John Kerry Explains Why the Glasgow Climate Deal Matters

a flop. But President Biden's Special Envoy on Climate, John Kerry, has been at this game so long. He was at the Earth Summit in Rio in which led to the COP process in the first place. So I was fascinated to get his long view on COPY when I spoke to him on the last day of the New Economy Forum last week. I also watched to find out what that much trumpeted US China statement on climate cooperation was

actually going to achieve. He negotiated it, after all. We have an edited version of that conversation in a little while. I'll also be asking our Eurozone economist may VERA. Kusa, why decarbonizing the economy could be a recipe for higher inflation. But first something very different and important and thoughtful report from Frankfurt based economy reporter Carolyn look on a subject we haven't touched on before here on stephanomics, the economic

impact of violence against women. I should warn you this piece does discuss experiences of domestic violence, medicraft, and I don't have the energy and courage I once had, even after a thousand therapies. It's broken and it's horrible because that's something to have to live with. You can't change it.

Tanya is vivacious, adventurous, has an infectious laugh. In her own words, She's a tough woman, one who worked many different jobs when she was younger, first as a medical assistant, than as an alternative medical practitioner, and later organizing events and concerts in her native Hamburg. She always dreamed of leaving Germany and moving abroad, and, like many of us, of being cared for. She thought she found that when

she met her ex boyfriend about two decades ago. He was eight years her senior and seemed like the first man who really loved her. Now fifty two, Tanya realizes it wasn't all that it seemed. Though. Tanya is not her real name, which we've changed for her protection. In I wasn't the first woman he beat up or was violent against. There were apparently a few before me, and he tell people in advance that I was mentally ill and hysterical, just so that when he beat me up

he could say, yeah, I told you she's crazy. The abuse began early in their relationship. Tanya broke up with him at one point, but gave him a second chance. They eventually decided to leave Germany and live in a mobile home on the Greek island of Crete, which for many would seem like a romantic adventure, but while there, he locked her up, beat her, and later abandoned her on a beach, leaving her desperate and helpless in a

foreign country with few avenues for support. She felt she had no choice but to return to Germany with him, and it was only there that she managed to end the two year nightmare when a colleague gave her a place to stay. The violence Tanya had to experience is unfortunately far from rare. One in three women experienced some form of physical or sexual violence by an intimate partner

or non partner, according to the World Health Organization. While the issue is sometimes framed as a personal issue and one that's more common in developing countries, It's actually pervasive across countries and carries deep emotional and economic costs, both

for victims and for wider society. Companies have started waking up to this fact after a number of studies showed how domestic abuse incurs both direct and indirect costs for the economy, beyond the already substantial legal bills, health and shelter costs. Victims naturally lose productivity when they suffer domestic abuse,

or might miss work altogether. In two thousand nineteen, Vodafone became the first company to offer ten days of paid leave to victims, and this year Facebook followed with twenty days of paid leave. Here's chief operating officer Cheryl Sandberg speaking on the day the policy was announced. This is something that affects everyone, including our employees. It's a situation where you need paid time off, and not just for yourself,

but for a loved one. And we're hoping, we're hoping that, um this is a problem other companies will start tackling as well. A huge part of the problem, as Tanya's case showed, is that attitudes in the workplace are often a huge deterrent to getting support in the first place. When she left her violent partner, several of her male colleagues initially took turns driving her to and from work to keep her safe, but none of them actually talked

to her, she says, or seemed to care very much. Eventually, her boss began harassing her and she had to quit her job. After my experience with domestic violence, I wanted to make decisions for myself. I didn't want to be an employee somewhere and let someone have power over Nowadays, Tanya as a freelance designer. It doesn't pay much, but she'd rather do that than share control with a workplace that doesn't have her best interests in mind. Employers could

actually do a lot to help victims. After all, where we work is where we spend one of the largest portions of our time. That's according to Jane Pillinger, an independent gender expert who worked with the u N and

it's International Labor organization on domestic violence policy. One of the really interesting things from the work that I've been involved in with trade unions and with companies across the world is just how relevant it is to be doing awareness raising in the workplace, giving people the tools to spot the signs, to communicate with somebody who's who's experiencing domestic abuse, because you might not be able to solve the problem, but you can open the door to helping

somebody take the first step to surviving to mystic abuse. In Germany, where Tanya is from, flawed attitudes about partner violence run deep. A recent study by an organization called front Line one hundred surveyed hundreds of business owners, managers, and executives and showed that one in four believed that there are reasons that can justify physical violence against a partner.

