Welcome to zero. I am Akshadarrati. This week, America's reset. Donald Trump is backed and possibly with the biggest mandate he's ever had that will have huge implications for climate and energy not just in the US but around the world. So this week I wanted to talk to someone who has been on the front lines of climate policy making, someone who's a Democrat and was lucky to be re elected. Congressman Rocanna represents California's seventeenth district, which includes Silicon Valley.
Over the years, he's been a vocal advocate for climate policy, and he's also a member of the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party. That means he has a big job to help secure America's future leadership in technology. In my conversation, I asked him about the consequences of Trump's election and what, if anything, can Democrats do to keep climate and clean
energy at the top of the agenda. Later I also talked to Jason Bordoff from the Center on Global Energy Policy at Columbia University. We talked about how a Trump administration is likely to shape our climate and energy future, and it's not simply just drill, Baby, drill. Welcome to
the show, Representative Kannor. It's a huge day today with the election, and when this episode goes out, the country will still be sorting through the many reasons Donald Trump was elected as president and the many issues that voters were responding to. But just days before the election, you wrote an op ed for Rolling Stone arguing that the polls were underestimating the importance of climate change to the average American. You said, climate change really is a kitchen
table issue. But now there is in the old office who many people would call a climate denier coming in January. So how do you understand what just happened in the election in terms of where were to see the significance of climate change.
It's important that we take away the right lesson from the election result. Obviously it was devastating for many of us who care about climate and progressive values, but it was in the context of people being unhappy about inflation, unhappy about the cost of living, unhappy about the situation on the border. Incumbent part parties have lost around the world, and in retrospect, having a president with forty percent approval rating made it very, very hard for whoever was running.
But that doesn't mean that voters, particularly younger voters, aren't going to care about climate. I think there is an extraordinary opportunity to organize and mobilize around it with Trump coming to power, and to be prepared to run on that agenda in twenty twenty six and in twenty twenty eight.
We need to make it clear that the world needs to invest in solar, which is the cheapest form of energy right now three cents to a kilowatt hour compared to natural gas at six cents and oil at seventh sense, that we need a climate resiliency infrastructure, and we've got to keep making the case. The one point I'll make is the Civil Rights Act in America was introduced in
nineteen sixty four. I understand what the climate emergency time is of the essence, but progress takes time, and my message to the climate activist is let's keep going.
But when you listed the things that people voted on, you said, there's immigration, there's inflation, there is the anti incumbency factor, but it does say that even today climate is not yet a kitchen table issue. How do you make it one?
Well, it is an issue for many young Americans, for sure, and it's a kitchen table issue in terms of the people who are dealing with the awful costs of hurricanes and storms. But it's not as alien as people going into a grocery store and seeing that the price of groceries has gone up, people seeing that they can't afford a house until you have your basic needs met. Very hard to think broadly about the issues of what's good
for the climate and the planet. So first we've got to make sure that we're talking about the day to day economic lives of people. And then we've got to continue to make the case that climate disasters are hurting the economy of America and having a negative impact on their kids and their lives. But it's very hard to make that central when people are not being able to pay the bills.
Now, President Joe Biden's climate legacy is notable. We saw historic climate legislation get passed under his administration. But I do want to ask you what happens to the legacy now, And I think we should take it piece by peace, because there were three big piece of legislation that were passed. Let's start with the Inflation Reduction Act. What do you think stays, and what do you think goes.
I believe that many of the tax credits will stay, and the reason is those are crediting jobs in red states. I mean, is Governor Kemp going to advocate not to have his state is getting a lot of those battery factories and those solar plants. I had actually been critical of the administration saying why aren't we getting them in more Union states? Why aren't we getting them more in Michigan, Wisconsin, Pennsylvania.
But one advantage of having them disproportionately in the red states is it's going to be harder to take those away. Is Elon Musk really going to say to Donald Trump guests, let's take away the tax credit for electric vehicles or impose the two hundred thousand vehicle cap again, I don't think so. So I am confident hopeful that a lot of that will stay. I am concerned that he's going
to start drilling in anwar. He's going to start grilling everywhere that we're going to have more efforts at subsidies for fossil fuel companies, and that to me is the bigger danger.
Do you think he will also chip at the bypart as an Infrastructure Deal or the Chips Act.
