John Kerry Expects Deal on Carbon-Trading Rules at COP
Sorry. Thank you. Very nice to see you all. Thank you John Kerry for being here. The US special presidential envoy for climate. But I think the real point about John Kerry is his long involvement in all this. I think you attended Rio as a senator. I did many years ago back in 1992. And you played a massive role in the Paris agreement not least by kind of brokering the joint U.S. China deal just the year before. So let's start with COP and what's happening especially the kind of final text you've had all these attempts to change things. You set a very good test I think for what would be success. You said look we must get the world back on a pathway to one point five degrees. Keep one point five
alive. Got the methane deal. We've got all these other things. You look at the pledges and even if you believe every single one of them we're still somewhat possibly closer to two degrees than one point five. And I suppose my question for you is what do you actually want to see in that final text that would make you happy about getting to that one point five degrees. I don't know if your trillion dollars trillion if you've got people here. Can I just say first of all what what a
great setting at the CIA to find that for. It was quite an exercise that I walked in. I feel like James Bond. I'm looking for cue. I want my Aston Martin. He's at the back. He's back there. What a great city. Spectacular. So let me. That's a great question John and thank you. It's a privilege to be here. Thank you all. Great to share some thoughts with you about what is happening here which I think is building into the potential of. Very significant.
When we did Paris we had one hundred and ninety five countries sign up to something that was. You know every country defining its own plan. That's the best you could get out of everybody. And the one point five degrees was almost an afterthought to the well below two degrees.
Because the island states and vulnerable countries felt they hadn't been heard enough and listened to. So in the last week we put together the one point five and that was a great. Coalescing feature in the end of the day no more you know that the finishing moves that there is a trade. And by the way. I know. Yes. How's the infrastructure here. Does this hold up. So so so Paris and I said it at the plenary and afterwards because you know I don't think we should overdo it. And and what I said was you know we're not guaranteeing our citizens that
we're going to keep the earth's temperature two degrees. What we're doing is sending a signal to the marketplace. That one hundred and ninety five countries are all going to move in the same direction at the same time. And that's the biggest market in the world. By the way it's four and a half billion to five billion users today already double digit trillions of dollars in market energy and transportation and industry and so forth. And
the markets signal really was going to affect the allocation of capital. And that was the theory. And that will change things. And we have this process in Paris where we get together afterwards we measure our ambition. Well that's exactly what's happened in the first two years after Paris. About 350 a billion dollars went to alternative renewable sustainable energy investment. And we were moving in the right direction until this.
Person appeared who without science without economic rationale without anything except the kind of vindictive mischief pulled out of the Paris agreement and it hurt and it's hurt the United States reputation Lee for three or four years. So President Biden has been determined to come back and to reassert ISE. It's not because it's politically something that you choose to do but because math mathematics physics. Science tells us this is what we have to do. And I mean have to do so. Mother Nature has played this extraordinary role in. Screaming at us shaking us really into common sense and Glasgow is the test of that really. So what I see happening after years of these meetings I mean I was as you said first cop and the creation of the cop was real in 1992 and before that. 1990 1988 when we were in the Senate. And Al Gore
and I and our whole group of senators were. Told by Jim Hansen this is happening. So this is a long journey and now is the test of whether we can really get there. You we are told that we were we were told by the IPCC in 2018. You guys aren't getting the job done. You have 12 years within which to get the job done make the decisions that not that you get the whole thing finished. But you have to make the key decisions and begin to implement on them to avoid the worst consequences of the climate crisis. So three years later now nine years we have to do that. That's what makes Glasgow so important. Are you happy with what has been achieved. I think. Well what do you want to see something extra in that final text.
Well I mean if if I want to deal with a wish list. Yeah sure. I'd love to see something extra. But you have to deal with reality. You have to deal with the way things move and happen in public affairs particularly in the extraordinarily complicated life of international diplomacy and multilateralism with 100 and almost 200 countries. And they're different. They have different challenges. Some of them have grown up on coal because that was all that was available. That's all anybody sort of knew back then. And they built 40 year assets which are funded and have investors who care about return on investment.
