1 00:00:00,600 --> 00:00:07,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:10,560 --> 00:00:14,360 Speaker 2: This is Bloomberg Intelligence with Alex Steinhl and Paul Sweeny. 3 00:00:14,520 --> 00:00:17,720 Speaker 3: The real app performance has been in US corporate high yield. 4 00:00:17,880 --> 00:00:20,239 Speaker 4: Are the companies lean enough? Have they trimmed all the fats? 5 00:00:20,320 --> 00:00:24,119 Speaker 3: The semiconductor business is a really cyclical business. 6 00:00:23,600 --> 00:00:27,200 Speaker 2: Breaking market headlines and corporate news from across the globe. 7 00:00:27,240 --> 00:00:29,880 Speaker 4: Do investors like the M and A that we've seen? 8 00:00:30,080 --> 00:00:31,000 Speaker 5: These are two. 9 00:00:31,040 --> 00:00:33,159 Speaker 3: Big time blue chip companies. 10 00:00:33,320 --> 00:00:36,920 Speaker 4: The window between the peak and cut changing super fast. 11 00:00:37,080 --> 00:00:41,680 Speaker 2: Bloomberg Intelligence with Alex Steinehl and Paulsweeny on Bloomberg Radio. 12 00:00:43,240 --> 00:00:45,680 Speaker 3: I'm Alex Steele and I'm Bailey Lepschotz filling in for 13 00:00:45,680 --> 00:00:46,320 Speaker 3: Paul Sweeney. 14 00:00:46,400 --> 00:00:49,120 Speaker 4: On today's Bloomberg Intelligence Show, we dig inside the big 15 00:00:49,159 --> 00:00:51,919 Speaker 4: business stories impacting Wall Street and the global markets. 16 00:00:52,080 --> 00:00:54,400 Speaker 3: Each and every week we provide in depth research and 17 00:00:54,480 --> 00:00:57,040 Speaker 3: data on some of the two thousand companies and one 18 00:00:57,080 --> 00:00:59,640 Speaker 3: hundred and thirty industries our analysts cover worldwide. 19 00:00:59,680 --> 00:01:01,800 Speaker 4: It is Climate Week, and today we look at how 20 00:01:01,800 --> 00:01:04,560 Speaker 4: oil and gas are playing into the energy transition. 21 00:01:04,840 --> 00:01:07,840 Speaker 3: Plus we'll discuss how the resulting emissions from wildfires are 22 00:01:07,880 --> 00:01:09,560 Speaker 3: threatening to make global warming worse. 23 00:01:09,760 --> 00:01:12,520 Speaker 4: But first we dive into that anti trust space. This week, 24 00:01:12,560 --> 00:01:15,280 Speaker 4: the US Justice Department suit the world's second largest card 25 00:01:15,319 --> 00:01:18,120 Speaker 4: payment organization, Visa, over an anti trust matter. 26 00:01:18,319 --> 00:01:20,680 Speaker 3: The case was filed in federal court in Manhattan on 27 00:01:20,760 --> 00:01:23,560 Speaker 3: Tuesday or tild. The US Anti trust enforces have been 28 00:01:23,560 --> 00:01:26,520 Speaker 3: preparing a case accusing Visa of taking steps to keep 29 00:01:26,640 --> 00:01:29,680 Speaker 3: rivals from challenging its dominance in the debit card market. 30 00:01:29,560 --> 00:01:30,039 Speaker 6: And for more. 31 00:01:30,120 --> 00:01:32,840 Speaker 4: Guest host Jess Menton and I were joined by Justin Teresi, 32 00:01:32,920 --> 00:01:36,360 Speaker 4: Bloomberg Intelligence, Anti trust litigation and policy analysts. We first 33 00:01:36,360 --> 00:01:39,319 Speaker 4: asked Justin whether this week's news surprised him at all. 34 00:01:39,440 --> 00:01:42,720 Speaker 7: The following itself wasn't too surprising. We know that DOJ 35 00:01:43,000 --> 00:01:46,600 Speaker 7: opened an investigation in twenty twenty one related to Visa 36 00:01:46,720 --> 00:01:49,320 Speaker 7: and its deepit card practices, so we thought something might 37 00:01:49,360 --> 00:01:52,240 Speaker 7: be coming. The timing before the election makes sense, we'd 38 00:01:52,240 --> 00:01:55,320 Speaker 7: see it now rather than later on this year. The 39 00:01:55,360 --> 00:01:58,440 Speaker 7: complaint itself, it seems fairly strong, as the Attorney General 40 00:01:58,560 --> 00:02:02,440 Speaker 7: said in his press conference. Basically, they're alleging that after 41 00:02:02,560 --> 00:02:05,559 Speaker 7: Dodd Frank and rules came into place about being able 42 00:02:05,600 --> 00:02:09,239 Speaker 7: to route debit transactions over more than one network. Visa 43 00:02:09,400 --> 00:02:12,640 Speaker 7: entered a series of contracts with merchants and banks that 44 00:02:12,680 --> 00:02:15,280 Speaker 7: allowed it to favor its own network over those of 45 00:02:15,320 --> 00:02:18,959 Speaker 7: its competitors. Seems like some true antitrust activity here that 46 00:02:19,080 --> 00:02:20,079 Speaker 7: DOJ's alleging. 47 00:02:20,400 --> 00:02:22,560 Speaker 1: When you're thinking about and especially when you were talking 48 00:02:22,560 --> 00:02:25,240 Speaker 1: about the current administration and the election coming up, do 49 00:02:25,280 --> 00:02:27,720 Speaker 1: you think a new administration would be able to potentially 50 00:02:28,080 --> 00:02:29,680 Speaker 1: amend a settlement here. 51 00:02:29,919 --> 00:02:32,320 Speaker 7: There's a couple of things to consider here, the first 52 00:02:32,320 --> 00:02:34,640 Speaker 7: being that is that this is not Visa's first time 53 00:02:34,919 --> 00:02:36,480 Speaker 7: at the antitrust. 54 00:02:35,919 --> 00:02:36,960 Speaker 8: Rodeo, if you will. 55 00:02:37,200 --> 00:02:40,600 Speaker 7: The company was back in two thousand and one when 56 00:02:40,639 --> 00:02:44,000 Speaker 7: it was still linked together with MasterCard before I went public, 57 00:02:44,040 --> 00:02:46,680 Speaker 7: and that case ended in a settlement. In twenty ten, 58 00:02:46,760 --> 00:02:49,600 Speaker 7: there was a similar anti trust suit related to credit 59 00:02:49,600 --> 00:02:52,240 Speaker 7: card fees. That case also ed in a settlement. So 60 00:02:52,840 --> 00:02:55,760 Speaker 7: there is some history here of these cases tending to settle, 61 00:02:56,040 --> 00:02:58,239 Speaker 7: and while there or not a new administration might be 62 00:02:58,280 --> 00:03:00,800 Speaker 7: amenable to that, it really remains to be seen. But 63 00:03:00,880 --> 00:03:03,560 Speaker 7: I think settlement is certainly something that's on the table. 64 00:03:03,960 --> 00:03:06,240 Speaker 7: And important to remember in all of this too, is 65 00:03:06,240 --> 00:03:09,360 Speaker 7: that the DOJ is really after some behavioral changes with 66 00:03:09,440 --> 00:03:12,200 Speaker 7: regard to these agreements. Right, We're not talking about some 67 00:03:12,280 --> 00:03:15,280 Speaker 7: kind of a structural change in Visa as a result 68 00:03:15,280 --> 00:03:17,000 Speaker 7: of this litigation most likely. 69 00:03:17,080 --> 00:03:19,079 Speaker 4: Right, So then what does that look like? So they 70 00:03:19,080 --> 00:03:22,040 Speaker 4: can't pay Apple anymore, et cetera. So Apple loses money, 71 00:03:22,280 --> 00:03:23,320 Speaker 4: and then what does Visa do? 72 00:03:23,800 --> 00:03:26,359 Speaker 7: Yeah, you know, it's it's a really a great question, 73 00:03:26,400 --> 00:03:28,160 Speaker 7: and I think one that that really goes to the 74 00:03:28,200 --> 00:03:30,919 Speaker 7: heart of Visa's debit business here. You know, DJ is 75 00:03:30,960 --> 00:03:33,359 Speaker 7: alleging that as a result of one hundred and eighty 76 00:03:33,400 --> 00:03:36,760 Speaker 7: of the largest of these contracts that Visa has, they've 77 00:03:36,760 --> 00:03:39,920 Speaker 7: been able to shield themselves from competition on seventy five 78 00:03:39,960 --> 00:03:43,040 Speaker 7: percent of the debit volume that's going through its network. 79 00:03:43,120 --> 00:03:45,600 Speaker 7: So this is a big money maker for Visa. It's 80 00:03:45,600 --> 00:03:47,680 Speaker 7: something to really keep our eye on here because it 81 00:03:47,680 --> 00:03:50,280 Speaker 7: could result in a chalk of its business going away 82 00:03:50,560 --> 00:03:53,840 Speaker 7: if these contracts were to also go away. So that's 83 00:03:53,840 --> 00:03:55,880 Speaker 7: really I think what we have to scratch our heads 84 00:03:55,880 --> 00:03:57,880 Speaker 7: a bad and wonder you know, is that the ultimate 85 00:03:57,920 --> 00:03:59,640 Speaker 7: remedy that we see from DJ. 86 00:03:59,800 --> 00:04:01,840 Speaker 8: But lots of time too, you know. 87 00:04:02,000 --> 00:04:04,560 Speaker 7: Give you an example the Google Search case from filing 88 00:04:04,600 --> 00:04:07,240 Speaker 7: to trial that was a three year time span before 89 00:04:07,240 --> 00:04:08,960 Speaker 7: we got there, So this is going to be something 90 00:04:08,960 --> 00:04:10,200 Speaker 7: that's around for quite a while. 91 00:04:10,560 --> 00:04:13,120 Speaker 1: Is there any way that Visa could argue that the 92 00:04:13,160 --> 00:04:17,120 Speaker 1: complaint fails to account for increasing competition from alternative payment 93 00:04:17,160 --> 00:04:20,160 Speaker 1: methods if you're thinking about account to account transfers. 94 00:04:20,800 --> 00:04:23,279 Speaker 7: Yeah, and I think that's exactly where we could see 95 00:04:23,320 --> 00:04:26,040 Speaker 7: Visa go in its motion to dismiss arguments or later 96 00:04:26,120 --> 00:04:28,800 Speaker 7: on down the line. You're right, we're seeing this increase 97 00:04:28,839 --> 00:04:31,760 Speaker 7: in competition from things like Venmo or cash app, right, 98 00:04:31,800 --> 00:04:35,479 Speaker 7: But the complaint is basically alleging that those forums haven't 99 00:04:35,480 --> 00:04:38,120 Speaker 7: been able to scale up to be as large as 100 00:04:38,120 --> 00:04:40,360 Speaker 7: they really could be because of deals. 