Amartya Sen and Ngozi Okonjo-Iweala in conversation with Nick Stern: building sustainability in a turbulent world
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Welcome to the LSE Events podcast by the London School of Economics and Political Science. Get ready to hear from some of the most influential international figures in the social sciences.

Oh my gosh, welcome. I feel like I'm at a Taylor Swift concert or something. To those joining us online, we are never late starting at LSE, but it's been so hard to get everyone in. Every seat is full. So welcome, a big, big welcome to the London School of Economics, to people who managed to make it here in person and get one of those valued seats, and to people joining us virtually. My name is Elizabeth Robinson. I'm going to be chairing the event today. I'm a professor in the Department of Environment

Department of Geography and Environment. I'm the acting dean of our global school of sustainability, and I'm beyond delighted to welcome you to this LSE public lecture.

This is the first of a series of events that are hosted by our new Global School Sustainability. I think we're five months old now, so we're still quite young. And I suppose we can think of this as the first of our Global School's intellectual inauguration. And what a way to start. So just to introduce the people you're going to be listening to, you won't have to listen to much more of me afterwards, I'm just going to sit back and enjoy the event like you guys. But we have Amartya Sen,

and Gozi Okonjo-Iweala in conversation with our own Nick Stern. And the topic is building sustainability in a turbulent world. And I'm going to do very short introductions because though people don't need introductions, they still get introduced. So, Amartya Sen, formerly the Thomas W. Lamont University Professor, Professor of Economics and Philosophy at Harvard University, previously the Master of Trinity College Cambridge, and a fellow at Harvard Society of Fellows and Honorary Fellow of the London School of Economics.

As I'm sure you all know, he of course was awarded the Nobel Prize in 1998 for his contributions to economic sciences. Of course he's been the recipient of many other awards. But I just thought I'd say what's, I suppose what's most important to me because like many of you, I grew up being taught as a student on his books and I was

finishing my PhD just as he got his Nobel Prize. And I suppose, for me, I just thought he brought a sense of humanity back into economics that may have been lacking just a little bit. He also reminded us that there's an ethical dimension to economics, whether implicitly or explicitly, it's there, and it's really important we're aware of it. And he reminded us economists should not ignore issues of social justice. So for many of us, he's a breath of fresh air still in the economics profession.

Ngozi Okonjo-Wala, oh my gosh, another

Shining light. I'm currently Director General of the World Trade Organization. She's been a trailblazer, I want to say much of your adult life, maybe all of your adult life, maybe your youthful life as well, who knows. But Ngozi served twice as Nigeria's Finance Minister and briefly as Foreign Minister in 2006. And she was the first woman to hold both positions and the longest serving Finance Minister in Nigeria. And a lot of awesome achievements while she was there.

She's also the first woman and the first African to hold position of Director General of the World Trade Organization. She's the founder of Nigeria's first ever indigenous opinion research organization, of course recipient of many global awards. And I think without doubt she's such an inspiring role model for many of us around the world.

I'll run Nick Stern. He gets an introduction too, just in case. Formerly IG Patel Professor of Economics and Government, Chair of the Grantham Research Institute, Chair of the Global School of Sustainability. He's held many other posts, Chief Economist at EBRD, World Bank, Head of the UK Government Economic Service, knighted for service to economics, made a life peer and then a companion of honour.

I suppose one of his seminal works for many of us, Stern Review, which transformed how we think about tackling climate change, and Nick continues still to be hugely influential in his leadership roles. He's central to why we're here this evening under the guise of the Global School, from founding the Grantham Research Institute to be a key reason why the Global School's founding donor chose to situate the Global School of Sustainability here at the London School of Economics.

as part two guests too many too many prizes to mention so i just wanted to say very briefly um global school sustainability here at the london school economics was launched in 2025 we're trying to advance we are advancing global efforts to shape a brighter future for all the sustainable resilient hopeful prosperous and inclusive we're here we're committed to the global school we're committed to the vision of our founding funder lei chang and our chair next time because we really believe that we can make a difference

but that we can influence change for good and that we're doing work that's grounded in excellence in research, particularly for the most vulnerable.

And we take our responsibility very seriously to reset how humans live together and with the natural world on this planet. We cluster our impact-focused research around five themes: generating sustainable growth, creating sustainable finance and business, mobilizing political, legal and governance systems, protecting and enhancing nature and biodiversity, and building sustainable societies. And just to let you know that there are more exciting Global School events. Nick is going to be launching his book that he just might mention himself.

We have the former President of Colombia, President Santos, another winner of a Nobel Prize, and we have our Lord Adair Turner, who's on our advisory board. So I'm about to shut up, but I do have to say, key logistics at the end of the lecture, we're going to ask you all to remain seated while the panel leaves the stage.

There will be a Q&A. I'm very strict about this one question. If you are lucky enough to have your questions asked, you cannot have a bonus question. Otherwise, I'm here just to keep the peace. And if there is a fire alarm, it's not a practice. So you will all be escorted out by our wonderful people who are helping. And can I just say thank you to all the people who make these events work? I can't name them. Some of them in red T-shirts. Some of them are part of the Global School. I'm going to hand straight over to you, Nick.

Thank you, thank you Liz so much and I'd like to add my thanks to all those who've helped make this happen and to the founder and donor Lei Zhang who has enabled the Global School of Sustainability.

Ngozi and Amartya are two of the founding members of our strategy board of the Global School, and that is one measure of their devotion to the LSE. Amartya was a professor here in the 1970s. Ngozi has an honorary doctorate from the LSE and is a great friend of the LSE. So thank you, Ngozi and Amartya. Thank you very much for coming.

