1 00:00:00,480 --> 00:00:04,840 Speaker 1: Welcome to zero. I am Akshatarati. This week climate Action 2 00:00:05,080 --> 00:00:21,119 Speaker 1: under Trump. It's week two at COP twenty nine in Baku. 3 00:00:21,760 --> 00:00:25,319 Speaker 1: The negotiations are heating up. Much of the fight is 4 00:00:25,400 --> 00:00:29,800 Speaker 1: about money, but countries like Saudi Arabia are also opening 5 00:00:29,920 --> 00:00:33,480 Speaker 1: up old fights about fossil fuels. How does this all 6 00:00:33,520 --> 00:00:36,600 Speaker 1: go down? We'll bring you more about whether there's a 7 00:00:36,640 --> 00:00:40,880 Speaker 1: deal on climate finance or not next week. Till then, 8 00:00:41,280 --> 00:00:44,080 Speaker 1: I thought I'll share two conversations I had about climate 9 00:00:44,120 --> 00:00:47,760 Speaker 1: action over the next four years as Donald Trump retakes 10 00:00:47,800 --> 00:00:51,320 Speaker 1: the White House. The first one is with Ali Zaidi, 11 00:00:51,600 --> 00:00:55,240 Speaker 1: who is currently the climates are under President Joe Biden. 12 00:00:55,400 --> 00:00:57,440 Speaker 1: I talked to Ali on stage at the Bloomberg Green 13 00:00:57,480 --> 00:01:01,480 Speaker 1: event here in Baku about what exactly endures inside the 14 00:01:01,600 --> 00:01:05,840 Speaker 1: US on climate action and can anyone pick up the 15 00:01:05,880 --> 00:01:09,960 Speaker 1: slack that's left behind when the federal government stops acting. 16 00:01:11,440 --> 00:01:14,160 Speaker 1: The second one is with Jonathan Pushing, who's the head 17 00:01:14,200 --> 00:01:18,200 Speaker 1: of the Environment program at the Hewlett Foundation and a 18 00:01:18,319 --> 00:01:22,800 Speaker 1: veteran US diplomat on all things climate. He says that 19 00:01:22,840 --> 00:01:24,760 Speaker 1: the world is a lot more prepared for a Trump 20 00:01:24,800 --> 00:01:28,080 Speaker 1: presidency this time, and there's also a lot more momentum 21 00:01:28,120 --> 00:01:33,160 Speaker 1: on climate action. That means both Ali and Jonathan agree 22 00:01:33,360 --> 00:01:36,679 Speaker 1: that things are likely to slow down rather than reverse 23 00:01:37,160 --> 00:01:40,720 Speaker 1: under Donald Trump. That's not to say it's good news, 24 00:01:41,319 --> 00:01:44,800 Speaker 1: but it does create opportunities for other countries to step 25 00:01:44,840 --> 00:02:04,280 Speaker 1: into the void and take on a leadership role. Welcome 26 00:02:04,360 --> 00:02:07,600 Speaker 1: to Bloombergreen, and welcome back to the Zero podcast. 27 00:02:07,800 --> 00:02:08,880 Speaker 2: Fantastic view with you. 28 00:02:09,480 --> 00:02:13,000 Speaker 1: Now. Last time we talked about two years ago, India 29 00:02:13,000 --> 00:02:15,160 Speaker 1: and Pakistan were going at it at the World Cup 30 00:02:16,720 --> 00:02:20,239 Speaker 1: and you were celebrating the US having passed the largest 31 00:02:20,240 --> 00:02:24,480 Speaker 1: climate legislation ever passed. Now there's good news and bad news. 32 00:02:24,600 --> 00:02:26,560 Speaker 1: The good news is India has actually won a World 33 00:02:26,600 --> 00:02:27,240 Speaker 1: Cup since. 34 00:02:27,080 --> 00:02:30,679 Speaker 2: Then, but who's keeping score right? 35 00:02:31,680 --> 00:02:36,400 Speaker 1: And Pakistan well has had a few climate impacts. And 36 00:02:36,520 --> 00:02:38,720 Speaker 1: the other bad news is well Trump is coming to 37 00:02:38,760 --> 00:02:42,840 Speaker 1: power and we don't know whether the largest climate bill 38 00:02:43,120 --> 00:02:47,160 Speaker 1: that the bide An administration was able to pass will 39 00:02:47,400 --> 00:02:51,040 Speaker 1: be able to get all the money, all the incentives 40 00:02:51,080 --> 00:02:53,920 Speaker 1: that it has out the door. How worried are you? 41 00:02:55,480 --> 00:02:59,280 Speaker 2: I am less worried than you might think I am 42 00:03:00,160 --> 00:03:06,440 Speaker 2: because in the architecture of our climate strategy, we anticipated 43 00:03:06,560 --> 00:03:09,760 Speaker 2: a handoff to the private sector to carry us the distance. 44 00:03:10,400 --> 00:03:13,519 Speaker 2: I think of the Inflation Reduction Act, the Bipersion Infrastructure 45 00:03:13,600 --> 00:03:17,480 Speaker 2: Law as the booster packs on a rocket, but the 46 00:03:17,560 --> 00:03:19,960 Speaker 2: rocket is the private sector. And I think what we 47 00:03:20,000 --> 00:03:23,760 Speaker 2: will see next year and the years after is that 48 00:03:23,880 --> 00:03:26,240 Speaker 2: during this period of time we were able to achieve 49 00:03:26,800 --> 00:03:30,720 Speaker 2: escape velocity in the United States on critical areas decarbonization. 50 00:03:31,400 --> 00:03:36,040 Speaker 2: I am worried about parts of the inflection point, which 51 00:03:36,160 --> 00:03:40,040 Speaker 2: to me feel very fragile. One of them is our 52 00:03:40,080 --> 00:03:44,120 Speaker 2: ability to sustain the manufacturing renaissance that's taken off in 53 00:03:44,120 --> 00:03:48,320 Speaker 2: the United States. We know that federal policy is so 54 00:03:48,640 --> 00:03:53,840 Speaker 2: critical to incubating that industrial capacity build out in a 55 00:03:53,880 --> 00:03:58,200 Speaker 2: couple of key areas. I think we might fall back 56 00:03:58,760 --> 00:04:01,920 Speaker 2: if policy is reversed course. 57 00:04:02,800 --> 00:04:07,440 Speaker 1: So the Trump administration is promising to cut taxes, and 58 00:04:07,480 --> 00:04:09,080 Speaker 1: that means it's going to have to try and find 59 00:04:09,160 --> 00:04:12,000 Speaker 1: money from places. I know that there is a lot 60 00:04:12,000 --> 00:04:14,240 Speaker 1: of money from the Inflation Reduction Act that's going to 61 00:04:14,280 --> 00:04:17,240 Speaker 1: go to Republican states that might stick around. But there 62 00:04:17,279 --> 00:04:21,040 Speaker 1: are certain types of incentives that might actually be cut 63 00:04:21,360 --> 00:04:26,080 Speaker 1: immediately or maybe phase down sooner than planned. A couple 64 00:04:26,080 --> 00:04:29,040 Speaker 1: of them that come to mind, electric vehicle tax credits, 65 00:04:29,120 --> 00:04:32,520 Speaker 1: might go altogether. The clean Electricity tax credit might be 66 00:04:32,560 --> 00:04:35,120 Speaker 1: phased down early. Do you think those two sectors have 67 00:04:35,480 --> 00:04:39,479 Speaker 1: met this rocket escapablocity that you hope? 68 00:04:40,520 --> 00:04:45,360 Speaker 2: Well, Look, I think that the American people are very 69 00:04:45,400 --> 00:04:50,520 Speaker 2: focused and rightfully so, on pocketbook issues, including the cost 70 00:04:50,520 --> 00:04:55,440 Speaker 2: of energy. Those electricity tax credits are tax cuts that 71 00:04:55,480 --> 00:05:00,560 Speaker 2: flow through to utility pairs who now see lower energy bills. 72 00:05:00,720 --> 00:05:04,000 Speaker 2: You can literally go to utilities around the country where 73 00:05:04,000 --> 00:05:06,719 Speaker 2: they will tell you how much the price of electricity 74 00:05:06,720 --> 00:05:09,440 Speaker 2: came down and how much families are benefiting because of 75 00:05:09,520 --> 00:05:12,800 Speaker 2: investments from the Inflation Reduction Act. So I think it 76 00:05:12,800 --> 00:05:16,400 Speaker 2: would be problematic not from just a climate perspective, but 77 00:05:16,600 --> 00:05:20,279 Speaker 2: from a retail economics perspective if there were to be 78 00:05:20,320 --> 00:05:23,279 Speaker 2: a reversal on that. On your point about is it 79 00:05:23,360 --> 00:05:27,160 Speaker 2: easy to undo this, Look, nine out of every ten 80 00:05:27,240 --> 00:05:31,680 Speaker 2: dollars from the grant side of our investment agenda is 81 00:05:32,400 --> 00:05:35,520 Speaker 2: in some form or fashion already into the economy. Most 82 00:05:35,560 --> 00:05:37,920 Speaker 2: of the tax credits twenty one out of twenty four 83 00:05:38,320 --> 00:05:41,719 Speaker 2: have some guidance associated with them and are moving forward. 