the_bridge_tank, auteur sur The Bridge Tank

Summit of Minds 2023: Technological revolution, geopolitics, & sustainable finance

Posted on 12 October 202312 October 2023 by the_bridge_tank

From 15-17 September 2023, the mountain air of the French Alps fuelled creative minds and change makers from around the world who gathered for this year’s Summit of Minds “Stretching Minds – Inspiring Change” in Chamonix. Two of these brilliant minds in attendance were The Bridge Tank’s very own Djellil Bouzidi, Economist & Founder, Emena Advisory, and Pranjal Sharma, Economic analyst & Author of “The Next New – Navigating the Fifth Industrial Revolution”. The Bridge Tank had already taken part in the Summit’s 2021 edition.

Addressing themes ranging across today’s most pressing economic, societal, environmental, technological and geopolitical issues, the Summit of Minds brought together experts, investors, and practitioners to share insights and to collectively explore creative ideas and new solutions.

Technological revolution in a changing world

During the Summit, our board member Pranjal Sharma explored themes of tech innovation and how to harness it, placing it in the context of changing geopolitical dynamics around the globe. These were topics Mr Sharma previously discussed during The Bridge Tank’s Davos Innovation Lunch 2022 and at this year’s World Economic Forum in Davos.

On geo-politics, Pranjal Sharma noted that what is incorrectly perceived by many as a global disorder is in fact a re-ordering of the world in which new geopolitical alignments are challenging the dominance of OECD countries. While legacy economies are struggling to adapt to this changing climate, emerging and developing economies are deepening South-South collaboration, something which will inevitably lead to the acceleration of regional currency (non-dollar) trade with the support of Saudi Arabia, UAE, India and Brazil. The global logistics map will undergo deep changes as new economic corridors like the IMEC were announced between India, Europe and the Middle East during the latest G20 Summit in India.

The technological revolution requires decisive action by governments in terms of control and regulation of technology, Mr Sharma argued. Protecting children and vulnerable communities in the digital world will be one of the – protection of society. But beyond these challenges, the technological revolution will offer a strong positive impact on the improvement of sustainability.

Drawing from his recently published book “The Next New – Navigating the Fifth Industrial Revolution,” Pranjal Sharma highlighted the transformation of business models resulting from the fifth industrial revolution. These are the result of three factors: emerging technologies; the urgency of sustainability; and the need for social equity. This emergence of new business models will generate new revenue streams worth $25 trillion, impacting all companies and industries.

The future of Sustainability-Linked Bonds

In Chamonix, Djellil Bouzidi, Economist, Founder, Emena Advisory and long-time board member of The Bridge Tank sat down with Eoin Murray, Head of Investments, Federated Hermes, UK to discuss sustainability-linked bonds (SLB). One of the first proponents of SLBs having laid out their premises in 2015 and a leading expert on the matter ever since, Mr Bouzidi shed light on these bonds, whose principal, unlike standard green bonds, vary according to the achievement of pre-determined sustainability targets. The discussion addressed SLBs growth in both private markets and from sovereign issuers, while also analysing their environmental effectiveness.

Having advised issuers worldwide and notably the Chilean government for the issuance of the world’s first sovereign SLB in March 2022, Mr Bouzidi has recently been raising the alarm on shortcomings and problematic approaches in the current SLB market threatening these sustainable finance tools’ future viability.

In 2020, Djellil Bouzidi published a seminal article on the matter for the Official Forum of Monetary and Financial Institutions, titled “How climate cuffs could save the planet”.

CHINA: Global innovation, research and technology dissemination in times of de-risking

Posted on 29 September 20239 October 2023 by the_bridge_tank

Building on The Bridge Tank’s long-time partnership with the Institutes of Science and Development of the Chinese Academy of Sciences (CASISD), China’s leading research institute, Joel Ruet was invited to hold a keynote speech at this year’s Forum on Cooperation and Governance of Global Science, Technology and Innovation. The Forum, which took place in Beijing on September 25^th 2023, is China’s most important annual conference on innovation.

The Bridge Tank and CASISD signed a MoU in 2018. Joel Ruet previously intervened in the opening session of the World Internet Conference organized by CASISD in November 2020.

