Latest / Trumponomics / What Climate Change Means for the Global Economy

Transcript

What Climate Change Means for the Global Economy · Trumponomics

• 0:01
  Speaker 1: Wildfires have been sweeping through California, causing untold damage and destruction.
• 0:07
  Speaker 1: Hurricanes seem to get stronger and stronger every year. Rising
• 0:11
  Speaker 1: sea levels our forecast to make much of the coastline
• 0:13
  Speaker 1: uninhabitable in the coming decades. This week on Benchmark, we'll
• 0:17
  Speaker 1: talk about how climate change is reshaping economies around the world,
• 0:22
  Speaker 1: and we'll look beyond all the destruction and doom to
• 0:25
  Speaker 1: what business and investors can do to help. Welcome to Benchmark.
• 0:38
  Speaker 1: I'm Scott Lanman, economics editor with Bloomberg News Washington, and
• 0:42
  Speaker 1: I'm Daniel Moss, columnist at Bloombergan in New York. Joining
• 0:48
  Speaker 1: us this week in our New York studio are two
• 0:50
  Speaker 1: colleagues who are particularly knowledgeable on the topics of climate change, economics,
• 0:55
  Speaker 1: and business. First, we have Dan Shurry. He's the head
• 0:59
  Speaker 1: of Green and Sustainable Finance at Bloomberg New Energy Finance,
• 1:03
  Speaker 1: our company's division that researches clean energy, advanced transport, and
• 1:08
  Speaker 1: other key topics on the future of energy. Dan, thanks
• 1:11
  Speaker 1: for coming on Benchmark. Absolutely the pleasure to be here.
• 1:14
  Speaker 1: And Next, we also have Emily Chasen. She's the Sustainable
• 1:18
  Speaker 1: Finance editor at Bloomberg News and edits Good Business Bloomberg's
• 1:22
  Speaker 1: free weekly newsletter on sustainable finance. Emily, thanks for being
• 1:26
  Speaker 1: with us, Thanks for having me. All Right, Well, before
• 1:29
  Speaker 1: we talk about all the disasters happening in the world,
• 1:33
  Speaker 1: let's talk a little bit about green and sustainable finance.
• 1:37
  Speaker 1: It's a topic that we haven't really covered on Benchmark before.
• 1:41
  Speaker 1: What is green and sustainable finance? How big is it?
• 1:44
  Speaker 1: And where is it going? Yeah, I actually get this
• 1:48
  Speaker 1: question a lot people who cover finance particularly haven't always
• 1:52
  Speaker 1: understood whether what's sustainable, what makes that different? So it's
• 1:56
  Speaker 1: actually a huge area. Um Sustainable investors just hit twelve
• 2:00
  Speaker 1: billion in US assets this year. That's one in every
• 2:03
  Speaker 1: four U s dollar invested is invested with some sort
• 2:05
  Speaker 1: of sustainable or responsible criteria. So that's actually been growing
• 2:09
  Speaker 1: about thirty a year for the past five years. So
• 2:13
  Speaker 1: it's really a rapid increase in this area. And there
• 2:16
  Speaker 1: are three major groups of investors that focus on this stuff.
• 2:18
  Speaker 1: There's a group that just invoids investing in controversial products
• 2:21
  Speaker 1: like weapons and tobacco or fossil fuels. Increasingly, there's other
• 2:25
  Speaker 1: investors that incorporate environmental, social governance risk and they just
• 2:29
  Speaker 1: sort of try and quantify the risk of climate change
• 2:31
  Speaker 1: or increasing inequality or bad corporate governance on their portfolios,
• 2:35
  Speaker 1: and they try to invest accordingly. And then there are
• 2:37
  Speaker 1: some investors that have gone so far even in this group,
• 2:39
  Speaker 1: to map companies pie locations and where their key suppliers
• 2:43
  Speaker 1: are and see if they have facilities in areas vulnerable
• 2:45
  Speaker 1: the storms or floods. And then the third group is
• 2:48
  Speaker 1: this group of impact investors, and those are investors that
• 2:51
  Speaker 1: hope to invest in products or services that have a
• 2:53
  Speaker 1: positive impact, like investing in lab grown meat or renewable
• 2:55
  Speaker 1: energy or sustainable agriculture. It's really just long term investors
• 3:00
  Speaker 1: and they're trying to map the future and figure out
• 3:02
  Speaker 1: what the cost of all these externalities are going to
• 3:03
  Speaker 1: be on portfolios. So many of them are sort of
• 3:05
  Speaker 1: long by and hold type people. And Dan, sure, how
• 3:09
  Speaker 1: how does this play into the topic of climate change
• 3:13
  Speaker 1: and you know other sort of big sweeping things that
• 3:17
  Speaker 1: are you know, really beyond the scope of economies or
• 3:21
  Speaker 1: countries and really go to, you know, how the human
• 3:24
  Speaker 1: race survives on this planet. So I think it boils
• 3:27
  Speaker 1: down to two key questions that investors are asking, especially
• 3:31
  Speaker 1: when you look at a topic like climate change, which
• 3:33
  Speaker 1: is very large and very nebulous, And the first question
• 3:36
  Speaker 1: is how how do my investments impact the environment around
• 3:40
  Speaker 1: me in the society around me? And the second question
• 3:43
  Speaker 1: is how does the society around me and the changing
• 3:46
  Speaker 1: climate impact my investments? And those two a very different
• 3:49
  Speaker 1: ways of approaching the same topic, and they result in
• 3:52
  Speaker 1: very different outcomes and very different ways of investing. And
• 3:56
  Speaker 1: green and sustainable finance really encompasses both of them. So
• 3:59
  Speaker 1: it's looking at both sides of the coin, both how
• 4:01
  Speaker 1: you impact the climate and how the climate impacts you.
