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Speaker 1: Welcome to Zero. I am Actuatrati and I'm chy Lee Raw.

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Speaker 1: This week moving past Paris. Hello lukshut Hi mightily.

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Speaker 2: So Trump has been in office for just over week.

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Speaker 2: As we record this, a lot has happened. Bloomberg Green

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Speaker 2: reporters Zarahirje has a great piece summarizing all the big

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Speaker 2: developments and what Trump's flurry of executive orders means for climate,

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Speaker 2: which I recommend listeners check out. There will be more

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Speaker 2: to come on all of that, but the big headline

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Speaker 2: that's going to have some impact, which everyone at Bloombergreen

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Speaker 2: is looking closely at, and what you're writing about this

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Speaker 2: week is Trump withdrawing from the Paris Agreement.

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Speaker 1: Yes, it's something I'm working with lots of reporters across

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Speaker 1: Bloomberg News because this is the second time that Trump

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Speaker 1: has on the US out of the Paris Agreement, and

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Speaker 1: there is a lot that has happened since twenty seventeen

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Speaker 1: when he first attempted it. There's some similarities, but many differences.

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Speaker 2: Okay, let's go through what's the same and what's different

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Speaker 2: from twenty seventeen.

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Speaker 1: The first time it happened. There were all these rumors

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Speaker 1: that once the US exits, it's the world's largest emitter,

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Speaker 1: it's the world's largest economy. Other countries that weren't really

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Speaker 1: committed to climate will also leave. Well, that didn't happen,

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Speaker 1: and even now we are only a week out, it

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Speaker 1: hasn't happened yet. There's still rumors of countries like Argentina

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Speaker 1: and maybe Russia that might want to pull out, but

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Speaker 1: so far that hasn't happened. The other thing is that

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Speaker 1: the US does provide significant funding towards climate finance, especially

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Speaker 1: under the Biden administration. Now that money is nowhere close

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Speaker 1: to the fair contribution that an economy the size of

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Speaker 1: the US should be making, but it was, you know,

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Speaker 1: eleven billion dollars in twenty twenty four. According to the

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Speaker 1: Biden administration, that money is going to go away. Plus,

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Speaker 1: the world's largest banks are in the US, the world's

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Speaker 1: largest companies are in the US, and that did have

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Speaker 1: an impact last time around, and it will have an

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Speaker 1: impact this time around. Multilateralism itself, especially on the climate stage,

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Speaker 1: was always on shaky grounds. It is perhaps on shaky

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Speaker 1: air grounds.

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Speaker 3: Now.

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Speaker 2: Okay, so those are things that are quite similar. What

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Speaker 2: do you feel is radically different this time? Around than

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Speaker 2: from twenty seventeen.

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Speaker 1: One is simply the time factor.

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Speaker 3: Right.

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Speaker 1: Twenty seventeen was thirteen years from twenty thirty, when many

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Speaker 1: companies and countries had set targets to reach. Now we

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Speaker 1: are just five years away and most countries and companies

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Speaker 1: aren't on track, so the urgency to act has grown.

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Speaker 1: Of course, climate impacts have grown in number and in ferocity,

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Speaker 1: and the urgency to act on climate change has grown.

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Speaker 1: There is also not that many were leaders who are

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Speaker 1: pushing for climate action. In twenty seventeen, you had just Trudeau,

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Speaker 1: you had Angela Merkel, you had David Cameron. This time

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Speaker 1: Trudeau is on his way out, Angler Merkele is not here.

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Speaker 1: David Cameron or none of the UK's very climate forward

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Speaker 1: leaders are stepping up. Sure, China's perhaps showing up in

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Speaker 1: bigger ways. There's an Australian leadership in place at least

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Speaker 1: for now, that's doing something, but the big bulwark of

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Speaker 1: world leaders against Trump's climate moves aren't here. And then,

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Speaker 1: the global economy in twenty seventeen had low interest rates

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Speaker 1: but very expensive clean energy. This time interest rates are higher,

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Speaker 1: but clean energy is cheaper and the sums being invested

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Speaker 1: in the clean energy transition are just far greater.

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Speaker 2: And our colleagues at Bloomberg and EF have some new

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Speaker 2: numbers on that energy transition out in a report today.