In the context of China’s gradual reopening to the world, Joel Ruet’s keynote speech to the Forum addressed crucial themes of global innovation, research, technology development and dissemination in times marked by the de-risking of relations with China.

Global innovation navigating uncertain times of de-risking

2023 will have witnessed the de-risking of EU-China relations become the new normal in Europe’s engagement with China. The idea of “de-risking rather than decoupling” has made it all the way into the Oval Office, as the United States increasingly rely on this approach in their relations with China.

Cooperation in core technologies linked to fundamental research (e.g. nuclear, genomics, AI) is also affected by this trend towards de-risking, Mr Ruet noted. Still, some common challenges remain which ensure a global acceleration of solutions. These will require “technology diplomats” to find a modus vivendi.

In nuclear power, fast breeder reactors, safety questions, non-proliferation technologies, fuel alternatives (e.g. thorium), or nuclear fusion are all “risks” which have already been taken, as China is already a nuclear-weapon state. The journey towards a safer, cleaner, non-military linked nuclear sector is thus to be taken jointly.
In genomics, Mr Ruet noted that France and China did cooperate in Wuhan’s virology centre. At the time of the COVID pandemic, sharing the DNA sequence proved useful in developing vaccines faster: at times when several coronaviruses have been identified as potentially mutable and harmful, international transparency and cooperation is more than ever needed. The UNGA just approved the idea of a common fund for the development of vaccines and the fight against epidemics. This is something The Bridge Tank had been advocating in 2020, alongside Liberal International and Socialist International. Virology should therefore be another sector beyond de-risking.
AI is arguably different, as its results may translate much faster and wider into regulations of society or even “control.” Here the “systemic rivalry” may make cooperation more difficult. However, technology diplomacy is needed here as well and talks will have to be kept alive, possibly with the mediation of think tanks.

On research, technology development and technology dissemination

Innovation was never “global,” Joel Ruet argued. While science is a commonly accepted status of truth and research offers cooperation opportunities, technology development is not the preserve of research institutions but involves companies and markets. Science may be kept common through publications and fundamental research (e.g. ITER in nuclear fusion).

However, it appears that all technologies that serve the ecological transition are becoming not only competitive but also “competitive advantages”. This is the case in China through a research-technology push in which the Chinese Academy of Sciences is central; in the EU through a green deal and regulation packages that increasingly move towards “new competitive advantages” (in carbon, materials, human impact etc.), or simply through subsidy-based attraction in the US.

Here, a policy dialogue is important. It should gather on a common platform scientists, technologists, trade and investment policy makers and national security policy makers. Indeed, the latter need to be included as concrete US rivalry measures on semi-conductors are for instance the result of the convergence of a double process that can be traced back to the 2012 US State Department report triggered by the China 2025 policy, and on the other hand the debate launched by Ms Pritzker under the Obama administration on risks to innovativeness resulting from a delocalised Chinese economy (something previously discussed in Chapter 5 of ISPI’s “China’s Belt and Road: A Game Changer?”).

Though science, research, technology, and economics may not necessarily be linked, in the current state of de-risking -as well as in China’s policy framework- they have undoubtedly become so. Their governance has to involve different streams of policy makers, pointing to another possible role for think tanks and CASISD. It is to be noted that NATO has interestingly taken up the technology agenda through finance by launching a private equity fund to de-risk startups from “needing Chinese money”.

On technology dissemination

The ecological transformation notably implies technology dissemination in conjunction with market innovation, Mr Ruet noted. “Technology transfers” seldom arise without innovation and are in fact a driver of the latter, alongside companies.

The role of China as a marketplace and of Chinese technological companies in new materials, new energies, and new mobilities is to be analysed properly.

The Bridge Tank’s past works have shown that technology “transfers” didn’t happen through joint ventures but through suppliers, through ecosystems arising from project capitalization, through state-led learning; all of these as a “technology for markets” deal between global companies and China. One should note this corresponds neither to classical trade economics nor to developmental economics. This has been a Chinese idiosyncrasy.

As China has caught up with the world, “technology for markets” is not possible anymore: only “technology for technology” or “market for market” approaches are left to be explored.