• 4:04
  Speaker 1: All right, well, let's let's move to the wildfires in California.
• 4:07
  Speaker 1: They've been called some of the worst in history. Can
• 4:10
  Speaker 1: you just catch us up on what's happening, Why they're
• 4:15
  Speaker 1: so bad, Why these this particular run of fires has
• 4:18
  Speaker 1: been so destructive. Absolutely. So. I've been looking at some
• 4:22
  Speaker 1: statistics actually from from cal Fire, and it looks like
• 4:26
  Speaker 1: fourteen of the twenty largest wildfires have happened in the
• 4:29
  Speaker 1: last fifteen years in California, And in line with that,
• 4:33
  Speaker 1: ten of the last fifteen years have been the hottest
• 4:35
  Speaker 1: on record on the West Coast. So what we're seeing
• 4:37
  Speaker 1: here is the effects of climate change really impacting the wildfires,
• 4:43
  Speaker 1: so that the fire that we're seeing right now, the
• 4:46
  Speaker 1: camp fires the deadliest in history. There have been over
• 4:49
  Speaker 1: eighty recorded deaths so far. There's still over nine people
• 4:52
  Speaker 1: who are unaccounted for. So there's a company of utility
• 4:55
  Speaker 1: company the spotlight of this this crisis right now that
• 4:58
  Speaker 1: may or may not be culpable, may may not have
• 5:01
  Speaker 1: started the wildfires in California that we're seeing this campfire
• 5:04
  Speaker 1: and it's really being being impacted, and it's impact in
• 5:07
  Speaker 1: the stock price as well. What we've seen is up
• 5:09
  Speaker 1: to fifty reduction in the share price or the share
• 5:12
  Speaker 1: value of pg n E in the days after the
• 5:15
  Speaker 1: campfire broke out. It's often said that if California were
• 5:19
  Speaker 1: a separate country, it would be part of the G
• 5:23
  Speaker 1: seven or the G eight. That's how large it's economic
• 5:27
  Speaker 1: footprint is. Do these fires change any of that or
• 5:32
  Speaker 1: have the potential to alter that in any way? Well,
• 5:36
  Speaker 1: California actually has really strong climate ambitions. The legislature this
• 5:40
  Speaker 1: year passed a bill that would require all of its
• 5:42
  Speaker 1: electricity to come from carbon free sources, and it also
• 5:46
  Speaker 1: became the first state to require solar panels in almost
• 5:48
  Speaker 1: all new homes. So those are actually really aggressive things.
• 5:52
  Speaker 1: In California sort of sees itself as on the front
• 5:54
  Speaker 1: lines of climate change. It's really worried about its beaches
• 5:57
  Speaker 1: eroding and that being a huge part of the economy.