101 00:04:40,040 --> 00:04:41,000 Speaker 8: They have with Visa. 102 00:04:41,440 --> 00:04:43,560 Speaker 7: But you know, the reality is, as you and I 103 00:04:43,640 --> 00:04:46,839 Speaker 7: both know, folks are using those platforms and the marketplace 104 00:04:46,960 --> 00:04:47,520 Speaker 7: is changing. 105 00:04:47,560 --> 00:04:48,800 Speaker 8: So I think that's probably going to. 106 00:04:48,800 --> 00:04:51,479 Speaker 7: Be part of parish parcel to what we see VISA 107 00:04:51,520 --> 00:04:52,599 Speaker 7: saying in its defense here. 108 00:04:52,760 --> 00:04:55,400 Speaker 4: How long does something like this take, particularly as Jess 109 00:04:55,440 --> 00:04:57,520 Speaker 4: was pointing out, we might have a change in administration. 110 00:04:58,440 --> 00:05:01,360 Speaker 7: Yeah, yeah, again, you know, really these slow moving cases here, 111 00:05:01,400 --> 00:05:03,119 Speaker 7: I think we really this is going to be something 112 00:05:03,120 --> 00:05:05,000 Speaker 7: that's around, I would say, for the next two or 113 00:05:05,040 --> 00:05:05,559 Speaker 7: three years. 114 00:05:05,839 --> 00:05:07,480 Speaker 8: At a minimum, we're going to get through a ton 115 00:05:07,520 --> 00:05:08,120 Speaker 8: of motion. 116 00:05:08,000 --> 00:05:10,840 Speaker 7: To dismiss practice next year likely get over that and 117 00:05:10,880 --> 00:05:12,520 Speaker 7: find ourselves in a discovery phase. 118 00:05:12,560 --> 00:05:14,719 Speaker 4: So, so is this like an overhang on the stock 119 00:05:14,760 --> 00:05:15,640 Speaker 4: then until then? 120 00:05:16,440 --> 00:05:18,279 Speaker 7: I would say so, I mean, you know, how the 121 00:05:18,279 --> 00:05:20,719 Speaker 7: stock reacts is how the stock reacts, but the overhang 122 00:05:20,839 --> 00:05:22,400 Speaker 7: is something that it is a long term risk. 123 00:05:22,400 --> 00:05:24,080 Speaker 8: I would say that's absolutely accurate. 124 00:05:24,440 --> 00:05:26,640 Speaker 1: In what ways do you think it would impact visus 125 00:05:26,760 --> 00:05:28,200 Speaker 1: earnings and revenue outlook? 126 00:05:29,640 --> 00:05:31,359 Speaker 7: Again, you know, I think we really have to go 127 00:05:31,440 --> 00:05:33,279 Speaker 7: to the heart of the question here with you know, 128 00:05:33,320 --> 00:05:36,840 Speaker 7: the actual percentage of debit transactions that Visa has been 129 00:05:36,880 --> 00:05:39,840 Speaker 7: able to shield itself from competition on. Again, the complaint 130 00:05:39,880 --> 00:05:42,360 Speaker 7: if it's correct, and again you know, the government's best 131 00:05:42,400 --> 00:05:45,040 Speaker 7: day is always the day they file their complaint because 132 00:05:45,080 --> 00:05:47,719 Speaker 7: no one's really responded to it yet. But if the 133 00:05:47,760 --> 00:05:51,480 Speaker 7: government's correct that Visas shield itself from competition on seventy 134 00:05:51,480 --> 00:05:55,039 Speaker 7: five percent of its transactions from these largest contracts, that's 135 00:05:55,040 --> 00:05:58,640 Speaker 7: a significant part of visas actual debit revenue. So that 136 00:05:58,720 --> 00:06:01,080 Speaker 7: I think is where the concern is coming in. You know, 137 00:06:01,160 --> 00:06:04,040 Speaker 7: it really goes the heart of Visa's debit business, and 138 00:06:04,120 --> 00:06:05,719 Speaker 7: we'll have to see what plays out over the next 139 00:06:05,720 --> 00:06:08,039 Speaker 7: couple of years here with regard to possible remedies or 140 00:06:08,040 --> 00:06:08,560 Speaker 7: a settlement. 141 00:06:08,800 --> 00:06:11,880 Speaker 3: Our thanks to Justin Teresi, Bloomberg Intelligence, Anti trust, litigation 142 00:06:11,960 --> 00:06:12,880 Speaker 3: and policy analyst. 143 00:06:13,360 --> 00:06:15,440 Speaker 4: One story from the Bloomberg terminal this week that caught 144 00:06:15,440 --> 00:06:17,040 Speaker 4: our eye was about. 145 00:06:16,640 --> 00:06:21,000 Speaker 3: Colleges skyrocketing tuition costs. COVID and fewer high school graduates 146 00:06:21,040 --> 00:06:24,440 Speaker 3: have been straining the survival of smaller American colleges, leading 147 00:06:24,480 --> 00:06:27,440 Speaker 3: many to shut down. Now some are joining a surprising 148 00:06:27,520 --> 00:06:29,320 Speaker 3: path mergers and acquisitions. 149 00:06:29,520 --> 00:06:32,479 Speaker 4: Northeastern University, once known as a Boston commuter school, has 150 00:06:32,560 --> 00:06:35,560 Speaker 4: even formed a dedicated mergers and acquisitions team with the 151 00:06:35,600 --> 00:06:37,360 Speaker 4: mission of getting big in a hurry. 152 00:06:37,480 --> 00:06:40,200 Speaker 3: It's the subject of a Bloomberg Big Take story titled 153 00:06:40,360 --> 00:06:43,960 Speaker 3: a college taps Wall Street playbook to rival Ivy's on admissions. 154 00:06:44,120 --> 00:06:45,960 Speaker 4: Guests host Jess Menton and I were joined by one 155 00:06:46,000 --> 00:06:49,839 Speaker 4: of the authors, Francesca Maglioni, Bloomberg Personal Finance and Higher 156 00:06:49,960 --> 00:06:52,720 Speaker 4: education reporter and mean first asked Francesca to walk us 157 00:06:52,720 --> 00:06:53,880 Speaker 4: through the legs of the story. 158 00:06:54,400 --> 00:06:57,880 Speaker 9: Northeastern University has been known for years as a commuter 159 00:06:57,960 --> 00:07:02,799 Speaker 9: school mostly attended by low students, and since twenty eleven 160 00:07:02,839 --> 00:07:06,400 Speaker 9: they've kind of been expanding their brand. They now have 161 00:07:06,560 --> 00:07:11,080 Speaker 9: fourteen campuses across the world, with three campuses abroad. What 162 00:07:11,120 --> 00:07:13,920 Speaker 9: we thought was interesting is that since twenty nineteen they've 163 00:07:13,920 --> 00:07:18,040 Speaker 9: been buying up other struggling schools, kind of tapping in 164 00:07:18,080 --> 00:07:20,560 Speaker 9: that private equity playbook and get M and A. Yeah, 165 00:07:20,560 --> 00:07:22,760 Speaker 9: like they've been merging with They've merged with three different 166 00:07:22,800 --> 00:07:25,520 Speaker 9: schools so far and kind of embedded the North Eastern 167 00:07:25,560 --> 00:07:28,320 Speaker 9: brand on these schools and now can offer to students like, hey, 168 00:07:28,360 --> 00:07:30,800 Speaker 9: you can study for a semester in California, you can 169 00:07:30,840 --> 00:07:33,040 Speaker 9: do a semester in New York. And this is very 170 00:07:33,040 --> 00:07:36,480 Speaker 9: different from those schools like Princeton and Harvard, which just 171 00:07:36,520 --> 00:07:39,680 Speaker 9: want to stay small and delete. They want to expand 172 00:07:39,720 --> 00:07:41,120 Speaker 9: their brand as much as they can. 173 00:07:41,000 --> 00:07:42,880 Speaker 1: Because there's a lot of schools, especially in the South 174 00:07:42,880 --> 00:07:44,640 Speaker 1: where I'm from, where you had a lot of magnet 175 00:07:44,680 --> 00:07:47,040 Speaker 1: schools and then satellite schools, whether it was like the 176 00:07:47,120 --> 00:07:49,160 Speaker 1: University of Texas or Texas A and M, so you'd 177 00:07:49,160 --> 00:07:51,920 Speaker 1: have not just the main campuses, say in Austin, Texas, 178 00:07:51,960 --> 00:07:54,600 Speaker 1: you had ones in say Dallas and outside of that. 179 00:07:54,640 --> 00:07:57,240 Speaker 1: So I'm wondering is this is there a particular playbook 180 00:07:57,240 --> 00:07:58,400 Speaker 1: when it comes to kind of like the M and 181 00:07:58,440 --> 00:08:00,400 Speaker 1: a type of feel it comes to something like this, 182 00:08:00,560 --> 00:08:02,760 Speaker 1: or is there different not apples and apples. 183 00:08:02,760 --> 00:08:04,240 Speaker 6: I guess yeah, I guess. 184 00:08:04,280 --> 00:08:06,520 Speaker 9: What's interesting with the Northeastern is that High D is 185 00:08:06,520 --> 00:08:08,680 Speaker 9: going through a very hard time. There's a lot of 186 00:08:09,040 --> 00:08:12,360 Speaker 9: smaller schools that are closing all over the US, and 187 00:08:12,440 --> 00:08:14,960 Speaker 9: so Northeastern is growing at a time when all these 188 00:08:15,000 --> 00:08:18,360 Speaker 9: other colleges are shrinking. Colleges are competing for students. The 189 00:08:18,400 --> 00:08:21,120 Speaker 9: number of students across the US is going to drop 190 00:08:21,160 --> 00:08:23,840 Speaker 9: by ten percent, the number of students going to college. 191 00:08:24,720 --> 00:08:26,480 Speaker 1: So why what's the driver there? 192 00:08:26,600 --> 00:08:29,000 Speaker 6: It's just a demographic cliff and. 193 00:08:29,400 --> 00:08:33,200 Speaker 1: The costs and it's. 194 00:08:32,160 --> 00:08:33,600 Speaker 6: Extremely expensive as well. 195 00:08:33,760 --> 00:08:38,160 Speaker 9: COVID was really bad for the college enrollment numbers as well. 196 00:08:38,200 --> 00:08:41,160 Speaker 9: And so Northeastern is kind of growing at a time 197 00:08:41,160 --> 00:08:43,880 Speaker 9: when all these other schools are shrinking. And when looking 198 00:08:43,920 --> 00:08:48,160 Speaker 9: for schools, they want valuable real estate. The latest acquisition 199 00:08:48,240 --> 00:08:50,400 Speaker 9: that they have is in New York. Now they have 200 00:08:51,000 --> 00:08:52,679 Speaker 9: three buildings in Manhattan. 201 00:08:53,120 --> 00:08:56,240 Speaker 4: Do they buy Marymount or was this part of yes, 202 00:08:56,280 --> 00:08:59,959 Speaker 4: they don't call it buying because still has its own brand. 