Global Trade and The Energy Transition
Good evening in North America and good morning in Asia and the Middle East. I am Jennifer Gordon, managing editor and senior fellow at the Atlantic Council Global Energy Center. I'm delighted to welcome you to the next two hours of live programming at the Atlantic Council Global Energy Forum. Thank you so much to John Defterios and adding a trainer for their discussion just now and thank you, John to you and your excellent Panelists for such a great discussion on the future, the transatlantic energy and climate relationship. Would next panel discussion will dive deeper into international relations looking specifically at global trade.
I am now it delighted to introduce Ambassador Paul it. Dobriansky, senior fellow at the Belfer Center for Science and International Affairs at the Harvard Kennedy School. For Our next panel discussion, Global trade and the energy transition. Paula, the floor is yours.
Thank you so much, Jennifer. Great to see you. And thanks to everyone who is joining us from around the world. I am very, very pleased to be moderating this discussion with our very esteemed panel who I will be introducing in just a moment. And they're going to be discussing and diving deep into the intersection between the energy transition and also global trade. Let me remind all of you that this particular panel
and event is on the record. And if you would like to participate in the conversation, please do submit your questions. Into the Q and a portal and will incorporate them into the discussion. Ah little bit later on Now, let me proceed forward, and I'd like to introduce our four very esteemed Panelists, and I'm gonna introduce them in the way in which I'm also gonna pose questions.
To them, eh? So let me begin upfront. We're going to hear first from Dr Jean Francois Tremblay, who is the deputy minister of Natural Resource is in Canada. And then second, we're going to go to Debra Lair, who's vice chairman and executive director of the Poulsen Institute. Thirdly, we will then hear from David Livingston, who's a senior analyst with the Eurasia group. And then we will hear from George Frampton senior fellow Global Energy Center of the Atlantic Council.
So welcome to all of you and let me go if I may to Dr Chen play first. You know, Doctor, as we know the energy sector is highly trade exposed and in order to attract investment and keep growing operations, employing people and investing in technology, we know that a competitive regulatory environment is really needed. So please share with us. What is Canada doing to bolster the competitiveness of the energy sector and also ensure that its own industry can attract investment? Particularly during this very capital, constrain time and welcome to you and look forward to hearing your response to this question.
Thank you, Ambassador and pleased to join you from the other world and other words, also the traditional territory of the and unseeded territory of the concatenation. It's a very important question, especially in this time of transformation from an energy perspective in Canada. We as you know, we have a very strong energy sectors and energy sectors. Letters, actually. Major export for us, It's more than 23% of our exportation that actually are the energy sector. We have oil gas we work on. I do electricity, nuclear biomass name it a lot of the energy sectors and, of course, the competitiveness of this energy sector, especially global least quite important in the current time.
Force. I would say that there's way feel that the transformation is actually and the Net zero economy in the green energy is offering a lot of unfortunate East boss. On one side. We've got the feed stock in the natural resources that
you need to produce those new source of energy. And on the other side, we've got the workforce. We've got the expertise. Cause. I think there's meant the initiatives that we're taking. I'm
going to try to put them into four categories. First of all, is making sure we've got the economic environment for investment. And that means for us having the banking system that is a good banking system. It means for us to have free trade agreements with and we have actually free trade agreements. We treat herds of DEA two thirds of sort of the of the of the global economy.
And it's making sure that we've got all the sound economy can corporate taxes are low, and we've got the lowest one in the G seven. That's something we need to continue to have to make sure that we've got solid growth and economic environment perspective. The other aspect is the is the regulatory regime. It's not anymore about economy could development versus environment. It's about making sure that we have major projects that are grounded and in good environmental practices, and we have just changed our regulatory regime We've got now and you environmental assessment process for all major projects in the country.
That takes into account the needs of from an environmental perspective but also making sure that we better engage with local population including indigenous people, and that's very important for us and for competitive nest. It's good for the year's G. I would say great off of our economy. Third and lemons for us is to work on decolonization. Even if you look at the trends on the on the Net zero economy, it's clear to the fossil energy will continue to be an important and will continue to be significant for the next two few decades for sure and well, so we have to work on the car urbanization the oil Senate industry has reduced by 30% the intensity of their GSG emission. They do invest in innovation and clean tech and as a government we actually kind of push and pull to make sure that the system is in place to have a dick urbanization of the energy that include new initiatives that we just launch actually on working precisely on McCann emissions, but also large litter and making sure that we're reducing the carbon Z the cabin ization of our industry.
Finally, I think a major point is we need to invest in the new In the new energy we can produce averaging. We can produce SMR. We have the expertise. We know that there's the energy markets going to be more complex that's more diverse in terms of social energy. We have launch is significant numbers of image of initiatives and there are climate plan to make sure that actually we we are increasing our capacity and in or competitiveness in those areas.
