Energy for Growth Hub
Podcast Nov 15, 2023

Episode #15 Vijaya Ramachandran: Every Country Has the Right to Its Own Energy Choices
Katie Auth, Rose Mutiso, Vijaya Ramachandran
Better Metrics and Data
Shaping Energy Transitions

To kick off Season 3, Vijaya Ramachandran, Director for Energy and Development at the Breakthrough Institute, explains what sparked her interest in energy, talks rich country hypocrisy, and demystifies climate finance.

Vijaya Ramachandran is a board member of the Energy for Growth Hub and the director for energy and development at the Breakthrough Institute. She works on the impact of the business environment on the productivity of firms in Sub Saharan Africa and has written extensively about the need for a reliable supply of electricity to raise productivity in the private sector. She has published her research in journals such as World Development, Development Policy Review, and Governance, and in the Oxford Handbook on the Economics of Africa. Prior to joining BTI, Vijaya worked at the Center for Global Development, the World Bank and in the Executive Office of the Secretary-General of the United Nations. She also served on the faculties of Georgetown University and Duke University. Her work has appeared in over fifty media outlets including the Economist, Financial Times, Guardian, Washington Post, New York Times, National Public Radio, and Quartz Africa.  Vijaya has a PhD in Business Economics from Harvard University.

Show Notes

Transcript

[Music]

KATIE AUTH: I’m Katie Auth.

ROSE MUTISO: And I’m Rose Mutiso and welcome to Season 3 of High Energy Planet, the podcast from the Energy for Growth Hub about new ideas to solve global energy poverty.

KATIE AUTH: On today’s show, we’re incredibly excited because we have Vijaya Ramachandran. She is the director of Energy and Development at the Breakthrough Institute, but luckily for us, she’s also a board member at the Energy for Growth Hub so Rose and I have gotten to know her over the past couple of years. She is a Harvard-trained economist focused on economic growth and energy infrastructure.

KATIE AUTH: Mostly in sub-Saharan Africa, but she’s also covered the Caribbean, Asia, and the Middle East. She’s worked at universities, including Duke and Georgetown, the World Bank, the Executive Office of the UN Secretary-General, and the Center for Global Development, and her work has been featured basically everywhere, including the New York Times, the Economist, the Financial Times, Foreign Policy, Nature, NPR, Vox — I could go on and on and on and on. And she just released a TED Talk on energy poverty and investment, which if you haven’t seen it, you should go check out immediately after this.

ROSE MUTISO: Vij’s TED Talk is really amazing and inspiring. So we are trying something a little different for Season 3. All our guests do incredible work and we love to talk about the issues, obviously, but we also want to focus more on who they are as people, what shaped them, and what drives them to do the work they do. I know some of you might really like the dry technical discussion, but hopefully, this tonal shift to a little bit more of the personal will create a little bit more balance and get us to know not just the issues but the people.

KATIE AUTH: This kind of came about because Rose and I, we’ve all gone to a million energy-themed conferences and we’ve all heard each other talk on panels about the work that we do, and it’s great and it’s interesting, but we all also have surprising, sometimes deeply inspiring stories to tell about how we got here and why we care about energy and Rose and I are really excited about tapping into more of those stories and hearing from people about why and where they want to take their work.

ROSE MUTISO: We’ll kick off each podcast with talking a little bit about the guests and why we are excited to have them on. So why do we admire Vij? Well, over the past several years that I’ve known Vij, I’ve been a direct beneficiary of her kindness and collaborative spirit. And, Vij, you’ve invited me to share perspective on projects you’re working on, you’ve facilitated introductions to give me more visibility, and you do such a good job of reaching out to share new insight or work that you think might interest me. And I have to say a Vij DM is the best kind of DM, so I’m hardly on Twitter or X anymore, but I think like 90% of my site visits to Twitter are just to see a Vij DM, because I’m like, this is going to be good. What does she want me to look at? So, , being in Vij’s orbit is really to feel seen and heard, and thank you so much for that. And also, because you’re super brilliant, and you do so much substantive work across so many domains, it also means that I learn so much from you and I literally get smarter every time I talk to you. So I’m really thrilled that our listeners will get to experience this today and, no pressure Vij, but there are a lot of people who need to get smarter at the end of this interview.