203 00:09:00,240 --> 00:09:04,400 Speaker 9: They just like swallow their liabilities and their assets. There's 204 00:09:04,440 --> 00:09:07,160 Speaker 9: no exchange of money that changes hands. 205 00:09:07,400 --> 00:09:08,960 Speaker 10: Interesting, is it working? 206 00:09:09,240 --> 00:09:11,679 Speaker 4: Like yeah, is this playbook actually helping Northeastern? 207 00:09:11,840 --> 00:09:12,480 Speaker 6: Yeah, it's working. 208 00:09:12,520 --> 00:09:16,040 Speaker 9: Northeastern last year had almost one hundred thousand students apply 209 00:09:16,160 --> 00:09:19,440 Speaker 9: to their university. They've seen their enrollment increase by fifteen 210 00:09:19,440 --> 00:09:22,920 Speaker 9: percent since twenty nineteen, and they've gone from being just 211 00:09:23,000 --> 00:09:26,600 Speaker 9: a local, little known brand to being known worldwide. 212 00:09:26,720 --> 00:09:29,120 Speaker 4: But part of the college thing is like the experience, right, 213 00:09:29,200 --> 00:09:31,560 Speaker 4: Like you go there and you live there, like maybe 214 00:09:31,559 --> 00:09:33,800 Speaker 4: you take a semester abroad or something, but like you 215 00:09:33,840 --> 00:09:36,880 Speaker 4: stay there and it feels a little weird and disjointed, 216 00:09:36,920 --> 00:09:38,040 Speaker 4: and then all of a sudden be like you're here, 217 00:09:38,040 --> 00:09:39,600 Speaker 4: and then you're there, and then you're there. 218 00:09:39,920 --> 00:09:40,520 Speaker 6: Yeah, for sure. 219 00:09:40,600 --> 00:09:42,520 Speaker 9: That's one of the things that Northeastern will say is 220 00:09:42,600 --> 00:09:45,120 Speaker 9: changing within higher ed and that's why they've been successful 221 00:09:45,160 --> 00:09:48,200 Speaker 9: in this moment. They think that students no longer or 222 00:09:48,200 --> 00:09:50,400 Speaker 9: some students no longer want to, you know, spend four 223 00:09:50,440 --> 00:09:52,840 Speaker 9: years in one place with a small community, and they're 224 00:09:52,880 --> 00:09:55,280 Speaker 9: looking to get new experiences and be more practical in 225 00:09:55,360 --> 00:09:57,719 Speaker 9: terms of their four years. How can this translate into 226 00:09:57,800 --> 00:09:59,480 Speaker 9: career after college and things like that. 227 00:10:00,200 --> 00:10:02,120 Speaker 6: So that's another way that they're different from other colleges. 228 00:10:02,240 --> 00:10:05,200 Speaker 1: Are there other potential universities or colleges that are eyeing 229 00:10:05,400 --> 00:10:07,880 Speaker 1: this type of model and they may try to do 230 00:10:08,080 --> 00:10:09,520 Speaker 1: and replicate something similar. 231 00:10:10,200 --> 00:10:10,760 Speaker 6: Yeah, for sure. 232 00:10:10,840 --> 00:10:15,199 Speaker 9: Northeastern's told us that they've heard from almost fifty schools 233 00:10:15,240 --> 00:10:18,240 Speaker 9: that have reached out, kind of interested and either merging 234 00:10:18,240 --> 00:10:20,720 Speaker 9: with them or learning about their business model. We saw 235 00:10:20,760 --> 00:10:24,200 Speaker 9: that Vanderbilt has now a campus in Florida that's kind 236 00:10:24,240 --> 00:10:26,480 Speaker 9: of a school that's trying to do something a little similar, 237 00:10:26,600 --> 00:10:28,800 Speaker 9: not at the scale that Northeastern is doing it, but 238 00:10:28,840 --> 00:10:30,880 Speaker 9: there's a lot of schools watching what they're doing right now. 239 00:10:30,960 --> 00:10:34,079 Speaker 4: Yeah, so is what they're doing also, though different from 240 00:10:34,080 --> 00:10:36,719 Speaker 4: that Marymount thing, Like I can still go to Marymount here, 241 00:10:36,880 --> 00:10:39,280 Speaker 4: say in New York City versus Northeastern, and then I 242 00:10:39,280 --> 00:10:41,040 Speaker 4: go spend a semester in California. 243 00:10:41,240 --> 00:10:44,520 Speaker 6: Yes, so Marymount is part of their whole plan. Okay, 244 00:10:44,559 --> 00:10:46,000 Speaker 6: so that is part Right now. 245 00:10:45,880 --> 00:10:49,400 Speaker 9: They're still Marymount because the merger was just announced, but 246 00:10:49,760 --> 00:10:54,000 Speaker 9: eventually it'll be Marymount at Northeastern or whatever brand they 247 00:10:54,000 --> 00:10:54,959 Speaker 9: decide to go with ye. 248 00:10:55,000 --> 00:10:56,480 Speaker 4: So then I can go to Northeastern and then be 249 00:10:56,520 --> 00:10:57,880 Speaker 4: like I'm gonna spend a year in New York going 250 00:10:57,880 --> 00:11:00,880 Speaker 4: in to Marymount, yes Hice, Okay, yeah, yeah, that's just 251 00:11:00,880 --> 00:11:04,319 Speaker 4: so interesting. It's just a different college experience when like 252 00:11:05,120 --> 00:11:06,720 Speaker 4: I would think that you go to college, you learn 253 00:11:06,760 --> 00:11:08,840 Speaker 4: how to like be by yourself, do launder by yourself, 254 00:11:08,880 --> 00:11:12,040 Speaker 4: get your debt by yourself, beer by yourself, and then 255 00:11:12,080 --> 00:11:15,080 Speaker 4: like that's it, not like jet setting off to different locations. 256 00:11:15,240 --> 00:11:15,480 Speaker 4: You know. 257 00:11:16,000 --> 00:11:19,120 Speaker 3: Our thanks to Francesca Maglioni, Bloomberg Personal Finance and Higher 258 00:11:19,200 --> 00:11:20,320 Speaker 3: Education reporter. 259 00:11:20,320 --> 00:11:23,000 Speaker 4: Coming up a conversation with Robbie men In, Singapore's Climate 260 00:11:23,040 --> 00:11:25,960 Speaker 4: Action Ambassador on sustainable financing in Southeast Asia. 261 00:11:26,120 --> 00:11:29,120 Speaker 3: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 262 00:11:29,160 --> 00:11:31,680 Speaker 3: depth research and data on two thousand companies and one 263 00:11:31,760 --> 00:11:34,800 Speaker 3: hundred and thirty industries. You can access Bloomberg Intelligence via 264 00:11:34,840 --> 00:11:37,520 Speaker 3: b I go on the terminal. I'm Baby Lipschals and. 265 00:11:37,480 --> 00:11:39,559 Speaker 4: I'm Alex Steele, and this is Bloomberg. 266 00:11:48,480 --> 00:11:52,360 Speaker 2: You're listening to the Bloomberg Intelligence podcast. Catch us live 267 00:11:52,440 --> 00:11:55,160 Speaker 2: weekdays at ten am Eastern on Apple card Playing and 268 00:11:55,280 --> 00:11:58,160 Speaker 2: broud Otto with the Bloomberg Business app. Listen on demand 269 00:11:58,200 --> 00:12:01,920 Speaker 2: wherever you get your podcasts are what just Live on YouTube. 270 00:12:03,320 --> 00:12:05,640 Speaker 3: I'm Alex Steele and I'm Baby Liftals filling in for 271 00:12:05,679 --> 00:12:06,240 Speaker 3: Paul Sweeny. 272 00:12:06,400 --> 00:12:09,800 Speaker 4: Each week we look at research from Bloomberg BNEF previously 273 00:12:09,800 --> 00:12:12,520 Speaker 4: known as New Energy Finance. They're the team at Bloomberg 274 00:12:12,520 --> 00:12:17,640 Speaker 4: that tracks and analyzes the energy transition from commodities to power, transport, industries, buildings, 275 00:12:17,679 --> 00:12:19,080 Speaker 4: and agricultural sectors. 276 00:12:19,200 --> 00:12:21,320 Speaker 3: This week, we looked at how oil and gas play 277 00:12:21,360 --> 00:12:22,560 Speaker 3: into the energy transition. 278 00:12:22,840 --> 00:12:25,440 Speaker 4: Guest host Normal Linda and I were joined by David Doherty, 279 00:12:25,520 --> 00:12:28,000 Speaker 4: head of Oil and Renewables Fuels Research, and we first 280 00:12:28,080 --> 00:12:30,000 Speaker 4: asked him to discuss some of the trends that he's 281 00:12:30,080 --> 00:12:31,240 Speaker 4: noticed over the past year. 282 00:12:31,679 --> 00:12:31,880 Speaker 11: Yeah. 283 00:12:31,920 --> 00:12:33,480 Speaker 12: I mean, if you think of the players in the 284 00:12:33,480 --> 00:12:35,560 Speaker 12: oil market, they're the energy pros in the world, right. 285 00:12:35,559 --> 00:12:38,760 Speaker 12: They've got the balance sheet, they've got the skills, they've 286 00:12:38,760 --> 00:12:41,360 Speaker 12: got the technology, and they're already established, right, so they've 287 00:12:41,360 --> 00:12:43,920 Speaker 12: got interest in seeing how this develops, how fast it goes, 288 00:12:43,960 --> 00:12:45,320 Speaker 12: how it impacts their bottom line. 289 00:12:45,360 --> 00:12:47,360 Speaker 10: Basically, what are the main hold ups in terms of 290 00:12:47,400 --> 00:12:49,840 Speaker 10: the transition, What are some of the headwinds. 291 00:12:50,960 --> 00:12:55,360 Speaker 12: I mean, capital is obviously raising capital smarts people in 292 00:12:55,400 --> 00:12:58,400 Speaker 12: the right jobs in the right place, push back both 293 00:12:58,440 --> 00:13:00,680 Speaker 12: political and from people. 294 00:13:00,760 --> 00:13:00,920 Speaker 1: Right. 295 00:13:01,080 --> 00:13:03,360 Speaker 12: People love the idea, but as soon as it costs money, 296 00:13:03,400 --> 00:13:05,520 Speaker 12: that's quite a difficult to swallow, especially now in like 297 00:13:05,559 --> 00:13:06,400 Speaker 12: inflationary times. 298 00:13:06,480 --> 00:13:11,240 Speaker 4: Right, is the conversation that evs will eventually supplant internal 299 00:13:11,240 --> 00:13:13,559 Speaker 4: combustion engines and get rid of gas demand. Is that 300 00:13:13,600 --> 00:13:15,959 Speaker 4: still something that you guys are working with in modeling 301 00:13:16,080 --> 00:13:17,600 Speaker 4: or has that conversation evolved? 