The survey respondents, who were mostly men, most often selected reasons such as not completing one's housework or refusing to have sex with the other as justifying such violence. German women's attitudes are just as concerning. Nearly twenty of women consider a husband to be justified in hitting or beating his wife, according to a two thousan c D report.

That's more than in any other country in Europe. The bottom line of all this is that blindness towards the troubling in sequences of domestic abuse is costing economies billions. The European Institute for Gender Equality estimates that the cost of gender based violence across the European Union is three

hundred sixty six billion euros a year. Sylvia Sako, a professor at the Brandenburg University of Technology, has studied the cost of domestic violence in Germany and says that companies need to do much more to stand up for victims. Here she is discussing one case she was involved in in which a female stalking victim spent years trying unsuccessfully to get help. You have done on She already exhausted all sorts of police measures and everything was unsuccessful. She

then lost her job. She became chronically ill for a long time, and then years later turned to the employer of the stalker. I eat the perpetrator and asked him for a conversation. The perpetrator's boss ended up confronting his employee about his actions, and it was only then that the starking finally stopped after years of trying to get help. Here's Jane Pillinger again. I suppose you know a lot of employers have said, why is it my responsibility, it's

a private issue in the home. Well, it's it is a private issue in the home, but you know it spills over into the workplace, and that's the issue for Bloomberg News. I'm Caroline luck Are now as advertised, here's that conversation with Presidential Special Envoy on Climate Change John Kerry for the Bloomberg New Economy Forum. One of the I guess relatively few positive surprises out of the Glasgow Summit was the US China Joint Glasgow Declaration on Climate

enormous symbolic significance. Clearly there haven't been a lot of joint US China or anything for a while. But what practical difference when we look at the words in that document, what practical difference are they going to make to the battle to contain climate change? Stephanie, the China Agreement is, in fact, I think significant. I'm not saying that because negotiated it with Shia Jama, who is a long time

associate and friend. He and I know each other quite well over twenty plus years UM and we've worked at this, uh, this issue. UH. The agreement is five pages that lay out our cooperative effort not just on methane and CEO two, but also on deforestation and the creation of a working group between our two countries which we are now immediately

going to begin to activate. And I hope that our working together will increase the sharing of data, increase the sharing of of options, and begin to engage us in a very important dialogue with the top leadership of both of our countries. UM And and that's our hope. But importantly, the agreement is quite specific in addressing methane with a

specific date for action. And the pledge is that we will reduce methane by on a global basis, which doesn't mean any individual country is doing the percent, but in contributed global aggregation we will get a thirty percent reduction on a global basis. And and trying to agreed UM to work with us to lay out an ambitious these these are the words AMBITI a national action plan which China must submit and and begin acting on by copy seven a year from now in uh in Charmel Shake.

So if we were to do the thirty percent reduction of methane on a global basis by as Fati Birol of the I e A has made clear to us, that 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 planes of the world to zero emissions. By so you can get a sentence of the enormity of what the reduction of methane can mean.

It's about a point to degree reduction in the rise of the Earth's temperature and it's the single biggest, fastest grab that we can make for dealing with this problem. The third thing that the agreement does is sets a date currently for when China, in the commencement of its fifteen five year plant, begins to phase down the consumption of coal and does so with an agreement with us that together we will work to make best efforts to

accelerate the reduction the phase out of coal. So all of what we do in Glasgow, or did in Glasgow obviously results in words reduced to paper, but that is what brought us to Glasgow, that is what resulted in the submission of a National Determined Contributions or n d

c s the production of emissions. It's the words translated into actions that actually resulted in our committing to additional funds forty a doubling of the amount of money that goes into adaptation of significant recognition of the challenge of loss and damages with the beginning of a dialogue that will take place over the next year to figure out how we deal with that. You mentioned the sums for