I'm not going to do an introduction again, but I'm going to tell one or two little stories, which I hope say something about Ngozi and Amartya from my direct experience. Let me start with Amartya because I've known him longer. And we met in 1969, probably before the majority of your parents were born. LAUGHTER

and through a wonderful mutual friend, Surya Mooji and Ian Little, who was a leading economist in Oxford at that time. And also we were working closely then with the wonderful Manmohan Singh, who we sadly lost in

who was then, just at that moment, coming to the end of his time at UNCTAD and before he went back to be at the Delhi School. So those were golden years in many ways. And Manmohan and T.N. Srinivasan, another close friend,

of Amartya and myself took me to India in 1974 and I've been going and living there ever since. So Amartya shaped as it were me before I went to India and I remember for example on Christmas Day, I don't know if it was 1974, Christmas Day we had a Chinese meal in Calcutta with my wife Sue. So we've been dear friends for 56 years and

The books that have influenced you have influenced me. The Choice of Technique is his PhD thesis on the cost of labour and capital intensity in an economy where you have distortions in labour markets, influenced my own PhD, which was similar on the same subject. Poverty and famine, development and freedom profoundly shaped the way in which I understand development.

and violence I circulated to my fellow permanent secretaries when I was in government for a brief period because I think they just didn't get it and I thought they needed to and I'm not sure I asked you if I could send it round just before it was published which I did do and most of them actually read it I hope it improved them

And the idea of justice, well, we'll come back to that because I hope we get a chance to talk about climate justice. And I could go on, but each one of those was a huge influence. Now, Ngozi, we got to know each other well 25 years ago, so a quarter of a century rather than half a century. But we knew each other before I went to the World Bank as chief economist. And we were clearly kindred spirits then.

But we did get to know each other well at the World Bank. And towards the end of about 2003, summer 2003, your first stint as finance minister with President Obasanjo. And Ngozi asked me to come out.

because she thought I could help. Well actually for me it was a great learning experience. And you know we had the formal meetings and talking about economics and so on but then you had a dinner and because it was Nigeria you had to dance. Ngozi and I and many others did dance and I'm very relieved that so far I've never seen a video of that event.

But let me give you an example of how clear thinking and back like steel could really get you somewhere. Corruption is a problem in many places, it's a problem in Nigeria. And people were collecting salaries at the Ministry of Finance and elsewhere. So Ngozi, the stroke of brilliance said, "Well if you want your salary you have to come here and you have to sign in, in person."

So all the Mickey Mouses and others on the wage bill lost, as it were, that source. Same time you published...

the resources that went from the federal exchequer to the states and lower down so that people at the other end knew, because it was published in the newspapers, what monies were flowing and so the people lower down from the states could recognize what they should be getting. I could go on. But those are examples where, you know, not many people take on corruption directly. It's hard and it's dangerous. And Ngozi suffered that.

But this is someone who is outstanding at Harvard, undergraduate, MIT, PhD, and all the great sort of academic story.

But that doesn't take you to the real action, to stand up and make policy and deliver policy. We worked together for many years from about 2013 as co-chairs of the Global Commission on the Economy and Climate. And again, I learned a lot from Ngozi and

Now standing up at the three Bretton Woods institutions, WTO is of course of critical importance and particularly now. Perhaps that's something we can get to in that story. I wanted to start by thanking you but describing how I've learned from both of you. It's a particular personal pleasure for me.

Now, we're going to discuss for maybe 40 minutes or so, and then we'll try to spend the last half hour with questions from you, as Liz indicated. Let me start, if I may, Ngozi. We're talking about sustainability, particularly climate change and biodiversity. And many of us have argued, I hope correctly and based on the science, that the risks out there are absolutely immense. For many people in the world, the risks from delayed or weak action are existential.

And so my first question Ngozi, because you really have a picture from where you sit that runs right across. And of course you've worked in the US and you've worked so intensely in Africa.

What's your take on how broadly and deeply those risks are understood amongst policy makers and public in both developing and developed countries? How well have people taken that on board in terms of the kinds of risks that we're all exposed to? Thank you Nick and it's an absolute pleasure to be here.

with Amartya, whom I first met when you came to give that talk at the World Bank during the Wolfensohn era. Nick, I don't have to repeat how long we've been together. So it's great to be here and to see this crowd. You know, how well and how deeply is this scene unfurled? The answer is not as well and as deeply as we would like.

I think that perhaps among the younger generation there is more of a feeling that we have an existential threat. But among policymakers, I think that it's a very mixed picture that I see. And let me say why. One of the things that I see if you serve in a cabinet is the fact that things are very siloed among policymakers.

The issue of climate change in many places and many seen as an environmental thing. It is not seen as something that cuts across. That is, it's related to the economics or the finance or the education or the health.

For me, it is something pervasive, intersectoral, multi-sectoral, you call it whatever you may, that requires an all-of-Cabinet approach in order to deal with it. But that is not often what you see among policymakers. You see a more, even with the nationally determined contribution, which in many cases

in many countries done by the Ministry of Environment without much knowledge or input from others, I'm afraid to say. So even with all what we've seen manifested by climate change, I don't think it's as deep and as well-described

seated in policymakers' minds across the world. There are some areas and some countries that are better than others, but that's my take. And I think that we've seen examples now. Why am I saying this? Because even now, when we know that this is an existential threat, but the fact that there's a major part of the world where this is not now seen as...

and I won't name names, it's not now seen as a major problem. We're seeing retreat. You're not supposed to mention that word anymore. You're not supposed to talk about climate change. Among the private sector, some of whom believe so much in this thing, we're seeing them withdraw and hold back suddenly. We're seeing even multilateral organizations, you're supposed to keep quiet. Well, I'm not, because I believe climate change is an existential threat.

So the fact that we are having this pulling back shows me that it's not as deep-seated as we would like. Otherwise, why don't people stand up for what is right? Why don't they stand up for what they know is the truth? And that's my answer to you, Nick.

Thank you, Ngozi. So the next question then is, so what do we do about it? One thing we do about it is start a global school of sustainability. Very Nick. But at the same time, we have to think about the communications, how we express ourselves, how we make the argument, what language we use, what examples we bring.

And it's something which is, is, it poses a real difficulty because the people, humans have solved problems through evolution, through understanding immediate effects. And a lot of what we're seeing now, of course, is very present. But the really big stuff will come 15, 20, 40, 50 years from now if we do nothing. So it's incredibly urgent.

but people don't feel directly that urgency. So it's a real challenge of analysis, communication, of getting arguments across. And humans evolved through, in part, their ability to anticipate. So we have to intensify that ability to anticipate through the arguments that we bring. The second thing is that if some people step back, for example, the United States has stepped back from...

Trade, aid, health, climate, security, one can go on. But then, can other people step forward? Will other people step forward? And I think the answer to that will probably be yes.