You know the Chips Act. I helped write the Chips in SIZAC, which Senator Schumer, and it's originated by a guy named Pete Crouch in the Trump administration. It was an idea that the Trump administration under POMPEII and started. So it would be short sighted, very short sighted for him to say America doesn't need to have industrial policy to make sure semiconductors are here and there. Many people in his administration would say we need that given the
rise of China, that we need a self reliance. So he may tinker with it, but I would be surprised if he repeals it. And even Johnson, who talked about repealing it, walk that statement back. Same thing with the Infrastructure Bill. I mean, he's talked about infrastructure so many times. We got it done. But my hope is, if anything, he'd expand it. I don't think he's going to repeal that. There may be efforts to repeal parts of the IRA that are dealing with subsidies and satims for solar and wind,
but I'm hopeful we'll be able to block that. I do think where he's going to try to really make a difference is on the EPA and taking away a lot of the rules that the EPA put on clean water, on p fast contamination, on other areas regulation.
Let's come to oil production, because it is something you have been vocal about. You have criticized big ol companies for holding back climent action. But the fact is the US produces more oil than any other country in history. The US produces fifty percent more oil today than Saudi Arabia, and a lot of that increase, by the way, has come under the Biden administration. But of course Trump has come to the fore saying he wants more oil to come. Drill, baby, drill.
None of this looks good for America's energy transition. What do you think it will take to move the US away from fossil fuels.
Well, the economics should dictate US diversifying. I mean, it's like I said, three cents a killowt hour on solar, whereas it's six or seven sets of killoot hour on oil and natural gas. And we're foolish to not be investing in the energy supplies of the future. We're foolish not to be investing in energy supplies that are better for our national security than a dependence on a product that also improves the geopolitical situation of Russia, Iran and Venezuela.
So I think what we have to do is make the argument that we are the party of the energy of the future guests. We have to have this transition in a way that makes sense. That you need oil and natural gas until there's an abundance of nuclear and solar and wind and geothermal. But the investments we need to be making are in the new things, just like we need iPhones and laptops, not old desktops or typewriters. Why are we investing in the old infrastructure as opposed
to the new. One of the areas I have been focused on is getting rid of fossil fuel subsidies. Obviously that's going to be hard in a Trump administration, but we have to remain focused on that so that when we do get a democratic president, that can be part of the agenda. In the first one hundred days.
As we record this, Republicans are likely to take control of this and it as well as the presidency, but the houses still upprograbs. No matter what happens, Democrats like you are going to have to work closely with Republicans to get anything done. Where do you see opportunities to work with Republicans on climate?
There are not many on climate. There are other areas where I'm more optimistic. I would hope, at the very least to get some recognition of climate change as existing. I would hope that we could help maybe bring manufacturing back to America. I have a Modernization of Steel Act that would actually bring new steel plants to America that are direct reduction iron based on a hydrogen And one way we could focus on climate is we can reindustrialize
America in a better, less carbon emittive way. And maybe we could get the some Republicans on board with that, not because they care about the carbon emissions, but because they care about the new manufacturing.
And if you can the carbon equation out, what other types of solutions that are green technologies that may reduce emissions but aren't primarily being targeted for that that you could try and convince Republicans to join. You.
Look, I think the Republican Party and its current form is very, very hostile to a lot of policies on climate. Maybe you could get some Republicans to care about clean air, clean water, having standards on p fast in terms of particles per million, or making sure that there's not too much prefat in products. Maybe we could have some preservation of open land. Maybe we can talk about the importance of replacing lead pipes so that we could have clean
drinking water. But it's always a push with Republicans on the environment.
In my recent conversation with billionaire and Silicon Valley veteran Vinod Coslar, who I assume you know, we talked about the possibility that Elon Musk could become Trump's climate champion. Is this something that you have thought about? Is this something that you've talked to Elon about? Is there any room for that to be somebody in the sphere of influence of Trump who would tell him why acting on climate is important.
Well, we know thy have good ideas. I know, but for many years, and I know Ilon. I congratulated him last night, and I think it's worth my talking to Ilon about that. I mean, his focus right now with so much about getting bureaucracy out of the way of
what he considers builders and entrepreneurs. But I think if he were to focus also on a climate agenda as part of the rebuild maybe he could break through because Donald Trump obviously has a lot of respect for him, and so it's a good idea, and it'll be one of the topics I'll discuss with the a lot when we meet.