KATIE AUTH: And why are we excited for our listeners to hear from Vij? One of the reasons is that Vij is seemingly unafraid to take on really contentious, complicated debates around equity and fossil fuels, and she has this really relatively unique way of approaching really complicated technical and economic issues with a deep sense of moral clarity, which you don’t often see in this space. And we’re going to talk to her about how she approaches that and why she thinks it’s important to humanize energy poverty.

[Music]

ROSE MUTISO: So Vij, let’s get started after that introduction. Let’s rewind the clock a little bit. Where and how did you grow up?

VIJAYA RAMACHANDRAN: So first of all, Rose and Katie, thank you so much for having me on the show. You’re very generous in your introductions. I do want to say that both of you have contributed a huge amount to my writing to help me shape my arguments better and to make my work better. So I want to thank both of you for that. That has happened on numerous occasions over the years, so thank you for that. And thank you for having me on the show and for being able to discuss these issues with you, which I’m very much looking forward to doing. Where was I raised? I was raised in Bangalore, in India, in the southern part of India. That’s where I went to school before I came to the US to go to college. So I experienced from a very early age the difficulties of living without a reliable supply of electricity, so I know that firsthand. It’s hard to forget, the kinds of challenges it brings. So I think in many ways my background and my upbringing very much kind of influenced what I chose to do later.

KATIE AUTH: So it’s interesting because in the low-key stalking of you that I was doing in preparation for this podcast, I saw that your professional and your academic background was originally really all about the business environment and private sector development, and I came across a CV of yours from not that long ago, I think it was 2018, and I was struck by the fact that it actually didn’t mention energy at all. So we were curious kind of how did you make the shift from private sector work to energy. What did that look like and how did that connect to your early life that you were just talking about?

VIJAYA RAMACHANDRAN: Yeah, so my training is all in industrial organization and I spent a lot of time at the World Bank, other places, understanding the kinds of problems that businesses face in poor countries, like what are the constraints that prevent them from growing, from becoming more profitable, from hiring more workers, and one of the things that kept popping up over and over and over again was the lack of a cheap and reliable supply of electricity. So if you go back to that work and look at some of the papers I wrote then, it was largely academic writing at that point, almost always electricity was a major constraint, either the most significant constraint to businesses or certainly in the top three. And this was true all across sub-Saharan Africa and it was true in big parts of Asia as well, particularly in South Asia where electricity remains a really significant problem. So I think that was what sparked my interest in the whole question of energy access and how energy relates to the alleviation of poverty. I do come to it from that business perspective, and I’ve always tried to keep that focus. If we really want countries to become richer, they need to have much bigger private sectors, they need to have a lot more people running businesses, working in businesses, being able to be hired into jobs and for that I think energy is just a really critical part of that and the data show it very clearly.

ROSE MUTISO: So Vij, it’s so interesting because actually I feel like your energy origin story reminds me a lot of Todd’s, who is the Energy for Growth Hub’s Executive Director, who was kind of deep in the depths of development and development economics and kind of came to energy later in his career. So I sometimes wonder like, why has it taken the development and the kind of development economics community so long to clock to this? And you and Todd are two examples. I mean I’m not mad at you, but I’m just curious to know why it’s taken decades of people working in economic development to figure this out.

VIJAYA RAMACHANDRAN: Yeah, it’s a really good question, Rose. I will say I met Todd I think close to 25 years ago when he had just come back to the US after living in England for a while and we would talk about energy issues even back then. We would try figure out kind of what the issues were in Africa with energy markets, with distribution companies, and so on. But you are right that this has never gotten the kind of prominence that it should have. And I think in part that’s because the development profession moved away from infrastructure in the eighties and nineties into social sector largely. It was a huge shift. It marked in parallel the shift of the World Bank away from funding infrastructure — cancelling dam projects, reducing the infrastructure portfolio drastically in the eighties, also into the nineties a bit. And I think from there, the development community kind of shifted into health and education. And you do see the size of the health sector is now probably, I don’t know, five or six times the size of any other sector in development. And I think that’s a result in part of a shift that occurred almost 30 years ago now, where the major development players decided infrastructure was too difficult. It had too many environmental negatives. There was a lot of pressure from non-governmental organizations, mostly I think in rich countries, that were objecting to the environmental consequences of building roads and building power plants and building dams and so on. And as a result, I think we saw this big shift away from the kinds of issues that you and Katie and I, talk and write about. And I think only now we’re coming back to that set of questions we’re ramping back up in terms of infrastructure. Spending, the donors are thinking about it more, but it’s taken a long time, I think for that shift to kind of work itself out.