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Speaker 2: You sat down with Albert Chung, Deputy CEO of Bloomberg NIF,

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Speaker 2: Bloomberg's New Energy Research Unit, to talk about what the

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Speaker 2: numbers are and what they have to tell us about

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Speaker 2: the momentum on the energy transition. So let's hear that conversation.

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Speaker 1: Now, Albert, Welcome to the show.

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Speaker 3: Thank you great to be here now.

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Speaker 1: As a climate reporter, I often feel like I have

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Speaker 1: two distinct realities that I live through all the time.

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Speaker 1: One where because we keep putting green as gases into

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Speaker 1: the atmosphere, the world keeps heating up and we see

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Speaker 1: more extreme weather events and more catastrophes. On the other,

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Speaker 1: the energy transition, the solutions to try and tackle climate

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Speaker 1: change only seem to be growing in size accelerating despite

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Speaker 1: the politics around the world. And these two realities are

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Speaker 1: seemingly contradictory, but they are two realities, and at pressure

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Speaker 1: moments like the election of Donald Trump, those conflicting realities

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Speaker 1: are hard to parse. I know that this is something

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Speaker 1: you also think about a lot. In an analysis you

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Speaker 1: wrote for Bloomberg and EF, you said you are also

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Speaker 1: in a constant state of dissonance. What do you mean.

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Speaker 3: Yeah, I mean, so we live and breathe energy transition

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Speaker 3: in BNF, and even if you just look at energy

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Speaker 3: transition all day, you also have this dissonance of things

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Speaker 3: sometimes looking really great and other times just not enough.

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Speaker 3: And certainly this year feels that way. I mean, there

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Speaker 3: was record investment across clean energy technologies, record numbers of

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Speaker 3: electric vehicles sold, record amounts of renewable energy installed, record

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Speaker 3: amounts of story you know, all these amazing achievements and

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Speaker 3: progress and scale and acceleration, which is great to see.

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Speaker 3: And yet and yet, and yet we always run the numbers,

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Speaker 3: as you know, at the beginning of every year on

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Speaker 3: what does actually need to happen to get on track

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Speaker 3: for the climate goals, for the Paris Agreement and so

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Speaker 3: on and so forth. And usually what we find is

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Speaker 3: the total amount of investment going into energy transition is

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Speaker 3: roughly about a third of what it needs to be

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Speaker 3: to get on track. So that's for me, that's the

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Speaker 3: dissonance we grapple with around this time of year. Actually,

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Speaker 3: funny enough in the winter when we're running those numbers.

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Speaker 1: Well, talking of investment trends, Luomageni f is launching its

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Speaker 1: report for the Investment Trends in the Energy Transition of

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Speaker 1: twenty twenty four today. What do the numbers say?

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Speaker 3: So the report is Energy Transition Investment Trends twenty twenty five.

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Speaker 3: It's a report we've been doing for twenty years and

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Speaker 3: this year we find that total global energy transition investment

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Speaker 3: hit two point one trillion dollars last year. That's a

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Speaker 3: new record.

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Speaker 1: That's breaching the two trillion dollar mark.

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Speaker 3: The first time over two trillion dollars, and so it's

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Speaker 3: a real milestone at a great achievement. But there are

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Speaker 3: some caveats in there. So one is growth year on

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Speaker 3: year was only ten point seven percent, which in most

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Speaker 3: industries you would take that as a growth industry.

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Speaker 1: If you're having to be happy with that salary.

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Speaker 3: Exactly exactly, I think we'd all be okay within eleven

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Speaker 3: percent rais. However, in previous years, the last three years,

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Speaker 3: the growth was between twenty four to twenty nine percent,

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Speaker 3: so the growth has been a bit slower. Now, what's

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Speaker 3: dry that growth. It's one country it's China. So China

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Speaker 3: invested more than eight hundred billion in energy transition last year.

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Speaker 3: That was more than the EU, the US and the

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Speaker 3: UK combined, which by the way hadn't been the case

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Speaker 3: the year before, So that doesn't happen every year. And

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Speaker 3: China alone drove two thirds of the global growth that

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Speaker 3: we saw last year.

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Speaker 1: Wow.

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Speaker 3: So yeah, it's a really interesting reader. We really enjoy

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Speaker 3: going through the data every year and kind of picking

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Speaker 3: out the trend. So I really thoroughly recommend that folks

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Speaker 3: take a look at that.