84 00:05:42,160 --> 00:05:45,640 Speaker 2: And you know, I believe and I think this is 85 00:05:45,760 --> 00:05:50,240 Speaker 2: manifest in the politics in Washington that we have grown 86 00:05:50,560 --> 00:05:55,440 Speaker 2: the political consensus around the Inflation Reduction Act through its execution, 87 00:05:56,080 --> 00:06:01,200 Speaker 2: which evidence point one is the letter from House Republicans 88 00:06:01,200 --> 00:06:04,960 Speaker 2: to their own leader saying, hey, let's stop trying to 89 00:06:05,040 --> 00:06:08,120 Speaker 2: repeal something that would unplug a bunch of jobs and 90 00:06:08,240 --> 00:06:10,040 Speaker 2: economic opportunity in our districts. 91 00:06:10,520 --> 00:06:14,280 Speaker 1: Well, ideology has never been more powerful in American politics 92 00:06:14,279 --> 00:06:16,880 Speaker 1: than it is, perhaps now, or at least in recent history. 93 00:06:16,920 --> 00:06:19,480 Speaker 1: Perhaps it is now. We are studying to see some 94 00:06:19,560 --> 00:06:23,360 Speaker 1: of the Trump administration's appointees, and what we are noticing 95 00:06:23,560 --> 00:06:26,240 Speaker 1: is that there are a lot of loyalists being put 96 00:06:26,279 --> 00:06:29,480 Speaker 1: and so there are wild cards that could be coming 97 00:06:29,480 --> 00:06:31,040 Speaker 1: your way. Aren't you worried about those? 98 00:06:32,360 --> 00:06:36,320 Speaker 2: Look, if you work on climate change, you're always counting 99 00:06:36,320 --> 00:06:40,120 Speaker 2: on there being wild cards. But I think there's a 100 00:06:40,200 --> 00:06:44,000 Speaker 2: real robustness in the system. The first part we talked 101 00:06:44,000 --> 00:06:46,920 Speaker 2: about already, and that's the private sector and the role 102 00:06:47,000 --> 00:06:50,640 Speaker 2: it's going to play in. I think continuing to pull 103 00:06:50,839 --> 00:06:54,880 Speaker 2: the policy a certainty along. They have made a trillion 104 00:06:54,960 --> 00:06:59,760 Speaker 2: dollars worth of investment bets predicated on a policy regime. 105 00:07:00,080 --> 00:07:01,880 Speaker 2: They're not going to want to see the rug pulled 106 00:07:01,880 --> 00:07:02,360 Speaker 2: out from. 107 00:07:02,200 --> 00:07:05,760 Speaker 1: All we had the egg on mobile CEO yesterday telling 108 00:07:05,800 --> 00:07:07,560 Speaker 1: us that the US should not pull out of the 109 00:07:07,640 --> 00:07:08,400 Speaker 1: Paris Agreement. 110 00:07:08,600 --> 00:07:12,680 Speaker 2: Yeah, and that's not your most obvious ally in this fight, 111 00:07:13,080 --> 00:07:16,520 Speaker 2: but not only calling for staying in Paris but also 112 00:07:16,600 --> 00:07:19,640 Speaker 2: calling to keep intact the incentives that have been put 113 00:07:19,640 --> 00:07:22,040 Speaker 2: in place. So I think there's that piece of it. 114 00:07:22,120 --> 00:07:26,440 Speaker 2: I think the robustness also comes from state policy. You've 115 00:07:26,440 --> 00:07:29,800 Speaker 2: got more than half of the states that have democratic 116 00:07:29,880 --> 00:07:33,840 Speaker 2: leadership and very much engaged in advancing clean energy. But 117 00:07:34,000 --> 00:07:36,640 Speaker 2: that actually ignores the fact that you have a bunch 118 00:07:36,720 --> 00:07:43,200 Speaker 2: more Republican governors whose entire economic theory rests on investments 119 00:07:43,240 --> 00:07:45,559 Speaker 2: from the Inflation Reduction Act. You go to a place 120 00:07:45,560 --> 00:07:50,080 Speaker 2: like Oklahoma, Governor sit an amazing leader in attracting private 121 00:07:50,120 --> 00:07:52,840 Speaker 2: investment to a state. Most of that private investment is 122 00:07:52,920 --> 00:07:56,360 Speaker 2: clean energy. Governor Kemp in Georgia, most of that investment 123 00:07:56,440 --> 00:08:00,360 Speaker 2: clean energy. Go to South Carolina Governor McMaster, most of 124 00:08:00,400 --> 00:08:03,680 Speaker 2: that new investment clean energy. So if you want to 125 00:08:03,760 --> 00:08:07,120 Speaker 2: see the politics of this, you look at the house 126 00:08:07,240 --> 00:08:09,680 Speaker 2: where they've written to their leader. You look at the 127 00:08:09,680 --> 00:08:13,440 Speaker 2: private sector where they put the bet on clean energy future. 128 00:08:13,680 --> 00:08:17,160 Speaker 2: You look at the states where they're running towards clean energy. 129 00:08:17,480 --> 00:08:21,360 Speaker 2: This is actually a much more robust system with a 130 00:08:21,400 --> 00:08:25,280 Speaker 2: lot more momentum behind it than we had in twenty seventeen. 131 00:08:25,320 --> 00:08:28,280 Speaker 2: So I hear you on the risk factors, but I'm 132 00:08:28,680 --> 00:08:32,880 Speaker 2: focused on the incredible momentum and I think that's where 133 00:08:32,920 --> 00:08:34,360 Speaker 2: I put my stock. 134 00:08:35,400 --> 00:08:37,760 Speaker 1: Now, let's look at the international front. We are here 135 00:08:37,760 --> 00:08:40,920 Speaker 1: at COP twenty nine. Negotiators are going to have to 136 00:08:40,960 --> 00:08:43,679 Speaker 1: battle out something that is perhaps going to be the 137 00:08:43,720 --> 00:08:46,559 Speaker 1: hardest thing that many experts are saying since the Paras Agreement, 138 00:08:46,640 --> 00:08:51,520 Speaker 1: because it's all about money, and especially rich countries, especially 139 00:08:51,520 --> 00:08:54,319 Speaker 1: the US does not like to talk about money as 140 00:08:54,440 --> 00:08:57,079 Speaker 1: much when it comes to hundreds of billions of dollars 141 00:08:57,120 --> 00:09:00,400 Speaker 1: that need to be given to developing countries. Before we 142 00:09:00,440 --> 00:09:04,000 Speaker 1: get into the details, the first thing that's going to 143 00:09:04,040 --> 00:09:07,440 Speaker 1: happen is that Donald Trump says he's going to pull 144 00:09:07,480 --> 00:09:10,120 Speaker 1: the US out of the Paris Agreement. Again, let's see 145 00:09:10,120 --> 00:09:12,600 Speaker 1: if he listens to the exit mobile CEO. But if 146 00:09:12,640 --> 00:09:15,600 Speaker 1: he doesn't, that means the US is not party to 147 00:09:15,679 --> 00:09:20,160 Speaker 1: negotiations within one year of him making that decision, and 148 00:09:20,200 --> 00:09:24,040 Speaker 1: that creates a credibility gap right now in these really 149 00:09:24,080 --> 00:09:29,280 Speaker 1: difficult negotiations are the other negotiators taking you and your 150 00:09:29,320 --> 00:09:30,200 Speaker 1: colleagues seriously. 