ROSE MUTISO: That’s such an interesting insight and actually I’ve never thought about it that way. So, again, thank you. You are making me smarter. I’m learning something new, but really helpful context for that to see the big picture. Okay, so Vij, you’ve written very powerfully about what you call green colonialism and the hypocrisy of rich countries cutting off financing for fossil fuels in poor countries. So what’s one anecdote that really crystallizes this hypocrisy for you?

VIJAYA RAMACHANDRAN: I think the one that I usually refer to is Norway, which is one of the world’s largest exporters of natural gas. I think it’s 14% or 15% of employment. It’s somewhere in the order of 10-15% of GDP. Natural gas plays a very significant role in the Norwegian economy. Norway, along with some other countries in the World Bank, has pushed really hard for the World Bank to stop financing fossil fuels, which includes natural gas projects in Africa. To me, this is the height of hypocrisy. I have been in public fora with Norwegian government officials where they’ve talked about expanding their natural gas exports, being able to increase their gas exports to poor countries, to middle-income countries. At the same time, countries that are doing that are also pushing for these bans, and I think somebody needs to call that out. It simply strikes me as the height of hypocrisy. I mean, to some extent the US is also in that boat because the US is, I think, on track to become the world’s largest exporter of natural gas, but has also joined in these calls for fossil fuel bans, albeit leaving a bit of a window open. But countries that are exporting fossil fuels, that are buying fossil fuels. There are a whole bunch of European countries buying natural gas, and signing 10-year contracts with Qatar and others. I don’t think that they have any right to come to these multilateral banks and impose these types of bans on poor countries.

KATIE AUTH: Yeah, and you write about this issue in such a clear, compelling, powerful way, Vij. But Rose and I in prepping for this, we’re really curious, one thing that we have found that is really hard when you try to make that argument, is that the debate around fossil fuel finance is so deeply emotional and so kind of tribal almost in the way that folks are locked in very emotionally to particular positions. I’m sure you must receive a fair amount of criticism and there’s always a risk that your position, which is actually highly nuanced, is going to get misconstrued to be anti-climate or people are gonna see you as minimizing the risk of climate change itself. How do you deal with that? Are you as unbothered by that as you seem to the outside?

VIJAYA RAMACHANDRAN: You definitely do not want to get put into a box. You don’t want to be labeled in some way that’s negative and you don’t want your arguments reduced to a form where all the nuance is gone and all the careful arguments are lost because of some sort of label or some sort of criticism. I am surprised by how little criticism I get. I have not gotten that much criticism. I think it’s because even those who are most committed to ending fossil fuels and to addressing climate change — where it’s their biggest priority above all else — I think even that group of individuals understands that the change has to come from rich countries first. I think that message has gotten through. I don’t see a lot of arguments saying, oh no, it’s Africa that should do it first. I don’t see a lot of that and I don’t get a lot of feedback that suggests that. I do get comments often that say that I am overly pessimistic about the lack of substitutability between fossils and renewables. I get people sending me papers saying you can build roads with wind power, or you can do all-natural farming or organic farming. I get comments like that, but I don’t get comments about my overall argument. I think that most people have at least some sense of concern over the equity

ROSE MUTISO: That’s really, both encouraging and interesting to hear because I think Katie and I have felt a little bit of pushback for articulating similarly nuanced positions, especially in the hard climate community, and we consider ourselves to be part of the climate community obviously, but I think that there are some corners where there’s this kind of black-or-white lack of nuance. But I’m really glad to hear that day-to-day the coalition of people who are like, “let’s be practical, let’s think about equity” is growing. That’s really, really promising. Building on this question of fossils and the transition, we really want to ask one more question because I think that your insights are so helpful to make sense of these difficult, multifaceted questions. So just one more for you on that topic. Both you and the Hub have advocated for targeted fossil fuel exemptions in poor countries, right? In countries like Liberia or Sierra Leone, the risk-reward calculation is relatively simple, because they’re so small and so poor, and a single gas plant can have enormous positive development benefits and contribute essentially nothing to emissions. So that’s an easy case to make, but it gets more complicated in countries that have a lot of poverty, but also have high emissions. A great example of this is obviously India, which has a huge coal problem. In my work I kind of get away with it by saying like, oh, I mostly work on Africa. Also I’m from Kenya, everything is green. So I kind of like cop out a little bit. But how do you approach climate versus development in a place like that, a place like India?

