WEBVTT - ICYMI: The Intersection of Climate Science and Capital Markets

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>You're listening to Bloomberg Business Week with Carol Masser and

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<v Speaker 2>tim Stenoveek on Bloomberg Radio. Well.

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<v Speaker 3>According to Bloomberg NAF New Energy Finance, the global carbon

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<v Speaker 3>market is already substantial. It's valued at eight hundred billion

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<v Speaker 3>dollars in twenty twenty three in project and projects. Excuse me,

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<v Speaker 3>a potential for the market to grow significantly. We're talking

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<v Speaker 3>about maybe one trillion dollars annually by mid century. This

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<v Speaker 3>growth depends on factors like the resolution of credibility issues

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<v Speaker 3>and the scaling of carbon removal and nature based solutions

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<v Speaker 3>Harmon Credits. By the way, one of the discussions going

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<v Speaker 3>on here at Millcoon with Morris Olivia Alberch's the CEO

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<v Speaker 3>and founder of Art to Meter, and she is also

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<v Speaker 3>I want to wink out prior to this from the

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<v Speaker 3>CEO at Aspiration of a Climate finance and oak Tree

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<v Speaker 3>portfolio company offerings SUS stateability solutions for consumers, businesses and investors.

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<v Speaker 2>Before that, she's spent a.

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<v Speaker 3>Decade at Pimco, most recently has had VSD business strategy.

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<v Speaker 1>I mean, you are just all in.

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<v Speaker 3>It feels like from a lot of different perspectives. How

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<v Speaker 3>would you today? What's all about milk and is the

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<v Speaker 3>intersection of finance and everything in our world, So how

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<v Speaker 3>would you describe the intersection of financial climate right now?

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<v Speaker 2>Absolutely? Look, as you mentioned, the carbon markets really are

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<v Speaker 2>that intersection of climate and capital markets, and we really

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<v Speaker 2>believe that they can be part of the solution to

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<v Speaker 2>help us decarbonize and transition the global economy to a

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<v Speaker 2>low carbon economy with energy dominance that's focused on clean energy.

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<v Speaker 2>So carbon markets are really at that epicenter. As you mentioned,

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<v Speaker 2>it's almost a trillion dollars today. This is not a

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<v Speaker 2>small asset class. It is not a small market, but

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<v Speaker 2>a lot of people focus their effort and energy on

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<v Speaker 2>the voluntary markets, which today is one point five billion dollars,

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<v Speaker 2>so fraction of the total carbon marketplace at artimeter where

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<v Speaker 2>carbon investment managers at our core, we're focused on applying

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<v Speaker 2>capital market savvy and experienced play US science and integrity

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<v Speaker 2>to help create a solution to the amount of carbon

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<v Speaker 2>that we have in the atmosphere, which is just fundamentally

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<v Speaker 2>out of balance.

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<v Speaker 1>It's the interest still there because there's been a lot

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<v Speaker 1>of talk about the US's commitment to climate chain goals

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<v Speaker 1>and the idea that governments start to pull back from

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<v Speaker 1>some of these goals and there might be less incentive

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<v Speaker 1>for investors which also to pursue those type of investments.

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<v Speaker 2>These are the exact topics that the market is wrestling

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<v Speaker 2>with today. We need to see clear demand signals for

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<v Speaker 2>carbon assets in the compliance markets, which make up the

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<v Speaker 2>bulk of the hundreds of billions of dollars of assets

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<v Speaker 2>in this space. They're clear demand signals because they're obligatory.

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<v Speaker 2>They're compliance markets where there's an obligation from those entities

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<v Speaker 2>operating in those jurisdictions like the California Cap and trade

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<v Speaker 2>system for example, where we haven't seen that same demand

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<v Speaker 2>function is coming in the voluntary markets. And I like

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<v Speaker 2>the kid, but it starts with the name. It's voluntary

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<v Speaker 2>carbon markets. It's voluntary. What do we need to see

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<v Speaker 2>more compliance, regulated, required activity?

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<v Speaker 3>Well, good luck with that, because you have a president

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<v Speaker 3>who has taken us away from the Paris Climate Agreement.

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<v Speaker 3>So how do we get there?

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<v Speaker 2>Well, it's interesting. The first speaker at Milkin on Monday

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<v Speaker 2>morning was Scott Besson, the US Secretary Treasury, and he's

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<v Speaker 2>talked about the idea of a carbon border adjustment mechanism

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<v Speaker 2>to match the competitiveness and leveling the playing field for

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<v Speaker 2>our US companies here in the US compared to the

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<v Speaker 2>European Sea BAM that has an export. Anytime you export

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<v Speaker 2>into the European markets, you're gonna have to pay a

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<v Speaker 2>carbon tax. Do you want to send as a US company?

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<v Speaker 2>Do you want to send your tax dollars to Brussels?

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<v Speaker 2>Or do you want to fund the government activity at

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<v Speaker 2>the US government? So I do think that there are

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<v Speaker 2>parts of the US administration today who are serious about

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<v Speaker 2>carbon as being part of a tariff plan and program.

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<v Speaker 1>So do you think you'll seek to renewed interest? I mean,

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<v Speaker 1>Bloomberg had a great story last week about how a

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<v Speaker 1>lot of financial cards have actually scaled back to the

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<v Speaker 1>SG departments. So I sort of saying that they over

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<v Speaker 1>hire given where we are now. But is this just

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<v Speaker 1>sort of kind of almost cyclical to a certain extent,

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<v Speaker 1>and then at some point, I know, if we're talking

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<v Speaker 1>to you two years from now, it'll just be a

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<v Speaker 1>totally different story.

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<v Speaker 2>I think that you're consistently hearing in sustainable finance. So

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<v Speaker 2>carbon is being an offshoot of this concept of sustainable

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<v Speaker 2>finance and sustainable investing. I think you've got clear kind

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<v Speaker 2>of consensus among institutional investors that climate, carbon other sustainability

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<v Speaker 2>factors are just a core part of your research function.

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<v Speaker 2>If you're not focusing on those factors and you're ensuring

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<v Speaker 2>homes in California, you're missing the vote, You're not doing

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<v Speaker 2>your job right. So these factors are critical as part

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<v Speaker 2>of the research function. Absolutely, But I do think you're

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<v Speaker 2>seeing a step back, particularly in the venture markets. I

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<v Speaker 2>think you're starting to see real interest, deep interest in

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<v Speaker 2>infrastructure project finance, where you're starting to see the technology

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<v Speaker 2>risk has passed and now you need to deploy and scale.

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<v Speaker 2>And I think you're seeing billions of dollars being deployed

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<v Speaker 2>into infrastructure project finance related activities.

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<v Speaker 1>Starting call theres so Long War Ago.

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<v Speaker 2>Olivia Albrick.

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<v Speaker 1>She's the CEO and founder of Arta Meter