Joel Ruet argued that each one of them is difficult in isolation and unlikely in times of de-risking. Both attempted together as a form of tit-for-tat may be the future. While technology for technology bottlenecks were what Mr Ruet had discussed so far; a “market for market” approach that would paradoxically be the return to canonical trade economics has been eliminated under the format of the EU-China investment treaty, as new competitive advantages are getting designed around societal values.

Only a global EU-China discussion combining research, technology, trade and investment may see some -although thin- possibility of cooperation arise.

This is however not what has happened recently and this is where the technology community has a role in conveying the needs for the planet while keeping de-risking in mind.

Accelerating the SDGs & unlocking new engagement models for the UN’s Agenda 2030

Posted on 19 September 202319 September 2023 by the_bridge_tank

Ahead of this week’s UN SDG Conference on the side of the UN General Assembly, Joel Ruet took part in a roundtable discussion led by our board member Judit Arenas, exploring transformative engagement models to help accelerate the implementation and achievement of the UN SDGs.

Convened on 14 July by APCO Worldwide & EY and moderated by Judit Arenas, Senior Director of APCO Worldwide, the discussion addressed how to accelerate efforts to reach the targets set out by the SDGs. Having now reached the mid-way point of Agenda 2030, this meeting pointed out opportunities and shortcomings in the pursuit of the SDGs, how to best engage stakeholders across sectors, foster transformative dialogue, build consensus and explore new modes of engagement across the board.

The discussion was an opportunity for Joel Ruet to share The Bridge Tank’s perspective and experience on the matter, which it has accumulated over the years. Focusing on the African continent, Joel Ruet noted that thanks to the support of the United Nations Development Program (UNDP), a growing number of states have developed integrated financing strategies for the achievement of the SDG. One of today’s great challenges is therefore how to best carry out these strategies and how to mobilise international financing.

Two points are of particular importance here:

Programmes ought to be developed based on portfolios of projects or pre-projects. This logic of project origination at the national level ensures a level of coherence and homogeneity for each country. No wider international coordination is required for this. Instead, such an approach guarantees greater legibility of programmes and project portfolios. It capitalises on science, best practices, know-how, and technologies, particularly for those SDGs with a stronger technical component (e.g. water resources, soil and land, renewable energy). The international community and Pan-African Development Banks have been financing and capitalising on these tools for years in their formulation of programmes.
It is central to involve local, sub-regional and Pan-African financial institutions in the resulting financial agreements. Once project portfolios and programmes have been de-risked by the international community, thereby providing insurance for the programmes, the latter become profitable. It is thus necessary to integrate these regional financial institutions in their financing. This ensures greater equality, access to profitability, and capacity building for financial institutions of the South. This capacity building is not primarily institutional and organisational, but one achieved through concrete actions.

The meeting was held under Chatham House Rules. It gathered high-level private sector delegates, policymakers, academic researchers, civil society organizations, and members of various industry associations and international organizations.

FRANCE CULTURE – Carbon offset programs in African tropical forests : crisis or new Eldorado ?

Posted on 8 September 20238 September 2023 by the_bridge_tank

As part of The Bridge Tank’s ongoing work on green finance, and our efforts within G20 to ensure that financial institutions in the South are involved in the design of green finance, Joël Ruet joined France Culture’s “Magazine du week-end” for a program dedicated to carbon credits in the African rainforest.

While carbon offset projects based on forest conservation efforts are multiplying, the effectiveness of these new financial mechanisms is now being called into question. The program was an opportunity for Joël Ruet to discuss the limits and opportunities of these innovative climate financing models with Alain Karsenty, Researcher at CIRAD’s “Environment and Society” Department, and Wannes Hubau, Biological Engineer specializing in tropical forests and Professor at Ghent University.

Speaking to Marguerite Catton, Joël Ruet introduced major challenges encountered today in the structuring of green finance tools:

“There is a green finance that is currently being structured, which is necessary but which does not exist, which is where all the dangers of appropriation and expropriation lie. Moreover, this green finance must cover climate finance, sustainable development finance and biodiversity finance. So there are 3 types of finance that don’t exist, that need to be defined and co-defined simultaneously, with very disparate stakeholders: the local communities, the governments of the Global South, the organizations of the Global North, and the financial powers of the Global North.”

