Development Dialogues: Who will pay for the global energy transition?

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In this episode of Development Dialogues, host Catherine Cheney is joined by Max Bearak, Anant Sudarshan and Jessica Seddon to examine one of the most complex challenges in global development: how can the clean energy transition move forward both quickly and equitably, particularly for low- and middle-income countries (LMICs) still grappling with poverty?

• Max Bearak is a reporter for The New York Times who covers international climate negotiations, energy politics, and new approaches to reducing emissions. His recent Poynter Lecture at Yale asked: Why are the rich failing the poor on climate change?’
• Anant Sudarshan is an economist at the University of Warwick and a Senior Fellow at the Energy Policy Institute at the University of Chicago. His work focuses on environmental regulation and air pollution, and he’s the senior editor of an upcoming VoxDevLit on that topic.
• Jessica Seddon is a governance and environmental policy expert whose career spans India and the U.S. She focuses on how institutions can better use data to tackle challenges like air quality and climate risk. She is currently a Senior Fellow at Yale’s Jackson School of Global Affairs, director of the Deitz Family Initiative on Environment and Global Affairs, and faculty affiliate of Yale’s Economic Growth Center.

A central tension throughout the discussion is the balance between emissions reductions and economic growth. While wealthy nations historically contributed the most to climate change, LMICs are now under pressure to take costly action. 

Development Dialogues, a collaboration between EGC and VoxDev, facilitates direct conversations between researchers and policy actors on pressing development issues. It builds on the VoxDevTalks podcast and Voices in Development, a podcast from EGC exploring issues related to sustainable development and economic justice in low- and middle-income countries.

“The conversation seems to revolve around money... when it doesn’t really address some of the fundamental causes of it, which come from a certain kind of economic system that we all live in.” - Max Bearak

The panel challenged the common framing of the climate crisis in terms of blame and reparations. Sudarshan argued that this narrative, while sometimes politically useful, is ultimately counterproductive. Instead, he emphasized the shared interest of all countries, including India and China, in mitigating climate change due to its profound local impacts.

Seddon added that the framing must also consider the speed of transition and the costs associated with it. She pointed out that shifting to renewable systems ahead of schedule incurs real financial losses, as retiring coal plants early or investing in still-maturing technologies can be expensive.

“The cost of that speed is leaving investments to not fully be paid back... but it’s not a dead end to nowhere.” - Jessica Seddon

The discussion turned to the role of aid, particularly in supporting both mitigation and adaptation efforts. Bearak highlighted the disconnect between lofty financial pledges and actual delivery, especially in Africa.

Seddon flagged trade volatility, especially US tariffs, as a barrier to clean energy development in LMICs. She cited Mexico’s disrupted electric vehicle industry as a case in point.

Sudarshan noted that while the cheapest form of power is now renewable, existing fossil fuel infrastructure in countries like India would require substantial buyouts to decommission early.

“If you want them to retire the coal plants they already have, then you might need to pay them for it.” - Anant Sudarshan

As for adaptation, the panel agreed that significant concessional finance will be required. Sudarshan explained that in India, expectations of foreign funding are low. Instead, domestic sources—corporate taxes, CSR spending, or carbon markets—are being explored.

The episode also examined how rethinking economic systems can accelerate climate progress. Bearak called for changes in how large financial institutions value nature and risk.

“We need a lot more money... and that money is going to need to come from some of the biggest sources of money that we have.” - Max Bearak

He cited examples like Norway’s sovereign wealth fund and BlackRock beginning to factor climate risk into their investment decisions—not out of altruism, but because “climate change is starting to actually diminish the value of many of the companies that they’re invested in.”

Seddon echoed this and pointed to increasing market interest in nature-based solutions.

“It's a venture capital backed race between different efforts to use combinations of sensing, satellites, AI to be able to detect and track the benefits [of ecosystems].” - Jessica Seddon

Sudarshan, meanwhile, underscored the importance of integrating environmental externalities—such as air pollution and biodiversity loss—into mainstream economic planning, warning that environment ministries are too often siloed. 

Sudarshan, who is a Senior Editor on an upcoming VoxDevLit on Air Pollution, drew attention to the issue as a more immediate and visible problem with powerful co-benefits for climate. Yet he emphasized a lack of state capacity as a fundamental barrier to progress in countries like India.

“There are many laws on the books, there are many rules on paper, and they’re not working.” - Anant Sudarshan

Seddon linked this to infrastructure and governance, noting that environmental improvement often requires the same capabilities as broader development goals; for instance, upgrading transport networks. 

“There's not really an easy solution... until some of the environmental change... gets reclassified as a matter of district economic development.” - Jessica Seddon

The conversation explored China’s outsized role in manufacturing clean energy technology. While Bearak stopped short of saying China 'holds power' in the transition, he emphasized its dominance. 

“The fact that China has come to absolutely dominate the production... does give them immense importance.” - Max Bearak

Sudarshan questioned the need for protectionist policies like India’s local content requirements that could delay the transition. Seddon, meanwhile, highlighted the temporary nature of this market power, pointing out that the clean energy economy is fundamentally different from fossil fuels.

The episode concluded with a reflection on agency and pathways forward. Bearak critiqued the slow pace of COP negotiations.

Instead, Seddon advocated for smaller, regional alliances focused on shared ecosystems and resilience. All three panelists agreed that leadership from high-emitting countries, particularly the US and Europe, is vital.

“Resolve your own energy policy, align it up with these climate goals. And that’s a huge thing in itself.” - Anant Sudarshan