VIJAYA RAMACHANDRAN: I think that’s a very, very difficult, set of issues around coal in India. I have written one piece about it with Sandeep Pai, who is with an Indian NGO called Swaniti and is deeply knowledgeable about coal issues. Coal India employs four million people, and in secondary and tertiary jobs probably another 10 million people are employed in coal-related activities. The revenues from coal that the government receives are distributed to fund health and education projects in 700 districts in India. So the idea that India can simply exit from coal, and announce something at COP, and that’ll be the end of it, it just simply doesn’t take into account any of these complexities. 70% of India’s electricity is from coal. It’s a huge chunk and I think, over half of the plants are less than 15 years old, so we are not going to see an exit from coal anytime soon. We are probably going to see India generate more electricity from coal before it starts to decline. That is the reality. And I think if we understand the reality, we can then start to figure out how we tackle this problem. Like how do we get India to shift away from coal to renewables? So India has very substantial ambitions around renewables, particularly around solar, which makes sense. There’s not a lot of wind, but there’s a lot of sun and so, it has very big plans to increase its capacity for solar and it is generally very committed to expanding the share of renewables in the energy sector. But the big question remains around how do we retrain, or relocate, or otherwise help the 15 million or so people who are related to employment in coal and what do we do about the revenues, how are we going to replace those revenues with other revenues to fund health projects and education projects and infrastructure projects in poor districts in India? I think these are the kinds of questions the Indian government is grappling with. I would like to see the international community understand the coal sector in India better, and then be able to come up with solutions that make sense in that context, rather than pushing for some particular language in COP statements and then getting very upset when India won’t agree to that language. That strikes me as largely kind of useless. If we can really figure out kind of what’s the kind of job retraining that needs to be done, or what do we need to do to replace these revenues? Where are the revenues gonna come from? I think that would be a very useful conversation that would be helpful to the government that also wants to tackle this problem.

KATIE AUTH: Clearly, India’s kind of a classic case study or definition of what we think of as just energy transition. This focus on transitioning a coal economy and I think you are seeing the international community slowly and probably belatedly focus more on that. That’s kind of the focus of the Just Energy Transition Partnerships (JETPs) is figuring out how to work with a country to transition away from coal. Does that hearten you to see that type of approach or do you think it’s not nearly enough or window dressing on a deeper problem?

VIJAYA RAMACHANDRAN: I mean, I think it is good that we have these types of initiatives that people understand that a just transition needs to occur. I even like that term because it sort of recognizes the complexity of the coal economy in the countries that are dependent on it. I think the big problem is that the amounts of money are nowhere near what will be needed to actually retrade and relocate and restructure these sectors, but it’s a good start. And if we can see these partnerships continue and become productive and really kind of help countries address the problem, then they could turn out to be a good way to kind of, we have to start somewhere, so I think it’s a good way to start. I do think though that the magnitudes, particularly in India — I mean, India really is sort of an outlier, right? India and China are the big outliers when it comes to coal, and for them, these partnerships are just really very, very small amounts of money. But I do think it helps to kind of get a dialogue going. I think that they’re a good idea.

KATIE AUTH: So to stick with India for a second, and take a slightly different approach — people might not know that a long time ago you were a research assistant for the legendary Indian economist Amartya Sen and we’re not gonna get into much specificity here, but I did wanna flag that right now the Hub team, all of us are rereading his seminal work, “Development as Freedom,” which for anybody who hasn’t read it, basically makes the case that development at its core is not really about infrastructure or access to services. It’s about making sure that individuals have choices and agency and the ability to make decisions for themselves and to seize opportunities, and things like infrastructure are just tools to enable that. And to me, when I was rereading that, it really struck me that it is very closely linked to your argument that energy is also all about agency and decision-making. And I was curious whether that resonates for you, the connection between how you’re approaching energy and that kind of core definition of development.