Now. Looking outside America, President Trump has long made it clear that he wants the US to leave the Paris Agreement. He withdrew once before in twenty seventeen, but because of a delay that was baked in, the exit was only completed in November of twenty twenty, and soon after President Biden saw to it that the US rejoined. This time, that withdrawal will happen faster and could likely have bigger consequences.
The exit time is only one year, and some conservatives are pushing Trump to go further and pull the US out of the climate treaty itself, which could be nigh impossible to join given how divided Congress is. So what do you think happens to global climate diplomacy If the world's biggest economy and the second largest emitter walks out for good.
We can't wellk out. We need to resist that, just like we resist walking out of NATO. And the argument I will make to my Republican colleagues, people like Senator Rubio, who drafted legislation to make it very hard for Trump to pull out of NATO, is that pulling out of these climate agreements is seating American leadership to China, which is a huge emitter, ceating American leadership to other nations, and that that's not in the interest of America to
lead the world. If you want America to lead in ai, if you want America to lead in crypto, if you want America to lead in biotech, then why wouldn't you want America to lead in climate. It's a matter of our leadership around the world. And I'm hopeful that that argument will carry the day, so that even if Trump engages in a lot of rhetoric about withdrawal, that he's unable to do.
So, and on China, you might be able to get bipartisan agreement. The Inflation Reduction Act was an important piece of legislation, and you had Senator Manchin explicitly say that he the key decided vote, supported it because he saw that that would help the US become more competitive against China. Now President Trump is perhaps more adversarial in his position
on China, with wanting to have bigger tariffs. But how do you think the US can continue to compete with China on green technologies under a Trump administration.
Well, a lot of it's going to come from my district, the private sector. When the private sector sees that the cost of producing renewable energy is going down, they see that the cost of battery storage is going down, that there could be enormous innovation in a huge market, nine trillion dollar market in energy. And yes, the government can help make that easier. But if the government is making it a bit harder, that may slow things down, but
it's not going to stop the entrepreneurs for innovating. It's not going to stop many members of Congress from continuing to build these relationships around the world. And so I would say that we have to continue to move forward as states, the cities. This is the private sector because the federal government, while critical, is not the only game in town, and it's not the only thing that defines America.
One of the things that has made your district and the state of California, but also so many other states in the US so good at innovating, is because they have attracted immigrants. But the issue that Trump campaigned on and the line he has taken on immigration seems to
be pretty detrimental. Do you think the US will continue to attract the level of talent that enable this kind of innovation if Trump follows through on deportation or other radical policies that he has talked about in his campaign in the election.
How extremely is I remember his last term, it slowed down immigration. Now partly that was because of COVID, but partly because it was the town he took. Now, the United States is a global race for talent. I mean, we want talented people to help innovate and create companies. Here. Trump had said on All In podcasts that he was open to reforming that process of founders and entrepreneurs and
scientists and technology leaders. We'll see what he does, but he would really be kneecapping America if he does not allow us to succeed in the global race for talent. If you're a football team or a basketball team and you've got a great center or a great quarterback who happens to be from Japan, you obviously will do everything to sign them. Well, the same thing is true if you want to be a great company.
And taking climate change is easier if countries cooperate. But Trump's narrative is one of competition. We talked a little bit about the US competition with China over green technologies, but under an America First agenda, European countries could also be seen as company editors. How do you think European allies are likely to respond to from on trade, on climate, on tariffs, things that are likely to play in this incoming press.
I think they're thinking, how do we survive it, how do we get caught time where Democrats come back into power in Europe at least, But I think they're going to try to do things to mitigate the damage. The hope that a lot of this is populist rhetoric, that cooler heads will prevail, that we don't ignite a trade war.
Notice trumpthing mentioned many tariffs in his speech last night, that we don't pull out a NATO, that we're still engaged in the world, and the Europeans need to hear from us from a diverse group of leaders, as the countries elsewhere in India and in the Middle East, about our commitment to staying engaged and recognizing that again the country is divided and the president doesn't speak for everyone.