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Speaker 1: And there is a framework that you have created to

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Speaker 1: try and understand this year that we are going into

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Speaker 1: with the politics where they are and with the energy

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Speaker 1: transition where it is. And you say that we have

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Speaker 1: gone through three phases of the energy transition, you describe

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Speaker 1: them as sacrifice, opportunity, and competition. Expand on that.

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Speaker 3: Yeah, I mean this was in the piece that I

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Speaker 3: wrote really about the way that the multilateral climate action

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Speaker 3: and discussion has evolved over the time that you know,

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Speaker 3: benf have been following this. So in the twenty tens,

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Speaker 3: you know, prior to the Paris Agreement, most countries thought

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Speaker 3: of climate mitigation and low carbon transition as a sacrifice

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Speaker 3: they would have to make, you know, they would have

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Speaker 3: to lower living standards or sacrifice economic growth in order

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Speaker 3: to save the planet. That was the kind of the

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Speaker 3: overarching thesis, and so a lot of the discussion around them, well,

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Speaker 3: how do I make sure that I don't do too

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Speaker 3: much too quickly, and make sure that other countries do

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Speaker 3: their part, and really just kind of find a fair

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Speaker 3: way to share the sacrifice.

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Speaker 1: Right, Developing countries were suffering and are suffering from most

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Speaker 1: of the climate impacts disproportionately, while developed countries have been

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Speaker 1: the ones that have put out all these venas gaz emissions. Then,

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Speaker 1: so there's always this push between developing countries wanting developed

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Speaker 1: countries to do.

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Speaker 3: More exactly, and that was always the primary axis of

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Speaker 3: this debate, was developing and developed countries having that sort

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Speaker 3: of discussion, but even among developed countries discussion of who

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Speaker 3: bears more responsibility and how can we make sure others

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Speaker 3: are doing their part? And all of that changed, you know,

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Speaker 3: after the Paris Agreement, which was really coming together of

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Speaker 3: this idea that actually this can be an opportunity. And

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Speaker 3: at the same time that the Paris Agreement was being signed,

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Speaker 3: we were seeing these tremendous cost reductions in renewal energy technology,

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Speaker 3: basteries and storage and electric vehicles all coming down in cost.

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Speaker 1: We had the IPCC one point five ZEA report come

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Speaker 1: out right after that, which sort of gave the world

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Speaker 1: and at zero framework, there's a Fridays for future with

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Speaker 1: all the kids marching on streets. That felt like a

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Speaker 1: momentum exactly.

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Speaker 3: And so we arrived in Glasgow in twenty twenty one

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Speaker 3: for twenty six with this idea that countries are grasping

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Speaker 3: the opportunity. So it became an opportunity framing in countries

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Speaker 3: almost racing to say we can do this faster and

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Speaker 3: better than we thought, and potentially faster and better and

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Speaker 3: capture more opportunities than others as well.

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Speaker 1: That led to record investments in the energy transition, but

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Speaker 1: also in climate tech startup which saw a huge amount

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Speaker 1: of investments coming through in twenty twenty one, twenty two,

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Speaker 1: and then over the past few years, even before the

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Speaker 1: US election, it all started to a little bit deflated.

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Speaker 3: Yeah, and I think the opportunity framing that was so

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Speaker 3: strong three or four years ago hasn't gone away. But

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Speaker 3: what's happened is that there's just been this very strong

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Speaker 3: sense of competition and quite a strong kind of economic

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Speaker 3: cost benefit analysis that's been injected into that at a

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Speaker 3: country level. So policymakers, heads of state are also saying, look,

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Speaker 3: we see this low carbon transition, opportunity to create industries,

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Speaker 3: to create jobs, to capture the value of this transition,

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Speaker 3: but we need to actually see that materialize in order

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Speaker 3: to make the case to our people that this is

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Speaker 3: the right way forward.

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Speaker 1: But if competition is being injected into the energy transition,

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Speaker 1: with what signals we're getting from President Donald Trump, around

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Speaker 1: increasing fossil fuel production, around taking all the subsidies away

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Speaker 1: from electric cars, around not giving any permissions to build

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Speaker 1: wind turbines in federal lands, and this very anti climate

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Speaker 1: it's not about economic, it's an anti climate move that's

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Speaker 1: being made. Does that mean the US just becomes less

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Speaker 1: competitive and the rest of the world competes instead.