All right. Well, thank you. That's very comprehensive answer and I will come back to you. You raised DSG. Let me come back to you. But on the next round, I want to go to us. I indicated Deborah Lair. And you know the pulse and institute. Certainly focus is a great deal on China. Um, we know that China has pledged reach carbon neutrality
by 2060. Now, actually, is that a realistic goal? And what do you think? Are the challenges for China to be able to actually reach that and also what we're going to be the ramifications of that in the context of trade? Right. Thank you, Ambassador. It's a very broad question, but I think a really important one. She jumping surprised a lot of people when
he made the pledge. Last year for China to reach carbon neutrality by 2060. He did this in part as a foreign policy move and his part as China's attempt to take on Climate as a major foreign policy issue, but also to set some very strict goals domestically within China, and to really push the industry. You know, it's hard to bet against China they often come through. But it's gonna have a significant impact at home both socially economically as well as globally to accomplish this, so they're going to need really three main things political will technological change and significant financial commitments. On the political will they have to take on transformation that their state owned enterprises who are the major polluters within the economy? That's significant because they're the major employers.
And they also even though they're not the drivers of growth, they still represent a significant portion of China's economy. And so it's going to be very hard for them to transform them, but they've recognized for a long time. It's a political challenge that they need to take on. One of the keys to that is to get their national carbon exchange up and fully functioning, which will be one way to use the markets to help drive down carbon. They also need to invest in technological change. They're creating a major technology backbone through creation, five G and really promoting new technologies that will help in meeting those targets. New energy vehicles is just one example of the priority that they've put on these low carbon. Um, industries and then financing.
They estimate that it's going to cost about a trillion dollars annually to meet their goals on climate change. But the Chinese government can only meet about 15% of that, and so they need to find ways to capture a lot of the private sector money that is out there that's available in China, but also available globally to get it to invest in helping them to reach those goals. They need to show that not only can they create, um green infrastructure, but they can find ways to do it in a way that becomes attractive to the private sector and getting good returns. And so as they said, it's a very ambitious goal. It will have an impact internationally because Not only is China looking to make changes domestically, they're looking to both export Some of these changes as well through then the technologies that they've invested in whether it's new energy vehicles or even the standards that they're creating through Thebes elopement of this national carbon exchange, and they're going to start to play a role in the drivers. And pricing like in renewable energy. So I don't bet against China is that it's a long way to get there.
They're just the beginning of this, but it's going to be a very interesting process to watch. You know, It's interesting because you said You don't bet against China because I was gonna ask you after you gave will the if these are the types of things that they undertake It almost sounded like your bedding a bit for I mean, is the bottom line that you think they will achieve it if they undertake all these steps. It's hard to say if they'll actually get there. I think the political
challenges are so significant as as well as me just some of the economic ones, but No matter what they're moving in the right direction and as the world's largest carbon emitter, we need them to move in that direction. And if with a new administration, it is an area that there could be cooperation if you have the United States and China working together. Um, you know, we can make a significant difference in the world. All right. Well, thank you for that, David. Let's go to you on being with Eurasia Group. You know, the arranger group really looks at
various issues strategically, so let's let's give you a strategic question. What do you see as the major developments around the globe that will in fact, shape the very nexus of energy and trade in the near future, And in fact is China one of the pieces What about Canada? We're hearing about the Canadian policies of what is your perspective on this? Thank you, Ambassador on guard a pleasure to be back in the Atlantic Council's Global Energy Forum, of course, virtually this year, but it but it's really a pleasure to be engaging with Such eyes, Steven other speakers on really such a important topic that Z only going to increase in in gravity. I think over the rest of this year and ahead you mentioned, you know China, so I'll start there. I mean, obviously. One of the important things that is sometimes is self evident, but but I think it is easy to lose grasp of when we talk about the ways that trade and the energy to transition come together. Is that we're increasingly talking about a less Western global landscape at least when it comes to where the marginal demand growth is going to be where the marginal investment is going to be, and where the marginal deployment of some of these new energy technology is going to take place to give a couple of examples. China, of course, has been the engine of growth over the past decade.
It's invested more than $800 billion into renewable since 2010 over the past decade. That's twice the amount of the United States on divan is China continues to be the engine of, you know, energy demand growth and investment. Some of that is also going to increasingly diversify out to the rest of Nano Easy D O E. C D Asia, So
we already know that non o E. C. D Asia emerging economies in Asia are seeing the fastest energy demand growth. And, of course, also concomitantly emissions growth of anywhere in the world. Um, when the guy FC tells us that emerging economy is alone could invest more than $20 trillion in clean energy infrastructure through 2030.