But it is something that we have to encourage. It's not that if somebody steps back, well, that's an excuse for doing less. Actually, if somebody steps back, that's an argument for doing more. And I hope and think, and we have to argue this, that leadership will emerge strongly and, you know, the United States will return and the people of Texas will be investing in solar and wind because it's cheaper.

and they noticed it's cheaper and that's what they're doing. So that's the first part of the story but I'd like to switch now to what we did together in the Global Commission on Economy and Climate or the publications around the new climate economy which we did just ahead of Paris, the first one.

And there we tried to make the case, and I hope we've been building that case, and Liz was kind enough to mention my book, which we'll be launching. The book is called, you know, The Growth Story of the 21st Century.

So what I'd like to turn to now, Ngozi, is the argument that you often hear that there's some kind of horse race between environmental responsibility on the one hand and growth and development on the other. You've heard it so many times, I've heard it so many times. How do you respond? How do you make the case that not only is this an imperative because of the dangers of doing little or acting weakly, but it's also a hugely important opportunity?

to follow a different path of development, which is much more attractive than the dirty, destructive models of the past. But we still have to win that argument as well. Well, before I go there, I just want to illustrate why, you know, development, growth, and fighting climate and lowering carbon emissions are not two things that are contradictory as many people, and that there is a new growth story that we'd like to tell. But I just...

talking about the farmers in my village. So they don't know, they don't call it climate change. But two times now I've been home and spoken to them. They told me that we just don't know what to do anymore, when to plant and when to harvest. The rains are coming at a different time or the wrong time. They're staying too long. Sometimes it's affecting the crops in the field.

and we don't know how to harvest or when. And they say this phenomenon is occurring more and more frequently. So they don't call it climate change, but they know that something is happening to them that wasn't happening before and that it's happening more frequently and that it's having an impact on their yields and their harvest and all that and that they're having less to sell in the market. So it's one and the same thing.

If we don't find a way to contain that problem, we can't be talking about growth and development and the improvement of agriculture from the point of view of this farmer when he or she is dealing with a phenomenon that is making their lives existentially extremely difficult. So that is a real-life story that one can share, to say that those who doubt...

Don't talk to big policymakers. Don't read too many books. Try to go down and speak to the farmers and the women and the people in the village and see what they are saying. And that is why we need to have stories that we can tell that can convince people, one, this has to be dealt with. Two, there is a new way of dealing with this that creates jobs.

Solving the problem can create a new set of jobs, a new approach, a new set of technologies that exist that will attract young people. And it doesn't have to be

two contradictory sets of issues. And that's what we need. It's finding the stories to illustrate what is happening and illustrate what the new growth story could be like. I think that's what's going to convince people. And I think when we talk about the fact that the new technologies cost so little or a much lower cost now,

The solar panels, you know, it's so much cheaper to get hold of them and invest in them than to go into old fossil fuels. And we have to do away with all the bad subsidies. We still have $1.2 trillion in direct subsidies, almost $7 trillion, according to the IMF, in indirect subsidies to fossil fuels today.

When a new technology that is so accessible and is so cheap, and trade, by the way, provides you the economies of scale that help to make this technology cheaper and more accessible. So trade has a role to play. It is being able to convince people that this can help shift in a way that can create jobs, that can provide the energy we need into new sectors. And can I illustrate one?

Take Africa, we now have critical, everyone is interested in critical minerals. This is something that the continent has in so many countries. In fact, only one third of its, its, those resources have been discovered on the continent and there's probably still two thirds to go. But of what has been discovered? So much of it, be it cobalt, be it copper, be it uranium, be it whatever, so much is critical.

to the new technology and the EV batteries and the AI and all the things we need now in the new world. But guess what? This continent is also the home of the 60% of the world's solar potential. So can you produce and process and add value to these minerals in place with cheap

Energy and even green hydrogen production? The answer is yes. There's a new growth story there and a new creation of jobs and a new combination of resources that can unleash new technologies, new jobs for young people, create value, create growth, create development.

Thank you so much Ngozi. And Africa could be a real driving force. But only 2% of the world's investment in solar goes to the continent, right? Exactly. With 60%. That's the question you have to ask yourself. How do you turn this around so you can have the investment needed to generate this new growth story?

So Ngozi, let's turn to, and I want to ask Amartya to help us with this, let's turn to climate justice and what that could mean and why it matters and what its implications would be for the kind of flows of finance that are necessary to realise this new growth story. Now, I...

I've already said that I learned about justice from Amartya. And I can't remember how many years ago now it was, Amartya, but we did an in-conversation here at the LSE, you and me, on your wonderful book, The Idea of Justice. And what you told me and the world...

there was that justice itself in terms of a global concept covering the whole society is not easy, but to understand and recognize injustice is easier and better defined and easier to get your hands around. And you told us that justice is a right or an entitlement denied.

And of course then the argument moves to right or entitlement. And for many of us, we followed you in thinking that what is it that we share? I mean rights are associated with common humanity and what binds us together in the sense in which we are fellow human beings. And one of that is the right to development or the right to shape the life, in your words, Samarcha, you have reason to value.

So if you think of injustice as rights and entitlements denied, particularly in this context, the right to development, the right to work, to shape and expand your opportunities and, as you said, to pursue a life you have reason to value, then it seems to me that you make immediately through that simple but beautiful idea...

a lot of progress in understanding what our obligations are between rich and poor because the rich have emitted and do emit more, much more than poor people. Between rich countries and poor countries because rich countries in their past have damaged the rights development of us all but particularly the poor countries and of course fundamentally when we emit we damage the opportunities and rights development of future generations.

And of course, there are further issues around within society. It's women who usually get the shortest straw when it comes to climate impacts and so on, as Ngozi was emphasizing. So how do you think arguments about climate justice...

should be formulated. How do you think they can help us galvanize action? Over to you, Amartya. First of all, let me, before answering, I'll try to answer the question. You mentioned how delighted I am to be with the companions I have today.

It's really a long time ago that we discussed many of these things. There's a kind of nostalgia. It's hard for me to stop sitting in this room. Fifty-five years ago I was lecturing on microeconomics in this room, in a blackboard with a job in hand. Without a microphone?

