had not deigned to pass this knowledge to him) and bows to her grace and superiority.

Why am I, sitting here on the beaches of Cancun, reminiscing about Tarantino’s oevre?  Well, it’s because of the way the Five Point Palm actually operates, explained via foreshadow earlier one by Bill himself.  It is not instant death – far from it.  The victim feels perfectly normal – except in his fifth step after the strike, his heart explodes and he drops dead.  It creates – literally – a perfect example of the walking dead.  Which is what brings us to the Cancun COP – climate’s first full gathering after the Copenhagen Five Point Palm Exploding Heart debacle.

Cancun is Bill getting up from the couch and taking that first proud step to his inevitable demise.  Everything here looks normal, feels normal – the mass ant colony of climate has done is annual migration to another odd corner of the world and set up shop. It’s lower energy than Copenhagen, Bali, the Hague or Kyoto, but that’s to be expected – off year COPs always go through these cycles

But make no mistake, COP/MOP process in its original form is most certainly the walking dead.  The fundamental political dynamics around past and future carbon responsibility in a world transitioning to new global multipolar balance (a dizzy prospect in its own right) have not been remotely resolved.  The chasm we saw in Copenhagen is not close to being bridged and there appears no way it ever will be bridged in this particular UN process.

To quickly review the dynamics of this particular Mexican standoff, developing countries continue to insist on an extension of Kyoto emission caps on industrial countries as the fundamental policy to engage mitigation.  Simultaneously, more and more industrial countries refuse to continue down that path.  While there are many other issues – macro and micro – this alone is a pretty binary choice and neither side is ever remotely likely to move.  Since the UN process is intrinsically based on 100% consensus, well – it ain’t gonna happen folks.  This  is my ninth COP/MOP total, my fifth in a row and these tensions are not getting better, they are getting worse.

Therefore – for all intents and purposes – the CMP process dead in its current configuration and the question is how many steps we will take before we too collapse in a heap.  For the record, cinema buffs debate  whether Bill died on his fifth or sixth step off the couch.  If each COP were a step, Tarantino’s model means we have another five years to go before we final collapse. Somewhat sickeningly, that feels about right.  Unlike David Carradine – who had total awareness of his fate – my guess is that substantial parts of the COP ant colony continue to delude themselves that this process represents the only relevant forum for climate management.

The COP process has become is own raison de etre and its existence seems increasingly  isolated  from the real innovation that countries, companies and other aggregations are attempting to address small fragments of the problem.  Basically, what goes on for two weeks inside these halls of official dialogue is a shadow game with little relevance to actual decision making around carbon policy, innovation and investment in the world that 6.5 billion people inhabit.  And vice versa.  And when when institutions exist simply for the reason that they exist under their own life force, a serious rethink is in order.

If we solely focus another half decade to supporting this particular paradigm, we may indeed be accused by our grandchildren of fiddling while Rome (and many other places) burned.  The efforts that thousands of negotiators and tens of thousands of other participants undertake to address the climate challenge through the COP process are undoubtedly real and important.  They are, however, driving toward an inevitable dead end.

The UN process as a intermediary of economic and environmental value between countries no longer holders up to scrutiny.  Being honest, we must recognize that the UN and CMP texts of the last decade do represent some agreement to abrogate  sovereignty – and for countries who are finding their way in a new global political  dynamic, this is likely a bridge too far.   Given the other forces at work, that simply is not a realistic assumption to make during such a fundamental power transition such as we find ourselves

This is not to say the UN does not have a role going forward – far from it.  My very good friend Christiana Figueres is now the ringmaster of the circus and if there is a human being on the planet who can recast the intergovernmental role positively for  our species and our fellow  earthlings, she’s the one I’d put my money on.  In my next installment in the next couple days, I’ll lay out some ideas for reinvigorating this UN processes relevance, making it so real climate mitigation work and UN support can walk hand in hand, as opposed to in parallel paths around the climate policy maze.