151 00:09:30,760 --> 00:09:32,960 Speaker 2: I think the US has built up quite a bit 152 00:09:33,000 --> 00:09:37,040 Speaker 2: of credibility over the last four years, including an announcement 153 00:09:37,080 --> 00:09:40,920 Speaker 2: I made today about three billion dollar target that the 154 00:09:40,920 --> 00:09:44,840 Speaker 2: President had set in twenty twenty one to mobilize adaptation 155 00:09:45,040 --> 00:09:49,480 Speaker 2: finance into the developing world, the Prepare initiative. We actually 156 00:09:49,480 --> 00:09:51,680 Speaker 2: met that goal a year early, and we'll meet it 157 00:09:51,760 --> 00:09:56,599 Speaker 2: again next year. But you know, I would be sugarcoating 158 00:09:56,640 --> 00:10:00,960 Speaker 2: it if I suggested that US leadership going into next 159 00:10:01,040 --> 00:10:05,360 Speaker 2: year from the federal government has a bright and positive 160 00:10:05,400 --> 00:10:09,200 Speaker 2: halo around it. In global climate conversations, I think people 161 00:10:09,440 --> 00:10:11,880 Speaker 2: hear what has been said, they read what has been written, 162 00:10:12,000 --> 00:10:15,679 Speaker 2: and they largely believe it. And as a result, that 163 00:10:16,480 --> 00:10:22,200 Speaker 2: I think diminishes the US federal position as the rules 164 00:10:22,200 --> 00:10:25,520 Speaker 2: are being written on the clean energy economy of the future. 165 00:10:26,000 --> 00:10:29,360 Speaker 2: That comes to the detriment of US businesses and US workers. 166 00:10:29,400 --> 00:10:33,480 Speaker 2: So I think that's a problem if we don't sort 167 00:10:33,480 --> 00:10:36,839 Speaker 2: of see this through in terms of the conversation that's 168 00:10:36,840 --> 00:10:40,600 Speaker 2: happening right now. It's all about bringing more countries in 169 00:10:40,920 --> 00:10:44,400 Speaker 2: around an ambitious target for twenty thirty five. It's quite 170 00:10:44,400 --> 00:10:47,360 Speaker 2: a way a way, I think the bigger that coalition 171 00:10:47,480 --> 00:10:50,839 Speaker 2: is and the boulder that ambition is, the more likely, 172 00:10:51,080 --> 00:10:53,320 Speaker 2: If that might be counterintuitive, but the more likely we 173 00:10:53,400 --> 00:10:56,240 Speaker 2: are to pull through on the other side and deliver 174 00:10:56,400 --> 00:10:59,600 Speaker 2: the resources that are necessary to lift up the entire 175 00:10:59,640 --> 00:11:01,400 Speaker 2: world in adapting to these challenges. 176 00:11:01,480 --> 00:11:03,960 Speaker 1: Why is that? Why do you think a bigger target 177 00:11:04,040 --> 00:11:06,199 Speaker 1: will make it easier given the US is likely to leave. 178 00:11:06,360 --> 00:11:09,080 Speaker 2: I think if it is a target that is fit 179 00:11:09,120 --> 00:11:12,160 Speaker 2: to purpose, that actually meets the moment, there will be 180 00:11:12,280 --> 00:11:14,640 Speaker 2: more of a pull to get it done. If it's, 181 00:11:14,760 --> 00:11:19,040 Speaker 2: you know, an anemic target, I think that makes it 182 00:11:19,160 --> 00:11:21,880 Speaker 2: less exciting for people to really put their weight behind it. 183 00:11:22,120 --> 00:11:25,640 Speaker 2: And I think the broader the coalition, the more likely 184 00:11:25,640 --> 00:11:29,800 Speaker 2: it is that, you know, when one country falls back, 185 00:11:29,840 --> 00:11:31,920 Speaker 2: the others pick up the slack, and so on so 186 00:11:32,000 --> 00:11:34,240 Speaker 2: forth we pull each other through in the end. 187 00:11:34,800 --> 00:11:37,680 Speaker 1: One reason why the Inflation Reduction Act has some more 188 00:11:37,720 --> 00:11:41,319 Speaker 1: teeth than would have been otherwise is because there was 189 00:11:41,360 --> 00:11:44,520 Speaker 1: a recognition from the Republican side that China is eating 190 00:11:44,600 --> 00:11:47,400 Speaker 1: the US lunch when it comes to green technologies. This 191 00:11:47,720 --> 00:11:50,800 Speaker 1: next four years are likely going to grow that gap. 192 00:11:51,040 --> 00:11:54,679 Speaker 1: Even with the Inflation Reduction Act staying as it is, 193 00:11:54,720 --> 00:11:57,880 Speaker 1: as you would hope it stays. What happens when you 194 00:11:57,920 --> 00:12:02,040 Speaker 1: come back, say in twenty twenty eight, Democratic president back 195 00:12:02,080 --> 00:12:05,080 Speaker 1: in power, and the gap between the US and China 196 00:12:05,200 --> 00:12:07,520 Speaker 1: is bigger when it comes to green technologies. How do 197 00:12:07,600 --> 00:12:08,240 Speaker 1: you catch. 198 00:12:08,080 --> 00:12:12,120 Speaker 2: Up if four years from now we have fallen further 199 00:12:12,240 --> 00:12:17,080 Speaker 2: behind China. I think that's economic malpractice at the federal 200 00:12:17,120 --> 00:12:22,200 Speaker 2: policy level. I think the science is not unsettled on 201 00:12:22,320 --> 00:12:26,320 Speaker 2: climate change, and yet folks articulate it as a matter 202 00:12:26,400 --> 00:12:30,320 Speaker 2: of belief. But even if you set that aside, the 203 00:12:30,480 --> 00:12:34,400 Speaker 2: economics are clear. These are technologies invented in the United States. 204 00:12:34,800 --> 00:12:39,199 Speaker 2: When we invest in their manufacturing capability and deploy them domestically, 205 00:12:39,840 --> 00:12:44,480 Speaker 2: there is unambiguous economic upside and energy security upside. It 206 00:12:44,520 --> 00:12:47,680 Speaker 2: would be economic malpractice to put us back in the 207 00:12:47,720 --> 00:12:51,000 Speaker 2: position we were four years ago, where we're in a 208 00:12:51,120 --> 00:12:55,280 Speaker 2: massive deficit in the leadership of these technologies. So I 209 00:12:55,400 --> 00:12:59,240 Speaker 2: understand your question, which is what happens if that deficit exists? 210 00:13:00,000 --> 00:13:02,560 Speaker 2: So if we come out of the ditch. So I'm 211 00:13:02,600 --> 00:13:08,040 Speaker 2: actually rooting for how root for anybody who puts America's 212 00:13:08,280 --> 00:13:11,720 Speaker 2: economic interests first? And I'm going to root for the 213 00:13:11,760 --> 00:13:16,160 Speaker 2: next Congress, the next administration, finding a way, whether it's 214 00:13:16,200 --> 00:13:19,480 Speaker 2: motivated by climate or not, to invest in our industrial 215 00:13:19,480 --> 00:13:22,760 Speaker 2: strength and invest in our energy security, and invest in 216 00:13:22,760 --> 00:13:26,280 Speaker 2: our ability to make the technologies that we pioneered in 217 00:13:26,320 --> 00:13:29,880 Speaker 2: the United States, make them cheaper, make them better, and 218 00:13:30,000 --> 00:13:33,120 Speaker 2: help them translate into jobs and economic opportunity. 219 00:13:33,520 --> 00:13:36,400 Speaker 1: So far, what the Trump administration has said is there's 220 00:13:36,400 --> 00:13:39,040 Speaker 1: going to be an Energi czar in the White House, 221 00:13:40,080 --> 00:13:43,280 Speaker 1: not a climates are So what happens after January taking 222 00:13:44,120 --> 00:13:47,400 Speaker 1: part and becoming part of the resistance which was created 223 00:13:47,480 --> 00:13:50,040 Speaker 1: after the system administration. 224 00:13:49,960 --> 00:13:53,040 Speaker 2: Well, the good news is I won't get shown up 225 00:13:53,080 --> 00:13:57,080 Speaker 2: by the next climates are No. I look, I'm I 226 00:13:57,120 --> 00:14:00,760 Speaker 2: am eager to be part of civil society and to 227 00:14:00,920 --> 00:14:04,920 Speaker 2: root for the success of a country I love, and 228 00:14:05,280 --> 00:14:08,960 Speaker 2: to find a way to plug into the imperative of 229 00:14:09,000 --> 00:14:11,840 Speaker 2: our times, which is that we rise to meet the 230 00:14:11,840 --> 00:14:14,960 Speaker 2: moment on climate change. Whether or not Joe Biden is 231 00:14:15,000 --> 00:14:18,200 Speaker 2: his office or Donald Trump is in office, or whomever 232 00:14:18,640 --> 00:14:22,600 Speaker 2: we are in the decisive decade for climate action. Climate 233 00:14:22,640 --> 00:14:25,280 Speaker 2: action is not on pause over the next four years. 