In this context, African rainforests are of particular interest for carbon offset projects. Often described as the lungs of the planet, these forests play a key role in carbon sequestration, making them important carbon sinks that need to be conserved. Carbon offset projects based on forestry assets thus offer a new kind of finance,

“finance that is no longer going to be in the computers of Wall Street or the City, but geolocated in places where people live, where sovereign states are trying to be economically sovereign.”

The structuring of financial assets based on the capacity of these forests to capture and store carbon does, however, depend on certain conditions, as Alain Karsenty, Researcher at CIRAD’s “Environnements & Societies” Department, pointed out.

“Just because a country has a forest that absorbs CO2 doesn’t mean it can sell carbon credits. A country must be able to demonstrate that it has taken measures to reduce deforestation compared to a reference scenario.”

Taking Gabon as an example, Joël Ruet highlighted the political trade-offs involved in incorporating tropical forests into the country’s NDC. First and foremost, it is necessary to differentiate between what is a gift of nature on the one hand, and the protection efforts made in the present carbon sink on the other, as well as to model the future, a difficult task given the almost absolute uncertainty surrounding the reaction of forests to ongoing climate change.

Although Gabon’s forest absorbs 100 million tonnes of CO2 today, simply maintaining this absorption capacity by 2050 will require major conservation and non-deforestation efforts. These will involve both unconditional measures and those conditional upon international funding.

The dichotomy between carbon credits’ perception as Eldorado and the crisis that looms over them therefore also stems from the uncertainty surrounding the perimeter and the sustainability of the underlying asset: its biological stability over time, the scientific models on which these offset mechanisms are based, and the accuracyd of the measurements and certifications carried out by private players with a vested interest in the outcome.

According to Wannes Hubau, biologist specializing in tropical forests and professor at Ghent University, the increase in carbon concentration in the atmosphere directly affects the forest:

“Before CO2 emissions, mature forests were in equilibrium with the atmosphere, so there was carbon sequestered by growing trees and released by dying trees, but now we’ve discovered that this free practice no longer exists. Because of CO2 fertilization, there is more growth and therefore more carbon captured than released, so forests have become a carbon sink. »

Numerous question marks regarding inclusivity and social justice still remain on this market currently being developed,

« it is a relatively young market. There is a need to improve regulations for funds to actually reach the village where the people protecting the forest are. »

Alain Karsenty also pointed out issues of credibility, effectiveness, and environmental integrity with these carbon offset programs.

« Everything is based on a baseline scenario. This can be the past, by comparing deforestation levels in the past […] or a business-as-usual scenario, with deforestation increasing in predefined proportions to meet development needs and a growing population. But these scenarios are in the hands of those who produce them, i.e. the people who draw up the projects, or the states that draw up their reference scenarios. They cannot be contested, and these scenarios often imply sharp increases in deforestation. […] There is a major credibility problem from the point of view of the environmental integrity of these mechanisms.”

The Bridge Tank: US-China climate talks should not forget the Global South – CGTN Dialogue

Posted on 2 August 20232 August 2023 by the_bridge_tank

Following the restart of China-U.S. climate talks and the three-day visit of U.S. Climate Envoy John Kerry to Beijing mid-July, Joel Ruet joined CGTN’s Xu Qinduo on “Dialogue” to discuss the importance of these talks between the two largest economies & greenhouse gas emitters on the planet and address some of its priority topics. From carbon emissions reduction to the acceleration of climate finance, the Global South must imperatively be involved in global climate action, Joel Ruet stressed. An important discussion to rewatch here.

The discussion was also joined by Chinese environmentalist Ma Jun, Director of the Institute of Public & Environmental Affairs and U.S entrepreneur Brandon Andrews, former Hill staffer.

Stressing the importance of these talks, Ma Jun highlighted the impact of both China and the U.S. in global GHG emissions, which “put together […] is nearly half of the global total.” Echoing this idea, Joel Ruet noted that there were two stringent issues which the two countries needed to address, “the first one is the emissions […], the second one is climate finance, which has to be accelerated,” notably towards the Global South.