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Speaker 3: Well, we're talking about this in the very very early

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Speaker 3: days of the new Trump administration. It's just been a

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Speaker 3: few days since he was inaugurated, and what we've seen

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Speaker 3: so far is of course that he is doing everything

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Speaker 3: he can really to roll back any kind of policy support,

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Speaker 3: particularly for electric vehicles. That's really the sort of biggest target,

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Speaker 3: let's say, And so it's at things like reviewing the

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Speaker 3: corporate average field economy targets, looking at the California waiver

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Speaker 3: that allows California to set its own its own emission standards,

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Speaker 3: looking at the IRA funding, looking at the electric vehicle

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Speaker 3: charging infrastructure funding, and seeing if they can stop those

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Speaker 3: funds going out, funds that have been previously committed. So

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Speaker 3: those are quite strong actions that he and his administration

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Speaker 3: want to take, and we will see how much of

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Speaker 3: that is successful and has the desired effect that he's

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Speaker 3: looking for. But the net impact of all of that

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Speaker 3: is that will slow the adoption of electric vehicles in

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Speaker 3: the US relative to what it had been forecast to be.

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Speaker 3: And as been f we have lowered our electric vehicle forecast.

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Speaker 3: So in the US, we've taken our EV forecasts from

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Speaker 3: about half of all new vehicles sold in twenty thirty

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Speaker 3: being electric to about a third. That's still growth, So

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Speaker 3: we still think, you know, the fundamentals driving EV adoption

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Speaker 3: are going to be strong, the economics are getting.

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Speaker 1: Better, and because it's going up from about ten percent.

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Speaker 3: Today exactly exactly, so it's still growing but there's a

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Speaker 3: lot that governments can do to try and slow it down,

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Speaker 3: let's say, maybe not change the direction, but at least

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Speaker 3: slow it down.

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Speaker 1: And what about the apparent slowdown of the EV transition

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Speaker 1: in Europe?

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Speaker 3: Yeah, and in Europe. So we've looked at it, and

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Speaker 3: in the end, when you look at twenty twenty four

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Speaker 3: as a year, EV sales were flat in Europe, so

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Speaker 3: they weren't up, they weren't particularly down that it's going

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Speaker 3: to come out that they were roughly flat, And there

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Speaker 3: was a lot of hand ringing in the industry about

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Speaker 3: the you know, consumers don't want them, et cetera, et cetera.

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Speaker 3: But you know, when we looked at it, some of

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Speaker 3: the reporting was really picking on data that wasn't necessarily fair. So,

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Speaker 3: for example, in Germany, there'd been a big sudden change

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Speaker 3: in subsidy programs, which meant that sales dropped very suddenly,

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Speaker 3: which is totally expected and to be honest, is going

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Speaker 3: to be part of the transition as you remove subsidies,

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Speaker 3: but that was reported on as being a really negative

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Speaker 3: moment for the EV industry. And then more importantly, you know,

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Speaker 3: we follow the policy very very closely and Europe has

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Speaker 3: a set of emission standards that automakers must meet, and

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Speaker 3: part of their way of meeting them is to sell

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Speaker 3: electric vehicles. Now, those standards have remained stable from twenty

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Speaker 3: twenty one to twenty twenty four. So twenty twenty four

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Speaker 3: was the last year that automakers were still at the

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Speaker 3: same standard as they had been for the last few years,

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Speaker 3: and that standard steps up in twenty twenty five. So

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Speaker 3: the thinking that we've put through the ringer internally is

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Speaker 3: to say, well, if we were an automaker and we

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Speaker 3: were already achieving the emissions targets that we'd been set

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Speaker 3: the last three.

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Speaker 1: Years, why would I do anything more?

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Speaker 3: We would save up our effort for next year. We

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Speaker 3: would look to launch our new models, reduce prices, and

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Speaker 3: all that in the next year when we have a

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Speaker 3: suddenly higher compliance target. So we think that the fact

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Speaker 3: that European automaic is sold about the same number of

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Speaker 3: evs in twenty twenty four as they did in twenty

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Speaker 3: twenty three kind of makes sense. It may not be

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Speaker 3: as much of a disaster as.

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Speaker 1: People thought.

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Speaker 2: After the break Uckshutt and Albert discuss how much the

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Speaker 2: Paris Agreement and the COP frameworks still matter when it

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Speaker 2: comes to continuing to drive the energy transition.