Without a microphone, yeah? Shouting. No, I think in addition to the really important point that Nick was in, and Nick has already made, that it's very important to recognize who it is who knows about what, because there is much more knowledge in the world

than is put to use. I think the question of policy came up in the context of the Negotiate Statement. But the people know about so many things which are not put to use at all. And that's important to recognize. My loyalty, of course, is mainly LSE, but among other institutions, it's also my college, where I studied in the Trinity College, Cambridge. Now,

Francis Bacon had a wonderful essay about 500 years ago called "On Doubt" or "Of Doubt" that even if you find a proposition that appears plausible to you, you should doubt it because it's only through doubt that something new understanding could emerge. And he wrote beautifully about it, if I may

reveal a text when I had to give the commencement address at Harvard in the context of getting a degree there. I began by quoting Bacon. Recently I was, in my mind, I asked the question,

when Bacon was writing these words, witches were being hunted and killed, burned, tortured. What did Bacon do? The answer is absolutely nothing. I think the division of who knows what and to what you want to apply it is very important, actually, even in the context of things that are much debated about the

things happening in Europe, the United States, India, in Africa and so on. A lot of people know those things that you particularly want to emphasize. But the question is to what extent they are being put to use. There are, of course, formulas that people get used to and they sometimes work quite well. My wife used to complain

that I know London very well, but my way of going from A to B is to go from A to London School of Economics and from London School of Economics to B. And while that invariably works, it doesn't always be, it's not always the best way of getting there. So I think in addition to

the thing that we want to find out and I'm very sympathetic to Nick's question about how bringing issues of justice into the story. I think there's a lot we know which we don't use. I think the, as I mentioned about the how solar panel has become much cheaper. Now, I am worried that given the way

the chiefness of nuclear power had been used. But the dangers are underestimated tremendously now. I think after a long effort, the climate dangers, except in some quarters, have been accepted. Those quarters where it's not accepted, I would say the same thing, that we ought to do something about it.

making those much more well known. And I'm delighted, for example, that the new sustainability

what is it called? Global School of Sustainability. It's going to do on one side. Similarly, the new thing, L3 has been far near in all these inequalities. It's a very big thing which one complained about and it's making a big difference that these things are happening in one of the

truly wonderful institutions, educational institutions in the world. The difference that institutions can make is sometimes underestimated. Mark Twain, Mark Twain once described cauliflower as a cabbage with college education. And there's a lot for college education that we

ought to admire and remember and apply. And I think one of the great things, and this is an aside, as they say, had it been an essay, this would be a footnote. The footnote is LSE has again and again shown how enormous debauches could be made. And I shall call it very privileged

When I was an undergraduate and came here, I used to come here quite often partly because Cambridge did seem rather boring in comparison with London. But aside from that, I liked being at the library here and meeting the guys here. What was the pub called? Three Towns? Three? Three Towns, I want to say. Yes, Three Towns. Which is now gone. But the...

the focus had to be one. So there were really three different things that I would like to emphasize in response to the question and the discussion that's always taken place. One is that the information, misinformation, discussion and misdiscussion are really almost as important as new knowledge, new understanding. And this is

a role that the universities can't see. I am of course saddened at the institution where I work for, namely Harvard, is under some attack at this time. But the fact is, these universities are, people don't quite often recognize how major things in their lives have happened. You don't think of Harvard when you go into an operation and can be anesthetized

But it might not have happened, but the research is taking place in the medical school in Harvard. So there are many different ways in which education and educational institutions makes a big, big difference to our life. And that has to be a real commitment, and I'm delighted

that this commitment is being pursued by my favorite institution, namely LSE, in every kind of way. Secondly, I think the willingness to raise questions is very big. I personally am worried that the climate threats

have pushed us more in the direction of the nuclear alternative and some new announcement came every morning this day I was reading the Guardian as I was driving from Cambridge to here. I think the dangers are underestimated and even the back of the envelope calculation

would indicate, you know, how much, with the amount of, if nuclear energy becomes a major civil source of power, how much of a danger it carries in terms of the radioactive material. And there's really different scale of time. It's not like 10 years, 20 years, you're dealing with billions of years before these things go away. So I think

If, I mean, one of the things that I resent sometimes whenever I arrive in my country, India, and somebody asks you, asks me, if you had a choice, what would you, what are the one or two or three things you would do? Well, the answer is, you don't have to do three things. You can do 135 things. And

We ought to not make things into such a single focus concern that it drowns the other dangers that the alternatives carry. And I think the question of negative point that they thought about the solar panel cheapening, but I thought the economists were very good in

in being concerned about the relative cost of things. Some people thought so. One of my teachers, Jim Robinson, told me the real trouble is economists got concentrated on the relative price of tea or coffee. And she was right to worry that that's not a good way of spending your time. But relative prices also are other things. And prices

not just the the trivial things like tea and coffee well it's not quite trivial but it could be but the but the it includes what we call externalities that our lives are affected by these things our lives are affected by the

falling into a nuclear fear all the time is really a great concern to me. So I think I would like to take this occasion of answering and responding or continuing the discussion on this question that the issue of risk with which you began, that the risks come from very different sources and it's

Some of them require better understanding, most of them require better dissemination, a lot better dissemination that we happen to have at this time. Thank you so much, Amartya. You've put the burden on our back in a very firm way. I mean, it's the institutions, particularly the academic institutions, that have to go out

and set out the issues and in particular challenge the misinformation which is of course there in abundance. You challenge us to use concepts, particularly our concepts from economics, opportunity cost, externality and so on and put it to use I think perhaps much better than we have done in the past. You've emphasised that you have for a very long time now

Public discourse, public discussion. Yesterday in a meeting you invoked the, I think it was 886 in China and the importance of dissemination through the printing press. You've long offered the world the example of Ashoka who brought people directly together for public discussion, including across the faiths.

And that is something that we can and should do at the university. But one thing I'd take away from what you said is that put your economics to good use. There's lots that we know, there's lots we understand. And in my own view, we're not using it well enough in all this. I'd like to take the last few minutes, and perhaps Ngozi, you could help us with this, on the question of how we raise the resources to do the wonderful things we know we can do.