234 00:14:25,560 --> 00:14:27,760 Speaker 2: It's on all of us to figure out how we 235 00:14:27,840 --> 00:14:32,240 Speaker 2: accelerate progress at home and abroad on that. 236 00:14:32,880 --> 00:14:44,200 Speaker 1: Thank you, Elie, thank you. After the break, I talked 237 00:14:44,240 --> 00:14:47,920 Speaker 1: to a veteran American climate diplomat, Jonathan Pushing, about how 238 00:14:48,000 --> 00:14:52,640 Speaker 1: global diplomacy changes once Trump becomes US president. Again. By 239 00:14:52,680 --> 00:14:54,800 Speaker 1: the way, if you've been enjoying this episode, please take 240 00:14:54,840 --> 00:14:56,760 Speaker 1: a moment to rate and review the show on Apple 241 00:14:56,760 --> 00:15:12,080 Speaker 1: Podcasts and Spotify. It helps other listeners find the show. Jonathan, 242 00:15:12,160 --> 00:15:12,920 Speaker 1: Welcome to the show. 243 00:15:13,040 --> 00:15:15,400 Speaker 3: Thank you so much. Glad to be here. Now. 244 00:15:15,640 --> 00:15:18,440 Speaker 1: These are not idle circumstances for you to be talking 245 00:15:18,480 --> 00:15:21,320 Speaker 1: about the US. We expect Donald Trump to pull out 246 00:15:21,320 --> 00:15:23,560 Speaker 1: of the PRAUS Agreement. We don't know, of course, there 247 00:15:23,560 --> 00:15:27,680 Speaker 1: are things that are unpredictable in a Trump residency, but 248 00:15:27,880 --> 00:15:32,760 Speaker 1: assume that happens, how do you think the world reacts, 249 00:15:33,200 --> 00:15:35,600 Speaker 1: and what have we learned from the first time this 250 00:15:35,720 --> 00:15:37,880 Speaker 1: happened that could be applied today. 251 00:15:38,320 --> 00:15:40,080 Speaker 3: So thanks very much. I think that there are a 252 00:15:40,200 --> 00:15:42,840 Speaker 3: number of pieces in the way we should look at 253 00:15:43,080 --> 00:15:45,120 Speaker 3: the questions you're asking, and I think they're the right 254 00:15:45,200 --> 00:15:48,760 Speaker 3: questions to ask. The first one is I do assume, 255 00:15:48,840 --> 00:15:52,600 Speaker 3: as you have suggested, that he intends to withdraw from Paris. 256 00:15:52,880 --> 00:15:55,280 Speaker 3: I think the open question is whether he also withdraws 257 00:15:55,320 --> 00:15:57,880 Speaker 3: from the convention, and we don't really know. He didn't 258 00:15:57,920 --> 00:16:00,440 Speaker 3: do it the first time. There's some indication that he 259 00:16:00,480 --> 00:16:03,520 Speaker 3: intends to do it now, but we don't know. Let's 260 00:16:03,520 --> 00:16:06,640 Speaker 3: assume for the moment that he doesn't. In that sense, 261 00:16:06,760 --> 00:16:09,880 Speaker 3: the US continues to be part of the conversation. They 262 00:16:09,920 --> 00:16:11,760 Speaker 3: have an observer's seat in the back of the room 263 00:16:11,880 --> 00:16:14,360 Speaker 3: because they're not a party to Paris any longer, but 264 00:16:14,440 --> 00:16:17,000 Speaker 3: because they're in the convention, they still have a role. 265 00:16:17,120 --> 00:16:20,360 Speaker 3: They have a perhaps small, but a delegation that continues 266 00:16:20,400 --> 00:16:23,000 Speaker 3: to come. That would be consistent with some of the 267 00:16:23,040 --> 00:16:26,880 Speaker 3: requests to the administration from some of industry, which believes 268 00:16:26,920 --> 00:16:29,480 Speaker 3: that the global rules are ones the US should be 269 00:16:29,600 --> 00:16:33,480 Speaker 3: involved in negotiating, and those standards will matter to them 270 00:16:33,600 --> 00:16:37,560 Speaker 3: as they do global business. A second possibility he actually 271 00:16:37,560 --> 00:16:40,880 Speaker 3: withdraws from the entire process. I think the thing that 272 00:16:41,120 --> 00:16:46,040 Speaker 3: countries have learned is two from the Morocco experience. Marrakesh 273 00:16:46,080 --> 00:16:49,000 Speaker 3: was the last time he was elected. He then withdrew 274 00:16:49,080 --> 00:16:51,680 Speaker 3: and we had that four year period. The first thing 275 00:16:51,680 --> 00:16:54,640 Speaker 3: that they've learned is that the US being out slows 276 00:16:54,720 --> 00:16:58,040 Speaker 3: things down, but it doesn't stop them, and the US 277 00:16:58,120 --> 00:17:01,560 Speaker 3: is a smaller share of the globe total today than 278 00:17:01,600 --> 00:17:04,360 Speaker 3: it was in twenty sixteen, give or take some it's 279 00:17:04,480 --> 00:17:07,080 Speaker 3: just over ten or eleven percent of the world total. 280 00:17:07,440 --> 00:17:10,520 Speaker 3: That's a much smaller share, and the world can move 281 00:17:10,560 --> 00:17:13,239 Speaker 3: on with the ninety percent of the global community that 282 00:17:13,320 --> 00:17:16,480 Speaker 3: is still engaged. The second thing which they learned is 283 00:17:16,520 --> 00:17:20,879 Speaker 3: that notwithstanding in the administration the executive branch withdrawal, the 284 00:17:21,000 --> 00:17:24,480 Speaker 3: US continued to act in many ways. Inertia is a 285 00:17:24,520 --> 00:17:28,320 Speaker 3: remarkable thing, and policies are hard to overturn once they've 286 00:17:28,320 --> 00:17:32,000 Speaker 3: been set. So policies, for example, like the Inflation Reduction 287 00:17:32,080 --> 00:17:36,000 Speaker 3: Act or the Infrastructure Law or the Energy Bill, those 288 00:17:36,000 --> 00:17:38,600 Speaker 3: are likely to go for some period of time, and 289 00:17:38,640 --> 00:17:42,240 Speaker 3: the incentives that they set are likely to continue. There's 290 00:17:42,400 --> 00:17:46,600 Speaker 3: also some indication that the states and localities will continue 291 00:17:46,600 --> 00:17:48,960 Speaker 3: to do the work that they have done. So while 292 00:17:48,960 --> 00:17:51,840 Speaker 3: there may be a slowing in the US frame, there 293 00:17:51,920 --> 00:17:56,439 Speaker 3: is continuity in the sense of more action, but it 294 00:17:56,480 --> 00:18:00,080 Speaker 3: will not be as aggressive as required to solve the 295 00:18:00,119 --> 00:18:03,679 Speaker 3: climate crisis, and the kind of ambition which the last 296 00:18:03,760 --> 00:18:06,800 Speaker 3: four years of the Biden team has brought will be missing, 297 00:18:07,359 --> 00:18:09,440 Speaker 3: and some of the pressure that the US can bring 298 00:18:09,480 --> 00:18:13,320 Speaker 3: to bear in the global community will be absent, and 299 00:18:13,359 --> 00:18:16,280 Speaker 3: it is not clear today that there is another country, 300 00:18:16,760 --> 00:18:19,800 Speaker 3: or even necessarily a group of countries that can pick 301 00:18:19,840 --> 00:18:20,200 Speaker 3: that up. 302 00:18:20,600 --> 00:18:23,840 Speaker 1: All right, There are two things that are different this 303 00:18:23,920 --> 00:18:28,480 Speaker 1: time around in a Trump presidency than last time. Last 304 00:18:28,480 --> 00:18:31,200 Speaker 1: time there was a delay baked in. The US left 305 00:18:31,240 --> 00:18:33,360 Speaker 1: out a very long time, and by that time Joe 306 00:18:33,359 --> 00:18:35,840 Speaker 1: Biden was elected, and so the US came back, but 307 00:18:35,880 --> 00:18:38,879 Speaker 1: no other country as a result of the US exit 308 00:18:39,359 --> 00:18:43,679 Speaker 1: followed through. This time, there's already noises being made. Papua 309 00:18:43,800 --> 00:18:47,200 Speaker 1: New Guinea did not send diplomats to COP twenty nine. 310 00:18:48,640 --> 00:18:52,640 Speaker 1: Argentina took their diplomats back, and we understand Mila is 311 00:18:52,880 --> 00:18:57,080 Speaker 1: thinking about taking Argentina out of Paris. Do you think 312 00:18:57,160 --> 00:19:00,040 Speaker 1: this time around the risk of other countries leaving is 313 00:19:00,119 --> 00:19:01,280 Speaker 1: higher or lower? 