Dean of The Fletcher School at Tufts University, and the first woman to lead the USA’s oldest graduate-only school of international affairs, Kyte also serves as the Special Representative of the United Nations Secretary-General for Sustainable Energy for All, and co-chair of UN-Energy. Kyte attended the 2019 World Economic Forum as one of the conferences ‘energy stewards’, not in a formal role, she says, but still firmly in the middle of the discussion.
“At Davos we could see that parts of the world are in fact coming together on green energy infrastructure,” she reports. “There is growing cohesion between ports, shipping, refineries, railway networks, and trucking, and we have producers and off-takers in places like Rotterdam, Australia, and Japan.”
But if progress is to be made toward decarbonization goals, she believes stakeholders will have to move forward quickly on the structural shift to renewables. “There is some resistance to infrastructure investment already, and there are growing signs of underinvestment. We have to move past the failure to deploy investments. Now more than ever it is important to invest in green energy infrastructure.”
Seeking maritime momentum
While the maritime industry has shown signs of movement, Kyte believes that shipping should be enacting even more aggressive measures than those prescribed by its governing body, the International Maritime Organization (IMO).
“If a percentage of the fleet committed to zero net emissions now, say 1-2 percent, that would create enough of a market signal for green hydrogen or ammonia producers to start ramping up. We could predict a certain demand, and owners could commit to the shift.”
But pivotal stakeholders are reluctant to make the first move, she says. “Fuel companies are willing to commit to making green fuel, but in the absence of government pressures or incentives, we need more pull from the shipowners to guarantee uptake.”
No nation left behind
The current green shift concept focuses on the developed world, Kyte notes. She questions whether there will there be sufficient industrial capacity in the developing world to achieve a global shift. “There is very little planning around that idea at the moment, but it will gain momentum as emissions grow in these places. The International Monetary Fund should consider how it supports green infrastructure with its funding, as opposed using resources to support incumbent and outdated infrastructure frameworks.”
While development in Europe could be part of a European Green New Deal with backing from the European Investment Bank, Kyte points out that this kind of cooperation is not as easy outside of an economic union.
“The transfer of energy is easier in a well-developed policy environment than in an emerging infrastructure. But how much discrepancy can we handle at once? Too much variation in the speed of adoption will make it difficult to exploit advances across national boundaries and jurisdictions,” Kyte warns.
The good news story, she says, is that the debate on hydrogen is maturing. “Use of hydrogen is more about heavy vehicles now, trucks, busses, trains and ships, and this opens the doors for commercial development and innovation. Individual corporate buyers will need available hydrogen or ammonia, and the market assumes that carbon will be priced, which in turn will incentivize hydrogen development.”
The question for Kyte is whether industry alone can ramp up infrastructure quickly enough to supply sufficient green hydrogen. “The industry needs to get busy doing what they can to support development of the infrastructure and the value chain. A proactive or aggressive policy would speed things up, but this has not happened yet.”
Policy must also take a role in ensuring safety and establishing standards in order to boost confidence in new solutions, she says. Regulatory uncertainty or policy reversals could all slow down the process. “There are doubts about the greenness of technologies and the viability of infrastructure investment. Both public and private investors will need to see incentives, and this requires a clear policy element.”
The UK, the Netherlands, Denmark, New Zealand and South Korea are all examples of countries that could move forward on green energy, she says. And while the federal government in the US is not driving development, Kyte points out that they still allow individual states to act. “Lack of national support and coordination will slow the process down, but the shift will still happen on the state level. There are plenty of potential investors out there.”
The time has come
On the timeline for realizing the green shift, Kyte is a realistic optimist: “Listening to the big multinationals at Davos it was clear that they have ambitions, but also that achieving these will require the confidence to make major investments.” The scenarios presented by Shell and other energy majors stipulate the need for hundreds of billions of dollars in investments over the next ten years, she says, not just in green fuels, but also in ports and efficient transportation.
“This is a moment of reconstruction, much like post World War II, or after the fall of the Berlin Wall, but it has to happen in the next 10-20 years.” It can be done, Kyte claims, but will require a ‘Marshall plan moment’. “That’s what the G7 and the G20 should be talking about now,” she emphasizes.
“It’s not just about getting off coal, it’s about what we need to build in its place. I worry that every day we don’t invest, we just make it harder.”
Editor’s note: The interview with Rachel Kyte was conducted before the Covid-19 pandemic began to impact global society. Kyte adds that green hydrogen, now more than ever, should be included as an element in stimulus packages, “to ensure that we build back better by building green.”