Solar in Africa is abundant and you can get solar panels for 10 cents a watt. Gas might cost you 50 cents or a dollar a watt and then you've got to buy the gas. You've got to have the batteries, of course, to store, but they're getting cheaper and cheaper. So the statement is that there's an enormous investment opportunity. You can't get into the digital world without electricity.

And of course, that's a big part of inclusion and involvement. So how do we, in a complicated world where aid is going down, not up, how can we work to get the resources flowing, particularly in the context of the notions of climate justice? And I think the answer to that is don't give up.

I mean, that's always the answer, don't give up, but it's particularly intense here. And when aid is becoming scarcer, as it is, then you look for leverage, you look for multipliers, you look for making more out of what you've got. And we both worked for multilateral development banks, and you worked as a finance minister.

So, in this world where we have to raise low-cost capital on a much bigger scale because of these enormous opportunities and the urgency and imperative of action, how do you see the multilateral development banks of the world responding?

Well, Nick, before we do that, I just wanted to say something about the notion of climate justice. Yeah, please. And what the thinking is among developing countries who feel very much that, you know, the developed countries are able to industrialize and create a good life and good living for their populations at the expense of

of the developing countries and now you've got a situation in which as you said in one of your writings, a ton of CO2 emitted in Johannesburg has the same impact as one emitted here in London or US or anywhere. So we all have to be in it and we all have to contribute. We can't say that we won't because we are in a global public bad situation. However,

What do you say to this truth? I think we ought to reflect about it because it speaks to the issue of how do you raise the financing and where does it go? When there's a lot of truth to the fact that the stock of emissions and the flow of emissions is still largely not coming from those parts of the world that are the poorest. And yet they are bearing the burden. And they are being asked to contribute.

And this is where the justice issue comes. How should we respond to those countries? We have to tell them that they have to be part of the solution. But who pays is really what you're saying. Who pays?

for that part of the solution and how do we make sure that the answer to their question of how can we industrialize means that any new investments coming is going to be part of this growth story that we talked about and those investments ought to be being made in that part of the world and that they ought to receive the financing that will help them create the new growth story, the new jobs, the new technologies. That is really because that's justice.

If we come about this in a way that doesn't serve the interests of those who didn't create the problem, then justice is lacking. So this is really what we need to focus on. And the way the world is going now, we are not seeing that justice being served. Raising the money for investment or for adaptation and mitigation

It's taking so long to raise $100 billion that was talked about per year in the Paris Accord. The loss and damage fund has $700 million in it now. But we know we need multiples, billions. We need billions, trillions to be able to fight this. You all know the numbers. I don't need to go into it.

And so I'm very, very concerned about this issue because the skepticism that is bred in the poorer countries in the developing world, in the south, if you will, without a recognition that we need to take of this climate, this justice issue, the skepticism that will be bred will be such that we will not be able to get the cooperation we need to solve the problem. And I'd like

policymakers there to stop thinking about trade-offs, you know, between growth and fighting climate change. So I just wanted to make that statement before coming to the issue of the financing, because if people do not internalize the climate justice angle of this,

then raising the financing becomes a problem. And it can't be done by the MDBs alone. We need to generate lots of private, we need the catalytic money of the multilateral development banks in order to be able. You know it's trillions.

that we need. We are not talking of billions, we are talking of trillions. So how are we going to catalyse those trillions? The MDBs can absolutely help in doing that. And I think so far they are doing a much better job, but they need to be better capitalised still. They can't raise even the hundreds of billions needed without additional capital from their shareholders, so that's the issue.

And then secondly, how to attract the private sector, how to catalyse that private financing that needs to turn billions into trillions. So that is where we are. And at this time I see a retreat rather than an advance. But let me just add one element to this. I told you there's still about $2 trillion in distortionary subsidies.

that are being given by governments that could help solve this problem. And I know, having been there, that removing these subsidies requires a lot of political will. So I'm not asking that all of it be removed. But I mentioned 1.2 trillion in direct fossil fuel subsidies. Actually, Nigeria has removed the fossil fuel. We made a try when I was there, went halfway, they've removed it now. But you need the courage for other countries to remove subsidies.

1.2 trillion. We have more than 600 billion dollars a year in distortionary trade distorting agricultural subsidies. We have more than 300 billion a year in wrongful water subsidies that go to subsidize the wrong things and the wrong behavior. And

If I could go on, $22 billion in harmful fisheries subsidies, which we've just negotiated to remove at the WTO, at least to mitigate. If you add all these subsidies up, you'll get up to $2 trillion. Even if we just did half of that and we channel those resources to those developing countries that need it in the name of climate justice, wouldn't we be doing something great?

I'm not asking for 100%. That's politically unrealistic. Just 50% of the $2 trillion. And we're here talking about $100 million, $200 million. We are happy because we've got $700 million in the loss and damage fund, and we have a trillion dollars that we could repurpose to finance this. Sorry. So that is part of your catalytic money that I want. Yeah. Yeah.

The answer is, to coin a phrase, yes, we can. And...

You've already mentioned a crucial part of that story of finance, and it comes, as Amartya is reminding us, from basic economics. I mean, these are toxic subsidies. They are encouraging bad, damaging things, whether it's fisheries, enormously important, of course, the emission of carbon dioxide, attacking the forests and so on.

So that's one area. The other area, as you mentioned, is the capital for the multilateral development banks. You could triple the flows from the multilateral development banks with essentially a capital injection of something in the order of...

tens of billions a year for, say, eight, nine, ten years. I mean, that's peanuts in the grand order of things. But the multipliers from, you know, Keynes' brilliant idea of paid-in and callable capital indicate that the leverage involved in those, and if you add the leverage if they work much better with the private sector, then you start to get to the hundreds of billions and the trillions from that as well.

So there really are roots here.