VIJAYA RAMACHANDRAN: Yeah, absolutely. I think it does resonate very strongly actually. I feel very strongly that every country has the right to make its own energy choices and that these choices are to be made by policymakers, by the citizens of these countries, according to their development goals. It’s about their choices. It’s about the path they’ve chosen to lift themselves out of poverty, to have better lives, to live lives with dignity. I think those are themes that Professor Sen really emphasizes in all of his writing — that development is about people being able to make the choices they want to make in life. And whether that be at the individual level, at the personal level, or whether it be, for a country as a whole, I think the argument sort of holds and with that in mind, I am deeply troubled by the sort of air of paternalism that hangs over the climate community. We should not be telling other countries what to do. We certainly should not be telling poor countries what to do. We shouldn’t be telling Africans what to do. That was tried in the 1800s. It didn’t turn out so well. I think we need to really let that go, and stop lecturing people about the choices they make. I think everybody has the right to make their own choices, and the right to make their own mistakes. And if there are infrastructure projects that turn out to be not so successful, well, everybody learns from them and moves on. I think this idea that somehow we need to sort of micromanage the development process to things that we think will work or we think are good for the world doesn’t make any sense. It goes very contrary to the kinds of things that Amartya Sen talks about in that book, “Development as Freedom,” which is just an absolutely wonderful book, as are all his other books. They’re just amazing to read, and he’s amazing to listen to.

ROSE MUTISO: So Vij, there’s this concept in mathematics, which is the Erdős number, which is your connection to publications with this famous mathematician and because we’ve published together, now I feel like I have a number two connection to Amartya Sen, which I’m very proud of. So thank you for that. Alright, so you’ve worked at the World Bank and it’s currently under a lot of pressure to expand its climate portfolio, but you recently looked at the kind of portfolio and found no clear methodology for what does and doesn’t count as climate finance. COP 28 is obviously around the corner, and climate finance, as always, will be back in the headlines, but it seems like we don’t even know what it is, not us, not the World Bank, not anyone. So, how would you want to see climate finance defined?

VIJAYA RAMACHANDRAN: Yeah, it’s a good question, Rose. I think we have somewhat of a sense of what climate mitigation looks like, so we know that if we’re replacing fossils with a solar plant or wind turbines or whatever, we are reducing emissions and that’s climate mitigation and we can measure that and we can say that financing for those types of projects is clearly climate-related. The challenge is with adaptation. We don’t have a clear understanding of what that is. As a result, what I found when I looked at the World Bank portfolio was a lot of ad hoc tagging of projects as adaptation — everything from education projects to health projects, to COVID-19 projects, to macroeconomic reform. Everything had these sort of climate co-benefits and were tagged as climate, but it wasn’t clear exactly what those were. There weren’t many explanations in the documents. I tend to think of climate adaptation as very closely correlated with economic development. Richer countries are able to adapt and they’re able to become more resilient. So I think we need to start from there and then try to understand what are the best projects for adaptation, and generally they will be infrastructure-related — replacing makeshift roads with paved roads, or building structures to codes, or having an electricity supply for an early warning system, or having hospitals with a constant electricity supply to cope with weather or climate shocks. Those are the kinds of things that really will make countries be able to adapt to climate better and a lot of that is investing in infrastructure. I think we need to get a clear understanding of that. We need to move away from the idea that because poor countries are very prone to climate shocks, they need to reduce the amount of energy they consume. That is simply completely and totally false. Really adaptation is very energy-intensive and it’s infrastructure-intensive, and I think if we can start from there we can get to a better system of coding our projects or directing our projects, directing the finance in a good way. Right now, it’s all over the place.

KATIE AUTH: So Vij, we mentioned at the top of this episode that we’re trying to focus more on our guests as human beings and as friends, and so we’re introducing a new tradition (you are our first guinea pig), which is that we are ending each interview with the same question. And the question is this, looking back since you started working in the development space, what’s the one thing that has changed the most about you since you started this work?

VIJAYA RAMACHANDRAN: Well, that’s a really good question, Katie and it’s not one that I’ve spent a lot of time thinking about. I’d say that I started out with a very technical view of the world. Everything was a model, everything could be modeled, answers could be found with data. It was all about that. It was all about keeping up with the latest techniques and data. I think as I’ve kind of gone through, the decades of working in this field, that view has considerably shifted and you’re met with the complexities of the world and meeting different people, I think has really shaped my worldview. Particularly my years at the Center for Global Development, working with Todd, Alan Gelb, and with Nancy Birdsall really changed the way I saw things and thought about things. I think the discussions that you have with colleagues, even now, the discussions I’m having with you right now, I think will change the way I think about some things. I think that it’s really helpful to have those conversations and then it’s absolutely helpful to do the fieldwork because when you go and travel around countries, you really do understand how much more complex this is than anything you could have thought of.