And that not only CD Asia represents the largest chunk of that. It's an eye opening number, and we're no longer talking about a a sub sector of the you know of the broader energy industry, or ah sort of niche sector here. Um then the drivers of that growth are also, you know, diversifying as well. So for the first time last year, there were more than 20.
Countries that invested at least $2 billion in renewable energy. China and India together accounted for $60 billion, but you've got, you know an increasing number of emerging economies. They're diversifying that The one other, you know, Macro trend I note and I'm sure you can dive deeper into some of the details of this is the conversation goes on. But the corona virus crisis will you know have shaped some of these trends in material ways as well. One of them, of course, is just the significant fiscal impulse that we see globally.
You know, over 20 well over $20 trillion of fiscal stimulus, a significant amount of which, in some economies has been earmarked for green spending on dear marked in particular for export oriented. Green manufacturing activity and green investment at the same time that you're getting a monetary policy response over 2022 the corona virus crisis that's lowered interest rates and all else being equal, has made investments in Mork, Capital intensive. But low recurring cost renewable and clean energy investments more attractive. So all this
is to say that you've got the fiscal impulse kind of the monetary policy conditions. And then also coming out of the crisis, a particular crisis, which is sharpened minds in terms of some of the vulnerabilities of the global trading system in the global economy to critical supply chain supply chains for critical materials on products. There's also likely going to be an acceleration of some of the Already. Excellent, Uh, trends in terms of industrial policy and an increased focus on you know a larger state directed role in investment in certain you know, strategic industries going forward. So all that anger is for a larger role for government strategic investments in some some key sectors within the energy transition, and I'd say particularly batteries and electric vehicles for for some reasons that we can explore further, um, and at the same time that you're going to see significant, you know, marginal demand growth in some of these technologies and not always CD Asia on that sets up, you know, a global landscape that looks different from You know, even even 12 years ago coming out of the global financial crisis.
Well, uh, thank you. I mean, you really have touched upon a number of key issues. That boy we could spend hours diving deep on. Um, but I'm glad you've given that overview and we will come back to a number of points that you have raised.
Let me go to George. Now, George, you know today, thinking about the fact that we've had the inauguration of the new administration here in Washington, one of the first actions that President Biden has taken has been to put the United States back into the Paris accords and In this regard. Let me let me bring in this issue of climate. Do you think that the harmonization of climate policies among trade partners can avoid a trade war? And you know, if so, what would this exactly look like? What does the potential friction you know? Essentially tell us about the kind of larger trade issues That new climate policies on both sides of the Atlantic. Good you know, will put into play. It's a key issue, and that would be great
if you could address this one. You're you need on me. Thank you very much. Ambassador. I'm very happy to be participating in this panel because I think that the Remarkable increases in climate ambition.
That we're seeing around the world. Beginning with the you and now, of course, the Obama administration coming back into this with Zero carbon and that carbon pledge Chinese, the Japanese, the Koreans. This. This new new increase in climate ambition, I think is going to raise a number of issues with the trade realm and with trade policy. That are going to be very important, increasingly important. And attention to harmonizing trade policies to make trade a positive for climate rather than climate policy, becoming a source of irritation in the Trade relations will be very important something that Biden administration Needs to address early and even peremptorily. Let me give you two
quick examples of what is that? Because of the new emphasis on Green Covad recovery plans. The real countries U. S and other developed countries. They're going to be over the next year or two years. Throwing enormous amounts of money into economic recovery.
Government spending that is going to be very carbon constrained. It's it's all aligned to be green and aimed at the carbon ization. So those investment programs are gonna be Have carbon limitations. They're gonna be subsidies for low carbon development. They're gonna be support tax benefits. Regulations.
Each of those programs is coming to have elements that in under traditional trade wt o trade rules other countries could possibly challenge And instead of having a mutual war about this You know the notion of sitting down early and talking about how the major developed economies, their trade partners agreed to sort of stand still and not get in the way of each other's Hold on recovery green covert recovery programs could be very important. Other at the other example is The border. The rise of this peculiar animal called the border carbon adjustment.
The new EU leadership, recognizing that in order to increase their ambition By 2030 and 2050. Europe was gonna have ah, very higher and steadily increasing carbon price. Has led you to commit to develop and implement a border carbon adjustment of some kind, precise designed to be determined this Spring and coming summer. Which is raised quite a lot of Anxiety among particularly the U. S business community,
and certainly Republican House and Senate offices. Um, and in fact, the Biden plan Contemplates a border carbon adjustment of some kind as well, even though the purpose of that is to protect your domestic industry and protect against leakage, and if you don't have a price, there isn't any basis for a carbon border adjustment. But It's in the plan. So the potential for as you said Border Carbon Adjustment war.