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Speaker 1: So a lot of these policies that we talked about

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Speaker 1: are policies that are now in place, partly because of

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Speaker 1: the Paris Agreement, where all the countries came together and

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Speaker 1: signed off on a target, and then some of the

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Speaker 1: countries went back and actually put legislations in action. Now

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Speaker 1: that all these legislations are in place, how much do

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Speaker 1: you think the COP framework still matters.

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Speaker 3: I think the COP framework matters a huge deal. I

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Speaker 3: think that if we are to take the Paris Agreement

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Speaker 3: seriously and get on track for well below two degrees,

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Speaker 3: we need to see higher and higher tightening rageting climate

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Speaker 3: targets from countries. So right now as actually as you know,

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Speaker 3: this year, there's going to be a lot of discussion

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Speaker 3: about twenty thirty five nationally determined contributions. Countries are due

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Speaker 3: to put forward their plans in the coming weeks for

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Speaker 3: twenty thirty five emissions reductions. Those matter a great deal

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Speaker 3: because those countries, assuming they do come forward with ambitious targets,

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Speaker 3: those targets then end up driving lawmaking and regulatory action

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Speaker 3: within those countries towards meeting those goals. So I think

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Speaker 3: that while CARP and NBCs are not the only, by

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Speaker 3: far from it, the only mechanism for driving energy transition,

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Speaker 3: it's one of the top down leavers that can really

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Speaker 3: make a big difference.

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Speaker 1: And so in terms of what it means for how

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Speaker 1: other countries and economies should navigate the transition. If the

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Speaker 1: US is no longer on board with the Paris Agreement,

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Speaker 1: what should the other countries be doing?

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Speaker 3: In my view, there will be two different reactions to

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Speaker 3: the US pulling out of the Paris Agreement and so

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Speaker 3: on. One is major economy stepping up and saying we will lead,

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Speaker 3: we want to lead. This doesn't change the science, this

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Speaker 3: doesn't change the objectives that we have to hit, and

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Speaker 3: so we will put forward ambitious goals and we're going

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Speaker 3: to hit them. I think for me, I have a

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Speaker 3: worry that some of the smaller economies, or even rapidly

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Speaker 3: growing economies, will take the US pulling out of the

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Speaker 3: Paris Agreement as proof that rich countries are not serious

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Speaker 3: about climate action and therefore may come forward with less

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Speaker 3: ambitious targets, or at least have the cover to do

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Speaker 3: so if that's what they want to do, so that

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Speaker 3: would be something I'd be looking and hoping doesn't happen,

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Speaker 3: but be looking for.

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Speaker 1: Thank you, alby thank you actually act.

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Speaker 2: Let's talk a little more about that last point Albert

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Speaker 2: was making. He was essentially saying that the US withdrawing

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Speaker 2: from Paris might give other countries cover to be less

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Speaker 2: ambitious in their climate goals, even if they do stay

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Speaker 2: in the Paris Agreement. Is that something that's been bearing

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Speaker 2: out in your reporting as you following the story.

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Speaker 1: I think that's right. There is a wide recognition among

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Speaker 1: experts we spoke to that the US leaving is not

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Speaker 1: a good thing for the international climate diplomacy sphere. We

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Speaker 1: spoke to Andre Corea do Lago, who is now the

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Speaker 1: COP thirty president and who was on the POD in

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Speaker 1: COP twenty nine when we met him in Baku, and

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Speaker 1: in a recent interview with Simone Iglesias, he said, given

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Speaker 1: that the world's largest economy has clearly decided to deviate

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Speaker 1: from the path of combating climate change, COP becomes even

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Speaker 1: more necessary in this adverse context, and then he went

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Speaker 1: on to add that you know, Brazil is part of

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Speaker 1: the Bricks framework, Brazil, Russia, India, China and South Africa

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Speaker 1: and that he hopes that that grouping will provoke discussions

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Speaker 1: at the COP in Brazil. And he said that he

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Speaker 1: hopes that countries can arrive at the COP in quotes

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Speaker 1: with new ideas and perceptions.

