The White House’s outgoing climate czar weighs in on Trump

deal on climate finance or not next week. Till then, I thought I'll share two conversations I had about climate action over the next four years as Donald Trump retakes the White House. The first one is with Ali Zaidi, who is currently the climates are under President Joe Biden. I talked to Ali on stage at the Bloomberg Green event here in Baku about what exactly endures inside the US on climate action and can anyone pick up the slack that's left behind when the federal government stops acting.

The second one is with Jonathan Pushing, who's the head of the Environment program at the Hewlett Foundation and a veteran US diplomat on all things climate. He says that the world is a lot more prepared for a Trump presidency this time, and there's also a lot more momentum on climate action. That means both Ali and Jonathan agree that things are likely to slow down rather than reverse

under Donald Trump. That's not to say it's good news, but it does create opportunities for other countries to step into the void and take on a leadership role. Welcome to Bloombergreen, and welcome back to the Zero podcast.

rocket is the private sector. And I think what we will see next year and the years after is that during this period of time we were able to achieve escape velocity in the United States on critical areas decarbonization. I am worried about parts of the inflection point, which to me feel very fragile. One of them is our ability to sustain the manufacturing renaissance that's taken off in

the United States. We know that federal policy is so critical to incubating that industrial capacity build out in a couple of key areas. I think we might fall back if policy is reversed course.

might go altogether. The clean Electricity tax credit might be phased down early. Do you think those two sectors have met this rocket escapablocity that you hope?

investments from the Inflation Reduction Act. So I think it would be problematic not from just a climate perspective, but from a retail economics perspective if there were to be a reversal on that. On your point about is it easy to undo this, Look, nine out of every ten dollars from the grant side of our investment agenda is in some form or fashion already into the economy. Most of the tax credits twenty one out of twenty four have some guidance associated with them and are moving forward.

And you know, I believe and I think this is manifest in the politics in Washington that we have grown the political consensus around the Inflation Reduction Act through its execution, which evidence point one is the letter from House Republicans to their own leader saying, hey, let's stop trying to repeal something that would unplug a bunch of jobs and economic opportunity in our districts.

leadership and very much engaged in advancing clean energy. But that actually ignores the fact that you have a bunch more Republican governors whose entire economic theory rests on investments from the Inflation Reduction Act. You go to a place like Oklahoma, Governor sit an amazing leader in attracting private investment to a state. Most of that private investment is clean energy. Governor Kemp in Georgia, most of that investment clean energy. Go to South Carolina Governor McMaster, most of

that new investment clean energy. So if you want to see the politics of this, you look at the house where they've written to their leader. You look at the private sector where they put the bet on clean energy future. You look at the states where they're running towards clean energy. This is actually a much more robust system with a lot more momentum behind it than we had in twenty seventeen.

So I hear you on the risk factors, but I'm focused on the incredible momentum and I think that's where I put my stock.

that need to be given to developing countries. Before we get into the details, the first thing that's going to happen is that Donald Trump says he's going to pull the US out of the Paris Agreement. Again, let's see

if he listens to the exit mobile CEO. But if he doesn't, that means the US is not party to negotiations within one year of him making that decision, and that creates a credibility gap right now in these really difficult negotiations are the other negotiators taking you and your colleagues seriously.

again next year. But you know, I would be sugarcoating it if I suggested that US leadership going into next year from the federal government has a bright and positive halo around it. In global climate conversations, I think people hear what has been said, they read what has been written, and they largely believe it. And as a result, that I think diminishes the US federal position as the rules are being written on the clean energy economy of the future.

That comes to the detriment of US businesses and US workers. So I think that's a problem if we don't sort of see this through in terms of the conversation that's happening right now. It's all about bringing more countries in

around an ambitious target for twenty thirty five. It's quite a way a way, I think the bigger that coalition is and the boulder that ambition is, the more likely, If that might be counterintuitive, but the more likely we are to pull through on the other side and deliver the resources that are necessary to lift up the entire world in adapting to these challenges.

is bigger when it comes to green technologies. How do you catch.

there is unambiguous economic upside and energy security upside. It would be economic malpractice to put us back in the position we were four years ago, where we're in a massive deficit in the leadership of these technologies. So I understand your question, which is what happens if that deficit exists? So if we come out of the ditch. So I'm actually rooting for how root for anybody who puts America's

economic interests first? And I'm going to root for the next Congress, the next administration, finding a way, whether it's motivated by climate or not, to invest in our industrial strength and invest in our energy security, and invest in our ability to make the technologies that we pioneered in the United States, make them cheaper, make them better, and help them translate into jobs and economic opportunity.