1. Cutting emissions

As U.S. Climate Envoy John Kerry stressed the need for China to decarbonize the power sector, cut methane emissions, and reduce deforestation, Ma Jun put China’s evolution and its goals for emissions to peak before 2030 and for carbon neutrality before 2060 into perspective.

“China is going through a massive industrialisation and urbanisation. Unlike Western countries which have naturally peaked their emissions and try to bend the emission reduction curve faster, China has not completed its industrialisation and urbanisation.”

Ma Jun, Director of the Institute of Public & Environmental Affairs

Still, China’s coal consumption has remained relatively stable since 2013, after having nearly tripled between 2000 to 2011. “China’s renewable energy target set for 2030 will be achieved by 2025” and its “EV targets for 2025 have been surpassed last year,” Ma Jun added.

Reacting to this assessment, Joel Ruet pointed out a twofold challenge, i.e. “scaling up those renewable energies that work and […] preparing the energies of the future like green hydrogen, for which we need research and an industry.”

Through the example of hydrogen, Mr Ruet reminded the audience that renewable energies produce electricity, which is only one form of energy, the others being solid (e.g. coal), liquid and gas. According to Joel Ruet “China will be able to gradually exit from coal only if it mobilizes the other sources of energy,” i.e. liquid and gas. On gas, the world therefore needs “a global alliance between China, the US and Europe to develop and invest in those technologies which are not yet mature for the market, mainly on green hydrogen.”

2. Climate finance

While traditional finance very much relies on assets which are either in the country of origin or in the global economy, connected to trade, Mr Ruet stressed that developing green finance will be achieved through “land restoration and carbon sinks through forests in Africa, Borneo Forest, Asia, Latin America and all around the world. The underlying factors of those assets are widespread, making it much more an issue of political economy and of involving the Global South in building this finance. Green finance will have to be much more collaborative than previous financial models.”

“Both China and the US have an edge in climate finance. It will be very important for these two poles of climate finance in the world to cooperate rather than compete.”

Joel Ruet, Chairman, The Bridge Tank

According to Ma Jun, China has indeed a lot to offer in terms of innovative financial models to face climate change.

China’s experience with solar power has seen the country develop “micro financing arrangements which allow rural households to take advantage of their rooftop to get clean energy and make money out of it.”

Combining “poverty relief and rejuvenation the countryside,” this model of micro-financing and rooftop solar panels “could be applied to other parts of the world and synergized to achieve the SDGs,” Ma Jun concluded.

From the curbing carbon emissions to bolstering climate finance, China-US climate talks must involve and support the Global South for international climate action to be both effective and inclusive.

Rewatch the show

OPENBOX TV with Alain Juillet – India/France: a strategic partnership

Posted on 26 July 202326 July 2023 by the_bridge_tank

On 14 July, Indian Prime Minister Narendra Modi was welcomed by French President Macron as guest of honour of this year’s Bastille Day Military Parade in Paris. On this occasion, Joël Ruet was invited on Alain Juillet’s OpenBoxTV to discuss the strategic partnership between France and India.

“India is a country larger than the world,” said the poet and former Mexican ambassador to India Octavio Paz. With this idea in mind, Joël Ruet and Alain Juillet, former High Commissioner for Economic Intelligence at the French Prime Minister’s Office, set out together to explore the social, political, economic and geopolitical diversity and complexity of “the world’s largest democracy.” Looking at China, France and England, Joël Ruet also discussed India’s strategic positioning in the world, between non-alignment and partial alliances, and addressed the importance of a continuing partnership between France and India.

To rewatch the programme in full (in French):

A conversation with François de Rugy & the Ambassador of Kazakhstan on energy and France-Kazakhstan relations

Posted on 11 July 202324 July 2023 by the_bridge_tank

On 30 June 2023, Joël Ruet sat down with former Minister of State, Minister for the Ecological Transition and Solidarity, and former President of the French National Assembly, François de Rugy, and the current Ambassador of Kazakhstan to France, Gulsara Arystankulova, to discuss bilateral relations between France and Kazakhstan and the prospects for energy and technology partnerships between the two countries.