314 00:19:01,320 --> 00:19:04,439 Speaker 3: And why? I think it's probably about the same. I 315 00:19:04,480 --> 00:19:06,960 Speaker 3: think that we're not likely to see many countries withdraw 316 00:19:07,720 --> 00:19:11,560 Speaker 3: The agreement is not, in some sense a particularly onerous one. 317 00:19:11,720 --> 00:19:14,800 Speaker 3: It leaves to each country the choice of what it 318 00:19:14,880 --> 00:19:18,440 Speaker 3: will do, and in some ways that flexibility means that 319 00:19:18,480 --> 00:19:21,439 Speaker 3: a country could decide to take up modest level of 320 00:19:21,480 --> 00:19:25,480 Speaker 3: reductions commitments and still be eligible for the financial aid 321 00:19:25,560 --> 00:19:28,080 Speaker 3: that comes with it, still be eligible to be part 322 00:19:28,119 --> 00:19:31,800 Speaker 3: of a dialogue on technology, part of a dialogue on trade. 323 00:19:32,160 --> 00:19:34,359 Speaker 3: So there's actually a lot of incentive to be in 324 00:19:34,720 --> 00:19:38,000 Speaker 3: and only marginal incentive to be out. I think the 325 00:19:38,080 --> 00:19:40,840 Speaker 3: second question, though, is what's different this time? He's going 326 00:19:40,920 --> 00:19:43,520 Speaker 3: to be pushing an oil and gas vision of the world. 327 00:19:43,560 --> 00:19:46,560 Speaker 3: He has said so in his campaign. He's not particularly 328 00:19:46,560 --> 00:19:51,160 Speaker 3: supportive of renewable transition. But this time, unlike the last time, 329 00:19:51,560 --> 00:19:56,120 Speaker 3: the prices for those alternatives are fundamentally competitive, and that 330 00:19:56,320 --> 00:19:59,800 Speaker 3: to me is a fundamentally different outcome. So a country 331 00:19:59,840 --> 00:20:03,520 Speaker 3: like China is very happy to engage in the global 332 00:20:03,560 --> 00:20:07,560 Speaker 3: dialogue and say, well, the US isn't available for funding 333 00:20:07,600 --> 00:20:10,639 Speaker 3: these new transitions, but we are. We're in, we have 334 00:20:10,680 --> 00:20:13,640 Speaker 3: a ready checkbook, we have an experience of a transition 335 00:20:13,760 --> 00:20:16,880 Speaker 3: at home. We are prepared to engage with you as 336 00:20:16,920 --> 00:20:20,040 Speaker 3: you make the transition. So now the question becomes what 337 00:20:20,080 --> 00:20:23,760 Speaker 3: will the Donald Trump administration offer as an alternative. Will 338 00:20:23,760 --> 00:20:26,880 Speaker 3: it offer low cost gas? Yes? But will that low 339 00:20:26,920 --> 00:20:29,960 Speaker 3: cost gas come with a dependency on the United States? Yes? 340 00:20:30,520 --> 00:20:33,879 Speaker 3: And how reliable will that be over a longer term 341 00:20:34,200 --> 00:20:37,359 Speaker 3: when you build out gas infrastructure. One of the advantages 342 00:20:37,400 --> 00:20:40,760 Speaker 3: of renewable energy is that once you've built it, this supply, 343 00:20:41,520 --> 00:20:45,000 Speaker 3: the energy itself is domestic. It doesn't come from a 344 00:20:45,000 --> 00:20:48,199 Speaker 3: tradable permit, it doesn't come from some kind of a commodity. 345 00:20:48,640 --> 00:20:52,639 Speaker 3: It comes because you have wind or sun or geothermal capacity. 346 00:20:53,000 --> 00:20:55,760 Speaker 3: So in that sense, there's an enormous value in the 347 00:20:55,800 --> 00:20:59,280 Speaker 3: security of your energy resource not to be reliant on 348 00:20:59,320 --> 00:21:02,000 Speaker 3: a global gas market or on one player like the 349 00:21:02,080 --> 00:21:04,840 Speaker 3: United States. I think where we were four or eight 350 00:21:04,920 --> 00:21:08,480 Speaker 3: years ago was much higher prices and therefore a very 351 00:21:08,520 --> 00:21:09,800 Speaker 3: different competitive market. 352 00:21:10,960 --> 00:21:13,040 Speaker 1: The other thing that the US is likely to do 353 00:21:13,119 --> 00:21:17,320 Speaker 1: before a formal exit happens under Trump, if it happens, 354 00:21:17,480 --> 00:21:20,720 Speaker 1: is to submit what is known as the Nationally Determined Contribution, 355 00:21:21,320 --> 00:21:23,760 Speaker 1: a target that the US will be setting for twenty 356 00:21:23,840 --> 00:21:26,480 Speaker 1: thirty five. Because the US is still party to the 357 00:21:26,520 --> 00:21:30,080 Speaker 1: agreement and all other countries are set to submit this 358 00:21:30,119 --> 00:21:37,400 Speaker 1: before February of twenty twenty five, how much do other 359 00:21:37,520 --> 00:21:42,720 Speaker 1: negotiators other countries take those goals and the US credibility 360 00:21:42,840 --> 00:21:46,240 Speaker 1: behind it. Given Trump might leave and as you talked about, 361 00:21:46,760 --> 00:21:50,359 Speaker 1: may slow down progress that is somewhat baked in, but 362 00:21:50,480 --> 00:21:52,560 Speaker 1: because it won't be as fast as we need it. 363 00:21:52,800 --> 00:21:55,280 Speaker 1: Those goals are likely to be much further out than 364 00:21:55,280 --> 00:21:56,200 Speaker 1: what is reality. 365 00:21:56,600 --> 00:22:00,639 Speaker 3: I think that's an accurate characterization. I think this submission 366 00:22:00,760 --> 00:22:04,439 Speaker 3: of a US NDC or a US commitment has a 367 00:22:04,440 --> 00:22:07,600 Speaker 3: couple of particular attributes. They'll do it before the end 368 00:22:07,600 --> 00:22:10,320 Speaker 3: of this term, which means to me that they're very 369 00:22:10,400 --> 00:22:12,680 Speaker 3: likely to be able to say, if we were staying 370 00:22:12,800 --> 00:22:15,199 Speaker 3: in this is the kind of trajectory we'd be on. 371 00:22:15,880 --> 00:22:19,520 Speaker 3: And by extension, this is a credible pathway for others. 372 00:22:20,080 --> 00:22:21,960 Speaker 3: This is a pathway that we think we could meet 373 00:22:21,960 --> 00:22:27,520 Speaker 3: with policy, with technology development, with engagement globally, with supply chains, 374 00:22:27,960 --> 00:22:31,199 Speaker 3: and that represents almost a baseline that the rest of 375 00:22:31,200 --> 00:22:33,880 Speaker 3: the world can look at to assess their own progress. 376 00:22:34,480 --> 00:22:36,680 Speaker 3: That's the upside of doing it. That means that there's 377 00:22:36,760 --> 00:22:39,400 Speaker 3: some vision of what you might want to try for. 378 00:22:40,119 --> 00:22:43,119 Speaker 3: On the other hand, there will clearly be a walking back. 379 00:22:43,400 --> 00:22:45,399 Speaker 3: There will be a sense wele the US wanted to 380 00:22:45,400 --> 00:22:48,560 Speaker 3: do that, but it won't. The Trump administration won't. So 381 00:22:48,600 --> 00:22:52,200 Speaker 3: should we in our country follow a good and desirable 382 00:22:52,240 --> 00:22:55,520 Speaker 3: path or one that might be easier with less burden, 383 00:22:55,960 --> 00:22:59,440 Speaker 3: less potential upfront cost and how to think about that. 384 00:23:00,000 --> 00:23:01,959 Speaker 3: I think it'll be in the middle. I think the 385 00:23:02,040 --> 00:23:05,639 Speaker 3: existence of a credible pathway will have an impact. I 386 00:23:05,640 --> 00:23:08,480 Speaker 3: think the absence of the US to push that will 387 00:23:08,520 --> 00:23:09,640 Speaker 3: also have an impact. 