It's on all of us to figure out how we accelerate progress at home and abroad on that.

assume for the moment that he doesn't. In that sense, the US continues to be part of the conversation. They have an observer's seat in the back of the room because they're not a party to Paris any longer, but because they're in the convention, they still have a role. They have a perhaps small, but a delegation that continues

to come. That would be consistent with some of the requests to the administration from some of industry, which believes that the global rules are ones the US should be involved in negotiating, and those standards will matter to them as they do global business. A second possibility he actually withdraws from the entire process. I think the thing that countries have learned is two from the Morocco experience. Marrakesh was the last time he was elected. He then withdrew

and we had that four year period. The first thing that they've learned is that the US being out slows things down, but it doesn't stop them, and the US is a smaller share of the globe total today than it was in twenty sixteen, give or take some it's just over ten or eleven percent of the world total. That's a much smaller share, and the world can move on with the ninety percent of the global community that

is still engaged. The second thing which they learned is that notwithstanding in the administration the executive branch withdrawal, the US continued to act in many ways. Inertia is a remarkable thing, and policies are hard to overturn once they've been set. So policies, for example, like the Inflation Reduction Act or the Infrastructure Law or the Energy Bill, those are likely to go for some period of time, and

the incentives that they set are likely to continue. There's also some indication that the states and localities will continue

to do the work that they have done. So while there may be a slowing in the US frame, there is continuity in the sense of more action, but it will not be as aggressive as required to solve the climate crisis, and the kind of ambition which the last four years of the Biden team has brought will be missing, and some of the pressure that the US can bring to bear in the global community will be absent, and it is not clear today that there is another country,

or even necessarily a group of countries that can pick that up.

thinking about taking Argentina out of Paris. Do you think this time around the risk of other countries leaving is higher or lower?

So there's actually a lot of incentive to be in and only marginal incentive to be out. I think the second question, though, is what's different this time? He's going to be pushing an oil and gas vision of the world. He has said so in his campaign. He's not particularly supportive of renewable transition. But this time, unlike the last time, the prices for those alternatives are fundamentally competitive, and that

to me is a fundamentally different outcome. So a country like China is very happy to engage in the global dialogue and say, well, the US isn't available for funding these new transitions, but we are. We're in, we have a ready checkbook, we have an experience of a transition at home. We are prepared to engage with you as you make the transition. So now the question becomes what will the Donald Trump administration offer as an alternative. Will it offer low cost gas? Yes? But will that low

cost gas come with a dependency on the United States? Yes? And how reliable will that be over a longer term when you build out gas infrastructure. One of the advantages of renewable energy is that once you've built it, this supply, the energy itself is domestic. It doesn't come from a tradable permit, it doesn't come from some kind of a commodity. It comes because you have wind or sun or geothermal capacity.

So in that sense, there's an enormous value in the security of your energy resource not to be reliant on a global gas market or on one player like the United States. I think where we were four or eight years ago was much higher prices and therefore a very different competitive market.

behind it. Given Trump might leave and as you talked about, may slow down progress that is somewhat baked in, but because it won't be as fast as we need it. Those goals are likely to be much further out than what is reality.

This is a pathway that we think we could meet with policy, with technology development, with engagement globally, with supply chains, and that represents almost a baseline that the rest of the world can look at to assess their own progress. That's the upside of doing it. That means that there's some vision of what you might want to try for. On the other hand, there will clearly be a walking back. There will be a sense wele the US wanted to

do that, but it won't. The Trump administration won't. So should we in our country follow a good and desirable path or one that might be easier with less burden, less potential upfront cost and how to think about that. I think it'll be in the middle. I think the existence of a credible pathway will have an impact. I think the absence of the US to push that will also have an impact.

it doesn't feel like that's happening. Are we actually moving away from a cooperative world trying to address climate change to a competitive world trying to address climate change? A competitive world that has existed in every other fora for as long as two hundred countries have existed on this planet. And is that a good thing or a bad thing?

on finance. But it is not, nor I don't think was it ever expected to be an implementing body. This is not where you go to write the rules of a public utility commission that's working in the state of Iowa. This is where you go to say, is that aligned with a collective effort? And it is also very good at reviewing the actions of the countries and seeing if they align or not. So to me, the question is not so much will that continued need for both setting

goals and for reviewing progress. Will that continue? Yes, with or without the United States. On the other hand, do we need other institutions and mechanisms to facilitate implementation. Absolutely, and those are going to be taken up by sector. So in some cases, for example, will the steal producers of the world figure out how to do a better job at low carbon steel and will that information move around? Yes? Will they compete with each other, of course they will.

Will they compete against a low carbon future. Yes, because global demand is going to drive that forward. Do you need a singular agreement where all countries agree on exactly how they would do that. No, that's where the market can play, I think its most effective role, where competition around price and the delivery of these attributes of zero

carbon become significant. So I think the agreement and the next steps around the agreement play out both collectively in the effort of setting the goal and evaluating progress, and individually and in the competition that each country and within each country companies have to find solutions that work.

has been created. Just the sheer number of funds and the number of steps you need to take to get the money out of them makes it really difficult for that money to actually do the work that needs to be done even if the money exists. Why is the finance problem so complicated and why does the structure require all these international funds and multiple of them that are being I think.

the process every time and saying it's not working. But supposing you think about it a slightly different way, and the question now is is their reform in the various financial institutions that are trying to change the way they provide for risk and to offset the risk in the market.

