Treasury Notes

 Five Questions with Gilbert Metcalf

By: Erika Gudmundson

As part of our “Five Questions” series, today we ask Gilbert “Gib” Metcalf, the new Deputy Assistant Secretary for Environment and Energy within the Office of International Affairs, five questions about his responsibilities and top priorities for Treasury in the coming months:

You have been in academia for most of your career. What drew you to public service at this time?

Over the past few years, much of my work and research has focused on the cost effectiveness of various approaches to reducing pollution, distributional impacts of environmental and energy policy and cost effective policies to achieve given policy goals. I've also written papers evaluating existing energy tax policies with a focus on measuring the efficiency of those policies and alternative approaches that might achieve desired goals at lower costs. In the process of doing this research, I've had the opportunity to testify before various Congressional committees on energy and environmental policy. All of this work raised my interest in becoming more involved in policy design and implementation, especially in an Administration that is committed to clean energy goals achieved in a cost-effective fashion.

What has been your most interesting experience so far at Treasury?

In the first month that I was at Treasury, I had the opportunity to be part of the U.S. team participating in board meetings for the Climate Investment Funds (CIF), a collection of multilateral funds that finance clean energy investments and support sustainable landscape and climate-resilient development activities in developing countries. At the meetings, I also had the good fortune to participate in the Partnership Forum, which fosters dialogue between CIF board members and stakeholders. It provided a fascinating opportunity to interact on a global level with civil society organizations, organizations representing indigenous peoples and others who are committed to energy efficient development and successful implementation of ambitious clean energy strategies with strong local support. I was inspired by the commitment to environmentally-sustainable development using green technologies within some of the poorest countries in the world.

At the CIF meetings, I saw first-hand how U.S. contributions to multilateral climate funds not only leverage contributions from other countries, but also unleash private finance at the project level. The Moroccan centralized solar project at Ouarzazate is a good example. Each dollar of U.S. contribution to this clean energy project is matched by nearly $25 of financing from Morocco and other countries as well as private investors. This is a project that strengthens U.S. ties with North Africa while also generating knowledge that can help drive down the cost of centralized solar power.

Why does the United States invest in multilateral funds focusing on climate change and the environment?

People often assume that the U.S. contributions to multilateral climate and environment funds are simply charity. While they certainly provide enormous benefits to countries that are, in many cases, among the poorest countries in the world, these investments provide real benefits to American taxpayers as well. These funds help strengthen national security and promote U.S. foreign policy, create jobs here at home and improve our environment.

Military leaders have long recognized the destabilizing impacts of climate change and the increased conflict risk this poses for the United States. In addition to the security implications, our investments in these funds have direct benefits to American businesses. For example, a CIF-funded wind project in Mexico created jobs for an Iowa turbine manufacturing company that helped keep it in business at a critical time for the recovery. Projects funded through the Global Environment Facility (GEF), another multilateral fund in which the United States participates, have directly benefitted U.S. firms throughout the United States. Two U.S. scientific supply companies, for example, sold $600,000 in measuring equipment for a Polychlorinated Biphenyls (PCB) waste management and disposal project in Mongolia funded by the GEF. And finally, these funds help our own domestic environment. Many pollutants that directly affect the United States come from foreign sources, so projects that reduce those emissions have direct and local benefits for our country.

People might wonder why Treasury has an office focused on energy and environmental issues – how would you explain it?

Two key parts of the Treasury Department’s official mission are to create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad and to strengthen national security by combating threats. Our office contributes on both fronts by supporting environmentally friendly and energy conscious policies. Green growth contributes to long-term economic growth both in the U.S. and abroad. Reducing the threat of climate change addresses a key national security concern by contributing to stability abroad. In this way, our office directly supports U.S. national interest and foreign policy goals.

Looking more broadly, the United States supports clean energy globally through its investments in multilateral funds – where Treasury takes the lead on U.S. participation – and through bilateral activities that are mostly run through the U.S. Department of State and USAID. Treasury is active in the strong oversight mechanisms of these various multilateral funds to protect U.S. interests while encouraging energy efficient development in a cost effective manner. The CIF Scaling Up Renewable Energy Program, for example, provides support for clean energy sources in low-income countries. But it is not enough to simply help with funding these projects. We also work hard to ensure that strong social and environmental standards are applied in countries we support and that the procurement process is fair and transparent.

Our office also focuses on the international negotiations over climate finance, including in support of the U.N. Framework Convention on Climate Change (UNFCCC), and the development of a Green Climate Fund. And finally, our office focuses on the development of domestic energy and environmental policy initiatives. We have deployed our office’s strong analytic capabilities in support of Administration policy discussions to ensure that the most cost-effective approaches are being taken to support clean energy development.

The United States supports environmental activities through both bilateral and multilateral efforts. How do these efforts differ and overlap?

The bilateral activities, administered by the State Department and USAID, are critical, since they support capacity building and technical assistance activities that help foster an environment in which clean energy investments can succeed. They also level the playing field by creating open, fair and functioning markets in which American clean energy and forestry businesses can compete and win. Our multilateral investments complement these capacity building activities while also helping fund major capital investments, which range from geothermal projects in Indonesia to wind and solar power projects in South Africa.

Our multilateral and bilateral activities are complementary. The capacity building initiatives, in many cases, make the multilateral funded capital projects possible. Host countries benefit from the large-scale capital projects and so are more receptive to initiatives that strengthen local institutions, remove regulatory hurdles and pave the way for the private sector to flourish in strong and open local markets. Because of these complementarities, there has long been a recognition of the value of balanced support between bilateral and multilateral activities. We work closely with State, USAID and across the Administration to continue making the case for robust support for climate finance given its clear benefits for our national security, the U.S. economy and the environment.

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