Now we are speaking just days before the start of COP twenty nine and Baku Azerbaijan. Trump doesn't control the White House yet. The US delegation is going to go under President Biden's instructions. But there's a risk that whatever happens at KOP will be irrelevant if Trump pulls out of the Paris Agreement. How do you think Trump's selection affects the discussions that will happen at COP twenty nine.
I think the reality is that people are going to be looking for American leadership and reassurance. They're going to say, what is the consequences of this? Who is going to be pulling out of what treaties? What is Trump going to do to hurt climate? But there we have to reassure them that there's still a lot of climate activities
people who care about the climate there. It would be important in my view, for the Trump administration to send someone there, and maybe as an initial matter, I can talk to Elon or others about the importance of US having representation there from the incoming new administration. But the key for surviving four years of Trump on climate is two progued. One is to make the argument to people in the Trump administration who may be sympathetic from a
perspective of just American leadership and American innovation. And secondly, to make the case to the world in America still remains the technological leader in so many climate areas, and so many people like Bill Gates, like John Dorr, like the No North COASTLA like Elon Musk, remain committed to solving the climate problem and they shouldn't write off the entire country because of who our president is, who got elected with fifty one fifty two percent of the vote
and forty eight percent descent.
Well, last time around, when Trump was elected, Paris Agreement had just been signed, The climate agenda was in ascendency. People were recognizing that, Okay, the US might have pulled out, but rest of the world is committed. Then around twenty twenty, when Joe Biden was elected, there was a backlash against Trump, but also there's clear recognition that climate is front of
the agenda. ESG investing, environmental social governance investing was in the ascendancy, and investors and financial authorities were getting involved in climate action. This time around, all of that is going in the opposite direction. It's not just the US. There are other elections around the world where climate hasn't been the top priority or has been a anti climate vote. Same thing with the ESG in the US, there's been political backlash against ESG investing. So the agenda globally has
been in a very challenging spot. And so when you think about non federal actors or state actors or local governments or entrepreneurs wanting to take the baton while Trump is not caring about climate, they just have a much harder job, don't they.
They do. But there's also a new generation that it's coming into positions of responsibility, a new generation coming in the Wall Street, into Silicon Valley, into nonprofits and businesses, and they care about climate, they care about having purpose in their jobs, they care about their future, their kids' future. And I'm waiting for that next generation to lead. Now. Will Donald Trump set back the climate agenda of the nation in the world for four years? Yes? Is he
gonna make it harder? Yes, there's there's no sugarcoating that. But does that mean that the climate movement and the next generations who get it can't still help make progress on this incredibly existential issue. Absolutely not. I think their work must continue and in some ways they will break through, and you also may see a reaction in the polls
and with the public against Trump. So right now, Trump's winning on all the immigration issues, but remember when he was in power, Democrats for winning because his policies were so draconian. If he institutes draconian policies that take us backwards with no appreciation of solar and winded batteries, there may become a reassessment in America saying, you know, Trump's gone too far, and it may give Democrats an advantage.
These things have a way of being a pendulum, and I don't think that Trump's going into a a neanderous view of climate is going to be sustainable with the American public.
Thank you, Representative Connor, thank.
You for your leadership and voice.
After the break, I speak to Jason Bordof, founding director of the Center on Global Energy Policy at Columbia University, about energy and tariffs under Trump. Jason, your job these is to think about energy policy at Columbia University, but before that you were in the Obama administration thinking about energy, climate and national security. So let's get into the meat
of it. I've been speaking with Congressman Rocanna, who says that yes, under Trump, they're likely to be some amount of climate action that'll continue, things like tax credit under the Inflation Reduction Act. But unfortunately, he thinks working with Republicans on climate is just going to be very hard. Do you see any common ground?
Yeah, and look, I do think there are at least some in the Republican Party thinking about climate change, although perhaps not with the same urgency or in the same way. It's also true that the business community is as well. And so take for example, the dramatic increase in electricity demand that we're going to see in the United States because of how energy intensive this historic and transformational new technology of artificial intelligence is, along with potentially electrifying other
parts of the economy like vehicles and other things. So in order, this is not a first and foremost about climate change. This is about being competitive in a critically
important technology for the twenty perst century AI. The US has a leadership role in that right now, and to maintain that leadership role for US companies like Meta and Microsoft and Google and Amazon, we need to really quickly help them meet their demand for more electricity and do it in a way that hopefully holds the existing set of consumers and businesses in the United States harmless and doesn't spread that cost among everyone because there'll be a
backlash otherwise if we do so. If you say remove carbon from the equation, I guess you can just build coal plants or turn them back on old coal plants that are forty years old in this country. I don't think that's going to happen, even hypothetically if a Republican administration wanted to do that. That's not where these companies are. That's not where they see the world going. They know the political pendulum is going to swing in four years or eight years and that's not going to be viable.