And it's unjust and it's hard, but it's absolutely feasible. And I hope that the work of the Global School of Sustainability will take all these things forward. Look at the deep moral philosophy and ethics underneath all this. Look at the way in which we apply our economics, particularly the way in which we live in a world that is not efficient. It's badly distorted so that there are win-wins because...

that we think about how the international financial system works because we've been part of that you and me and many of the others here and see how we can leverage that much more strongly so I know it's hard I know it's big but those investments are very big but conditions those investments can be created and they can be financed

So it's our work here to take that story out. And follow your lead, Amartya. Universities have to be the places of public discussion, of ideas, of problem solving, and including the taking on of the disinformation. Nick, can I just add something? I think we must give

the multilateral development banks also give them a bit of a shout out as they say, because I think they're working so much better now. It's not perfect, but they are coordinating so much more with each other in terms of how they leverage the resources that they have. And that is a big thing because each acting on its own doesn't have as much firepower, but coming together to pool resources and partner with each other

a whole big difference in how they can also encourage leverage and they are doing it. And just in case you think it's relevant, here are five multilateral development banks with zero U.S. shareholding. The Asia Infrastructure Investment Bank, the European Investment Bank, the Islamic Bank,

Bank, the new Development Bank, the Bricks Bank, and CAF, the Latin American Development Bank. There's plenty of scope here. When some people step back, other people can step forward. But we should have questions, Liz. Over to you. Yeah. Gosh, there's something very special, isn't there, about being in the room, listening to people who've devoted their careers to trying to make change for the better, and three real greats sitting on the

the dice here. So this has just been very special, I think, for all of us. And for those of you listening in to this or those of you on the virtual, it's pretty special too. So Q&A time now. I'm going to take three questions probably from the audience first. I'm going to try and have a mix of different generations for sure. Do we have mics at the top as well? Can we just walk one over that way? Okay.

And do we have mics here? I'm going to ask you, you're going to ask the second question while the mic comes to you, okay? And then we're going to have the first question from you right, yep, yep, from you right there. And the second, and we're going to have the third question from, oh my gosh, too many faces. Oh, you were waving enthusiastically, you're the third question. But can you keep the questions short? Can you keep the answers short? Then we can have more questions. Let's have the set of three questions, please.

Hi. I wanted to aim this question for Professor Sen, but feel free to chip in. I find that some of the development banks and agencies and the processes are colonial in nature. How can we decolonize processes and policies? Because it makes the bargaining power of low- and middle-income countries very weak.

So any advice that you would have on that? Fantastic, how we can decolonize MDBs and processes. And then we have our second question there. Okay, thank you very much to the panelists and also to Dr. Ngozi. My question is to her. Really, it's about Africa being the global south, having the greatest impact of sustainability, of climate, the climate crisis.

So my question really is about what is the possible optimal solution considering that the choices are difficult. She's talked about the tradeoff between climate and growth and development. We've seen large investments by the private sector go largely to non-sustainable ventures like the largest refinery on the continent.

So what is the possible trade-off for policy makers, for governments? I lost where the speaker is. The speaker is there. Thank you very much. It's a difficult trade-off but I want to hear from her what the optimal solution is because the corner solutions are sometimes not feasible or very difficult and very expensive. Thank you. And our third question?

Hi. So it has been mentioned the necessity for critical minerals... Oh, slow down. We can't hear you. We're all on a different generation from you. So it has been mentioned the necessity for critical minerals for the so necessary energy transition. However, I want to pose a contextual question for the panel.

In the Latin American context, these critical minerals are located in rural areas near local and indigenous populations who see their lives being directly impacted by the extraction of the critical minerals. To give an example, the copper smelter at La Orolla in Peru is one of the most polluted places in the world and has caused chronic lung diseases to the local population.

It seems to me that we are talking about solar panels, investment, finance, bilateral cooperation, et cetera, as ants in themselves, right? Well, I think that the core idea of sustainability is to create capabilities that allow people to live a life that they have a reason to value, right? So my question is, how do we reconcile the direct effect on local indigenous populations' well-being

necessary for the energy transition with the necessities of sustainability. Three fantastic questions. So, Amartya, I think the first question was directed to you. How can we decolonize processes? Small question. Simple question, right? I think the

idea of colonization is such a complicated one. We can look at decolonization in many distinct ways. Sometimes I think today the literature is not an anti-decolonizer, but I think the colonization way of looking at things has probably been a bit overdone

in the sense that in the world, in the imperial days, colonization was a natural thought to come. But there are so many different ways our problems go, whether it's global warming, or I was discussing nuclear proliferation, or continued inequality. We have to... I'm very sympathetic to the question, but what can decolonization...

contribute to that understanding is very important. But we have to sometimes recognize that a few of the ideas are easier to articulate and they have names. And sometimes the names may not be present in our conversation and yet be very important. These days when

there seems to be some danger of right-wing extremism becoming stronger in the world, including in Europe. But it's worth remembering an old story from the anti-Saxon days of Italy in the early '20s, when my teacher, Piero Schlaffer,

I was a refugee to England at that time. This is a story about a fascist recruiter who is going around in the villages in Italy and explaining that Mussolini had done a lot of very good things. And he asked this peasant, saying, you should join the fascist party. To which this peasant says, oh, no, no, I can't do that.

He said, "Why can't you do that?" He said, "Because my father was a socialist, my grandfather was a socialist, how could I possibly join the fascist party?" When a fascist recruiter then says, "That's a silly argument. Just because your father and grandfather were socialists doesn't mean that you can't join the fascist party. What would you have done if your father was a murderer?"

and your grandfather was a murderer." To which the pheasants replied, "Well then, of course, I would have joined the fascist party." So I think there are a lot of names that are not there, but pheasants in our thoughts. Colonization used to be one of those. I think it's probably overdone it.

his role at this moment. I know that a lot of my friends would object to my diagnosis only, but thank you for asking that question. And Gozi, I think you can probably tackle, well, you could all tackle all of them, but what do you want to address? Well, I was asked a direct question about the optimal solution for the Global South on these kinds of investments.

investments going into fossil fuels at this time and the answer is there is no optimal solution. We're in a second and third best world I think and the reason is because we are living in real time and we talked about the issue of climate justice and industrialization and how does the global south handle this. How do we manage the desire to contribute?

to decarbonizing the world whilst at the same time trying to develop. And I think what was talked about in the Paris Accord was that each country was asked to give the timeframe within which they felt they could do, they could contribute to net zero. And most gave 2050. And several developing countries went longer. Some gave 2060.

and many of the developing countries that give 2060 felt they needed a little bit of a longer time. So we should have a world in which some should be able to do it sooner, like those in Europe, those in the developed world should do it before 2050, giving others the space to do it longer so that net-net we can come out at a good place. So why am I saying all this? Because

Some countries in the South feel they have a resource and they need a little bit more time to adjust. They have to do it. There's no choice about that. But they need more transition time.

to be able to come out of the use of the fossil fuels and fully into cleaner fuels. But should they wait? No, I think that they should start making the investments in clean fuels now for all the reasons we said, that the cost is so much more

cheaper than what investments in fossil fuels will give you. But we are living with some facts. Some investments have already been made. Like you said, a big refinery has been built and it's there. So the issue is should we invest in another refinery somewhere else? The answer is no. We should be investing in the much cheaper renewables. So

The solution is not optimal, but I think we are in a world in which we need to cater for a transition period for many countries in the global south, in which they phase in the use of the renewables as fast as possible while phasing out the use of the fossil fuels which they've already invested in. So that's the answer that I would give to that. On the critical minerals...