This discussion was part of a symposium held at the French Senate on the theme of “Energy sovereignty for Europe and France: what solutions, what partners?” The Bridge Tank’s recent work in Kazakhstan is best exemplified by our contribution to the development of an auction mechanism for renewable energy in 2021 and the highlighting of the challenges faced by foreign investors in the country.

Future ambitions and cooperation

During her address, Ambassador Gulsara Arystankulova emphasised the profound relationship that links France and Kazakhstan, and the close cooperation between the two countries in the energy sector. In November 2022, the President of Kazakhstan, Kassym-Jomart Tokaïev, was notably welcomed to Paris by President Macron. This cooperation has been particularly strengthened since the start of Russia’s invasion of Ukraine, with Kazakhstan offering a key alternative to Russian oil and gas. With its wealth of raw materials and as the oil giant of Central Asia, the country plays a key role in Europe’s energy supply and will be a central player in the continent’s energy future.

For despite its status as an oil giant, Kazakhstan is pursuing an ambitious energy transition strategy aimed at gasifying its energy mix and achieving 50% renewable energy by 2050. To meet the supply and interconnection challenges posed by the country’s size, Kazakhstan is betting on a process of energy decentralisation based on state-subsidised green energy mini-systems.

Kazakhstan’s ambition to be carbon neutral by 2060 is underpinned by considerable assets. With its vast open spaces, abundant sunshine and rare earth resources, the country offers great potential for the development of renewable energies. French groups are already positioning themselves in the country, such as TotalEnergies, which has launched a 1GW onshore wind farm project in the Zhambyl region of southern Kazakhstan, in partnership with the National Wealth Fund Samruk-Kazyna and the National Company KazMunayGas.

Partnerships and issues of sovereignty

According to Joël Ruet, there are many opportunities for not only energy cooperation but technical and technological cooperation between France and Kazakhstan. The world’s leading producer of uranium, Kazakhstan supplies the uranium needed to run France’s nuclear power plants, notably through a close partnership with French nuclear giant Orano.

As the third largest foreign investor in Kazakhstan, France has every interest in positioning itself to generate new partnerships and launch new industries in the country, as well as continuing to develop its know-how and human resources, particularly in the nuclear and hydrogen sectors. Cooperation between France and Kazakhstan cannot therefore be limited to its energy component and to the supply of raw materials. This cooperation must bolster its technical and technological component in order to develop joint research, knowledge and innovation in the sector.

In the context of these partnerships, it is important to consider energy in its various forms, not only through the issue of electrification but also by taking into account energy in its liquid and gaseous forms, which represent a significant proportion of the energy mix.

Placing this observation in the context of French energy sovereignty, François de Rugy emphasised that energy sovereignty is not just a question of electricity, but of oil and gas – resources that, in France’s case, are almost entirely imported. To ensure security of supply, France will therefore need to diversify sources of supply, but also electrify uses by decarbonising transport, heating and industry.

In recent years, however, France has been faced with a new challenge resulting from the declining availability of nuclear power plants due to maintenance and declining production capacity. According to François de Rugy, it is therefore crucial to invest in both renewable energies and the renewal of France’s nuclear power plants, using France’s strengths and expertise in these areas.

The evolution of Kazakhstan’s energy sector undoubtedly offers great potential for cooperation with France and Europe. Although the country currently supplies fossil fuels and raw materials to the Old Continent, it will be an essential partner in the energy transition and in the development of renewable and low-carbon energy sources.

B20 India – Final meeting of the Action Council on African Economic Integration

Posted on 5 July 20235 July 2023 by the_bridge_tank

After 6 months of work and proactive engagement by its members, the B20 India Action Council on African Economic Integration – An Agenda for Global Business met for its fourth & final meeting on June 30, 2023. As a contributing member to the Action Council, The Bridge Tank attended the meeting, represented by its chairman Joel Ruet.

The B20 India Action Council on African Economic Integration is an initiative of the Business20 (B20) – the G20’s engagement group with the business community – launched under India’s 2023 presidency and chaired by Sunil Bharti Mittal, Founder & Chairman of Bharti Enterprises. A long-time advocate for greater economic integration of the African continent and a strong proponent for North-South & South-South engagement, The Bridge Tank had joined the Action Council in January 2023, during the B20 Inception Meeting.