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Speaker 2: And that sounds quite similar to the tone he was

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Speaker 2: taking when you talk to him in November. He wasn't

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Speaker 2: even officially in this role of COP thirty president yet,

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Speaker 2: but you spoke to him about Balm and it was

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Speaker 2: clear he was already feeling very ambitious about what role

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Speaker 2: Brazil can play on the global stage when it comes

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Speaker 2: to climate. So that will be something interesting to watch

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Speaker 2: another ten months from now. In blem. We haven't yet

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Speaker 2: talked about what the US withdrawing from the Paris Agreement

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Speaker 2: means for companies who are also using the goals set

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Speaker 2: out by Paris and the sort of binding framework to

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Speaker 2: set their own climate targets.

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Speaker 1: Indeed, between twenty seventeen and now, most major companies around

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Speaker 1: the world have set net zero goals. Many of them

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Speaker 1: have twenty thirty targets, and as we know, many of

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Speaker 1: them aren't on track. I spoke to Helen Clarkson, the

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Speaker 1: CEO of the Climate Group, who said, especially in the

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Speaker 1: US particularly the weaponization of social media has led to

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Speaker 1: companies doing what is called green hushing, which is continuing

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Speaker 1: their green activities but not advertising it. She said. They

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Speaker 1: just don't want to put their heads above the parapet.

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Speaker 2: So they might carry on doing what they've been doing,

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Speaker 2: but quietly trying to not draw attention to it, particularly

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Speaker 2: on social media, is what you're.

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Speaker 1: Saying, right, And that's not the case for European companies,

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Speaker 1: where the governments have clearly legislated goals. And sure there's

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Speaker 1: some right wing turn in some countries, but European companies

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Speaker 1: and banks are quite committed to the Paris Agreement. We

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Speaker 1: also know in twenty seventeen that a number of non

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Speaker 1: state actors and regional governments in the US stepped up

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Speaker 1: to try and meet Paris Agreement goals, even though the

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Speaker 1: federal government wasn't a part of it.

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Speaker 2: Speaking of other actors stepping in, this seems like the

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Speaker 2: place to mention that Mike Bloomberg, the founder and majority

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Speaker 2: owner of Bloomberg LP, which is the parent company of

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Speaker 2: Bloomberg News, is going to be making up the US's

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Speaker 2: contribution to the UN's climate body, the unf tripleC, and

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Speaker 2: he did provide that same support when Trump withdrew from

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Speaker 2: the Paris Accord in twenty seventeen. Last time that was

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Speaker 2: more than fifteen million dollars. It will probably be something similar,

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Speaker 2: I imagine this time.

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Speaker 1: He's also a supporter of the All In coalition that

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Speaker 1: includes many of these non state actors and regional governments.

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Speaker 2: One last big picture question before we go. The end

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Speaker 2: of this year, twenty twenty five will be ten years

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Speaker 2: from when the Paris Agreement was first signed. So the

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Speaker 2: US pulling out is a big deal, but we've already

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Speaker 2: had ten years of this agreement being in place, with

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Speaker 2: its ups and downs, and in some ways, is it

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Speaker 2: fair to say that that alone has been a pretty

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Speaker 2: big success.

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Speaker 1: Yeah. I mean, we can discuss the numbers as we

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Speaker 1: did around investments, around energy trends, around company and government

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Speaker 1: commitments and legislations, but really, to me, the biggest thing

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Speaker 1: is that the reality of climate change and of climate

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Speaker 1: action has sunk in deeper into the public consciousness in

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Speaker 1: a way that just did not when the Paris Agreement

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Speaker 1: was signed. People kind of know what net zero is

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Speaker 1: today or one point five c or if not, they

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Speaker 1: definitely know that they can certainly start to connect some

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Speaker 1: of the most extreme weather events that are happening around

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Speaker 1: the world to climate change and the demand for climate

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Speaker 1: action despite the political outcomes in certain countries, hasn't yet.

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Speaker 2: Gone down nice talking with you actually, thank.

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Speaker 1: You, Mite, and thank you for listening to Zero. And

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Speaker 1: now for the sound of the week, that's the sound

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Speaker 1: the world. If you like this episode, please take a

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Speaker 1: someone who doesn't trip on the word multilateralism.

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Speaker 2: Multilateralism.

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Speaker 1: You can get in touch at zero at Bloomberg dot net.

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Speaker 1: Zero's producer is Mighty Lee Rao. Bloomberg's head of podcast

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Speaker 1: is Sage Bauman and head of Talk is Brendan nuna Aati.

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Speaker 1: Music is composed by Wondering Special thanks to Alfred san

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Speaker 1: So