388 00:23:12,440 --> 00:23:15,600 Speaker 1: The reason cops exist and work is because we have 389 00:23:15,760 --> 00:23:20,199 Speaker 1: a global problem that requires all countries to come together 390 00:23:20,440 --> 00:23:23,680 Speaker 1: and discuss how do we address it. But I think 391 00:23:23,720 --> 00:23:29,240 Speaker 1: there has been philosophically a thought that given climate change 392 00:23:29,240 --> 00:23:32,120 Speaker 1: in climate science has been now well understood and impacts 393 00:23:32,119 --> 00:23:36,800 Speaker 1: are being felt, the desire for countries to work together 394 00:23:36,840 --> 00:23:42,359 Speaker 1: will actually grow because this catastrophe is here today, but 395 00:23:42,440 --> 00:23:46,440 Speaker 1: it doesn't feel like that's happening. Are we actually moving 396 00:23:46,480 --> 00:23:50,480 Speaker 1: away from a cooperative world trying to address climate change 397 00:23:50,480 --> 00:23:53,919 Speaker 1: to a competitive world trying to address climate change? A 398 00:23:54,000 --> 00:23:57,879 Speaker 1: competitive world that has existed in every other fora for 399 00:23:58,359 --> 00:24:01,320 Speaker 1: as long as two hundred countries have existed on this planet. 400 00:24:01,960 --> 00:24:03,640 Speaker 1: And is that a good thing or a bad thing? 401 00:24:04,320 --> 00:24:06,640 Speaker 3: I think we should be clear about the role which 402 00:24:06,640 --> 00:24:09,600 Speaker 3: the convention and the process plays well and the role 403 00:24:09,640 --> 00:24:12,560 Speaker 3: which it could never really deliver. It is very good 404 00:24:12,600 --> 00:24:15,440 Speaker 3: at goal setting. It has set a goal for us 405 00:24:15,480 --> 00:24:18,399 Speaker 3: for all countries to act domestically. It is set a 406 00:24:18,440 --> 00:24:21,200 Speaker 3: goal for us for those domestic actions to be enshrined 407 00:24:21,240 --> 00:24:24,120 Speaker 3: in regulation or in law. It is set a goal 408 00:24:24,160 --> 00:24:28,080 Speaker 3: for temperature increase well below two and striving for one 409 00:24:28,119 --> 00:24:31,640 Speaker 3: point five. It has set a goal for collective efforts 410 00:24:31,640 --> 00:24:35,520 Speaker 3: on finance. But it is not, nor I don't think 411 00:24:35,640 --> 00:24:38,679 Speaker 3: was it ever expected to be an implementing body. This 412 00:24:38,840 --> 00:24:41,359 Speaker 3: is not where you go to write the rules of 413 00:24:41,400 --> 00:24:44,400 Speaker 3: a public utility commission that's working in the state of Iowa. 414 00:24:44,880 --> 00:24:47,080 Speaker 3: This is where you go to say, is that aligned 415 00:24:47,080 --> 00:24:50,760 Speaker 3: with a collective effort? And it is also very good 416 00:24:50,760 --> 00:24:54,160 Speaker 3: at reviewing the actions of the countries and seeing if 417 00:24:54,160 --> 00:24:57,159 Speaker 3: they align or not. So to me, the question is 418 00:24:57,200 --> 00:25:00,639 Speaker 3: not so much will that continued need for both setting 419 00:25:00,680 --> 00:25:05,159 Speaker 3: goals and for reviewing progress. Will that continue? Yes, with 420 00:25:05,440 --> 00:25:08,120 Speaker 3: or without the United States. On the other hand, do 421 00:25:08,160 --> 00:25:14,000 Speaker 3: we need other institutions and mechanisms to facilitate implementation. Absolutely, 422 00:25:14,480 --> 00:25:16,560 Speaker 3: and those are going to be taken up by sector. 423 00:25:16,960 --> 00:25:20,400 Speaker 3: So in some cases, for example, will the steal producers 424 00:25:20,400 --> 00:25:22,520 Speaker 3: of the world figure out how to do a better 425 00:25:22,600 --> 00:25:26,359 Speaker 3: job at low carbon steel and will that information move around? Yes? 426 00:25:26,760 --> 00:25:29,399 Speaker 3: Will they compete with each other, of course they will. 427 00:25:29,720 --> 00:25:33,320 Speaker 3: Will they compete against a low carbon future. Yes, because 428 00:25:33,359 --> 00:25:36,159 Speaker 3: global demand is going to drive that forward. Do you 429 00:25:36,200 --> 00:25:40,240 Speaker 3: need a singular agreement where all countries agree on exactly 430 00:25:40,280 --> 00:25:43,280 Speaker 3: how they would do that. No, that's where the market 431 00:25:43,359 --> 00:25:46,760 Speaker 3: can play, I think its most effective role, where competition 432 00:25:46,880 --> 00:25:51,000 Speaker 3: around price and the delivery of these attributes of zero 433 00:25:51,160 --> 00:25:54,800 Speaker 3: carbon become significant. So I think the agreement and the 434 00:25:54,840 --> 00:25:58,320 Speaker 3: next steps around the agreement play out both collectively in 435 00:25:58,400 --> 00:26:01,880 Speaker 3: the effort of setting the goal and evaluating progress, and 436 00:26:02,119 --> 00:26:06,160 Speaker 3: individually and in the competition that each country and within 437 00:26:06,200 --> 00:26:10,119 Speaker 3: each country companies have to find solutions that work. 438 00:26:10,480 --> 00:26:12,480 Speaker 1: So I'm going to ask you a finance question now, 439 00:26:12,560 --> 00:26:15,640 Speaker 1: because this is the cop at which a big finance 440 00:26:15,680 --> 00:26:19,000 Speaker 1: goal has to be agreed on. Now, whatever the goal 441 00:26:19,080 --> 00:26:20,840 Speaker 1: might be, and whether we get a deal or not, 442 00:26:21,000 --> 00:26:23,200 Speaker 1: we can look back at the funds that do exist 443 00:26:23,440 --> 00:26:28,360 Speaker 1: and recognize maybe the partial success or really a failure 444 00:26:28,440 --> 00:26:31,520 Speaker 1: of those funds. There's the Green Climate Fund, There's the 445 00:26:31,520 --> 00:26:35,679 Speaker 1: Global Environment Facility, there is now the Global Shield that 446 00:26:35,720 --> 00:26:39,359 Speaker 1: has been created. Just the sheer number of funds and 447 00:26:39,400 --> 00:26:41,960 Speaker 1: the number of steps you need to take to get 448 00:26:41,960 --> 00:26:46,000 Speaker 1: the money out of them makes it really difficult for 449 00:26:46,119 --> 00:26:48,600 Speaker 1: that money to actually do the work that needs to 450 00:26:48,600 --> 00:26:52,439 Speaker 1: be done even if the money exists. Why is the 451 00:26:52,480 --> 00:26:56,320 Speaker 1: finance problem so complicated and why does the structure require 452 00:26:56,400 --> 00:26:59,719 Speaker 1: all these international funds and multiple of them that are 453 00:26:59,720 --> 00:27:01,400 Speaker 1: being I think. 454 00:27:01,240 --> 00:27:04,720 Speaker 3: The underlying issue is broken down into those countries that 455 00:27:04,800 --> 00:27:08,680 Speaker 3: have access to commercial capital, those countries that have access 456 00:27:08,720 --> 00:27:12,159 Speaker 3: but at high rates, and those countries that really don't 457 00:27:12,160 --> 00:27:15,560 Speaker 3: have access. And in fact, if we look at the funds, 458 00:27:15,880 --> 00:27:18,960 Speaker 3: the majority of the actual resources are going to the 459 00:27:19,080 --> 00:27:22,200 Speaker 3: upper middle income countries. They're not going to the bottom 460 00:27:22,240 --> 00:27:25,199 Speaker 3: of the pyramid. And so in some sense, that community, 461 00:27:25,440 --> 00:27:28,159 Speaker 3: which is more than one hundred countries, come back to 462 00:27:28,240 --> 00:27:31,359 Speaker 3: the process every time and saying it's not working. But 463 00:27:31,400 --> 00:27:33,840 Speaker 3: supposing you think about it a slightly different way, and 464 00:27:33,880 --> 00:27:37,680 Speaker 3: the question now is is their reform in the various 465 00:27:37,720 --> 00:27:41,640 Speaker 3: financial institutions that are trying to change the way they 466 00:27:41,680 --> 00:27:46,000 Speaker 3: provide for risk and to offset the risk in the market. 