302 00:13:18,120 --> 00:13:20,800 Speaker 12: It's evolved, I mean that is kind of the trend though. Yeah, 303 00:13:20,800 --> 00:13:23,040 Speaker 12: when you look at things when they're cheaper upfront, right, 304 00:13:23,200 --> 00:13:26,360 Speaker 12: consumers tend to shift towards that. If it's cheaper day 305 00:13:26,360 --> 00:13:29,000 Speaker 12: one for buying an EV versus an internal combustion engine car, 306 00:13:29,040 --> 00:13:30,800 Speaker 12: and all else is equally, you're probably going to see 307 00:13:30,800 --> 00:13:31,480 Speaker 12: a shift towards that. 308 00:13:31,600 --> 00:13:31,800 Speaker 2: Right. 309 00:13:31,920 --> 00:13:34,320 Speaker 4: So we're really though US centric here and we don't 310 00:13:34,320 --> 00:13:35,440 Speaker 4: see that in the same way. 311 00:13:35,480 --> 00:13:37,720 Speaker 10: But elsewhere, is that truly what's happening? 312 00:13:38,120 --> 00:13:38,560 Speaker 5: Yeah, you are. 313 00:13:38,559 --> 00:13:41,280 Speaker 12: You're seeing a big uptick in Europe and in China 314 00:13:41,360 --> 00:13:44,080 Speaker 12: for example, and even here in the US California for example, 315 00:13:44,080 --> 00:13:46,600 Speaker 12: behave it's much more like a European economy. When we 316 00:13:46,600 --> 00:13:49,720 Speaker 12: think about the transition to evs, we've seen really high 317 00:13:49,800 --> 00:13:50,920 Speaker 12: rates of penetration there. 318 00:13:51,440 --> 00:13:53,439 Speaker 10: What are some of the main themes in market dynamics 319 00:13:53,440 --> 00:13:55,120 Speaker 10: that your team is focused on right now? 320 00:13:55,440 --> 00:13:57,960 Speaker 12: Yeah, Like, the rate of this change is interesting. What's 321 00:13:58,000 --> 00:14:01,320 Speaker 12: happening in different markets? What responses. If you take the 322 00:14:01,440 --> 00:14:04,040 Speaker 12: US for example, it's a it's a mature market. So 323 00:14:04,040 --> 00:14:05,840 Speaker 12: when these evs come into the market, you're seeing a 324 00:14:05,880 --> 00:14:09,240 Speaker 12: decline in gasoline sales versus saying in China where it's 325 00:14:09,280 --> 00:14:12,559 Speaker 12: like what could have been doesn't necessarily manifest, right, So 326 00:14:13,080 --> 00:14:15,679 Speaker 12: that turns into then power in your pocket. Right, You're 327 00:14:15,720 --> 00:14:18,360 Speaker 12: seeing the cost of gasoline isn't coming down even though 328 00:14:18,360 --> 00:14:21,280 Speaker 12: you're expecting it to a less gasoline being consumed. There's 329 00:14:21,280 --> 00:14:23,520 Speaker 12: so many more dynamics in just a four wheels on 330 00:14:23,560 --> 00:14:24,720 Speaker 12: the road situation, right, And. 331 00:14:24,640 --> 00:14:26,440 Speaker 10: How are all these things impacting the consumer? 332 00:14:27,440 --> 00:14:29,400 Speaker 12: Yeah, I mean, if you think about costs in your 333 00:14:29,400 --> 00:14:31,240 Speaker 12: pocket when it comes to driving your card, that's a 334 00:14:31,240 --> 00:14:33,040 Speaker 12: big thing, particularly here in the US, particularly in an 335 00:14:33,040 --> 00:14:35,640 Speaker 12: election year. You know, it trickles down into inflation. You 336 00:14:35,680 --> 00:14:37,920 Speaker 12: get something delivered to your house, the cost of diesel 337 00:14:37,960 --> 00:14:41,160 Speaker 12: impacts all of these things, so your consumers are super 338 00:14:41,200 --> 00:14:43,160 Speaker 12: sensitive of anything to do a cost at the moment, 339 00:14:43,360 --> 00:14:45,520 Speaker 12: and probably the biggest development here in the US it's 340 00:14:45,520 --> 00:14:49,120 Speaker 12: been interesting is less consumptional gasoline hasn't turned into less 341 00:14:49,200 --> 00:14:51,360 Speaker 12: prices at it. You know, a lower price at the pump. 342 00:14:51,520 --> 00:14:52,120 Speaker 10: Why do you think that. 343 00:14:52,240 --> 00:14:54,160 Speaker 12: Is Well, this is key. This is something we have 344 00:14:54,200 --> 00:14:56,200 Speaker 12: to think about as you go towards transition. If you 345 00:14:56,240 --> 00:14:58,120 Speaker 12: pull supply in any scenario, you're going to see a 346 00:14:58,160 --> 00:15:01,400 Speaker 12: price spike. In the US, we're seeing less refinery production 347 00:15:01,480 --> 00:15:03,080 Speaker 12: then we have a few years ago. So you're seeing 348 00:15:03,080 --> 00:15:04,920 Speaker 12: over a million baros per day cut in the last 349 00:15:04,960 --> 00:15:06,880 Speaker 12: two three years alone. And when you have a less 350 00:15:06,880 --> 00:15:09,200 Speaker 12: supply of something, even if you have less demand, it 351 00:15:09,200 --> 00:15:12,720 Speaker 12: really depends on which one goes first and HASP deduct changes. 352 00:15:12,720 --> 00:15:14,640 Speaker 10: And so what are people thinking when will this all 353 00:15:14,680 --> 00:15:15,200 Speaker 10: shake out? 354 00:15:15,880 --> 00:15:18,400 Speaker 12: I mean it's shaking out already. It's already checking out 355 00:15:18,440 --> 00:15:20,000 Speaker 12: in the fore court when people are buying the car. 356 00:15:20,160 --> 00:15:22,920 Speaker 12: You're seeing the response some refiners, for example, some big 357 00:15:22,920 --> 00:15:25,160 Speaker 12: refineries like P sixty six are switching some of their 358 00:15:25,200 --> 00:15:28,640 Speaker 12: facilities to make things like renewable diesel or sustainable aviation fuel. 359 00:15:29,240 --> 00:15:32,120 Speaker 12: So people are posturing. Companies are posting for the next five, six, 360 00:15:32,240 --> 00:15:34,560 Speaker 12: seven years, right, which. 361 00:15:34,400 --> 00:15:36,120 Speaker 4: Is such a great point because I guess the question 362 00:15:36,160 --> 00:15:39,400 Speaker 4: then becomes, if we're posturing for the seven or eight years, 363 00:15:40,000 --> 00:15:42,600 Speaker 4: what does the landscape in your world look like then? 364 00:15:43,080 --> 00:15:46,000 Speaker 4: I mean everyone seems to say it's a yes, and 365 00:15:46,240 --> 00:15:49,600 Speaker 4: we need everything above all, And is that how you 366 00:15:49,640 --> 00:15:50,160 Speaker 4: model it? 367 00:15:50,440 --> 00:15:52,560 Speaker 12: That is how we model it. In our sort of 368 00:15:52,600 --> 00:15:56,000 Speaker 12: standard outlook twenty twenty nine, we see peak oil consumption globally, 369 00:15:56,000 --> 00:15:57,840 Speaker 12: so that's still pretty far out. There's still a lot 370 00:15:57,840 --> 00:15:58,480 Speaker 12: of growth left. 371 00:15:58,640 --> 00:16:00,480 Speaker 4: Also, peak doesn't mean the then it goes to zero. 372 00:16:01,280 --> 00:16:03,240 Speaker 4: I feel like that's something we need to also wraprimind around, 373 00:16:03,280 --> 00:16:05,000 Speaker 4: like just because it's not increasing, it doesn't mean it's 374 00:16:05,120 --> 00:16:06,000 Speaker 4: rapidly decreasing. 375 00:16:06,080 --> 00:16:06,880 Speaker 5: Yeah, you're totally right. 376 00:16:06,920 --> 00:16:08,800 Speaker 12: Even in like a net zero world, in our modeling, 377 00:16:08,840 --> 00:16:11,000 Speaker 12: you get about twenty five million boos per day of oil, 378 00:16:11,120 --> 00:16:13,160 Speaker 12: So you know net zero doesn't mean zero oil. 379 00:16:14,400 --> 00:16:15,920 Speaker 10: So what does the growth outlook here? 380 00:16:17,080 --> 00:16:19,200 Speaker 12: You're looking at about four or five million boos per 381 00:16:19,280 --> 00:16:21,800 Speaker 12: day upside in our inner base case scenario. But lots 382 00:16:21,840 --> 00:16:24,120 Speaker 12: of things can change that, right. Policies are the main 383 00:16:24,160 --> 00:16:26,600 Speaker 12: thing to look at, particularly in big markets like the US. Right, 384 00:16:26,640 --> 00:16:29,800 Speaker 12: the US consumers is about one in every five bowels globally, 385 00:16:30,200 --> 00:16:32,640 Speaker 12: so if something changes here, the whole market can change. 386 00:16:32,680 --> 00:16:34,120 Speaker 12: The dynamic is really upended. 387 00:16:34,520 --> 00:16:36,480 Speaker 4: When we take a look at say China and India, 388 00:16:36,640 --> 00:16:40,120 Speaker 4: large consumers of energy, obviously, are they jumping from coal 389 00:16:40,160 --> 00:16:40,480 Speaker 4: to what. 390 00:16:41,000 --> 00:16:43,520 Speaker 12: You know, gases of transition fuel? We're see seeing them 391 00:16:43,520 --> 00:16:46,120 Speaker 12: shift towards I was just in Beijing last week, and 392 00:16:46,160 --> 00:16:48,000 Speaker 12: there's a very different way of looking at the oil 393 00:16:48,040 --> 00:16:51,040 Speaker 12: market versus if you're down in Texas, Right, it's what's 394 00:16:51,120 --> 00:16:53,640 Speaker 12: the displacement? Because they need more and more energy, right, 395 00:16:53,640 --> 00:16:55,440 Speaker 12: they don't want to import that energy, So what can 396 00:16:55,480 --> 00:16:58,160 Speaker 12: you do domestically In the case of power, that's coal. 397 00:16:58,200 --> 00:16:59,960 Speaker 12: But we're also seeing in the case of evs, right, 398 00:17:00,120 --> 00:17:03,000 Speaker 12: LNG trucks, even electric trucks. So we have a lot 399 00:17:03,040 --> 00:17:05,280 Speaker 12: we can learn from them. But they're just different, very 400 00:17:05,280 --> 00:17:06,199 Speaker 12: different markets. 401 00:17:06,240 --> 00:17:08,520 Speaker 4: And how did they get there? Is it because of subsidies? 