And there's a whole there's a huge network as you know John there and anybody. So the issue is how do you move all of that. I think we're moving it rather remarkably right now. I think this cop is already different and better than any cop I've ever been to. There is a greater sense of urgency a greater sense of focus a greater sense of possibilities than I've ever felt coalescing before. Now there's still some issues. There's loss and damage. There's adaptation there's resilience there's
finance. There's the issue of ambition which is perhaps perhaps the single most important because if you don't have enough ambition you're just going to be feeding the trough of adaptation. So there's got to be a balance here. Yes we have to adapt. But the single most important thing is to avoid two point seven degrees three degrees four degrees. But if everybody is when they if everybody. If everybody everybody.
Even did what they said they're going to do in Paris. We were still heading to over three degrees folks. So that's why this is so critical. This is the checkpoint that Paris envisioned. When we come five years later. It's actually six because of Covid. This is the measurement of whether or not we are correct. And I see corrections beginning to take place. You think it's enough.
I mean you just mentioned that according to the official numbers on the National Determined Contributions we're still at two point seven degrees on what that's going. It may come down a bit. There's an announcement today. But do you think one of the things that people are talking about here is the need to cool nations back on an annual basis. Come back next year and measure the NDC crank it up again. Would you support that. Well we come back next year no matter what because we have cut 27 and then cut 20 DAX ship. But actually measuring I don't know. Let me just finish. I thought it would be I think insanity not to measure every year. We should. We're going to be measuring every day by the way. We now have satellite systems and they're growing in number. Copernicus and trains and so forth that have the ability on a daily basis to measure the carbon footprint of
the supply chain of a large corporation or to measure the entire output of a country or the government buildings. We can pinpoint we have accuracy. You may have seen a terrific story. I'm sorry you mentioned but The Washington Post was a good story had a terrific story. You saw it with the methane pinpointed in Russia and the whole map of methane etc. And methane as we all know is responsible for 50 percent of the warming of the earth. It's point five degrees of one point one
now or so where we've warmed to. And if we can do the methane pledge which President Biden put forward here a hundred and eight countries have come forward to join the methane pledge. And as Fatih Birol told us the other day if we can achieve the methane pledge it is the equivalent of taking all the cars of the world all the trucks of the world all the ships of the world all the airplanes of the world and taking them to zero emissions. That's extraordinary. And you have countries suddenly
focused on it. You know as well as I do that the pledge is for to have that 30 percent 30 percent reduction by 2030 but not it. But it's not individual country countries saying they will cut by X amount which is the difference between that and the. And that is accurate. It is the difference. And you also haven't got China or Russia in it. Well let's see what happens in the next
days. Maybe we can work it and get a U.N. to use it. Do you think you might be able to pull China into the meeting. Well we're working at it. I was up till 3:00 in the morning yesterday. It was. It's today. It started yesterday. And we were up to 30 in the morning the night before that working with a number of different countries. And I'm hopeful.
I'm just. There is a specific China problem isn't it. They are the biggest emitter of greenhouse gases. Obviously that doesn't take into account the historical things that they always build up. They're not they haven't actually done anything here other than commit. So no that's not fair. So no it's not. No it's not financing coal outside China. I urge you to go read their plan. It's the one plus and plan and. Errors you'd read it because I spent a lot of time reading it in the last couple of days. It actually calls it. It says they will do a lot. Is it enough. No. But will they do a lot. Yes. They're talking
about strictly limiting coal. It's talking about getting rid of bulk coal usage. They're talking about phasing down after a certain point. And China has 79 percent of all of its energy comes from coal. That's the way they built a less developed country. And I can remember being in Shanghai and early 1990s standing on the bond looking out at the Pudong. And there were a
couple of skyscrapers going out with with rickety bamboo lashed scaffolding and two. And then I came back ten years later and there was another Hong Kong staring you in the face where there'd been rice paddies. That was China's had this incredible journey has been fueled by coal. I've also sat on the Pudong. And you can see the barges laden with coal timing down that