I totally respect what you said. I don't see, and there should not be trade-offs between the ability to develop these in a way that respects, one, that's why we are talking of clean energy, doing these developments with clean energy in a way that respects

the environment, respects the rights of indigenous people and communities. Gone are the days when you move in to try and develop these critical minerals as if the people who own them don't exist. I think those days are gone and just because there's now a new gold rush

shouldn't change the necessity to have the optimal plans that involve indigenous peoples, local communities, clean and environmentally sustainable approach to developing these critical minerals. Can that be done? Yes. Must it be done? Yes. That would be my answer. Great. Let's have three more questions. Can I add something to that? I think...

Having sent them, you know, the occupational hazard and Nick and I and all economists suffer from overvaluation of optimization, I think. That is, we are so concerned with getting the optimum that sometimes we forget that that could be not the right thing to do. I think of a philosophical story

From like four or five hundred years ago, it's the story of a guy called Buridan who writes about an axe, about a donkey. It's not about an axe that he actually possessed, as far as I can see. It didn't, but he did write about it. And what happened to the donkey is that there were two heaps of haystacks

and it wanted to get the optimal one. But couldn't determine. One looked a bit longer, the other looked a bit higher. He couldn't determine which was the optimum. And he went on dithering and dithering until he died of starvation. I think optimality comes at some cost. And I think

There are occasions when we should give up the search for optimality and go for one of the hashtags. I love that. It's good. And there really are a whole collection of very strong, positive ways forward. I mean, solar in Africa, we keep saying it, but it is overwhelmingly important. Africa probably has 250 gigawatts of power, everything.

The capacity in China to make solar per year is way over 1,000 gigawatts. They're investing a year about 300 gigawatts. The world has that capacity. It's 10 cents a watt. My friends say it's down to nine now, but let's call it 10 cents a watt. That is an enormous opportunity, and what it tells us, and particularly Ngozi and I are emphasising, what you need is low-cost capital.

And low-cost capital we know how to produce through the MDBs, through getting rid of the toxic subsidies and so on. So we know how to take those opportunities. Will it be a perfect story? No. Will it be a very good story? Absolutely. We have about eight minutes, so I want three short questions and three short answers. Question there. Yep. Yep, there. And that's number one. And yep, you... Yeah, yeah, no, don't look behind. Yeah, it really is you. Number two, if we can get a mic there.

I have to take one from upstairs. You there. Yeah, yeah. We nodded at each other. Okay, one, two, three. Short questions, please, and short answers, because it'd be nice to get an answer to each of the questions. Hi, I'm interrupting this event to tell you about another awesome LSE podcast that we think you'd enjoy.

LSEIQ asks social scientists and other experts to answer one intelligent question, like why do people believe in conspiracy theories? Or can we afford the super rich? Come check us out. Just search for LSEIQ wherever you get your podcasts. Now, back to the event. Most emissions currently come from non-democracies, autocracies, and will do in the future.

Can you speak, can you project that the mic's working but not well? Okay, sorry. Most emissions currently come from non-democracies, from autocracies. Some of them, like China, are taking action on the climate, but many others, like for instance Saudi Arabia and Russia, are not only not taking action but being very obstructive when it comes to the climate crisis.

Is the rising tide of autocracy around the world a danger to the climate? And how do you get autocracies to deal with this problem? Thank you. Thank you. Question two? Yeah. Considering the current state of world politics, to what extent do you think political agendas are a barrier preventing a sustainable world? And what can we expect going into the future? Fantastic. We're going to... Oh, sorry. What can we expect...

going into the future. So far, two questions on political structures. Number three. Thank you so much for this amazing talk panel. My question is for Dr Ngozi. You talked about raising money. My question is very simple as to relate to the application of that money because I think we've discussed a lot about the prevention strategies, technologies which can help us prevent things, but what about the mitigation because in lots of parts of the world, people are already bearing the burden and how should we

how much money should go into mitigation versus prevention. Thank you. Great. And a couple of these online questions have sort of been covered, but just one asks about the role of community cohesion and trust. So I'm just going to add that on so we make sure we have got questions from our virtual audience. Okay. If we could have brief answers on the issue of rising tide of autocracy, political agendas, and raising money. And, guys, do you want to start this time? I'm just...

I'm laughing at the question of emissions come from autocracies. I don't know. Have you substantiated that? Seems to me like some democracies are not doing badly in also emitting themselves. Or maybe the definition of democracy is changing.

No, but look, seriously, perhaps China is one good example. And you mentioned that China works...

really hard. I remember years ago, and Nick can say more about this, where there was tremendous criticism of China and blame for being a huge contributor to the world's emissions and not doing anything about it. And I think that is part of

What drove China into this strategy of saying, well, we'll try to work on that, but we'll not only do it, we'll conquer the world by taking over, you know, everything to do with renewables. So you can have a situation in which an autocracy decides that this is the right thing to do.

because it's existential. And I think China decided to do that. They did that for themselves and they're doing it for the rest of the world, and the rest of the world is in consternation because it means that they can't compete in some of the sub-sectors. So I don't believe that the nature, that autocracy necessarily stands in the way of

being a responsible climate citizen. It could work if you can get a rising tide of everybody working with you. But let me not say too much. I don't have the answer to that. I just don't think that we should be too proud that democracies are doing everything right. And maybe you can pitch in.