402 00:17:08,640 --> 00:17:11,960 Speaker 4: Is it because they were so dependent on coal? Like 403 00:17:12,080 --> 00:17:15,399 Speaker 4: what leads that transition there differently than say in the US. 404 00:17:15,720 --> 00:17:18,960 Speaker 12: Yeah, I mean, I think it's dependency on imports. For 405 00:17:19,119 --> 00:17:21,960 Speaker 12: one example, they've got a lot of national champions, and 406 00:17:22,040 --> 00:17:24,440 Speaker 12: to be honest, when they say they're going to do something, 407 00:17:24,560 --> 00:17:27,000 Speaker 12: they do it in Europe and in the US you 408 00:17:27,040 --> 00:17:28,520 Speaker 12: got to get it through parliament, you got to get 409 00:17:28,520 --> 00:17:31,119 Speaker 12: it through votes. It's a lot slow over process, and 410 00:17:31,160 --> 00:17:34,639 Speaker 12: there's less domestic manufacturers like Tesla's a big, big player here, 411 00:17:34,680 --> 00:17:36,359 Speaker 12: but it's kind of it in China. You've got a 412 00:17:36,440 --> 00:17:38,760 Speaker 12: lot of big producers, a lot of big industrial champions, right, 413 00:17:38,800 --> 00:17:41,080 Speaker 12: and they're encouraged by the States and by the city 414 00:17:41,200 --> 00:17:42,480 Speaker 12: and by incentives. 415 00:17:42,760 --> 00:17:45,280 Speaker 10: So how do we fit into the bigger international ecosystem. 416 00:17:46,400 --> 00:17:48,200 Speaker 12: Well, for the US, one of the most important things 417 00:17:48,240 --> 00:17:50,640 Speaker 12: is it's sort of gasoline production. Machines send a lot 418 00:17:50,640 --> 00:17:55,119 Speaker 12: of gasoline abroad South America, Europe. Even so there's a 419 00:17:55,160 --> 00:17:57,919 Speaker 12: change coming along for US refiners basically, and you're starting 420 00:17:57,920 --> 00:18:01,400 Speaker 12: to see how they just their positioning in a sort 421 00:18:01,400 --> 00:18:02,680 Speaker 12: of a market leading way. 422 00:18:02,720 --> 00:18:05,440 Speaker 3: I think our Thanks to David Doherty, head of Oil 423 00:18:05,440 --> 00:18:07,440 Speaker 3: and Renewable Fuels Research, this. 424 00:18:07,320 --> 00:18:10,720 Speaker 4: Week, Bloomberg Intelligence broadcasted live from the earth Shot Summit 425 00:18:10,760 --> 00:18:12,440 Speaker 4: at the Plaza Hotel in New York City. 426 00:18:12,600 --> 00:18:16,040 Speaker 3: The summit celebrated innovators who are trailblazing solutions to repair 427 00:18:16,080 --> 00:18:19,120 Speaker 3: our Planet and the event was co hosted by Bloomberg Philanthropies. 428 00:18:19,280 --> 00:18:22,000 Speaker 4: Guest host Damien Sassaur and I were joined by Robi Menon, 429 00:18:22,160 --> 00:18:24,360 Speaker 4: Singapore's Ambassador for climate Change. 430 00:18:24,440 --> 00:18:27,199 Speaker 3: He discussed the global impact of central bank policies and 431 00:18:27,320 --> 00:18:29,639 Speaker 3: also sustainable finance in Southeast Asia. 432 00:18:29,880 --> 00:18:32,400 Speaker 4: I first asked Rabbi to reflect on his former role 433 00:18:32,440 --> 00:18:35,200 Speaker 4: as Managing Director of the Monetary Authority of Singapore. 434 00:18:35,440 --> 00:18:37,240 Speaker 11: Well, I've been a bit removed from that scene for 435 00:18:37,320 --> 00:18:39,960 Speaker 11: quite a while now, so, but if I were to 436 00:18:40,000 --> 00:18:42,800 Speaker 11: reflect back two years ago when we were all facing 437 00:18:42,840 --> 00:18:47,119 Speaker 11: a surge in inflation globally, and the conventional view at 438 00:18:47,119 --> 00:18:51,119 Speaker 11: that time, which I subscribed to also was that given 439 00:18:51,160 --> 00:18:56,000 Speaker 11: how low interest rates were and how easy and accommodative 440 00:18:56,040 --> 00:18:59,600 Speaker 11: monetary policies have been for ten years, the catch up 441 00:18:59,640 --> 00:19:03,040 Speaker 11: to tie rates to bring down this inflation is going 442 00:19:03,080 --> 00:19:05,960 Speaker 11: to be unprecedented. And indeed there are heights in rates 443 00:19:05,960 --> 00:19:08,680 Speaker 11: and the tightening of monetary policy, including in Singapore through 444 00:19:08,680 --> 00:19:15,159 Speaker 11: the exchange rate, was quite significant, and I thought this 445 00:19:15,400 --> 00:19:18,000 Speaker 11: was going to come at the cost of a severe 446 00:19:18,040 --> 00:19:22,200 Speaker 11: slowdown in economic growth and rise in unemployment. I'm talking 447 00:19:22,200 --> 00:19:25,760 Speaker 11: globally right, and this has been the case in all 448 00:19:26,080 --> 00:19:31,560 Speaker 11: previous instances. I think looking back, we've done not too badly. 449 00:19:32,440 --> 00:19:37,919 Speaker 11: We've avoided major recession in the major economies. There hasn't 450 00:19:37,960 --> 00:19:41,240 Speaker 11: been any sizeable increase in unemployment, the labor market has 451 00:19:41,280 --> 00:19:45,480 Speaker 11: been quite resilient, and surely, but surely, you know, we've 452 00:19:45,520 --> 00:19:49,000 Speaker 11: been bringing down inflation. I think this is a credit 453 00:19:49,040 --> 00:19:51,560 Speaker 11: to many of my ex colleagues in the central banking world. 454 00:19:52,680 --> 00:19:55,959 Speaker 11: I will not comment on specific policy moves such as 455 00:19:55,960 --> 00:19:58,840 Speaker 11: the one they made recently, but I think we should 456 00:19:58,880 --> 00:20:01,880 Speaker 11: step back and see we actually did not do badly. 457 00:20:01,960 --> 00:20:04,600 Speaker 11: It could have been much worse to be able to 458 00:20:04,640 --> 00:20:09,200 Speaker 11: ease this early, but that itself is the right move. 459 00:20:09,240 --> 00:20:11,359 Speaker 11: I would not come in, but the fact that we 460 00:20:11,359 --> 00:20:15,760 Speaker 11: were even having this conversation about easing about stimulus, when 461 00:20:15,800 --> 00:20:18,159 Speaker 11: not too long ago we were fighting inflation. It has 462 00:20:18,200 --> 00:20:20,800 Speaker 11: come down, so I think this has been quite remarkable. 463 00:20:21,760 --> 00:20:24,640 Speaker 4: And this also brings sort of the question of climate 464 00:20:24,680 --> 00:20:27,920 Speaker 4: action and financing that part of the market as well, 465 00:20:28,000 --> 00:20:30,399 Speaker 4: because part of the conversation here in the US with 466 00:20:30,400 --> 00:20:33,840 Speaker 4: the Inflation Reduction Act is that that in essence is inflationary, 467 00:20:34,359 --> 00:20:37,119 Speaker 4: and that the more money that every country spends on 468 00:20:37,240 --> 00:20:40,119 Speaker 4: greeting stuff, the more you're going to create sort of 469 00:20:40,119 --> 00:20:41,119 Speaker 4: an inflation bubble. 470 00:20:41,560 --> 00:20:42,160 Speaker 5: Is that true? 471 00:20:42,200 --> 00:20:46,360 Speaker 11: From where you sit, I think that that is going 472 00:20:46,400 --> 00:20:49,800 Speaker 11: to be at best quite short term. Some stimulus through 473 00:20:49,880 --> 00:20:54,120 Speaker 11: any new investments going into an area of scarcity will 474 00:20:54,200 --> 00:20:58,520 Speaker 11: create some price pressures and demand pressures against limited supply. 475 00:20:59,160 --> 00:21:02,760 Speaker 11: But the objective of the Inflation Reduction Act as it is, 476 00:21:02,960 --> 00:21:06,920 Speaker 11: as is the objective of similar packages in every other country, 477 00:21:07,200 --> 00:21:10,240 Speaker 11: is to expand the supply capacity. Is to expand the 478 00:21:10,280 --> 00:21:14,120 Speaker 11: supply capacity for renewables, for cleaner technologies and so on. 479 00:21:14,440 --> 00:21:17,440 Speaker 11: So yes, in the short term that capacity has not increased, 480 00:21:17,480 --> 00:21:20,320 Speaker 11: you will get momentary increase in inflation and price pressures 481 00:21:20,600 --> 00:21:23,680 Speaker 11: as you put in demand. But when the supply capacity increases, 482 00:21:23,920 --> 00:21:29,000 Speaker 11: that stabilized. So as with any industrial transformation or restructuring, 483 00:21:29,400 --> 00:21:31,960 Speaker 11: there will be short term price effects, but that should 484 00:21:32,000 --> 00:21:33,119 Speaker 11: even out once a supply and. 485 00:21:33,119 --> 00:21:33,800 Speaker 2: Demanded back in. 486 00:21:33,880 --> 00:21:37,840 Speaker 11: So I don't think there's anything inherently inflationary in these packages. 487 00:21:37,960 --> 00:21:41,320 Speaker 13: In Singapore's key position along the Malacostrait, it sits between 488 00:21:41,440 --> 00:21:44,119 Speaker 13: two of the largest polluting countries on the planet, that 489 00:21:44,240 --> 00:21:47,280 Speaker 13: being China and India. Talk to us about your location 490 00:21:47,400 --> 00:21:50,720 Speaker 13: in the world, your geostrategic location. How are you addressing 491 00:21:50,840 --> 00:21:55,640 Speaker 13: those two nations their capability to enact climate change. 492 00:21:56,480 --> 00:22:01,199 Speaker 11: I think both China and India have huge potential to 493 00:22:01,240 --> 00:22:06,600 Speaker 11: address a climate challenge, particularly with respect to mitigation and 494 00:22:06,680 --> 00:22:11,200 Speaker 11: renewable energy. The countries are large. We often forget that 495 00:22:11,320 --> 00:22:15,840 Speaker 11: China is installing more renewable capacity each year than the 496 00:22:15,840 --> 00:22:19,240 Speaker 11: rest of the world put together. India is a close second. 