• 5:59
  Speaker 1: There's tourism, and the wildfires are really damaging this infrastructure
• 6:02
  Speaker 1: like pg n E that Dan talked about. PGNI has
• 6:05
  Speaker 1: like at one point four billion and wildfire insurance and
• 6:08
  Speaker 1: that's definitely not enough given the fires last year and
• 6:10
  Speaker 1: this year. So and that infrastructure is what you need
• 6:13
  Speaker 1: to do more renewable energy and there I mean, California
• 6:15
  Speaker 1: is launching its own satellite to detect methane. But these
• 6:19
  Speaker 1: wildfires released obviously a lot of carbon emissions into the atmosphere. Um,
• 6:23
  Speaker 1: they do set the state back, and it's um, it's
• 6:25
  Speaker 1: really the I know Donald Trump was saying it was
• 6:27
  Speaker 1: forest management um that caused the wildfires, but California is
• 6:32
  Speaker 1: actually a tinder box for a totally different reason. That
• 6:34
  Speaker 1: just had very scant rainfall and hot, dry winds and
• 6:37
  Speaker 1: just been bone dry. About eighty eight percent of California
• 6:40
  Speaker 1: was abnormally dry as of October two, and there are
• 6:43
  Speaker 1: wildfires like this all over the world. There's Scandinavia, Greece,
• 6:46
  Speaker 1: there's record heat in Texas, Japan, Africa over the past
• 6:49
  Speaker 1: year UM and it's just the droughts and the wildfires
• 6:53
  Speaker 1: are all very interrelated. And the droughts are also a
• 6:55
  Speaker 1: huge um source of an issue for agricultural jobs or
• 6:58
  Speaker 1: food supply. The the economic initiatives that the finance initiatives
• 7:03
  Speaker 1: that you're just talking about, you know, not just in
• 7:06
  Speaker 1: California but around the world. How long will it take
• 7:09
  Speaker 1: for these industries. Are these initiatives to sort of make
• 7:12
  Speaker 1: up for the kind of damage that's being done in
• 7:15
  Speaker 1: the various fires that you also cited. So when we
• 7:19
  Speaker 1: look at California, for example, I think there's going to
• 7:21
  Speaker 1: be more damage for a while before we start to
• 7:24
  Speaker 1: see any sort of improvement. If you look at the
• 7:27
  Speaker 1: potential liability that the PGNI might incur, the cost that
• 7:30
  Speaker 1: they might incur if they are proven to be the
• 7:33
  Speaker 1: cause of these fires, it could well cause a bankruptcy
• 7:35
  Speaker 1: and that would have a knock on impact for the
• 7:37
  Speaker 1: end consumer. You know, we talk about pgn E being
• 7:40
  Speaker 1: being a victim of climate change, but really it will
• 7:43
  Speaker 1: be passed onto the rate pair, the electricity pair that
• 7:46
  Speaker 1: will have a few huge knock on impact on the
• 7:48
  Speaker 1: cost of power for residents, the cost of power for
• 7:51
  Speaker 1: industries in California, which might well impact the the the
• 7:55
  Speaker 1: entire face of industry in California. If power becomes too expensive,
• 7:58
  Speaker 1: then that might cause a corporations to move elsewhere. Yeah,
• 8:02
  Speaker 1: in the US, we have a very centralized electricity system
• 8:07
  Speaker 1: and UM electricity empower utilities are actually really it's moving
• 8:10
  Speaker 1: from fossil fuels to electricity empower utility sort of being
• 8:13
  Speaker 1: on the front line of climate change here, and investors
• 8:16
  Speaker 1: concerns about what kind of fuel they're using, and UM
• 8:19
  Speaker 1: using natural gas and fossil fuels increasingly people are worried
• 8:23
  Speaker 1: about that. So, but to decentralize the climate system and
• 8:27
  Speaker 1: to have more wind and solar, those windy and solar
• 8:30
  Speaker 1: places are like different places in the in the country,
• 8:32
  Speaker 1: so you have to rebuild the whole electric grid and
• 8:35
  Speaker 1: that people say that could take like thirty years. So
• 8:37
  Speaker 1: we have a long road ahead of us. So are
• 8:39
  Speaker 1: people trying to actually fund that for thirty years? Are
• 8:42
  Speaker 1: people that forward looking, our investors that forward looking, or
• 8:46
  Speaker 1: or do things tend to be more shortsighted? For sure?