The tension and friction. There is Eyes, something that really needs to be avoided, and there are ways to do that. You probably is leaning toward a less trade impacting form. Off Linkage protection, which is to use Their own cap and trade system for imports rather than have a tariff where Levy Um, but there are lots of ways that the U. S and Canada, which also
is as it was going to have a very high price on carbon Uh versus the United States, which right now doesn't have Unidentifiable high price on court economy wide carbon price. Lots of ways to get together early on and begin to talk about how to develop other kinds of measures, standards and arrangements that will Ordered against leakage and protect the competitiveness of each country's In each country's high class, highly carbon intensive industries without having a trade war. So I think the importance here for the bite administration is Is to address these issues early, knowing that announce of prevention Is going to me, much less expensive than a couple of pounds of pure down the road. Right. All right. Well, thank you, George very much. Let me go back. We're going to do Let's do another round of questions with each of you and I also am gonna mix a couple of things up. We go along.
But let me start with back again with you, Dr Tremblay and actually would welcome if you have any reaction to what George said, Because I did notice as he was speaking, You seem to be shaking your head. Yes, an agreement. But I also want to come back to what you teed up a little bit before because you were talking about investors, and we know that investors in fact around the world are making clear choices. Putting money in businesses, industries and jurisdictions that, in their own view are meaningful E combating climate change So on by the way, divesting from those that aren't So you had mentioned earlier. The increased focused on DSG from investors.
So how is Canada's own energy sector? Responding to this shift in investment? To keep the industry growing in the long term, so I'd welcome your response to that, and also if you have a reaction to what George had said Yeah, Reaction to George. Uh, I don't really agree with what George said. I reacted because this is this is a very important point. Boss. We're moving ahead with Important government pricing. We're moving ahead with the king's
fuel standards. Now it's important and lore economy also integrated between Canada and U S. We've got, I think 70 pipelines crossing the board. Border. We've got said, I think it's more than 30 transmission line. So at the end of the day, it's really important for economy Tonto to have actually measures that are complimentary that are lying that out the goods to move one from one side to the other side, because our economy is in no prosperity depends on this. That's why I was reacting. Torto George comment on this because I think it's particle important for our country. On the S G. I think for me, it's It's a Neff firt from the fondest
actors from the industry, but it's also an effort from the from the government. The reason why I think Canada is good and Felonious, Gee perspective persons because we're great democracy. I'm sorry to say that, but it's true. We have the rule of law. We've got a system in place that is grounded.
On. We can insure some certainty through the investors and we we also have practices that are well respected. And I think that's important, or industry sectors and energy sectors has been quite active on the S G I bas have been signed for years in the energy sectors. The is I mentioned before a lot of measures in King techs have been taking to reduce the emissions of the industry sector.
But we need to do more and we want to be better, and it is an area that we're working on. For me. This. There's two areas that are part of William or than the first one is, I think more and more if you want to have a good years, G profile you need to commit on the Net zero economy. I think countries have to be care on what is the directions. What are the expectations from that from the national perspective? Most recent climate change plan that we just launch in December is quite clear on this will in place. Elation, elation. Governments as to develop a plan has to review the plan. As I mentioned before we have now clean to your standards and are being developed. We increased the
carbon pricing and Canada and we are making a lot of significant investments in making sure that we are the carbon izing the the industry and also in investing the new energy. Sources writing for me, That's a very important point because it send the single to the sectors on what exactly the sandbox looks like in the country and how they can participate to the development of this new economy. So that's that's the first point. Second other for me, that is important is how do we improve diversity and inclusions in the energy sector? It is an area that is quite important. I think it's important for us to How do you make sure that, uh, population participated. The population benefit from the energy sectors that they actually a lot of the energy sectors in all countries are in small, remote communities close to small window communities. So how do we make sure that they are included the benefit from the From the economy perspective coming with the energy sectors, and that's an area that force is very important.