497 00:22:20,200 --> 00:22:24,040 Speaker 11: So these two countries, in terms of their geography, are 498 00:22:24,080 --> 00:22:28,000 Speaker 11: well endowed to deploy clean energy, but they're going to 499 00:22:28,040 --> 00:22:30,879 Speaker 11: take time because what we forget is that energy demand 500 00:22:30,920 --> 00:22:34,440 Speaker 11: in these countries is also increasing rapidly. The energy consumption 501 00:22:34,520 --> 00:22:37,280 Speaker 11: per capita in China and India is a fraction of 502 00:22:37,280 --> 00:22:41,000 Speaker 11: that in the West, and there are still many villages 503 00:22:41,160 --> 00:22:45,680 Speaker 11: without access to electricity. So even as they install solar capacity, 504 00:22:45,920 --> 00:22:48,960 Speaker 11: they're having to build cold plants and keep their fossil 505 00:22:49,000 --> 00:22:51,720 Speaker 11: fuel plants running to meet that, which is why they're 506 00:22:51,720 --> 00:22:55,040 Speaker 11: going to take longer. But surely they will get there 507 00:22:55,320 --> 00:22:59,720 Speaker 11: because of the inherent capacity for renewable energy. Actually, where 508 00:23:00,320 --> 00:23:05,560 Speaker 11: more is Southeast Asia because similar situation, rapid growth and 509 00:23:05,680 --> 00:23:09,680 Speaker 11: energy demand, rise of middle class urbanization, people having access 510 00:23:09,720 --> 00:23:10,480 Speaker 11: to electricity. 511 00:23:10,800 --> 00:23:12,920 Speaker 5: You mean Indonesia, Philippines, Vietnam. 512 00:23:13,119 --> 00:23:17,080 Speaker 11: Yes, all the countries around US, including US, we are 513 00:23:17,520 --> 00:23:22,679 Speaker 11: in many ways alternative energy disadvantaged single pore, particularly so 514 00:23:22,760 --> 00:23:26,520 Speaker 11: because we're a small island city state. Imagine New York, 515 00:23:26,960 --> 00:23:31,720 Speaker 11: you know, deploys clean energy entirely within the city. But 516 00:23:31,840 --> 00:23:34,800 Speaker 11: even in the countries that are relatively well endowed, they 517 00:23:34,800 --> 00:23:38,639 Speaker 11: do have challenges with great for instance, is forested mountainous. 518 00:23:39,040 --> 00:23:42,640 Speaker 11: Laying those transmission lines is not easy, not straightforward, and 519 00:23:42,720 --> 00:23:47,920 Speaker 11: the distribution of renewable energy capacity is very uneven geographically 520 00:23:47,920 --> 00:23:51,200 Speaker 11: across Southeast Asia. So I think that's a very bigger challenge. 521 00:23:51,280 --> 00:23:54,800 Speaker 4: Might be what about financing? We have like thirty seconds left. 522 00:23:54,600 --> 00:23:57,680 Speaker 4: What's the biggest hurdle to financing all of this? 523 00:23:57,880 --> 00:23:58,280 Speaker 5: Right now? 524 00:23:58,800 --> 00:24:01,320 Speaker 11: There is enough private capital in the world to solve 525 00:24:01,320 --> 00:24:04,600 Speaker 11: the climate crisis. There is enough financing if you look 526 00:24:04,640 --> 00:24:08,159 Speaker 11: at the annual flows of financial assets well in excess 527 00:24:08,200 --> 00:24:11,600 Speaker 11: of the funding gap. The problem is you need to 528 00:24:11,640 --> 00:24:16,439 Speaker 11: find bankable projects at appropriate risk return metrics. And this 529 00:24:16,520 --> 00:24:19,320 Speaker 11: is why you need blended finance with public capital coming 530 00:24:19,359 --> 00:24:23,560 Speaker 11: in to catalyze private capital. That synergistic combination is what 531 00:24:23,640 --> 00:24:25,880 Speaker 11: we need and that will be enough to solve this 532 00:24:26,320 --> 00:24:26,560 Speaker 11: all right. 533 00:24:26,560 --> 00:24:29,800 Speaker 3: Thanks to Ravi men On, Singapore's Ambassador for Climate Change. 534 00:24:29,960 --> 00:24:31,920 Speaker 4: Coming up on the program, a look at policies in 535 00:24:31,960 --> 00:24:34,120 Speaker 4: the European Green Deal that look to make the European 536 00:24:34,240 --> 00:24:36,119 Speaker 4: Union climate neutral by twenty fifty. 537 00:24:36,320 --> 00:24:39,520 Speaker 3: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 538 00:24:39,560 --> 00:24:42,040 Speaker 3: depth research and data on two thousand companies and one 539 00:24:42,119 --> 00:24:45,280 Speaker 3: hundred and thirty industries. You can access Bloomberg Intelligence via 540 00:24:45,359 --> 00:24:46,800 Speaker 3: Bigo on the terminal. 541 00:24:46,960 --> 00:24:50,200 Speaker 4: I'm Bailey Liptoles and I'm Alex Steel, and this is Bloomberg. 542 00:24:55,160 --> 00:24:59,000 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 543 00:24:59,080 --> 00:25:02,920 Speaker 2: weekdays and ten Eastern on applecar Play and Android Auto 544 00:25:03,040 --> 00:25:05,840 Speaker 2: with the Bloomberg Business Act. You can also listen live 545 00:25:05,920 --> 00:25:09,080 Speaker 2: on Amazon Alexa from our flagship New York station, Just 546 00:25:09,160 --> 00:25:11,800 Speaker 2: say Alexa Play Bloomberg eleven thirty. 547 00:25:13,600 --> 00:25:16,119 Speaker 3: I'm Alex Steel and I'm Bailey Lipschaltz filling in for 548 00:25:16,160 --> 00:25:16,760 Speaker 3: Paul Sweeny. 549 00:25:16,840 --> 00:25:19,640 Speaker 4: We continue with conversations from our broadcast at the earth 550 00:25:19,720 --> 00:25:22,160 Speaker 4: Shot Summit at the Plaza Hotel in New York City. 551 00:25:22,320 --> 00:25:25,920 Speaker 3: The summit celebrated innovators who are trailblazing solutions to repair 552 00:25:25,960 --> 00:25:29,120 Speaker 3: our planet, and the event was co hosted by Bloomberg Philanthropies. 553 00:25:29,280 --> 00:25:31,800 Speaker 4: At the event, we looked at the European Green Deal. 554 00:25:31,920 --> 00:25:33,840 Speaker 4: In the Deal, there is a set of policies that 555 00:25:33,880 --> 00:25:36,919 Speaker 4: look to make the European Union climate neutral by twenty fifty. 556 00:25:37,119 --> 00:25:39,720 Speaker 3: To achieve this, the European Commission has pledged to mobilize 557 00:25:39,720 --> 00:25:43,480 Speaker 3: at least one trillion euros in sustainable finance Investing. 558 00:25:43,720 --> 00:25:46,640 Speaker 4: Guest host Damien Sassaur and I were joined by Nania Calvino, 559 00:25:46,760 --> 00:25:49,359 Speaker 4: president of the European Investment Bank, and she talked about 560 00:25:49,359 --> 00:25:51,960 Speaker 4: the bank's role in the European Green Deal. We first 561 00:25:52,000 --> 00:25:54,440 Speaker 4: asked Nadia whether the bank is meeting its targets. 562 00:25:54,800 --> 00:25:57,000 Speaker 14: Yes, well, it's going well, it's going well. We are 563 00:25:57,040 --> 00:25:59,359 Speaker 14: on track to meet the target of one trillion euros 564 00:25:59,359 --> 00:26:02,520 Speaker 14: in investment green finance. More than fifty percent of our 565 00:26:02,560 --> 00:26:06,440 Speaker 14: annual investments go to the climate transition to the green finance, 566 00:26:06,680 --> 00:26:08,920 Speaker 14: so as to make it a success, a European success, 567 00:26:08,960 --> 00:26:10,359 Speaker 14: a global success for all of us. 568 00:26:10,400 --> 00:26:12,960 Speaker 4: But why do I keep hearing then that Europe has 569 00:26:13,040 --> 00:26:15,040 Speaker 4: more at the stick approach and the US has the 570 00:26:15,080 --> 00:26:17,320 Speaker 4: carrot approach with the IRA, How did they differ. 571 00:26:18,000 --> 00:26:20,879 Speaker 14: Well, I think that we have a shared endeavor, you know, 572 00:26:20,960 --> 00:26:23,760 Speaker 14: which is to ensure that we do this green transition, 573 00:26:23,880 --> 00:26:26,080 Speaker 14: that we move to a net zero economy, and that 574 00:26:26,160 --> 00:26:27,119 Speaker 14: this is profitable. 575 00:26:27,480 --> 00:26:29,439 Speaker 15: Well, my side of things is the carrots. 576 00:26:29,480 --> 00:26:32,879 Speaker 14: Actually I am the investor, so we are probably we 577 00:26:32,920 --> 00:26:35,680 Speaker 14: are the largest multilateral development bank in the world. Maybe 578 00:26:35,720 --> 00:26:38,160 Speaker 14: people don't know. With a six hundred billion balance sheet. 579 00:26:38,520 --> 00:26:41,000 Speaker 14: Ninety percent of the investments are done in the EU, 580 00:26:41,400 --> 00:26:44,439 Speaker 14: where we are the largest investor in renewables. We're probably 581 00:26:44,440 --> 00:26:47,240 Speaker 14: one of the largest investors in renewables in the in 582 00:26:47,240 --> 00:26:48,000 Speaker 14: the whole world. 583 00:26:48,280 --> 00:26:48,880 Speaker 5: Well not yet. 584 00:26:48,880 --> 00:26:52,520 Speaker 13: I mean renewables is a very broad topic, solar, wind, water, nuclear, 585 00:26:52,840 --> 00:26:54,920 Speaker 13: Talk to us about where you're deploying your balance sheet. 586 00:26:54,960 --> 00:26:57,560 Speaker 5: I mean, six hundred billions, a lot of money, well. 587 00:26:57,320 --> 00:26:59,199 Speaker 14: More than fifty percent, as I said, is going to 588 00:26:59,240 --> 00:27:03,760 Speaker 14: climate finance, and this is sustainable infrastructures, This is sustainable transport. 589 00:27:04,160 --> 00:27:08,680 Speaker 14: This is also renewables, wind energy, greeds, solar, and also 590 00:27:08,800 --> 00:27:11,800 Speaker 14: new fuels, the fuels of the future, for example green hydrogen. 591 00:27:12,040 --> 00:27:16,600 Speaker 14: We're supporting very innovative, large projects, also large traditional infrastructures, 592 00:27:16,960 --> 00:27:19,720 Speaker 14: and dynamic startups that are really going to be the 593 00:27:19,720 --> 00:27:23,560 Speaker 14: ones finding the technologies, the breakthrough technologies for all of us. 594 00:27:23,600 --> 00:27:26,440 Speaker 4: I mean we've seen with hydrogen though that it's hard. 595 00:27:26,760 --> 00:27:30,119 Speaker 4: That green hydrogen particular is quite hard. I mean Germany 596 00:27:30,200 --> 00:27:32,399 Speaker 4: had a sort of backtrack from that in particular with 597 00:27:32,440 --> 00:27:36,480 Speaker 4: the war in Ukraine. In addition, like Oorsid dropped and 598 00:27:36,560 --> 00:27:39,720 Speaker 4: had to ditch out on a hydrogen project. Can you 599 00:27:39,760 --> 00:27:41,040 Speaker 4: do hydrogen profitably? 