467 00:27:46,600 --> 00:27:49,840 Speaker 3: Now I have some real indications of progress. Some of 468 00:27:49,880 --> 00:27:52,720 Speaker 3: the adjustments being made in the World Bank, for example, 469 00:27:53,080 --> 00:27:56,800 Speaker 3: are increasingly not looking at project finance which goes to 470 00:27:56,800 --> 00:27:59,800 Speaker 3: an upper middle income country, but looking at why is 471 00:27:59,800 --> 00:28:02,840 Speaker 3: there so much risk? And can I reduce the risk 472 00:28:03,200 --> 00:28:06,479 Speaker 3: so now that country could borrow from the market and 473 00:28:06,520 --> 00:28:09,800 Speaker 3: the rates would be more competitive. This, of course is 474 00:28:09,800 --> 00:28:12,879 Speaker 3: why you have other connected problems. The debt burden of 475 00:28:12,920 --> 00:28:16,080 Speaker 3: countries makes this more difficult, and the questions of the 476 00:28:16,200 --> 00:28:20,160 Speaker 3: number of different demands on resources are also more difficult. 477 00:28:20,720 --> 00:28:22,960 Speaker 3: But I would submit that at the end of the day, 478 00:28:23,480 --> 00:28:25,600 Speaker 3: the problem here is not will there be government to 479 00:28:25,680 --> 00:28:28,560 Speaker 3: government transfers of funds, but there will be a de 480 00:28:28,720 --> 00:28:32,200 Speaker 3: risking of private capital, and the combination of the reduction 481 00:28:32,359 --> 00:28:35,479 Speaker 3: in price of what we are trying to do, plus 482 00:28:35,520 --> 00:28:40,000 Speaker 3: some risk adjustment and risk management will fundamentally alter the 483 00:28:40,120 --> 00:28:43,560 Speaker 3: investment trajectory. And we're already starting to see that, and 484 00:28:43,600 --> 00:28:46,600 Speaker 3: it's moving down the development chain, which is to suggest 485 00:28:46,640 --> 00:28:49,880 Speaker 3: that over time, the money that will have to provide 486 00:28:50,040 --> 00:28:52,440 Speaker 3: from one government or from a group of governments to 487 00:28:52,640 --> 00:28:55,760 Speaker 3: other governments will pay for a smaller share of the total, 488 00:28:56,200 --> 00:28:59,640 Speaker 3: and the market investment will increasingly pay for the large 489 00:28:59,640 --> 00:29:00,840 Speaker 3: share of the transition. 490 00:29:01,920 --> 00:29:05,560 Speaker 1: This idea is usually referred to as blended finance, and 491 00:29:05,600 --> 00:29:10,080 Speaker 1: blended finance itself is not new, but working at sort 492 00:29:10,120 --> 00:29:14,000 Speaker 1: of billion dollar scale is quite new. It's only really 493 00:29:14,040 --> 00:29:16,200 Speaker 1: in the last ten years that that's worked. If you 494 00:29:16,240 --> 00:29:19,360 Speaker 1: were to look at success stories. What comes to mind 495 00:29:19,480 --> 00:29:22,360 Speaker 1: as things that people should look at and may not 496 00:29:22,400 --> 00:29:26,200 Speaker 1: be a perfect analogy, but ways in which blended finance 497 00:29:26,200 --> 00:29:28,360 Speaker 1: can really unlock capital at scale. 498 00:29:28,440 --> 00:29:30,479 Speaker 3: So I think it's really helpful to think about some 499 00:29:30,520 --> 00:29:33,320 Speaker 3: of the things that various development agencies are doing, including 500 00:29:33,360 --> 00:29:35,960 Speaker 3: the World Bank. But let's take a couple of examples. 501 00:29:36,560 --> 00:29:40,920 Speaker 3: For a long time, development finance was project finance. The 502 00:29:41,000 --> 00:29:43,880 Speaker 3: idea behind it was there's a new power plant, or 503 00:29:43,880 --> 00:29:46,840 Speaker 3: there's a road, or there's a factory, and I will 504 00:29:46,880 --> 00:29:49,880 Speaker 3: put in capital to enable that to be developed. But 505 00:29:50,040 --> 00:29:54,240 Speaker 3: many of the developed country development agencies have shifted and 506 00:29:54,240 --> 00:29:57,560 Speaker 3: they've said, what are the barriers to private markets working 507 00:29:57,640 --> 00:30:00,880 Speaker 3: to investment working? Well, there are a barrier to policy. 508 00:30:01,120 --> 00:30:04,600 Speaker 3: Those policies don't allow the repatriation of profits, or the 509 00:30:04,640 --> 00:30:08,440 Speaker 3: policies have high surchcharges in tariffs, or the policies make 510 00:30:08,480 --> 00:30:11,120 Speaker 3: it difficult to get access to the grid. If you 511 00:30:11,240 --> 00:30:14,640 Speaker 3: are to adjust those policies, you'd actually start changing the 512 00:30:14,760 --> 00:30:18,960 Speaker 3: risk of the investment. And we're seeing development agencies increasingly 513 00:30:19,000 --> 00:30:23,080 Speaker 3: focus their attention on those kinds of policy adjustments. So 514 00:30:23,120 --> 00:30:25,960 Speaker 3: you look at some places like Ghana or like Kenya 515 00:30:26,080 --> 00:30:29,680 Speaker 3: in Africa, both of which have seen some really interesting 516 00:30:29,760 --> 00:30:34,000 Speaker 3: evolution in the way they treat farign capital and the 517 00:30:34,120 --> 00:30:37,200 Speaker 3: kinds of ways that that capital is now welcomed because 518 00:30:37,200 --> 00:30:39,640 Speaker 3: it's easier to deploy it and to bring it to 519 00:30:39,680 --> 00:30:44,560 Speaker 3: project programs, and that now enables private markets and banks 520 00:30:44,600 --> 00:30:47,320 Speaker 3: around the world to come in because the risk has 521 00:30:47,360 --> 00:30:50,080 Speaker 3: been reduced. I think we'll see more of that. It's 522 00:30:50,160 --> 00:30:53,080 Speaker 3: much more evident in some of the upper middle income countries. 523 00:30:53,320 --> 00:30:55,560 Speaker 3: You see it in a very different way in Mexico 524 00:30:55,920 --> 00:30:58,680 Speaker 3: than you do in Mali. Mali is still having a 525 00:30:58,720 --> 00:31:02,280 Speaker 3: great deal of difficulty civil unrest. They're much much harder 526 00:31:02,320 --> 00:31:06,120 Speaker 3: to work. Mexico is seeing much much more capacity in 527 00:31:06,200 --> 00:31:07,360 Speaker 3: terms of market investment. 528 00:31:07,920 --> 00:31:09,920 Speaker 1: Now, I want to ask you a big picture question 529 00:31:10,200 --> 00:31:13,360 Speaker 1: looking at twenty twenty five, ten years of Paris, and 530 00:31:13,400 --> 00:31:15,080 Speaker 1: I say ten years of Paris, but I want to 531 00:31:15,080 --> 00:31:18,280 Speaker 1: ask a picture much bigger than Paris, which is when 532 00:31:18,280 --> 00:31:20,600 Speaker 1: the Paris Agreement got agreed. It was sort of the 533 00:31:20,640 --> 00:31:23,719 Speaker 1: moment where not just the fact that finally a climate 534 00:31:23,760 --> 00:31:27,360 Speaker 1: cop led to an agreement, but also a recognition that 535 00:31:27,400 --> 00:31:30,440 Speaker 1: governments around the world were starting to prioritize climate in 536 00:31:30,440 --> 00:31:33,640 Speaker 1: a way that they had never done so and we 537 00:31:33,640 --> 00:31:37,600 Speaker 1: can split what happened after Paris in maybe two hours. 