We have, as you probably know initiation in front of Parliament for the implementation of the United Nations indigenous right declaration, So that's a very important animus far as the U. N trip. We also work more with the industry on projects like, for example, equal by 30, where we work with industry, making sure that they commit to gender equality in the industry. By 2030. So for me on the Asian years decide we're doing great, But
there's still things that needs to be done. That needs to be addressed. Make sure that we have an energy sectors that it's actually get the social acceptance on but also at the same time benefit to all the different groups of the population. Together. Thank you for providing that perspective. That's very helpful on
the rounds out a bit of also more of what you said initially, Debra, let's come back to you on China because we really have a great resource in you and looking at where China is and how it fits into this picture. But what I want to also pose to you. I also David, I want you to take on because I'm going to invoke the Eurasia Group Eurasia Group, in fact, had predicted that one of the top wrists Is that quote in 2021 climate will go from a playground off global cooperation to an arena of global competition. Unquote So first starting with you, Debra How do you see that? Playing out exactly between the United States and China and also one of the ramifications more broadly for the rest of the world. In this case, a great thank you, Ambassador And
I know David will have a lot of insights into this is well, but I think the Eurasia group is really onto something with this point. And I look at it in two ways. One economically. Goldman Sachs has a study that they've done on the opportunities for Investments and sails into the Chinese market for environmental goods and services, and they estimate it's about a trillion dollar opportunity. That's hugely competitive for companies who are looking to sell and compete in China, and it's one of the ways clearly the China's going to try and grow its economy coming out of Cove. It And so there's competition on the economic and trade front. But there's
also going to be competition on the investment and financial front is we look at what China has done in the context of energy vehicles, new energy vehicles As I was mentioning earlier they had decided that they could not compete in the traditional car market. And so they were gonna leapfrog with the technologies. They created subsidies. A for purchasing. They encouraged investment in these categories, and they now dominate the world in sales, and they're beginning to expert these technologies overseas. Just recently, we've seen even Egypt this week announced um, a joint venture to manufacture new energy vehicles in Uh, Egypt, and so China is going to be setting the standards globally, to the degree that they can in many of the clean technologies, and that's an area where there are going to be taking the United States head on eyes. We develop our own technologies, as Abide administration
looks at what our policies were going to be on exports of technologies to China. Um China is the largest market for our companies to commercialize those technologies. And if they don't have access to China, if we're not able to find ways to balance the limits And the rules around technology is going to have an impact on our own domestic industry. So Let me conclude there and let David add tol that I'm sure he has some terrific thoughts. I'm lucky I get to go second, because Debra just made made a flurry. Terrific points. Um, much more articulately than I would have. I
would just add a, You know, a couple of things. If you're looking for Uh, anecdotal evidence that this is well, just look at what a Core part of the recently negotiated, You know, comprehensive agreement on investment between the U in China, uh, that clean energy. And the electric vehicle sector played in those negotiations. And in the final, you know list of negotiated concessions on market access, etcetera. Um you know, one of the one of the major objectives on the Chinese side was to increase market access to the renewable sector in Europe, which they were able to do, albeit with specific caps on some of that investment on AH member state basis in the EU.
Going the other direction. One of the primary objectives of the part of the EU that was successful was in gaining market access to electric, the electric vehicle market and new energy vehicle manufacturing in China. Another thing worth keeping in mind here is that those air those air, you know, competitive advantages that have been negotiated in the sense that investment in manufacturing is not Covered by most favored nation or MFN provision that if the wt o level and so you know those reductions in terrorists or market access gains are to be, you know, kind of completely captured by the by the negotiating party. In this case that the U. S so I think that's just, you know, an anecdotal piece of evidence in terms of the centrality of some of these sectors in in China on Electric vehicles writ large on just highlight. You know, it's not hard, Tonto do it back in the envelope map math to understand why this is so important there around 10 Million electric vehicles globally today. Around one billion in more than one billion internal combustion engine passenger vehicles today.
That means that if you're looking to replace the fleet entirely, you're looking at doing a 10 X two times over of the current amount of electric vehicles deployed. Um, your your, You know, this may sound kind of outlandish, but it's actually feasible, considering where battery costs are going. That cost of the electric vehicle battery pack is Gun for, you know, dropped in price 88% between 2010 and 2020 over the past decade, Bloomberg estimates that the cost will drop below $100 for kilowatt hour in 2024. And that is where you start to get to the range of cost competitiveness without subsidies with internal combustion engine vehicle and again when you have, you know, low interest rates abundant consumer credit on do you know? Ah lot of central banks around the world looking to kind of flatten out the yield flatten out the curve s so that they keep credit on the back end of that curve cheap for a long time. It creates a set of
circumstances in which electric vehicles could be very attractive to the individual household very quickly. Now what this means is that these? You know, some of these vehicles will piggyback on existing vehicle supply chains, but many new value chains will need to be created. Um, uh, U S M C, A, for example, increased the amount of local content that's required North American content that's required in the manufacture of new energy vehicles over what was in NAFTA. And that's going to require a huge amount of realignment of existing value chains in the electric vehicle sector to the point where I think it's no longer a question of If, But when North America will develop a massive battery manufacturing and electric vehicles supply chain compared to what they have today. The real question is whether that how that's going to be distributed across Canada, the United States and Mexico and how that North American platform in new energy vehicles is going to compare to the EU platform that's being readily invested in by EU officials and industry. As well as the Chinese platform, which we know already has a head start and is deploying tens of Gigafactory is every year when when the United States is struggling, you know, has struggled particularly kind over the past several years to deploy even a handful of Giga factories Battery Gigafactory is per year.