river. China has to move away from coal and they are laying out a plan which isn't yet enough. So what do you do about that. Well our our theory is well let's try to work together to see if we can find the ways as nations around the planet to accelerate this. We've been doing that in the last months. We've worked with Mexico. Two months ago President Lopez Obrador wouldn't talk about anything but oil. They're going to exploit their oil. Mexico was oil. That's what represented them. That was their asset. We went down there we met with them and spent time. He spent the whole day with me talking about this. And in the end
he signed on to an agreement where Mexico said we're gonna submit a new NDC next year. We're gonna deploy geothermal. And then of course they have active volcanoes. We're going to deploy hydro solar wind. They have incredible capacity for that in the southern part of the country. They could be a major provider of alternative resource energy to the United States to Canada. You could. And on and on this next week on the 18th. There is a meeting a summit of the Americas with
Canada the US and Mexico meeting to talk about this vision of how do we come together. So you know this is very different from the insults of the last four years. This is a genuine effort by President Biden to pull people together and to find solutions. Do you think just one last thing on that final text do you think you can bring the Chinese the Russians these other people into committing say to measuring indices on an annual basis or to adding at least something else into the final text of what comes out. Well yes I think we have to add to the final text. But please remember COP is not defined just by the indices particularly this cop. I mean we started a thing called the first mover coalition. We had Volvo at the table. Volvo has
pledged they are going to buy 10 percent of their steel for all. Their manufacturer of cars will now be green green steel. That sends a message to the marketplace that green steel has a market society has a buyer. And so you can begin to invest with confidence and it begins to deal risk in the same way. DHL is part of this. They are going to do things with their shipping to be carbon free. Maersk has signed up. Maersk has ordered eight new ships cargo vessels carbon free. And they
don't exactly know which propulsion they'll use. But they're going to do it and they will do it. Amazon has giant joined this first mover coalition. So that's on the side. That's not part of an NDC but that's going to result in emissions reductions. You have United Airlines as part of that. They made a commitment with respect to the sustainable aviation fuel. So we're going to try to accelerate the creation of markets. But there are a bunch of
other things. There's a market demand initiative. There's a lot. There's the forest initiative there. Article 6 I mean Article 6 is the other. As you know getting these last few days that is the way by which carbon trading erratic should it be started is not going to get through. I believe it will. I'm going out on the limb I really believe it will. I think we can finish the rulebook here and our team is worth sixteen sixty. Our team is working really really hard and has been all year by the way. This is not just a Glasgow effort. We've been working all year to work on the transparency issues on the accountability reporting data all the components the markets the markets is a very critical component of it. I hear
more and more business folks talking about pricing carbon. President Biden has not yet made a decision regarding that but there are a group of senators here yesterday day before and we had a long conversation. There is increasing discussion in the U.S. Senate about pricing carbon. Everybody here who watches the models knows that if you if you change your assumption in the modelling nothing gets you more reduction of warming than pricing carbon. It's a winner. Why they why not worried about the company's High Flyers. Well you know surely it's a better way to raise money. It's a more it's you touch you tax is up to you. Doesn't work. Looked at the makeup of the United States Senate. There's a yes. I can see you. I can see your problem.
I'm trying. I'm saying in a perfect world I'm allowed to be a willful journalist. And you sadly have to deal with this these practicalities at least in theory. Do you not see that a carbon tax is the same scenario that I said that this is a complete direct. Harry Truman was a senator and he is to sit where I began. No. Ninety nine in the united way back in the corner. And I was back there with Jay Rockefeller and Al Gore. I feel that's all the newbies go back there. And he wrote home his mother frequently and he wrote home to his mother saying Dearest mother I'm on the floor of the United States Senate. And I look around
I look at my colleagues and I you know I see the ghost of Clay and Webster and Calhoun. And I pinch myself and I say how the hell did I get here. And then about five months later he's writing home his mother dearest mother again late night in the Senate. I look across the Senate. I see my colleagues I pinch myself. And I say how the hell did they get here.