And they also do value the credibility the position they have as leaders in the energy transition. So will it change how the EPA regulates emissions and is that going to have an impact on how we think about the role of the decline of coal plants or maybe the role of natural gas in this transition. Sure, but these are still renewables are very cheap. You see these companies doing huge deals for nuclear power, and there actually is bipartisan agreement on both sides of the Aisle that nuclear
is an important technology to move forward on. It's easy, It's actually easy to imagine for me that Republicans and Democrats might work together to say, what would it look like to dramatically shorten the timeframe to get new nuclear online in this country? Not for some because we need zero carbon electrons on the grid, and for others because we need a more electricity to meet the needs of critical technologies like AI, for which they are national security
and economic reasons. That seems more likely to me than the idea that we would restart coal in this country for or the electricity that AI needs, partly because I'm not sure the policy environment will go in that direction, but also because that's what the that's not what the firms want to do.
Okay, Now, let's come to the energy equation. The US producers today fifty percent more oil than Saudi Arabia, and Trump wants to increase that production with his drill Baby, drill monthra. So what do you think happens to clean energy as a result, Because government has limited bandwidth, even as the demand for clean energy may be growing, if the focus is on supporting fossil fuels, doesn't clean energy just suffer.
I think the risk to the outlook for clean energy is less from what may be done to purportedly try to help support domestic oil and gas production, and more by what happens to policies targeted at supporting clean energy production. So if we pull back tax incentives in the IRA, if we pull back regulati tory tools and regulation that was implemented by the EPA for emissions from power plants and cars, you know, all of that has the potential to raise the cost or slow down the pace of deployment.
If we take away tools like the Loan Program Office of the Department of Energy, which can lower the cost of capital to invest in clean energy projects, all of those would have a more significant impact, I think when you look at what might be done to unleash, if that's the right word, oil and gas production in the US, and as you said, it's been growing for many years since the show Revolution started, regardless of which party was in the White House. You know, there are a couple
of constraints on that. So one or just market constraints. The more you produce, the more prices fall, and there's a sort of self correcting mechanism that the industry itself applies. Most of the production growth we've seen in the share revolution has been on private land, not on public land. And the big debates that happen, say in the permitting reform bill that is currently being proposed in Washington, you know, things like that affect the auctions and the leasing for
new areas of the Federal offshore. Well, that may affect production a decade from now, It doesn't have an effect production in the near term. So some of the changes that would be made may have effects further out, less
so in the near term. But even then, you know, you can go back and look at a chart with the acreage put up, the acreage allowed to be bid on by the Obama administration, the Trump administration, and the Biden administration, and under Trump, you see it goes through the roof right, much much more of the Federal offshore was open to the oil and gas industry, and they said, please bid on this and buy this from us so you can produce oil and gas. The amount that was
actually bid by the industry didn't change hugely. It changed based on market conditions. The amount that is currently being proposed in the Permitting Reform bill. But there's a lot of controversy and disagreement about actually it didn't matter how much was posed. The amount actually bid on by the industry has always been less than what the Mansion Barroso Permitting reform bill would require because market conditions themselves are
a constraint here. And I think I'm not saying it'll have zero impact, but I think that will probably be true here. It is worth remembering that even when George W. Bush was in office, you know, he was the one who stood up in a State of the Union and said, now,
of course this was before the show Revolution. But even with the US being the largest producer in the world fifty percent more than Saudi, as you said, although less remember Saudi's voluntarily withholding barrels from the market to try to get the price up, they could be producing more
and if the market needs that, they will. It's still a global market, so regardless of how much we're producing, if something happens in the Middle East or anywhere else, the price of the pump goes up for everyone, regardless of how much we produce. And the best thing we can do to enhance the resilience of our economy to inevitable oil price shocks is to use less oil in the first place. There have Republican administrations have recognized that
in the past. I don't know if a Trump administration will, but it should.