S O. All this adds up together TOC, one of the most, you know, kind of predictable, uh, economic transitions and energy technology and economic opportunities in in the history of economic transitions and one that country's air gonna readily lean into Thank you, David. Wow. Say you really don't deep on that one. George. I have to ask you this because you are very focused, of course on You know, the Biden administration? You're focused on the EU. Uh, What do you think about what David just said? Are you in agreement with that? Is that how you see? You know, he really cast this as a rather significant issue.
That's Ah, before us are. Is that your perspective? Well, I think that the U agreement with China is a a descriptions that Deborah and David gave to some of the aspects of that. Uh, that's a perfect example of how Trade policy can be used to foster Global climate ambition and improve everybody's climate program instead of causing Each side's clock Trading partners Climate program to be impeded or slowed down and I think But that's true. Also of Not just of China, but indeed and I think that People coming into the Biden administration and certainly both the U and the U. K. Uh, climate.
Officials. UK will host the G seven meeting as well as the glass Go cop. Uh, are looking immediately to this climate summit that President Biden said he's going to put together in his 1st 100 days. If that comes about if not G seven meeting in London.
To begin to focus specifically on how these kinds of investment Agreements and investment. Arrangements. And commitments that the G seven can make can actually help with the trade situation and increase everybody's investment. The big emphasis on finance When you come back to the sort of U. U S Canadian. Situation which the minister referred to I think what's happening between the U. S and
Canada potentially could happen even more is a good example of how again Trade can become positive, and there's a way to harmonize aniline climate programs with Canada at a 30 $40 carbon price. I'm going up to over $100 now projected by in the next decade, there isn't any major trading partner of the United States that has a better reason to put a trade, you know, border carbon adjustment. On its imports from the United States than Canada. And yet, if you talk to business people in Canada and I can characterize the government, so perhaps the minister doesn't have to say this, but there's a tremendous reluctance to do that.
Because the Canadians realized that the benefits of order carbon adjustment for their industry are probably far less than the trade disruption that it would cause an overall trade relationships. So they're not eager to do that, And what we're trying to do with Canada is to do ah, harmonization of climate programs in a different way so they could beam or equivalent. And it has adopted California's no carbon fuel system. Canada's moving on zero mission vehicles So in the Electrification Fleet electrification area, which is our largest Our largest, you know, sector of the missions.
Policies can be can be complementary, and so there isn't the price difference and can be viewed as something that doesn't really provide for leakage of the nations. So what? What were we need to do are doing it need to do more. Canada's a pretty good model, also for how trade can be used to benefit everybody's climate program. Rather than be disrupted.
I thank you, George. I do have some questions from our viewers around the world. But I do want to give you Dr Tremblay. Just a chance. Do you want to comment on what you heard from? George certainly invoked Canada a number of times in his perspective.
Would you like to comment at this at this moment? Hold him money Every time you pronounce the word Canada's that's going to cost me about tonight. No teasing. I want to come back. Maybe on also on what David said about the gods, the battery value chain. I think it's a very good point. I think we should not underestimate the change of paradigm in this In this economic shift. It's a very significant one. Every time we have a shift like that there's new natural resources that are used in your source of energy. So the first time it happened in human history, and I think it's going to demand and it is going to ask North America to really work together on developing this changes value chain and that's going to be a very important reason to have to be good partners over the next few years.
I agree. Of course, with George on the importance of harmonization you want as I mentioned before the flow of goods between the two countries to be on Eagle plane chilled. You want to make sure that actually we haven't integrated economy. And that's you know, that's even better, because that creates certainty for the industry that actually it's not just developing on one side, as you know and exporting on the other side as we know the other sectors. The The piece is actually are moving the border of many times sometimes, so it's very integrated, and that's why it's so important to do it.
Let me if I can go with one of the questions. We have several questions. I do want to get in from our viewers. One was and it's very much related to this conversation. The question is what possibilities exist for the US you, China. Trilateral relationship, particularly under the new Biden administration. Debra, Do you mind if I go to you on that one? Would you be willing to take it on? Sure. The
Biden administration has stated that before they roll out their new China policy, they want to seek to rebuild and coordinate with their allies. On their China policy. I think that's obviously an excellent place to start. What I think that the chances of doing that in a timely way are going to be very difficult. And I think that thesixties s is going to be mixed. In areas where I think our allies will see it in their interest to coordinate with us. They will, but in areas where they're going to
pursue their own self interests, as always, But as we saw with the China, you agreement, they're going to move forward. And they're not going to lose sight of the fact that four years we could be facing a different kind of administration again and so taking on China China's the fastest growing economy, major economy in the world right now. Many other countries are still struggling to come out if their post covert recession and there are only two real options for them to look to to do that the United States or China.