KATIE AUTH: Yeah, and it’s actually, it’s nice to hear you say that, yes, the world is messy, but that’s not a bad thing. And if we lean into that and embrace it, all of our work is going to be better, so I really appreciate that.

ROSE MUTISO: And Vij, I love that we started this podcast talking about how we can’t wait to learn from you, and the listeners to also learn from you, and to say that you’re learning from this conversation is great and really in keeping with what we’re trying to do, just kind of talking to each other, sharing, chitchatting, expanding our mindsets together.

ROSE MUTISO: So thanks for that. Okay, Vij. Now it’s time to play Short Circuit, which is a rapid-fire round of five questions. All right. We’re gonna keep it quick, quick, snappy. Boom, boom, boom. Okay, are you ready?

VIJAYA RAMACHANDRAN: Yeah.

KATIE AUTH: Okay, number one, what’s your favorite city you’ve ever lived in and why?

VIJAYA RAMACHANDRAN: I would say New York, it’s such an exciting place to live and so many things to do.

ROSE MUTISO: Okay. What’s one podcast book or article you can’t stop thinking?

KATIE AUTH: Other than this one, obviously.

ROSE MUTISO: And it could be celebrity nonsense. Don’t feel like you have to present yourself as serious.

VIJAYA RAMACHANDRAN: So the book I always think about that I read is James Ferguson’s, “The Anti-Politics Machine”? Highly recommended it. I won’t say more about it. I’ll ask your listeners to go read it.

ROSE MUTISO: Okay, an intriguing place to leave us. We’ll check it out.

KATIE AUTH: Which aspect of your career path do you think would surprise teenage Vij the most?

VIJAYA RAMACHANDRAN: I guess the number of places I’ve traveled. I never thought I would do that, but I have now traveled much of Africa, and much of Asia, but I’ve never been to Latin America, so that’s something to be done.

ROSE MUTISO: Okay, next Hub retreat, Latin America. Who is one person that inspires you?

VIJAYA RAMACHANDRAN: I would have to say Amartya Sen. I mean really a life-changing opportunity to work with him for the year that I did, and just such an amazing thinker and writer and such a wonderful person. So, yeah, absolutely. It would have to be him.

KATIE AUTH: That’s awesome. And finally, what is your go-to comfort food?

VIJAYA RAMACHANDRAN: Oh, I would have to say popcorn.

KATIE AUTH: Really?

ROSE MUTISO: I kind of love that. Why?

VIJAYA RAMACHANDRAN: I always like it, so if I need a break, that’s going to be it. It’s so quick to make.

ROSE MUTISO: Yeah, that’s really great. That’s very you. So, thanks so much for that. You did really well, with, and this is another new segment for us, which is short circuit and you are a great first guest, so thank you.

KATIE AUTH: Vij, thank you so much for being with us here today. Rose and I both deeply appreciate your mentorship and just having a chance to discuss with you and work with you on a daily basis. Thank you so much for being with us.

VIJAYA RAMACHANDRAN: Thank you so much Katie, and thank you Rose for this opportunity to speak with you today. I really enjoyed our chat and I look forward to more conversations, of course, with you on this set of challenging topics. Thank you so much for having me on the podcast.

ROSE MUTISO: This has been so great. We really got into some really interesting content, really complex issues, but I think we also had a love fest, which is like the whole point of the new season. So thank you so much and it was really great to get to know you better.

[Music]

ROSE MUTISO: High Energy Planet is a production of the Energy for Growth Hub, matching policymakers with evidence-based pathways to a high-energy future for everyone. Find out more at energyforgrowth.org. And share your questions and thoughts with us @energyforgrwoth on Twitter and LinkedIn.

KATIE AUTH: If you like today’s episode, be sure to rate and review the podcast and tell a friend about us. Bob Lish is our executive producer and Audrey Zenner is our senior producer. Join us next time for more High Energy Planet.