The Action Council’s co-chairs present during the meeting included Mauro Bellini, Chairman, Marcopolo Board of Directors, Brazil, Tony Elumelu, Chairman, Heirs Holdings, Nigeria, Patricia Nzolantima, Founder, Bizzoly Holding, Democratic Republic of Congo, Valentina Mintah, Founder, West Blue Consulting, Ghana, Cas Coovadia, CEO, Business Unity, South Africa, Birju Pradipkumar Patel, Joint CEO, ETG World, South Africa, & Sudarshan Venu, Managing Director, TVS Motor Company, India.

The meeting presented the policy paper developed by the Action Council along five priority themes:

Promoting stronger human capital outcomes across health, education and skilling
Transform agriculture and food systems to sustainably improve productivity, food security and nutrition levels
Structural transformation through industrialisation via private investments, technology adoption, MSME enablement and energy access
Facilitating trade to harness the potential of integration into regional and global value chains
Bridging the physical and digital connectivity gaps through facilitating investment.

The policy paper and its recommendations will now be submitted to the G20 and presented to stakeholders through B20/G20 dialogue. The paper hopes to serve as the basis for continued advocacy and dialogue in favour of African economic integration.

Policy Brief – How China came to dominate the global EV lithium-ion battery value chain: Lessons and opportunities for Africa

Posted on 27 June 202327 June 2023 by the_bridge_tank

This policy brief was written by Xieshu WANG, Senior Expert, Finance, Resources and Mobility, The Bridge Tank, and was first published by the Centre for Business and Development Studies, Copenhagen Business School Policy Brief No. December 2022. For the original publication, click here.

The electrification of vehicles is accelerating and the global automotive industry is under full transformation. China has become an indispensable partner for EV makers as the only country that has succeeded in building a complete and competitive industry value chain of EV lithium-ion batteries. Top-down government-led policymaking has been an important driver; bottom-up firm-level vertical integration strategy and investments have effectively created a closed-loop supply chain. Africa is still at an early stage in this mobility transition. But with its rich deposits of minerals and potential markets, it can become a key player in the global EV value chain, if a favourable ecosystem for the fast uptake of EV and related green businesses could be developed in time.

Key points:

Government-led policymaking, constant adjustments, and temporary infant industry protection policies have been some of the main drivers of the fast-growing EV industry and the lithium-ion battery sector in China.
Many Chinese firms deploy a strategy that can be defined as “specialised vertical integration”, i.e., actively entering related upstream and/or downstream segments within the EV lithium-ion battery supply chain, while continuing to reinforce their existing capacity in the original segment of the value chain, which serves as an expansion base.
With the soaring demand for minerals for batteries and EVs, Africa, with its rich deposits of lithium, copper, cobalt and other minerals, could become a key player in the global EV value chain.
Designing an EV promoting regulatory framework, applying incentive policies, & developing government-led R&D programs are important starting points to attract technologically leading MNEs in the EV value chain, encourage local startups and develop competitive industrial clusters. Fostering regional alliances and collaboration as well as developing industrial investment funds dedicated to firms along the EV value chain are other avenues of action that ought to be explored.

About the author

Xieshu WANG is Senior Expert, Finance, Resources and Mobility at The Bridge Tank and associated researcher at the Centre de recherche en Économie de l’Université Paris Nord (CEPN). She is a member of the Osservatorio sulle Economie Emergenti Torino (OEET) and has been a research fellow at the Interdisciplinary Institute for Innovation of Ecole Polytechnique de Paris and the Department of Economics and Statistics ‘Cognetti de Martiis’ of the University of Turin.

Concordia Europe Summit: European sovereignty, energy security & transatlantic relations

Posted on 21 June 202321 June 2023 by the_bridge_tank

On 15-16 June 2023, prominent decision makers from across Europe and the world gathered in Madrid, Spain for the 2023 Concordia Europe Summit. Two days of high-level closed-door conversations on the theme of Democracy, Security & Geopolitical Risk addressed some of the most pressing issues facing Europe, including cyber and energy security and diplomatic tools. The Bridge Tank was in attendance at the summit, represented by its president Joel Ruet and board member Raphael Schoentgen, who took part in a session on Europe’s renewable energy transition.