And so there are going to be reluctant to take on China in any significant way. So I think if we put the trade issues aside, finding areas of common interest are going to be very important for the overall relationship. Clearly, climate change is one of those, and I do think there's the potential of coordination between Not just the U, and the United States and China. But many of our allies to coordinate and see if we can't come forward with New policies, and I think the big issue in all of this is going to be financing and how we coordinate on the whole green finance issues because ultimately Paris is only as good as our ability to implement and for most countries, they don't have the financial wherewithal to do that. Any of you like to jump in on this and add anything further on this particular question.
Maybe I'll just just t O echo to amplify an echo again. Whatever said, and just add that I think a really interesting Catalyst for reef. Exploring some of those green finance discussions in interesting ways is probably again the emergence from the some of the debt distress and some of the debt loads that that several Emerging economies They're gonna have coming out of the corona virus crisis. You know, for those who have been tracking this, they're probably aware that there's still a search for alignment and invasive search for alignment Kind of between the G. Some of the G 20 and Western Financial Paris Club, You know, debt relief initiatives that have gone on and the role that You know, Some expect China to play as a major lender, both official unofficial lender Toe You know too many of these economies through belt and road finance related financing, but also otherwise. On guy I think you know, bringing in an energy transition, a climate resilience component to some of those discussions about trying to find common ground between some of the traditional, you know, lender entities in the form of the Paris Club, and, um, you know, and, of course, private creditors, etcetera on DCI China. On the other hand,
you know it can be if done right. A very interesting additive component. That could be a win win all around. Words, Do you mind if I come to you on another question that has come in to come in from our viewers, its uppermost in particularly a lot of Europeans minds. How does the post Brexit UK US trade relationship that into all of this? Do you have a view on that that you'd like to share? Well, I know that the British and U U Climate, people have continued to work together. Through all this.
Uh, And I'm not sure that it really In the long run. We'll have On enormous amount of impact. Um It may make I mean, if you look at the China on the one hand as the Is as Denver said that one of the two Sources of financing that countries That don't have the resource is to do a meaningful energy transition right now will look to The other two are really the UK and the US So It's the UK now in the U. S that have the have. The resource is
In the rest of the developed world. The financial resource is the markets the access So in some ways it may enhance slightly. The ability of the U. K. I don't want to be very supportive of the Brexit pieces, but it may be somewhat Envious. A push to the UK to become more active in climate finance with the U. S.
And certainly Boris Johnson, and the government is very conscious of the fact that You know, this is going to be in some ways more important year than the Paris Conference here. They are hosting it. They will be get the credit or the blame to some significant extent. Uh of its success or failure. And I think it puts a heavy, heavy stress on them. So it's not inconceivable to me that this will enhance the appetite.
Off Britain, Tonto. To come toe become more of a leader rather than just be part of the pack of the EU, but to be show some war leader Seymour leadership. Have to shoot. You know they'll have to show some leadership because this is the first thing that the UK does. That's this visible in the world is a hole on their own. And if they can't take leadership if they fall behind that makes Brexit look like a much bigger Ms. Take
So there's a lot of steak for the British and the upcoming year on climate and we'll see if that operates to the advantage of the club climate finance itself. Right. Do any of the other Panelists. Do any of you have a view on this that you want to share? Right. Let me move on. Uh, we have another question, Um, which is a successful trade agreement would typically increase emissions output. Can trade policy truly be climate neutral? Wants to take that one on Can a trade policy be truly climate neutral? David. I don't know. I see you sort of owe or our doctor Tremblay. Either way, David.
Let go. It would have to It's for you. I'll just say that I I think it Z. You know, it's it's a complex question. It's a complex topic. And so there's there's not gonna be an easy answers to complex answer as well. It depends on the
job. Is that how you're framing carbon neutrality? Specially as well as temporally. And I think that's really important because we're often times going to generate admissions to, uh on net reduce emissions later on in time.
That's also of course, going to be done on a geographic basis as well. Is that as you know, we have to take account of that. And, you know, I think that you know the The objective here should be two in the interim try to reduce the carbon intensity of trade. Wherever we can into the degree we can, because of course, that's going especially coming out of a pandemic and a very challenging set of economic headwinds. You know, reducing that carbon intensity actually has the potential to unlock.