Now I have some real indications of progress. Some of the adjustments being made in the World Bank, for example, are increasingly not looking at project finance which goes to an upper middle income country, but looking at why is there so much risk? And can I reduce the risk so now that country could borrow from the market and the rates would be more competitive. This, of course is

why you have other connected problems. The debt burden of countries makes this more difficult, and the questions of the number of different demands on resources are also more difficult.

But I would submit that at the end of the day, the problem here is not will there be government to government transfers of funds, but there will be a de risking of private capital, and the combination of the reduction in price of what we are trying to do, plus some risk adjustment and risk management will fundamentally alter the

investment trajectory. And we're already starting to see that, and it's moving down the development chain, which is to suggest that over time, the money that will have to provide from one government or from a group of governments to other governments will pay for a smaller share of the total, and the market investment will increasingly pay for the large share of the transition.

put in capital to enable that to be developed. But many of the developed country development agencies have shifted and they've said, what are the barriers to private markets working to investment working? Well, there are a barrier to policy. Those policies don't allow the repatriation of profits, or the policies have high surchcharges in tariffs, or the policies make it difficult to get access to the grid. If you are to adjust those policies, you'd actually start changing the

risk of the investment. And we're seeing development agencies increasingly

focus their attention on those kinds of policy adjustments. So you look at some places like Ghana or like Kenya in Africa, both of which have seen some really interesting evolution in the way they treat farign capital and the kinds of ways that that capital is now welcomed because it's easier to deploy it and to bring it to project programs, and that now enables private markets and banks around the world to come in because the risk has

been reduced. I think we'll see more of that. It's much more evident in some of the upper middle income countries. You see it in a very different way in Mexico than you do in Mali. Mali is still having a great deal of difficulty civil unrest. They're much much harder to work. Mexico is seeing much much more capacity in terms of market investment.

the Paris Agreement got agreed. It was sort of the moment where not just the fact that finally a climate cop led to an agreement, but also a recognition that governments around the world were starting to prioritize climate in a way that they had never done so and we can split what happened after Paris in maybe two hours. The first five years was really recognizing what it means

to try and meet these goals. You had the one point five c report that came out that sort of created the net zero by twenty fifty framework that has been adopted by countries and companies. You had investors thinking about investing in ESG because interest rates were low and they thought they could get more return on something that is fundamentally the right thing to do, and there might actually be longer term returns to be gained. And then you can look at the following five years, and then

things started to hit reality. If you're to imagine the next ten years now that we've sort of come to a point of more realism on climate, which is carbon cannot be the top priority for any country, but it will be among the top priorities, maybe the top five, maybe the top ten priorities. How do we tackle a global problem over the next ten years as the urgency to act becomes faster, but the reality is going to pull it down.

And if they provide both services, both a service for reducing emissions and a service for resilience, they'll be more attractive. Let's give an you example that there have been some massive storms in the United States. It goes back to Superstorm Sandy. We've had Heleen this past year. Interestingly, the communities that were most resilient to those storms were able

to put their solar grids onto the market. Those that relied on conventional centralized power, primarily of natural gas, had blackouts. That's a very interesting conclusion. The same thing has happened in Hawaii for typhoons. The same thing has happened in India after the floods. Those local communities that actually had access to domestic, local renewable energy were much more quick to recover. There's a second question here, and that's the

price question. Prices have come down for the alternatives, and the prices have come down for a variety of alternatives that are central to the question. One, the price of renewables has come down. It's now much cheaper and in most of the world competitive with fossil fuel. Not everywhere, but much of the world. Two, the price of an

electric vehicle has come down. And for some it's been the Chinese market, which is extraordinarily rapidly growing, but it's also been a two and a three wheeler market which is coming out of India, and that's penetrating into Africa with those vehicles, not just with a four wheel light duty car. We're seeing the price of alternative industry coming down, not yet to the point of competition, but to the point where some supplemental price from carbon makes it an

equivalent cost. And that looks like it's going to continue to drop at the same rate. If all those things continue, the next ten years is likely to see an acceleration of action. I think it will be less quick in the absence of policy stimulus, but it will occur. And I think really the agenda for this negotiation and for the global endeavor is can you further accelerate the transition, not will it stop or will it continue? But can it go faster?

The music is composed by Wonderly Special thanks to jend De Luis, Sharon Chen, Shuwan Wagner, Ethan Steinberg, Blake Maples, and Jessica Becker. I am Akshatrati Back soon.