European sovereignty: Climate targets, autonomy & energy security

In the opening session of the Summit, Former European Commission (EC) President José Manuel Barroso testified to the intricate link between establishing binding climate targets and achieving energy security in Europe. Despite the challenges these climate targets represent, the EU 2020 Strategy was achieved by enlarging the problem from its environmental component to energy security, thereby winning over the EU’s new members as the EC launched infrastructure investments, he noted. This is an approach which has also been used by the US and India.

Putting the current discussion on the EU’s strategic autonomy in its geopolitical context, Othmar Karas, First Vice-President of the EU Parliament, noted that Russia’s aggression very much clinched the debate on the EU’s strategic autonomy and sovereignty, as well as on its defence strategy. Mr Karas stated that this debate was led “in a spirit of cooperation with NATO.”

Connecting this issue with environmental challenges, this was an opportunity for The Bridge Tank’s president Joel Ruet to engage with the EU Parliament’s First VP on the contribution of the European Green Deal in the EU’s strategic autonomy. Binding policies are indeed only beneficial inasmuch as they are embedded into larger trade-offs. It is therefore important that the EU & US do not lose cooperation for autonomy against illiberal regimes. In particular the short term subsidy war the two blocks are currently engaged in presents a worrying trend, Joel Ruet argued.

In the midst of the new rivalries arising, the next 10 years will be crucial in fine tuning the right PPP inventor/adopter and funding models, Will Roper, Former Assistant Secretary of US Air Force, contended.

During a session on “Pathway to Independence,” Ambassador Paula Dobriansky, former US Under Secretary of State for Global Affairs under President George W Bush, recalled that the US government was also very focused on the ramifications of the war in Ukraine. She acknowledged noticeable moves on nuclear energy and hydrogen in Europe, something also pointed out by other speakers who emphasized the need to work on the supply side of energy security to move towards Europe’s autonomy. This question was also addressed by our board member Raphael Schoentgen during a session on “Europe’s Energy Landscape: Alternatives for the Renewable Transition.”

Transatlantic Diplomacy & Security and the role of Latin America

The question of transatlantic cooperation was a central topic during the Summit. The benefits of a strong and sovereign Europe for the US were highlighted by different panellists, as partnerships benefit from both parties’ strength and confidence.

A session on “Transatlantic Diplomacy & Security: Strengths and Future Opportunities” gathered Former President of Colombia Iván Duque Márquez, Spain’s Minister for Foreign Affairs José Manuel Albares, US Ambassador to Spain Julissa Reynoso, and Radoslava Stefanova from NATO.

According to José Manuel Albares, the transatlantic relationship is very important in the context of Russian aggression. The US is a natural ally of the EU and the transatlantic agenda will be at the heart of Spain’s coming EU presidency, including on the technological agenda, Mr Albares stated. In this process moving towards a Europe of defence and greater integration, the EU also needs to consider having a decision making process based on a qualified majority and not unanimity, he added.

The central role of the transatlantic alliance is also acknowledged on the other side of the Atlantic, Ambassador Reynoso contended, adding that the current President of the United States has been the one to believe in it the most in recent history. Building on this, Radoslava Stefanova reminded the audience that NATO already provides an amount of integration in military systems and procurement based on member countries’ commitments and is therefore working towards convergence.

Iván Duque Márquez addressed the opportunities created by Spain chairing the EU in offering a unifying point between Latin America and the EU. Latin America’s ecosystems are essential in the fight against climate change and the continent is a key player in energy supply, be it oil, gas, and green hydrogen but also in securing the EU’s food security. Additionally, Latin America is facing similar questions to those raised within the EU with regard to how to best approach its relationship with China, particularly in matters of trade.

Iván Duque also raised these issues in a session alongside former President of Mexico Felipe Calderón in which they discussed Latin America’s role in Global Sustainability. Iván Duque particularly highlighted the hypocrisy that makes CO2 worth 50 dollars a ton in Brussels and 5 in the Congo Basin or the Amazon. Felipe Calderon called for a real implementation of the “polluter pays” principle and a reward for absorption at equal price across the planet. “Actually funding capital costs is more important than pledges,” he added.