adaptation and mitigation for the developing countries. That was one aspect of this agreement that certainly felt short and for many who were there through all of the negotiations left a kind of bitter taste in their in their mouths, because it felt that it seemed too many that very little progress have been made in really offering developing countries a path two develop as well as be part of

this climate action. Do you understand those who felt disappointed by what came out of it, the lack of actual money on the loss and damage and the failure to even meet the hundred billion dollar target, which you've admitted was is nothing in the scheme of things of what's going to be needed. Well, look, let me let me be more Stephanie. I'm glad you asked the question because I really wanted to tackle that. You know, the hundred billion was a goal. It's become a target, but it

was a goal. It was pulled out of the air by Gordon Brown. I think in Copenhagen Uh. Where they were trying to find agreement and and they decided to be a hundred billion. We accepted that in Paris when we negotiated it. But as I said, it was the goal of a hundred billion. When I took this job on, we were at sixty seven billion for the year. Uh excuse me, And um, that's the first year the Biden

administration could step up, Folks. A guy named Donald Trump cut all the funding, and a guy named Donald Trump pulled out of the agreement. And so when Joe Biden became president, the first budget he is in front of them is that budget we're working on right now. And we put eleven point four billion into that, doubling the already doubling that Joe Biden had engaged in. Even as we're trying to get our own country back on track and do the things we need to do to get

the job done. We've had, we've accepted a fifty production. We are legitimately on track to keep one point five degrees alive. And I personally which more energy was spent focusing on some of the countries that didn't submit in d c s or folks and big countries, and focusing on the countries that are not on a one point five track, but indeed are going to be uh, you know, putting more emissions into the into the atmosphere over the

course of the next number of years. So the reality is we got up to nine to ninety seven billion according to the o E c D for next year, and if we can come pleat the budget that we have coming in, then we'll be over the hundred billion for next year. So we are making good in the first year that we have an opportunity need to do

something with the budget. In addition, loss and damage does not even have been accepted at a major part of the agreement that we accepted the idea that it is important to deal with and that we do have to have a dialogue. But look, if we don't want to shut the entire United States Congress down on putting money into climate, we can't accept the opening of the liability which is going to tie up the courts and the structure and not get the money we need for adaptation

and resilience. So we really ought to be putting more effort into adaptation and resilience where we are doubling the money. But the bigger issue, folks, is not a hundred billion dollars. That's peanuts compared to what we have to be doing here. And the fact is that we went to the top

banks in the United States. I personally engage with Goldman Acts, Morgan, Stanley, well Spargo, City, uh JP, Morgan, Bank of America, and those six banks have committed that over the next ten years they're prepared and will invest four point one six trillion dollars in this transition. In addition, Larry Fink at black Rock says he's going to put at least a trillion in and and others will. And there's a Global Finance Alliance which Mark Karney has has been working with,

which has tens of trillions allegedly of additional money. We have to find a way to deploy that money. That money is not giveaway, it's not concessionaire, it's ready to invest. So countries bear responsibility to also step up and make sure that they have the transparency and the contracting and the p p a s and the ability to be able to make those trillions into deployable investment bankable money.

You know as well as I do that a lot of the money that's needed is needed in developing countries, and there's no commitment from those big financial institutions to take the money to where it's going to be really needed. If you're if you were Prime Minister Modi, we had a rather probably what you would consider a minimum commitment from India at the cop But if you were Prime

Minister of India, would you have said anything different? Have you been given any reason by the rest of the world to be more ambitious in your domestic target when you're also looking at a new to developing I understand Prime Minister Money. I've met with them several times this year. We formed a partnership to help India be able to deploy at four hundred and fifty gigawatts of renewable power, and we've agreed to bring finance and technology to the table.

We will need India's governmental help to be able to make sure that the land is available either lease or sale, that the transmit lines can move across one state to another UH and obviously this is a two way street to some degree. But in addition to that, yeah, we have foreign assistance programs. We have the Development Finance Corporation, which will have several billions of dollars that it is already currently financing projects in less developed countries around the world.