I mean, there's a whole political economy to everything we are talking about that underlies everything and the political will. And what has been shocking to me is that what I see as something that science has made exceedingly clear to us can be so questioned. That is what is shocking to me, that we could have that and that science can be subjected to a political agenda and questioned. So...

This is the reality we face. And what we are hoping for is that there are enough politicians of goodwill who will see you. Nick talked about who will take the lead. I think there are enough who can take the lead if they have the courage to do so.

And we have to look to those. We don't need to name names about who they are and where they are. But if they stand up for what is right and stick to what is right, I think at least if you don't take over the world, you can show their courage to stand up for what works. And on raising money, how much should go to? You know, it's hard for me to get into the mitigation versus adaptation. I prefer prevention.

I prefer to see a world in which if we can do as much to stop things, and that's what we are talking about. The science is showing us that there's urgency to the matter. It's already too late, and if we don't act, we will have a catastrophe going forward. So for me, this issue of prevention before the deed is done is exceedingly important, and as much of the

Money we raise that can go to mitigation should go there.

However, we're already faced with some serious consequences in adaptation too. We're already living with some of the dangers of what we've already instigated with regard to the impact of climate change. So I don't know, maybe Nick can answer how do we divide up the money we raise. It's very difficult for me to talk about that. Some people say that too much is going to mitigation and not enough to adaptation. But

You know, I'll leave it to you to round up. Okay. The question on the autocracies and emissions came from Fiona Harvey of The Guardian, who's been one of our pioneering journalists on all this, and I think we should recognise, Fi, your contribution to all this. But I think Russia and Saudi Arabia...

I think are best understood in taking their position as petro-states with people with direct vested interests rather than necessarily to do with democracy or autocracy. China has given two big goals, net zero by 2060 and peaking emissions by 2030. I think China's 15th five-year plan, which is 2026 to 2030,

will be the most important because China is the biggest emitter and the fastest growing, one of the fastest growing economies, less fast than India, but one of the fastest growing economies. So what they do is of enormous importance. I think they'll be peaking emissions around now or the next year or so.

Their non-fossil fuel capacity now exceeds the fossil fuel capacity and power generation. And of course, what they have to do is ramp up their grid so that they use that much more intensively. But that's coming.

So I don't actually see a big distinction in terms of emissions between autocracy and democracy, but I do think we have to, as political economists, understand vested interests, and the two states you mentioned really do have very powerful vested interests in fossil fuels. I think on political agendas, and it's really related to trust, is that we have to find positive ways forward. My understanding of trust is...

It comes in large measure from a wonderful philosopher that you know well, Amartya, Onora O'Neill. And Onora O'Neill on trust says, "Well, don't think so much about trust first. Think of trustworthiness."

You don't want to trust people who are not trustworthy. So the question is how do you build trustworthiness? Well, partly it's a moral position, but partly it's also increasingly around climate change. It's in self-interest. It really is in self-interest of the rich countries to help the poorer countries in making the wonderful investments that are necessary. It's not a burden. It's raising the capital and the cost of capital and so on.

So I think that does take us to the obligations of the rich countries. They undermine trustworthiness with the vaccine apartheid during COVID. So recognizing what's happened to trust, what is it that's undermined it?

and also not only press the moral case but press the self-interest case as well. You can have both arguments and I like the moral one first but the self-interest one is also, it seems to me, very powerful. Lastly, mitigation, adaptation, development.

Planting mangroves, mitigation, adaptation, development. Restoring degraded land, that's mitigation, adaptation, development. Public transport, that's mitigation, adaptation, development. And you can go on. Decentralized solar, mitigation, adaptation, development. So much of what we need to do is just good development.

And setting up a horse race between mitigation on one hand and adaptation on the other, I think is to misunderstand the problem. Thanks so much. We're out of time. Amartya, do you want to say the final words before I close? The final word is a very difficult thing. I'm going to say the final word, don't worry. You can say the almost final word. No, but I think on this...

very interesting issues that were being discussed just now about democracy and so on. There's so much to think about. There's an issue, to make distinction, there's an issue of the being a right person, being a right people, having the power. That's John Stuart Mill, representative of government and so on. Along with that, there's an issue of what happens if

Some people have the majority, which is democracy, and yet are tyrannical to minorities. That's John Stuart Mill on liberty. So I think all these issues somehow call for democratic concern, and they, when we do formality, social class theory,

There could be one democratic condition that if X gets majority over Y, then X wins. The other is, no matter who has won, if some voters move from X to Y, that should not make Y win. That's a positive, franticness issue.

There are a whole lot of questions. I'm delighted that it came up, and I want to make just two final words, if I may. One is to say that democracy

particularly in the way I look at it, is also a major contributor to all those issues about development that Nick raised. And I think there was a long period when Nick was not leading the world, when

democracy didn't seem to be part of development. And yet it is, absolutely. And the second thing is, that's my final, final word, is that if you like to govern a country, you have to see how others reason. And this is very important because the governance of a country is a combination of

of reasoning, if there's anything in the subject that I spend most of my life on, or half of my life on, being 91 now. It's a social science theory. It's the combination of the reasoning. How did somebody reason? And I end up with an example of a story actually from Berkeley, in the US of California. A new student arrived

in literature, he wanted to borrow from the library a famous novel called Grapes of War. Steinbeck's Grapes. Steinbeck, yeah. So he looked for Steinbeck's novel and couldn't find it in the library, in the literature section at all. And then

he thought and went to agricultural books and there he found grapes of loss. We have to find out how others think. Very funny. Thank you. Thank you so, so much.

I hope that those of you who are still around in 30 years look back and go, what were we thinking? And by then we'll have prosperity, we'll have reduced inequality, people have access to clean energy, we'll have clean air, we'll have sustainable diets, and we'll be living in just a much more sensible way. You know, if we really look down on the way we live our lives at the moment, it really doesn't make sense. The extreme inequality and the fact that who would choose to design a world with air pollution, with high inequality, with bad diets?

But we've somehow ended up here. Hopefully we'll solve it. It's been an absolute privilege. I know we've done the applause already, but let's just record what an absolute privilege it's been to be with these three greats. And just thank you so much for your time. That's amazing. Thank you.

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