You know, more efficient economic growth and more productivity. In a way we're just focusing on the absolute bottom line. Emissions in trade doesn't necessarily lead you that same outcome. Let me just say that it's a Matter of pure policy. The question is absolutely correct, because the purpose of a trade agreement is to increase output, right? Just like the purpose of the, uh, covert recovery clip investments that countries all over the world making is to increase out but But the trick, of course, is to make sure that the way in which that plan is designed to the way in which the output has produced is lower carbon output. So can trade agreements do that. They certainly can. If the if the if the parties seek Have that as a zoo, you know as a critical Objective and follow through.
Pepper, did you? I don't know. I saw you. Motion at least acknowledge that yes. Do you want to make a quick comment on this or no? It seemed like you were in agreement with what George just said. Oh, I wasn't. Yes, I wasn't agreement. I was thinking it was a very clever way to think about the issue. So, yes,
but that seems to be part of. I think it is. We look at expanding our Issues around which we negotiate. I know with the Canadians, you've been very creative and looking diversity and including that and trade agreements. Clearly, this is going to be a critical part of any trade
agreement that we look at going forward. A and Dr Tremblay. We have five minutes left. So I'm going to do. Ah, quick round Robin with each of you, But let me begin with you again. If you of course, have a comment on that last question go forth. But I do want to ask you because now we have the Biden administration. Just how do you see in terms of Canada's energy sector? What will be maybe opportunities or changes shifts that you envision. But please,
if you'll give a brief response to that, so we could do the round Robin and get everybody in Yeah, On the first one just coming back on the trade. I think it's ah We have to. We have to go to a situation where it's not between economy, development and trade versus emission in reduction of the emission.
It's finding a way to have economy development that actually include this. How do we use the trade agreements to go there? Think David is right for certain period of time. It may be the intensity But at some point it's gonna have to be it's going to have to be going in that direction is for sure. I think it's hard for false. The relationship with United States within administration offer a lot of unfortunate ease means we're going to Paris together. We're going to Paris on the same side.
The same clear objects, which I think is key for two nations. It give us an importunate CTO to actually start working on how we get there and how we get to the Net zero economy. What does mean DEA the development of this off of the supply chain from the critical, minimal perspective to get the batteries and the technology and and the natural resources and the tools that we need for the new economy. I think we are boys to actually succeed together on this, and that's what I believe The relationship is a relationship of friendships that has been there for decades and and will continue.
On Now we have a partner and it's been a long time since the last time we had a partner is actually in us with stolen the line in terms of climate change, and I think in terms also on on green energy, Esso, and we also share the same kind of objective of making sure that the population The diver Steve, the population is well respected, making sure that we're inclusive in our policy, making sure that this development is not against such certain group of the population, So there's actually a sad welfare. As we say in France. It isn't American one that I think you're going to be able to her. Thank you, Dr Tremblay. Forgive me for interrupting, but we only have about 2.5 minutes left, So I'm going to go to Debra. Very fast Question. 30 seconds. Really. So what's the opportunity with China? Given the new new phase we're going into But usually I would say the opportunity with China is not only working with them at home, but abroad and financing can make a big difference, and the Chinese just released a study looking at Suggesting that they given environmental ranking to all belt and road projects. And while they can't change the policies that those governments make, they can change how they lend to those projects, and if they can change those standards, they can make a huge difference in what happens along the belt and road.
And that's I think, a potential area of cooperation and then David and then George, just I'll let you take it in whatever direction you want, but just to be brief with the new administration and relevant to this topic. What opportunity do you see or challenge? David? Really 30 seconds. Very quickly. I'll just say 11 thing. I'm very excited about that. The I think that the biting campaign and now and now the by an administration is emphasized repeatedly is a need to Invest first at home before starting T O. You know, Tonto, engage again and reconsider. How that you know the trade system needs to evolve. Ah to accommodate climate change, And I think that's important to be sustainable from a political economy perspectives that we create these growth industries at home in the clean energy future, and then we can engage globally on how we grow this together.
All right, George, just a footnote to the train discussion. I think they're tremendous opportunities. If we view North America as a whole in in energy cooperation and And climate and certainly Biden and Trudeau administrations will will be very, very cooperative. But
there were certainly those Canadians and Americans who thought that Obama was not that interested in Really North American cooperation. Bringing the Mexicans along on the climate agenda will be hard, but they're tremendous opportunities here looking at North America as more of an entity All right, Well, look first, let me say to a doctor shall follow of Jean Francois Tremblay, Deborah Lair, David Livingston and George Frampton. All of you have been absolutely terrific and energetic, given the time in which were operating, at least in eastern standard time, and just thank you. You've been an outstanding outstanding panel, and now it really gives me great pleasure to pass it back to Jennifer.
Was going to take on the next panel. Jennifer back over to you and thank you.