But the real fight here, folks, let's we're gonna be real about this. We we have been a leading nation in consistently assisting other countries to develop. But figure, please focus on this. Twenty countries equal of all the emissions. They're basically your g twenty though not exclusively those those twenty countries, they're the greatest responsibility for helping to solve

this crisis right now. And the fact is that no country really accepted as included that this was a genuine crisis until when we all went to Rio and formed the process by which we now meet every year for twenty six years. But the truth is a lot of countries decided to grow with coal, not with nuclear, not

with gas, not with other alternatives. And coal is the primary culprit today in warming the planet and in polluting the air, and in creating the intensity of the storms that comes with the increased moisture that rises from the oceans. And we have to start where the greatest amount of emissions are if we're going to win the battle. So if more than of those twenty countries are now committed

to a one point five degree track. And what we have to do is go to the countries where the greatest amount of emissions are and begin to reduce the greatest amount of missions the fastest we can, as fast as we can, and and that means China, Russia, India, Mexico, South Africa, Brazil. You know a group of country Indonesia, and those are the countries we've been doing climate diplomacy with.

South Africa has accepted a new plan. But we have to all of us be able to put the deals together that will that will phase out their coal fast and provide the alternative renewable energy. The truth is that if India were to deploy the fifty gigawatts of renewable energy, then India's in compliance with one point five degrees. So this can happen. It will take all of us working together. You talked about the importance of US leadership here, which

is clear. Commitments to this agenda didn't used to be a partisan issue in the US, but it sure is now. If you looked at the polls, if you look at the recent election results in Virginia and elsewhere, you would say the Democrats are overwhelming underdogs for next year's election,

and at this point for the next presidential election. Why should the rest of the world believe this leadership is going to continue beyond the next two or three years in this crucial period for the very simple reason that the marketplace is going there, whether the government does or not. This is going to be a global revolution, and I

believe that transformation is going to be so far. Look, General Motors and Ford Motor Company have already announced they're gonna only produce electric cars by by They're gonna have fifty of their cars are going to be produced our elector. So I'm just telling you you think they're going to spend hundreds of millions of dollars retooling those plants for electric and then turn around because some politician comes in

and wants to deny science. Again. No, what we're doing in the United States has nothing to do with politics and ideology. It has everything to do with mathematics and physics. And if you understand mathematics and physics and you believe the science, this is gonna happen because it's gonna happen in all the rest of the world, and the United States is not stepping up to say, hey, we're the leader here. This is everybody's got to be leaders here.

Everybody's gonna step in together. But we are here to make up for the deficit of a guy who didn't understand science and didn't have any economic rationale and who pulled out of the Paris Agreement and hurt the world in doing that. And we don't have any time for that. So we're gonna come back. We're gonna do everything in our power because our citizens are as exposed as citizens

everywhere else in the world. I mean, if, if, if, if leaders don't grab onto this baton, they're gonna get thrown out because the public understands what's happening and they're demanding action from all of us. So I believe no politician in four is going to step up. And besides, it's way too premature to be making any speculations about

I can't believe what's going on. Prison Biden is going to pass his next piece of legislation, and together with his infrastructure bill, that's gonna put about two trillion plus dollars, much of which is going to go to climate action in the United States. And even while Donald Trump pulled out of the agreement, the vast majority. Thirty seven governors in the United States, Republican, the Democratic like continued to stay in the Paris Agreement. Over a thousand mayors continued

to stay in the Paris Agreement. And they you know, as I say, America's stayed in that agreement. And and fully ninety of the new energy being brought online around the world today is online because of renewables. This is happening without government. It's happening because the marketplace has made a decision. That's where we have to go. And with disclosure and and trading mechanisms and pricing of carbon and see bam coming at us. Believe me, folks, Uh, no

one politician can undo what is about to happen. Well, that's an emphatic note on which to begin our final day of deliberations. John Kerry, Special Presidential Envoy for Climate, thank you very much for joining us. I have to do really so I wanted to stick with the same theme to pick up on some work that Bloomberg Economists have done on the economic implications of climate change, with one of the authors, Eurozone economist Mayva Kuza, friend of