So that tells you a lot about the series but there is a US best people I think if you can I can I can. I just want to share the bright side of this. We were headed before we came to Glasgow. We're headed towards about two point seven degrees. Fatih Birol has done a great job in my judgment at the IAEA. He's turned it into a genuine watchdog and motivator. Told me the other night and he's now report that I think he's out publicly. You take all of what has been put on the table here in Glasgow. That is to say all the indices but all the other. The forestry
initiative the deforestation target the methane target. You add all the initiatives. He said if everybody does what they promised to do we would be at one point eight degrees. Think about that folks. The notion before we came here that we could be halfway through at the potential of hitting that now where we hit it. The key to what happens with Glasgow is going to be the
follow up. I'm going to turn my operation into literally a mentoring handholding effort. We're going to work with Saudis. We're partnering with them on their deployment of green hydrogen into the desert to do the solar that will that will that will power the electric risers that will produce the hydrogen that then go into pipes and go to Greece to Italy and feed Europe and Africa. So you know things can really happen here. There are 46 critical technologies that have been designated by the IEA. Forty two of them are behind and they're not at scale. They are critical. 50 percent of the reduction in emissions that we need to get will come from technologies that are not yet at scale but present by just 30 billion dollars. That's going to the Energy Department. That's going to go into our national laboratories. And so what. When we get this reconciliation legislation that I believe we will get it in the next weeks and that is going to be the most massive sort of effort to bring together the forces we need to try to achieve this. So I think something's happening. And and
and the way we're going to get where we need to go is to work with Indonesia till their promises become real work with India. We have made a partnership with Prime Minister Modi. Prime Minister Modi has committed even as he has a huge dependency on coal today. He wants to change the supply chain on solar panels. They're going to be making them in India. He is determined to deploy 450 gigawatts of renewable energy and that means solar and wind principally. And
they put about 100 and some out already. So we said and I said what do you need. How how will you get there. So we need finance and we need technology. So we agreed in a partnership with the UAE and with Sweden to work at the handholding necessary to bring the technology and the finance to the table. Now what does the
finance need to finance needs a bankable deal. That means risking means blended finance and in some concessionary money we could do that. We have to rewrite I think some of the rules perhaps for the for the model development multilateral development banks. I mean they have you know Bretton Woods as Bretton Woods. It was great for post-World War Two but we need something different now in terms of financial instruments and efforts to accelerate the deployment of the trillions of dollars that are there. We had 17 trillion dollars sitting on the sidelines paying for the privilege of being parked in some fund
or some bank or somewhere. That's insanity a net negative net net negative interest rate when you could have been earning some percentage in a revenue producing environmentally sound deal where you have revenue that comes from energy production or revenue that comes from transportation of one kind or another. But all of this is all this is from the private sector. Just to just to throw some. Well the private sector. Let me tell you why. Modi talked about he wanted a trillion dollars from the rich countries. There was a plan but one hundred billion dollars in debt as you well know America. The hope was that America might put 40 percent of that. I think you've committed violence committed putting 11 billion in 2012 ten point four billion. No. Eleven point four billion a year from 2024. Well yes this is the first budget cycle President
Eisenhower had with the needs. It's a smaller money. I mean let's get real here. Not his first budget cycle. The president has. He is addressing climate and putting out on point four billion when you are the president and you're elected the other president whoever that might be has put the budget in for you. You're stuck with whatever is there. The next year is your first opportunity. That was signed sealed and delivered well before a
cop. So you're actually entering into 23. But leaving all that aside 100 billion is not the fight. The UN the UN Finance Report makes it crystal clear that to effect this transition to get to net zero by 2050 we need two point six to four point six trillion a year in order to do that. No. No government in the world. No government in the world. Not China. Not the United States where the two biggest economies has the money necessary to do this. You're talking in billions. Billions. Doesn't do it. You've got to have trillions. So I decided when I left being secretary of state the only way we're going to win this battle is to bring the private sector to the table. So I went out minute. I got appointed to this job and I worked with Goldman Sachs with Morgan Stanley Wells Fargo Citi JP
Morgan Bank of America. And they have all stood up and said and by the way ESG is now in every boardroom in the world. People are thinking differently. We have a debate about stakeholder shareholder. If you think there is a giant very quickly do you think that's changed. When I first met you totally it was governments pushing thing and companies were the problem. Correct. You now think companies are ahead of governments. Yes totally. And not only are companies