600 00:27:41,320 --> 00:27:42,200 Speaker 15: And how do you do that? 601 00:27:42,280 --> 00:27:44,399 Speaker 14: But we have to, we have to because it is 602 00:27:44,560 --> 00:27:48,080 Speaker 14: can right now, well we are right now. We're investing 603 00:27:48,080 --> 00:27:50,239 Speaker 14: in a number of projects in Europe which are more 604 00:27:50,320 --> 00:27:53,680 Speaker 14: having to do with industry hubs. So we are greening 605 00:27:53,840 --> 00:27:58,080 Speaker 14: industry highly polluting, highly energy intensive, so like a cement 606 00:27:58,240 --> 00:28:02,800 Speaker 14: industry that yes, still you know, all these large industry 607 00:28:03,160 --> 00:28:04,400 Speaker 14: so we are. 608 00:28:04,080 --> 00:28:06,840 Speaker 16: We're seeing, for example, close to port to Report in 609 00:28:06,880 --> 00:28:09,000 Speaker 16: the south of Portugal, we're going to have a green 610 00:28:09,080 --> 00:28:13,119 Speaker 16: hydrogen hub, so that's very close to traditional industries and 611 00:28:13,160 --> 00:28:15,760 Speaker 16: we're helping them become green and also profitable. 612 00:28:16,600 --> 00:28:18,240 Speaker 15: Likewise in other parts of Europe. 613 00:28:18,320 --> 00:28:20,800 Speaker 14: You know, we are at the early stages of these 614 00:28:20,840 --> 00:28:22,960 Speaker 14: new technologies and it is only normal you know that 615 00:28:23,080 --> 00:28:26,600 Speaker 14: some projects fail, that some projects are succeeding, and that's 616 00:28:27,000 --> 00:28:30,040 Speaker 14: that's why we are the European Investment Bank is a 617 00:28:30,040 --> 00:28:33,000 Speaker 14: public investment bank to take the risk, to make sure 618 00:28:33,080 --> 00:28:37,119 Speaker 14: that patient capital, long term investors are taking those risks, 619 00:28:37,160 --> 00:28:39,880 Speaker 14: so that also we mobilize private capital and we make 620 00:28:39,920 --> 00:28:40,720 Speaker 14: this a success. 621 00:28:41,240 --> 00:28:43,520 Speaker 13: Well, you know, other multi level finance institutions, I mean 622 00:28:43,560 --> 00:28:46,440 Speaker 13: development banks out for example China, Korea, et cetera, have 623 00:28:46,520 --> 00:28:49,120 Speaker 13: had a very poor track record of deploying capital profitably. 624 00:28:49,160 --> 00:28:50,720 Speaker 13: And you know, I know the IIB is different. I 625 00:28:50,760 --> 00:28:52,800 Speaker 13: know the World Bank Group is very very different. And 626 00:28:52,840 --> 00:28:55,320 Speaker 13: I know we're talking about perpetual capital, perpetual investments. 627 00:28:55,520 --> 00:28:57,760 Speaker 5: But the end of the day, you do have to 628 00:28:57,760 --> 00:28:58,880 Speaker 5: get a return on your investment. 629 00:28:58,920 --> 00:29:01,280 Speaker 13: So talk to us about which set within the broader 630 00:29:01,680 --> 00:29:05,360 Speaker 13: renewable space, within the border climate space carry the highest 631 00:29:05,400 --> 00:29:07,080 Speaker 13: return on investment from your perspective. 632 00:29:07,440 --> 00:29:10,040 Speaker 15: Well, actually, we are very profitable. Let me be very clear. 633 00:29:10,080 --> 00:29:11,960 Speaker 14: The fact that we're a public bank doesn't mean that 634 00:29:12,000 --> 00:29:13,800 Speaker 14: I don't have to deliver for ashholders. 635 00:29:14,200 --> 00:29:17,160 Speaker 15: So around two billion euros we had in profit last year. 636 00:29:17,200 --> 00:29:20,080 Speaker 15: We've been profitable since the bank, since its inception. 637 00:29:20,600 --> 00:29:23,640 Speaker 14: We have a very low return very low level of 638 00:29:23,680 --> 00:29:26,280 Speaker 14: non performing assets. When I say very low, I mean 639 00:29:26,360 --> 00:29:27,760 Speaker 14: like zero point four percent. 640 00:29:27,520 --> 00:29:28,120 Speaker 5: Of our assets. 641 00:29:28,200 --> 00:29:28,520 Speaker 13: Huh. 642 00:29:28,560 --> 00:29:30,160 Speaker 15: So it is a very profitable bank. 643 00:29:30,200 --> 00:29:32,040 Speaker 14: And what we have is a very large balance sheet 644 00:29:32,040 --> 00:29:37,160 Speaker 14: and very balanced portfolio with large infrastructures, traditional infrastructures which 645 00:29:37,200 --> 00:29:42,120 Speaker 14: are very profitable, lower risk and also highly risky endeavors 646 00:29:42,200 --> 00:29:46,760 Speaker 14: like innovative startups or large investments into new green technologies. 647 00:29:46,920 --> 00:29:48,760 Speaker 14: And that's what's allowing us, I think, to make a 648 00:29:48,760 --> 00:29:51,720 Speaker 14: difference in making projects bankable at the end of the day. 649 00:29:51,840 --> 00:29:53,560 Speaker 4: So what have you noticed in terms of if you 650 00:29:53,560 --> 00:29:56,720 Speaker 4: support a project, does it bring in private investors and 651 00:29:56,800 --> 00:29:58,440 Speaker 4: private capital at. 652 00:29:58,360 --> 00:29:59,680 Speaker 15: The end of the day, it does? 653 00:30:00,600 --> 00:30:02,680 Speaker 14: You know, the European Investment Bank is considered to be 654 00:30:02,720 --> 00:30:06,360 Speaker 14: a reference in terms of technical expertise in some areas 655 00:30:06,400 --> 00:30:10,080 Speaker 14: for example green for example health. So once the EiV 656 00:30:10,240 --> 00:30:12,960 Speaker 14: says yes, I'm going to invest in this project, immediately 657 00:30:13,000 --> 00:30:14,560 Speaker 14: a number of investors say I. 658 00:30:14,640 --> 00:30:16,760 Speaker 5: Join, naddie. I'd love to ask you a question. 659 00:30:16,760 --> 00:30:19,080 Speaker 13: I mean, in my world, the emerging market space, there 660 00:30:19,080 --> 00:30:23,440 Speaker 13: has been an absolute explosion of sustainable finance vehicles and mechanisms, 661 00:30:23,440 --> 00:30:25,800 Speaker 13: you know, green bonds, clean bonds, you name it. 662 00:30:26,000 --> 00:30:27,520 Speaker 5: I'm curious to hear your thoughts about a lot of that. 663 00:30:27,560 --> 00:30:29,320 Speaker 13: I mean a lot of sovereign nations, a lot of 664 00:30:29,320 --> 00:30:32,760 Speaker 13: countries are issuing that under this green bond umbrella. 665 00:30:33,200 --> 00:30:34,320 Speaker 5: You know, do you believe in that? 666 00:30:34,320 --> 00:30:36,000 Speaker 13: Do you think they're just green washing or are they 667 00:30:36,000 --> 00:30:38,920 Speaker 13: really deploying that capital in a clean and efficient way. 668 00:30:39,320 --> 00:30:41,800 Speaker 14: We have to ensure, indeed that the green bond standards 669 00:30:41,840 --> 00:30:44,200 Speaker 14: around the world are not green washing, and that that 670 00:30:44,240 --> 00:30:46,800 Speaker 14: should be a top priority. Otherwise, you know, once you 671 00:30:46,840 --> 00:30:49,800 Speaker 14: lose the credibility, then you lose everything in capital markets. 672 00:30:49,840 --> 00:30:51,000 Speaker 15: I don't have to explain it to you. 673 00:30:51,520 --> 00:30:53,680 Speaker 14: So that's why I think we have a very important 674 00:30:53,840 --> 00:30:58,000 Speaker 14: shared interest in having global standards, you know, the taxonomies 675 00:30:58,000 --> 00:30:59,840 Speaker 14: that are being developed in different parts of the world. 676 00:31:00,040 --> 00:31:02,840 Speaker 14: Europe has been a pioneer in that area. Also, the 677 00:31:02,840 --> 00:31:05,880 Speaker 14: European Investment Bank, by the way, has pioneered green bonds, 678 00:31:05,920 --> 00:31:08,800 Speaker 14: and we have to make sure that those standards are 679 00:31:08,840 --> 00:31:12,600 Speaker 14: met and that green investments are really green, so that 680 00:31:12,680 --> 00:31:15,360 Speaker 14: we make sure that this is providing sufficient finance to 681 00:31:15,440 --> 00:31:16,600 Speaker 14: close the investment gap. 682 00:31:16,920 --> 00:31:19,440 Speaker 4: How do you offset your risk? Sorry, how do you 683 00:31:19,480 --> 00:31:22,480 Speaker 4: offset risk when you're taking on riskier projects? 684 00:31:22,640 --> 00:31:25,320 Speaker 14: Well, we have a capital base. But generally what we 685 00:31:25,360 --> 00:31:28,280 Speaker 14: do is that we have riskier and less risky projects, 686 00:31:28,320 --> 00:31:31,160 Speaker 14: and we mobilize our capital in a very wise manner. 687 00:31:31,200 --> 00:31:34,120 Speaker 14: You know, sometimes our shareholders and say you should take 688 00:31:34,120 --> 00:31:35,840 Speaker 14: on more risk because that's what your. 689 00:31:35,680 --> 00:31:36,440 Speaker 15: Capital is for. 690 00:31:36,680 --> 00:31:39,760 Speaker 14: But I think that we have a relatively good balance 691 00:31:39,800 --> 00:31:41,280 Speaker 14: in terms of can you give me. 692 00:31:41,200 --> 00:31:43,200 Speaker 4: A balance on that, Like what would be considered a 693 00:31:43,240 --> 00:31:46,160 Speaker 4: low risk project, what we considered a high risk For example, well. 694 00:31:46,560 --> 00:31:50,240 Speaker 14: An infrastructure in a European country, that is a low 695 00:31:50,360 --> 00:31:55,000 Speaker 14: risk project. When we're building trains or rolling stock or 696 00:31:55,120 --> 00:31:58,120 Speaker 14: or a metro or port. I mean this is a 697 00:31:58,360 --> 00:32:00,680 Speaker 14: I mean we are lending to a sovereign state which 698 00:32:00,680 --> 00:32:04,280 Speaker 14: has a very high rating, and this is our shareholders. 