538 00:31:37,800 --> 00:31:42,080 Speaker 1: The first five years was really recognizing what it means 539 00:31:42,160 --> 00:31:44,680 Speaker 1: to try and meet these goals. You had the one 540 00:31:44,680 --> 00:31:47,000 Speaker 1: point five c report that came out that sort of 541 00:31:47,040 --> 00:31:49,560 Speaker 1: created the net zero by twenty fifty framework that has 542 00:31:49,560 --> 00:31:53,360 Speaker 1: been adopted by countries and companies. You had investors thinking 543 00:31:53,360 --> 00:31:56,280 Speaker 1: about investing in ESG because interest rates were low and 544 00:31:56,320 --> 00:31:58,280 Speaker 1: they thought they could get more return on something that 545 00:31:58,360 --> 00:32:01,040 Speaker 1: is fundamentally the right thing to do, and there might 546 00:32:01,080 --> 00:32:04,520 Speaker 1: actually be longer term returns to be gained. And then 547 00:32:04,560 --> 00:32:08,600 Speaker 1: you can look at the following five years, and then 548 00:32:08,640 --> 00:32:12,560 Speaker 1: things started to hit reality. If you're to imagine the 549 00:32:12,600 --> 00:32:16,040 Speaker 1: next ten years now that we've sort of come to 550 00:32:16,080 --> 00:32:19,280 Speaker 1: a point of more realism on climate, which is carbon 551 00:32:19,400 --> 00:32:23,160 Speaker 1: cannot be the top priority for any country, but it 552 00:32:23,240 --> 00:32:26,440 Speaker 1: will be among the top priorities, maybe the top five, 553 00:32:26,480 --> 00:32:30,320 Speaker 1: maybe the top ten priorities. How do we tackle a 554 00:32:30,320 --> 00:32:34,120 Speaker 1: global problem over the next ten years as the urgency 555 00:32:34,160 --> 00:32:37,440 Speaker 1: to act becomes faster, but the reality is going to 556 00:32:37,480 --> 00:32:38,160 Speaker 1: pull it down. 557 00:32:38,760 --> 00:32:41,600 Speaker 3: So I think there's two realities. There is the reality 558 00:32:41,640 --> 00:32:44,960 Speaker 3: that is essentially about the climate change itself, and over 559 00:32:45,000 --> 00:32:48,520 Speaker 3: the last ten years, we've seen the increasing level of impact. 560 00:32:49,440 --> 00:32:52,040 Speaker 3: I think that that impact starts to show up in 561 00:32:52,240 --> 00:32:56,560 Speaker 3: local will to change. It shows up in a combination 562 00:32:56,640 --> 00:32:59,560 Speaker 3: of need for resilience. But it also shows that some 563 00:32:59,600 --> 00:33:01,560 Speaker 3: of the things things that we are looking to as 564 00:33:01,600 --> 00:33:04,920 Speaker 3: part of the solutions set, will need to accommodate that resilience. 565 00:33:05,360 --> 00:33:08,600 Speaker 3: And if they provide both services, both a service for 566 00:33:08,640 --> 00:33:12,200 Speaker 3: reducing emissions and a service for resilience, they'll be more attractive. 567 00:33:12,440 --> 00:33:14,760 Speaker 3: Let's give an you example that there have been some 568 00:33:14,840 --> 00:33:17,520 Speaker 3: massive storms in the United States. It goes back to 569 00:33:17,560 --> 00:33:22,600 Speaker 3: Superstorm Sandy. We've had Heleen this past year. Interestingly, the 570 00:33:22,680 --> 00:33:26,200 Speaker 3: communities that were most resilient to those storms were able 571 00:33:26,280 --> 00:33:30,360 Speaker 3: to put their solar grids onto the market. Those that 572 00:33:30,440 --> 00:33:35,560 Speaker 3: relied on conventional centralized power, primarily of natural gas, had blackouts. 573 00:33:35,920 --> 00:33:39,480 Speaker 3: That's a very interesting conclusion. The same thing has happened 574 00:33:39,480 --> 00:33:42,239 Speaker 3: in Hawaii for typhoons. The same thing has happened in 575 00:33:42,240 --> 00:33:46,000 Speaker 3: India after the floods. Those local communities that actually had 576 00:33:46,080 --> 00:33:50,600 Speaker 3: access to domestic, local renewable energy were much more quick 577 00:33:50,640 --> 00:33:53,680 Speaker 3: to recover. There's a second question here, and that's the 578 00:33:53,720 --> 00:33:57,120 Speaker 3: price question. Prices have come down for the alternatives, and 579 00:33:57,160 --> 00:33:59,800 Speaker 3: the prices have come down for a variety of alternatives 580 00:33:59,800 --> 00:34:03,080 Speaker 3: that are central to the question. One, the price of 581 00:34:03,120 --> 00:34:06,320 Speaker 3: renewables has come down. It's now much cheaper and in 582 00:34:06,360 --> 00:34:10,120 Speaker 3: most of the world competitive with fossil fuel. Not everywhere, 583 00:34:10,120 --> 00:34:12,839 Speaker 3: but much of the world. Two, the price of an 584 00:34:12,840 --> 00:34:15,719 Speaker 3: electric vehicle has come down. And for some it's been 585 00:34:15,719 --> 00:34:19,160 Speaker 3: the Chinese market, which is extraordinarily rapidly growing, but it's 586 00:34:19,160 --> 00:34:21,200 Speaker 3: also been a two and a three wheeler market which 587 00:34:21,239 --> 00:34:24,239 Speaker 3: is coming out of India, and that's penetrating into Africa 588 00:34:24,280 --> 00:34:27,399 Speaker 3: with those vehicles, not just with a four wheel light 589 00:34:27,480 --> 00:34:32,320 Speaker 3: duty car. We're seeing the price of alternative industry coming down, 590 00:34:32,840 --> 00:34:35,160 Speaker 3: not yet to the point of competition, but to the 591 00:34:35,200 --> 00:34:38,799 Speaker 3: point where some supplemental price from carbon makes it an 592 00:34:38,800 --> 00:34:42,200 Speaker 3: equivalent cost. And that looks like it's going to continue 593 00:34:42,239 --> 00:34:46,120 Speaker 3: to drop at the same rate. If all those things continue, 594 00:34:46,320 --> 00:34:49,120 Speaker 3: the next ten years is likely to see an acceleration 595 00:34:49,320 --> 00:34:53,000 Speaker 3: of action. I think it will be less quick in 596 00:34:53,080 --> 00:34:56,840 Speaker 3: the absence of policy stimulus, but it will occur. And 597 00:34:56,880 --> 00:35:00,160 Speaker 3: I think really the agenda for this negotiation and for 598 00:35:00,200 --> 00:35:04,080 Speaker 3: the global endeavor is can you further accelerate the transition, 599 00:35:04,600 --> 00:35:07,520 Speaker 3: not will it stop or will it continue? But can 600 00:35:07,560 --> 00:35:08,200 Speaker 3: it go faster? 601 00:35:09,320 --> 00:35:10,080 Speaker 1: Thank you gentathmen. 602 00:35:10,400 --> 00:35:15,640 Speaker 3: Thanks, it's been a pleasure to talk to you. 603 00:35:19,000 --> 00:35:22,040 Speaker 1: Thank you for listening to Zero. If you like this episode, 604 00:35:22,080 --> 00:35:24,160 Speaker 1: please take a moment to rate or review the show 605 00:35:24,200 --> 00:35:27,799 Speaker 1: on Apple Podcasts and Spotify. Share this episode with a 606 00:35:27,800 --> 00:35:31,239 Speaker 1: friend or with someone who is a Trump supporter. You 607 00:35:31,280 --> 00:35:34,040 Speaker 1: can get in touch at zero port at Bloomberg dot net. 608 00:35:34,360 --> 00:35:37,680 Speaker 1: Zero's producer is Mighty Leraum. Bloomberg's head of podcast is 609 00:35:37,680 --> 00:35:41,520 Speaker 1: Sage Balmer and head of Talk is Brendan nune Our. 610 00:35:41,560 --> 00:35:44,879 Speaker 1: The music is composed by Wonderly Special thanks to jend 611 00:35:44,880 --> 00:35:49,400 Speaker 1: De Luis, Sharon Chen, Shuwan Wagner, Ethan Steinberg, Blake Maples, 612 00:35:49,560 --> 00:35:53,319 Speaker 1: and Jessica Becker. I am Akshatrati Back soon.