ahead of government but companies understand that their future is tied to having a stable marketplace a viable marketplace. Having supply chains that aren't interrupted by cyclones and storms and floods and so forth. We spent two hundred sixty five billion dollars in the United States a couple of years ago just cleaning up after three storms. Are you kidding me. Maria Irma
and Harvey. Harvey dropped more water in the Louisiana Texas area than goes over Niagara Falls in a whole year. Did that in five days. That's just three. That's one storm. Irma had the first sustained winds of one hundred eighty five miles an hour for 24 hours. This is what's happening folks. The warming of the ocean which comes from the coal and the acidification is. And the heat the heat 90 percent of the heat goes into the ocean. The warming of the ocean puts out more
moisture. That's your intensity of storms. And it's gonna get worse. I mean how much Alaska had something I can't memorize to feed or something of rain in a few hours. The other day. I mean you've got gotta get real on this. This is trillions of dollars needed needed now. And we can win this fight. We cannot win without the private sector at the table. Just one can just push you one last time on this issue. The American government I think if you took all the people here they would agree with you that it's being driven normal by companies and governments. But on the lot of people here I think when Trump
left they all appreciate what you have done particularly. But they still look at America and think America is not the people signing up to do electric cars by 2035. America is still someone who's letting coal carry on just like the Chinese are. No we're not actually. They're not fine. You're not financing it outside. No no no no no no. We're not. We're not. We're not. Over five hundred coal plants shut in the United States in the last few years. That's true. Other another 58 are going to close this year. You're a guy named Bloomberg. Yes. He has been deeply involved in closing these plants. Has beaten. He has been he's been very good on that. I think he has. And there will be hopefully my job is secure. On your job. On your job. You Jihye
Lee is a good guy. But you have this problem but vital. You know you are out here doing this stuff back at home. You talked about the Senate. The Senate is not passing things in the same way as you would hope. But you know these different measures the great hope was America would drive this thing. You are trying but the motor of American government behind you
is not pushing as hard. Well no it's pushing very very hard actually. The president is. Fixated on getting this legislation done it is hard it is hard right now. The United States Senate. I was privileged to be in the Senate when it was somewhat the old Senate. And for anybody who wants to know what that was like. Robert Caro's book on Lyndon Johnson the master of the Senate is a brilliant first 300 page log book first 300 pages a very long book are so good in describing if you want to understand the setting. That said it departed beginning with the Gingrich revolution in 1994. And then we went through the Tea Party and the Freedom Caucus etc. and notice that even Republican speakers
at the House disappeared during that sort of turmoil. So it became a very difficult place. I think there are a lot of people there who really want to make things work right now. And yes there is this divide on the one piece of legislation. But you know I I just had this confidence that you know it goes in cycles and it will come together. You don't think that the world is changing. You look at what happened here with the fuss about people spending money on heat pumps. If it was really shown in France you look at the sort of protests that happen once normal people get confronted with the costs of adapting to climate change. And I suppose my question for you is the last question is do you worry that this issue of climate change or adapting to climate change could be a bit like globalization where the elites the economists politicians people like you and me we all support the need to do this thing. But actually when you confront it with people you say to people this is going to be
jobs lost here. It's going to be extra money on gas it's going to be pricing carbon that actually when people hit that that they won't like it. And that's what you're beginning to see in the energy crisis which has happened over the past few months. You've seen China is pumping you know pumping. It's going back to coal because it needs to you see people calling on natural gas. Renewables aren't ready yet. And people don't trust them. Do you worry that climate change is the new globalization and
that way something that the elite support and normal people don't. Actually I don't. Because Mother Nature is going to be relentless. And she's more powerful than any of us. So what is going to happen is you're going to see millions of
people moving from places they can't live in anymore. And if you think the Syrian exodus during the Syria war. Changed the politics of Europe. Wait till you see. The complete agricultural capacity of Africa implode. Where do you see water. Not available in places. I mean the Pakistani prime minister told me they already have a diminishment in the amount of hydro they can use because of the change in that in the Himalayas etc.. No I think that the question is can we manage. The potential of a certain amount of chaos that will come if we don't do it. And will it all get lost in that. That's why again Garlasco I think is so so critical. This moment is so critical.