699 00:32:04,400 --> 00:32:08,360 Speaker 14: So investments within the EU are considered to be generally 700 00:32:08,480 --> 00:32:11,120 Speaker 14: lower risk. Or for example, we do also through the 701 00:32:11,120 --> 00:32:13,440 Speaker 14: financial sector, we do lending to SMEs in. 702 00:32:13,400 --> 00:32:16,600 Speaker 15: Europe that is very profitable, lower risk. 703 00:32:16,720 --> 00:32:19,000 Speaker 14: Then if we are investing in a very large project 704 00:32:19,080 --> 00:32:22,280 Speaker 14: one billion, two billion project in green hydrogen, as you 705 00:32:22,320 --> 00:32:24,280 Speaker 14: were single, you know. 706 00:32:23,800 --> 00:32:25,680 Speaker 5: I'd like to take a variation on that question. 707 00:32:25,720 --> 00:32:27,680 Speaker 13: That's important because you're right, it's a lot of these small, 708 00:32:27,760 --> 00:32:31,080 Speaker 13: medium enterprises. They're the ones who are actually proactively, you know, 709 00:32:31,120 --> 00:32:35,320 Speaker 13: taking risk in the market. What sort of risk hedges, 710 00:32:35,520 --> 00:32:38,960 Speaker 13: transmission vehicles, carbon credits, offsets can they take advantage of, 711 00:32:39,040 --> 00:32:41,480 Speaker 13: I mean, what's available to them to help offset their 712 00:32:41,560 --> 00:32:42,800 Speaker 13: risk in the space. 713 00:32:43,240 --> 00:32:46,440 Speaker 14: But what we do is we provide guarantees and portfolio 714 00:32:46,440 --> 00:32:50,920 Speaker 14: guarantees or other sort of financial support to the banks 715 00:32:51,040 --> 00:32:54,200 Speaker 14: so that they can lend to SMEs with lower interest rates. 716 00:32:54,360 --> 00:32:56,280 Speaker 15: That's basically what we do and. 717 00:32:56,200 --> 00:32:59,960 Speaker 14: Again that allows us to reach a large share of 718 00:33:00,000 --> 00:33:05,160 Speaker 14: Europeans means and there, for example now investing in green technologies, 719 00:33:05,320 --> 00:33:08,600 Speaker 14: energy efficiency thanks to the support of the European Investment Bank. 720 00:33:08,720 --> 00:33:10,680 Speaker 14: I don't know if many of them know it, you know, 721 00:33:11,160 --> 00:33:13,440 Speaker 14: because they go to a bank, a commercial. 722 00:33:13,000 --> 00:33:16,160 Speaker 15: Bank, but you know, although they are. 723 00:33:16,040 --> 00:33:18,840 Speaker 14: They have to signal in their loans that this is 724 00:33:19,520 --> 00:33:20,200 Speaker 14: supported by. 725 00:33:20,120 --> 00:33:22,400 Speaker 15: The European Investment Bank. I don't know if they always do. 726 00:33:22,840 --> 00:33:24,680 Speaker 14: But the fact of the matter is the EiV is 727 00:33:24,720 --> 00:33:28,120 Speaker 14: one of the key elements that he's driving the European economy. 728 00:33:27,960 --> 00:33:31,200 Speaker 3: Our thanks to Nadia Calvino, President of the European Investment Bank. 729 00:33:31,480 --> 00:33:33,920 Speaker 4: Staying on climate, we also focus on a Bloomberg big 730 00:33:33,960 --> 00:33:36,480 Speaker 4: take story this week titled climate change is so bad 731 00:33:36,880 --> 00:33:39,960 Speaker 4: even the Arctic is on fire. Guest host Damien Sassara 732 00:33:40,000 --> 00:33:41,640 Speaker 4: and I were joined by one of the reporters on 733 00:33:41,680 --> 00:33:45,600 Speaker 4: the story, Kyle Kim Bloomberg, data visualization reporter. We first 734 00:33:45,640 --> 00:33:47,560 Speaker 4: asked Kyle to walk us through the story and what 735 00:33:47,640 --> 00:33:48,080 Speaker 4: he learned. 736 00:33:48,320 --> 00:33:51,680 Speaker 17: Climate change, you know, is making wildfire is more common 737 00:33:51,720 --> 00:33:54,960 Speaker 17: and intense, and that may not be the new part, 738 00:33:55,000 --> 00:33:57,200 Speaker 17: because that's, you know, been in the news for a while, 739 00:33:57,240 --> 00:34:00,440 Speaker 17: but it's also causing fires and places that a lot 740 00:34:00,440 --> 00:34:03,480 Speaker 17: of people normally wouldn't expect, like the Arctic and the 741 00:34:03,520 --> 00:34:08,560 Speaker 17: wetlands in Brazil and Indonesia. And what's really unique about 742 00:34:08,560 --> 00:34:11,680 Speaker 17: these fires is that they tend to move underground and 743 00:34:11,840 --> 00:34:15,000 Speaker 17: smolder below the surface, and it could be for months 744 00:34:15,040 --> 00:34:19,400 Speaker 17: that this is happening. And these underground fires are basically 745 00:34:19,440 --> 00:34:25,320 Speaker 17: burning through prehistoric vegetation called peat and just releasing enormous 746 00:34:25,360 --> 00:34:30,200 Speaker 17: amounts of carbon. And these peak materials they only cover 747 00:34:30,320 --> 00:34:32,680 Speaker 17: about three to four percent of the Earth's surface, but 748 00:34:32,840 --> 00:34:35,960 Speaker 17: they hold up to a third of the world's soil carbon. 749 00:34:36,120 --> 00:34:39,239 Speaker 17: So it means that these fires are having an outsized 750 00:34:39,280 --> 00:34:43,240 Speaker 17: impact on climate change and causing a lot of negative feedback. 751 00:34:43,840 --> 00:34:46,960 Speaker 17: We're saying that carbon from the burning peat is causing 752 00:34:47,920 --> 00:34:51,959 Speaker 17: emissions from the Arctic Circle to skyrocket, and it's accelerating 753 00:34:52,520 --> 00:34:55,560 Speaker 17: the thawing of permafrost there, which is this always frozen 754 00:34:55,640 --> 00:34:58,239 Speaker 17: layer in the ground, and when it melts, it releases 755 00:34:58,480 --> 00:35:02,080 Speaker 17: things like carbon and methane, and it's making the architect 756 00:35:02,160 --> 00:35:02,680 Speaker 17: even hotter. 757 00:35:03,239 --> 00:35:06,480 Speaker 4: How do you prevent that? Like I appreciate that we 758 00:35:06,560 --> 00:35:09,399 Speaker 4: all need to tackle climate change, et cetera, but this specifically, 759 00:35:09,960 --> 00:35:12,600 Speaker 4: because it's even hard to see, how do you manage it? 760 00:35:13,120 --> 00:35:16,280 Speaker 17: Yeah, well, even the professionals, you know, it's it's fighting 761 00:35:16,320 --> 00:35:19,760 Speaker 17: fire in general is a hard task, right, but fighting 762 00:35:19,800 --> 00:35:24,320 Speaker 17: them underground it's very difficult because it is not visible. 763 00:35:24,800 --> 00:35:27,640 Speaker 17: So they you know, look for smoke coming from the ground. 764 00:35:27,800 --> 00:35:32,200 Speaker 17: And for example, in places in Indonesia, firefighters are using 765 00:35:33,160 --> 00:35:36,360 Speaker 17: fire suppression holes. They're basically injecting water into the ground 766 00:35:36,400 --> 00:35:40,319 Speaker 17: and it's hard to tell really if it's fully extinguished 767 00:35:40,400 --> 00:35:43,080 Speaker 17: or not. And it's you know, this is a very 768 00:35:43,160 --> 00:35:47,000 Speaker 17: understudied and not well understood yet, and so there's still 769 00:35:47,040 --> 00:35:49,399 Speaker 17: a lot to learn and how to combat these kinds 770 00:35:49,440 --> 00:35:53,080 Speaker 17: of fires. And for now, you know better monitoring for 771 00:35:53,200 --> 00:35:56,080 Speaker 17: carbon emissions, but at least help to understand the scope 772 00:35:56,080 --> 00:35:56,720 Speaker 17: of the problem. 773 00:35:57,160 --> 00:35:59,120 Speaker 13: Well, Kyle, here's the interesting thing about it. You make 774 00:35:59,160 --> 00:36:01,160 Speaker 13: a great point. You know, the permafrost cover. I mean, 775 00:36:01,160 --> 00:36:02,640 Speaker 13: this is a real risk black carbon. 776 00:36:02,760 --> 00:36:04,640 Speaker 5: We know what the risk is. But isn't a lot 777 00:36:04,680 --> 00:36:06,720 Speaker 5: of that taking place in Russia? I mean, is Russia 778 00:36:06,760 --> 00:36:08,319 Speaker 5: even aware of this? And do they even care? 779 00:36:08,719 --> 00:36:13,759 Speaker 17: Yes, they definitely are aware. You know, scientists project as 780 00:36:13,800 --> 00:36:16,759 Speaker 17: much as a third of the permafrost in the northern 781 00:36:16,840 --> 00:36:19,400 Speaker 17: Hemisphere is gonna receive by the end of the century, 782 00:36:19,440 --> 00:36:22,520 Speaker 17: and a lot of that is in Russia. A lot 783 00:36:22,560 --> 00:36:25,440 Speaker 17: of the permafrost now that's going to be gone by then, 784 00:36:25,760 --> 00:36:30,360 Speaker 17: and the climate experts are already identifying the eastern region 785 00:36:30,400 --> 00:36:35,359 Speaker 17: of Russia has seen the largest growth amongst Arctic wildfires 786 00:36:35,360 --> 00:36:38,439 Speaker 17: since the early two thousands, So they're aware that it's, 787 00:36:38,520 --> 00:36:41,200 Speaker 17: you know, going to be more and more of a problem. 788 00:36:40,960 --> 00:36:41,279 Speaker 12: All right. 789 00:36:41,280 --> 00:36:44,080 Speaker 3: Thanks to Kyle can Bloomberg Data Visualization Recorder. 790 00:36:44,520 --> 00:36:49,040 Speaker 2: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 791 00:36:49,239 --> 00:36:52,160 Speaker 2: and anywhere else you will get your podcasts. Listen live 792 00:36:52,239 --> 00:36:55,840 Speaker 2: each weekday ten am to noon Eastern on Bloomberg dot com. 793 00:36:55,960 --> 00:36:59,319 Speaker 2: The iHeart Radio app tune In, and the Bloomberg Business app. 794 00:36:59,440 --> 00:37:02,480 Speaker 2: You can also watch us live every weekday on YouTube 795 00:37:02,680 --> 00:37:04,480 Speaker 2: and always on the Bloomberg Journal 796 00:37:08,080 --> 00:37:08,120 Speaker 1: M