And it's not just sold production. The US is also the world's largest exporter of liquefied natural gas today. What do you think happens to the role of gas in the energy transition as a result of Trump coming to power, Do we start talking about gas as a bridge fuel again?
Well, we may start to talk about it that way that you know, it doesn't mean it's true. But the question of what happens to the role of gas globally, you know, is viewed differently in emerging and developing economies, as you know very well, than it is in developed
economies like the US and Europe. I suspect a Trump administration, based on what it said, would move very quickly to remove the temporary ban presumably temporary ban that the Biden administration had put on the approval of new export permits to export natural gas from the United States. But again, kind of the same with oil in terms of the
market is going to determine a lot of this. There is a quite significant question about whether that will have any impact at all or much of an impact on what happens to the global gas market and how much gas export capacity the US builds. Even with the pause that the Biden administration put in place where they said, we're not going to give any new permits to export natural gas until we do some study of the economic
and environmental implications of that. We were already roughly doubling export capacity over the next several years in this country. And if you look at the projections in the latest World Energy Outlook by the IA, they view a world that by the end of the decade is kind of a wash in natural gas. Maybe things tighten up a decade down the road after that. So the question is how much more gas does the world really need and who's going to step up to invest in multi billion
dollar projects to export more gas? If everybody who wants a permit can have a permit, I think you know, I'm not saying the answer to that will be zero. There may be a couple of projects that move forward, but I don't think it's a huge number, just given the market reality of what's happening in the world, how much gas is coming online, and also the outlook for gas demand as you see more competition from other fuels, including zero carbon fuels.
Trump has also been pushing tariffs in a big way, and economists have warned against the kind of broad tariffs that he has proposed, but he's dead set on them. Say you were to advise Trump on tariffs, what kind of tariffs would you be okay with? And what would you not be okay with?
Yeah, I mean, I think it's notable that a lot of the analysts and the large banks and such, when they look at the outlook for oil prices, they had projected lower oil prices under a Trump administration, not because production in the US would be dramatically higher, but because of concerns about what the tariff policy would do to the outlook for US economic growth. And I share a concern that very aggressive and across the board use of tariffs could be detrimental to the US economy and to
consumers and businesses that they're purportedly aimed to help. I think it's fair as the Biden administration, as both sides of the aisle actually have started to do. As Jake Sullivan said at the Brookings Institution a year or two ago, it is appropriate to rethink some of the assumptions about global economic integration, whether other countries would play by the rules. We assumed that they would, China in particular, and maybe at just course if that's not playing out the way
we thought. And so when you look at tariffs that were put in place on imported goods from China like electric vehicles and other things, there are actually several rationales given for that. One is there's more carbon intensity and production there, so you can think about a carbon border adjustment as one tool, and the Europeans are doing that. Maybe to work with the Europeans on something like that. There may be national security considerations we want to think
hard about that. I think they're probably different for advanced semiconductors with sensitive military applications than they are for a cheap manufactured product like a solar panel. So not all clean energy should be thought of the same way, and we want leadership. There are economic reasons why we want
industries to be located here. Tariffs, if they're well targeted, if they're designed carefully, they can play a role in offsetting some of the unfair practices that where we're not on a level playing field with others, particularly in China and the rules of the WTO. I think both sides of the all frankly, have been too quick to dismiss and throw out I understand why people are concerned the WTO is not fit for purpose for how fast the
world is moving anymore. But there is a rules based trading system, and it's designed to handle things like unfair subsidization of certain industries, and we want to not lose sight of those tools, even if new tools are probably needed as well.
Thank you Jason, Thanks Ocsha, it's great to talk with you. Thank you for listening to Zero. And now for the sound of the week, that's the sound of oil drilling. Expect lots more of it to happen. If you liked this episode, please take a moment to rate or review the show on Apple Podcasts and Spotify. Share this episode with a friend or with someone who sold their ESG stocks. You can get in touch at zero pod at Bloomberg
dot net. Zero's producer is Mighty le Raw. Bloomberg's head of podcast is Sage Bauman and head of Talk is Brendan newnan. Our theme music is composed by Wonderly Special thanks to Shawan Wagner, Monique Molina Ethan Steinberg, Blake Naples and Jessica beck I am Akshatrati back soon