the podcast Neva. So you're basically thinking through you know what the kinds of things that we hear about. It's a cop tow any six in Glasgow. Where countries are making commitments very close short term or longer term commitments to decarbonize, you know, inherent in that commitment is the idea that carbon prices carbon, the price of carbon in the economy is going to get higher, that we're going

to stop subsidizing all these fossil fuels. And what you're looking at is the these various estimates of how that rise in the carbon price is going to feed through to the general level of prices and certainly the general um rate of inflation. So when when you step back from that research, do you think that the kind of price hikes and mad variation in the cost of energy that we've seen recently that's going to be much more common in the future as we have these various different

rates of carbon. That's going to get much more common as we have these efforts to decarbonize. So it will already, I would say that it really depends on how old only old disorder transition is. First, if you can imagine a case where globally we um countries and policy makers agree on a relatively well settled price for carbon. Then

it's easier for producers to plan ahead. It's probably easier for inflation expectations to adjust as well, and you would have this initial potential increase in producer prices, but it's probably going to be much smoother if, in contrast, you have something where from one year to the next we can have very large changes in um carbon taxis, carbon prices, carbon regulations, and there's less time to adapt than I think the impact on prices is going to be bigger.

And in addition, it's also a question of how prepared

the energy system is to the new regulations. We know that, for instance, renewable energy tend to be maybe more volatile volatile in their production, and as long as there is this sort of backup coming from more higher fuel intensive, in emission intensive products they call, for instance, which would cost a lot in the world with higher carbon prices, then it would increase massively the cost of production if renewable drops for a temperate period, and that will increase

sort of volatility of energy inflation. And I think one thing that is important to consider as well is that not only it will affect inflation, it would increase inflation, but it's also as a place, so it would reduce growth, it would reduce economic activity. And so for central box you can have this sort of um much more volatile inflation, higher on average, and the trade off with supporting the economy, and different sample box will probably see this trade off differently.

Some may look fruit the pacing crazies and we have higher inflation and mostly brought for crave. Some may actually decide that they need to takeen policy to high in inflation at the expense of the could activity. I guess you've seen a little sort of dry run for some of this where people are blaming efforts to combat climate change for the spike in energy prices that we've seen.

And if we get the kind of variability of inflation, the impact on growth that you've just talked about coming down the track causing challenges for central bankers also as a result of combating climate change, you know that could that could make for some quite difficult politics as well as decisions for central bankers. Yes, definity, and we've seen that even increasing um energitects. For instance, we've seen in

France the religion par days that it's actually difficult. It's so it tends to be energic, existance to be regressive, so they tend to affect poor people more, and that's always a very difficult political um political choice to make.

The recent increase we've seen in energy prices is a combination of some very unusual renewable poor production from renewable which we may see the wind not blowing exactly as the remaking more if we rely more on renewable, plus potentially if the climate system becomes more unusual as well. But it's also a direct impact from the supplying negg. It's supply bottom example, you sink for the pandemics, so

it's some of them. It's a bit of both. But in any case, it's clear that the policy choices that we have to be made in terms of UM, both at the same time driving the tradition but also making the adjustments UM and supporting the parts of the go to mean that needs to body will be quite a

difficult challenge for for policymakers. And it's not a part that part of the money UM from the Yobian Union as part of their Andrew beck Age is on the just position from for instance, because that's some things that are already very aware. Yeah, the just transition, so making sure that it doesn't just involve hiking the price of energy and having it effect lower income households worse worse than others. Um that's clearly is a very important piece

of that, maybe, Causina, thanks so much. Thank you. That's it for this episode of Stephanomics, but do follow at Economics on Twitter for a lot more news and analysis from Bloomberg Economics. This episode was produced by Magnus Hendrickson, with special thanks to John Kerry Maybel Cuzin, Karen and Look, Claudia Madler, and Catherine Bosley. Mike Sasso as executive producer of Stephanomics and the head of Bloomberg Podcast is Francesco Levy m h M.