The. We are very tuned in President Biden has major components of his legislation that are based on. A just transition. And on environmental justice. And there has been built into many of the politics of the world. I think many of you know this. The most massive inequity that I've seen in my lifetime. We have. People working harder and harder and they don't get ahead. And that's true in societies from the United States or Europe and other parts of the world and people who don't have those jobs don't really see how they're going to get ahead. And that's
largely because we've had a really fraudulent horrendously distorted tax system. And I used to be on the Finance Committee of the United States Senate. The books of the tax code would go from here up to here. If you read through them and almost every page in them are pretty personally carved out corporate benefits one kind or another individual ones. And it just doesn't work. Right. Let's be honest about it. When when you have finally we're addressing a G 20 you just said we're going to have a minimum corporate tax on a global basis. And I'm not I'm not I'm a capitalist. I believe in people's
ability to invest and innovate and be entrepreneurial and go out and make money and make things. But there's a difference between capitalism and robber baron capitalism. And in some places that's what's been practiced. So you have this incredible that's what's fueled globalization. That's what's for you that the antipathy to it that is what is fueled this knee jerk anger in many parts of the world where somebody like Donald Trump could win because people actually believed he was going to fight for them. The populist rhetoric. And if we address that better and we we've done better at that in different periods of our lives during the 1960s 70s 80s we had a more fair and less distorted system. I think we'll get back to it. I personally believe that you know that can be redressed. But coming back to this that you know
just pointing out something like coal by 2030 in the United States we won't have coal we will not have coal plants by 2035. President Biden has set a target that we will be in our power sector. Carbon free. We're the largest oil and gas producer in the world but we're saying we're going to be carbon free in the power sector by 2035. I think that's leadership. I think that's indicative of what we can do it. By the way building out a grid in the United States is jobs. It's jobs for engineers for heavy equipment operators electricians plumbers steelworkers. You run the list of it that we don't have a grid. And we saw what happened in Texas. We have an East Coast grid a west coast grid. A little line goes across the Dakotas. And of course Texas has
its own grid. So big hole in the center of the United States of America. We have a rover roving around Mars. We have we invent the Internet. We invent vaccines. We can put a man on the moon. We can't send an electron in 2021 from California to New York. That's insane. It's stupid. And you know. We need to be able if we had a smart grid we can use what's happening in daylight in California to excuse me in New York to help California or to send energy to the Midwest or whatever. There's so many things staring us in the face that we can do. I think this is the most exciting transformation since the
industrial revolution which which I did not live through in my life. I just think we're onto something. I'm very very young and optimistic. President Obama said me yesterday. You know John I know you're an optimist but but I am an optimist but I'm an optimist based on what's possible. And remember what Nelson Mandela said. You said it always looks impossible until it is done. We're getting it done.
And I think this next few days is pivotal in that. And if we are at one point nine degrees at one point eight we still can get to where we have to go because the scientists didn't say you have to have it done by the end of cop. They said you have 10 years and we now have nine years. So we can go to China. We can work with Russia. Russia by the way is
at the table with us. I went to Russia. We talked to Putin weighs in. He's got a challenge. He's gotten extractive economy. He's got the Siberia tundra is burning. He's got infrastructure for that extraction. That is very much threatened by the permafrost the shifting and melting. I mean those are real problems. How do you change that. How do you move rapidly enough to put it in the RTX. You know we're looking at fourth generation. I met with Bill Gates the other day talked at length
about what's happening with potential small modular reactors that are different that don't threaten meltdown don't have the potential for proliferation challenge. Don't have the waste problems and can be actually portable. You know the United States Navy I was in the Navy the United States Navy. We had ships from the 19 late 1950s through the 60s. We've had ships that are nuclear. We've never lost a sailor. We've never had a spill. We've never had a meltdown. Nothing. No accidents. So maybe the next generation is going to give us absolutely zero emissions control lable. Better
option here. And I'm for all of the above right now. I'm for making sure we continue with fusion. We continue here. We're pouring our efforts into research across international lines. And I am confident. Yes. That we can get there. Human beings created this problem. Human beings can solve it. That's a very good place to wrap up. Jim Carey thank you very much.
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