• 8:49
  Speaker 1: Some investors have told me that they wish the government
• 8:51
  Speaker 1: would fund the upgrades to the electrical grid, and they'll
• 8:53
  Speaker 1: invest in the wind and the solar projects because they
• 8:54
  Speaker 1: know how to do that. It's really hard to do that,
• 8:56
  Speaker 1: but there's increasingly transmission lines and electricity trading so and
• 9:00
  Speaker 1: stuff like that. But the government really controls a lot
• 9:02
  Speaker 1: of the infrastructure there. So that is definitely a project
• 9:04
  Speaker 1: that should happen. And is this likely to be a
• 9:07
  Speaker 1: federal initiative should it come to pass, or is it
• 9:10
  Speaker 1: going to be a patchwork of individual state programs. I'd
• 9:16
  Speaker 1: say as long as the federal government isn't that interested
• 9:19
  Speaker 1: in climate change, and then it'll probably be a patchwork
• 9:22
  Speaker 1: of states. What we see now is as a complete
• 9:24
  Speaker 1: fragmentation in different states taking different stances on climate change
• 9:28
  Speaker 1: and what their role should be. California happens to have
• 9:30
  Speaker 1: a very very very strong stance on climate change with
• 9:33
  Speaker 1: a very very very high target for the issue. Here
• 9:36
  Speaker 1: is that PG and E is a very key player
• 9:39
  Speaker 1: in reaching those targets. So if they were to be
• 9:41
  Speaker 1: wiped out by bankruptcy proceedings following this fire, rather ironically,
• 9:45
  Speaker 1: they're actually going to be needed to help meet these
• 9:47
  Speaker 1: targets in the first place, and the stack is actually
• 9:50
  Speaker 1: up today because investors are betting that California will back
• 9:52
  Speaker 1: them because they need them. All Right, Well, let's move
• 10:11
  Speaker 1: on to hurricanes and other major storms like typhoons. We've
• 10:15
  Speaker 1: seen plenty of that. This year, we had the second
• 10:18
  Speaker 1: year in a row at least in the US with
• 10:20
  Speaker 1: multiple storms that have caused wide scale destruction. It might
• 10:23
  Speaker 1: even be more than two years. Uh. Hurricanes getting more
• 10:27
  Speaker 1: frequent and stronger. So when you look at hurricanes, it's
• 10:31
  Speaker 1: not so much the frequency the matters. It's the strength
• 10:34
  Speaker 1: that matters, because that's where the damage comes from, and
• 10:36
  Speaker 1: that's ultimately where the cost is incurred. And they're getting stronger.
• 10:40
  Speaker 1: If you look at the damage that's that's been incurred
• 10:42
  Speaker 1: in the US since the nineties, we've seen that actually,
• 10:45
  Speaker 1: what thirty of total damage costs from hurricanes happened in
• 10:49
  Speaker 1: seventeen alone from three hurricanes, Hurricane Harvey, Maria, and Erma.
• 10:53
  Speaker 1: So they're getting more powerful. That's because sea levels, sorry,
• 10:57
  Speaker 1: sea levels are rising, but also the temperature of waters
• 11:00
  Speaker 1: is increasing, which makes them more intense. When they're more powerful,
• 11:04
  Speaker 1: we get category five hurricanes for example, making landfall. That's
• 11:07
  Speaker 1: what the damage happens. Last year, there are a lot
• 11:09
  Speaker 1: of billion dollar storms, so the damage is definitely increasing
• 11:13
  Speaker 1: from these hurricanes when they make landfall and then and
• 11:16
  Speaker 1: I have both lift overseas in Asia, which is also uh,
• 11:20
  Speaker 1: you know, suffering from typhoons that we read about. Can
• 11:25
  Speaker 1: you tell us how how these kinds of storms are
• 11:27
  Speaker 1: wreaking havoc in Asia as well or other places around
• 11:30
  Speaker 1: the world. Yeah, So the typhoon that we saw in
• 11:32
  Speaker 1: Asia this year was the most powerful on record, I believe,
• 11:36
  Speaker 1: and the fact that it happened to hit some major
• 11:38
  Speaker 1: cities and we're seeing huge over not overpopulation, but we're
• 11:41
  Speaker 1: seeing huge population rises in coastal areas around Asia, Hong
• 11:45
  Speaker 1: Kong for example. That the damage is tangible and you
• 11:48
  Speaker 1: can really see it in the cities there. So cities
• 11:50
  Speaker 1: happened to make two options. The first one is to
• 11:52
  Speaker 1: either make themselves more resilient with flooding defenses and storm defenses,
• 11:57
  Speaker 1: or it's a case of you know, essentially giving up
• 12:00
  Speaker 1: and moving inland. And that hasn't happened yet, but that's
• 12:02
  Speaker 1: something that you know, the frequencies, if the frequency of
• 12:05
  Speaker 1: large scale and strong storms happens to go up, then
• 12:08
  Speaker 1: that might be the only option in the future. That
• 12:10
  Speaker 1: is already happening in New Orleans in the US. And
• 12:15
  Speaker 1: home prices in the US have actually fallen around the
• 12:18
  Speaker 1: hurricanes and wildfires and um, I think Bloomberg found that
• 12:22
  Speaker 1: homes in areas exposed to fires and hurricanes were worth
• 12:26
  Speaker 1: less last year on average than a decade earlier. So
• 12:28
  Speaker 1: you are starting to see this risk get incorporated in that.
• 12:31
  Speaker 1: And you know, people buying flood insurance are being able
• 12:34
  Speaker 1: to obtain flood insurance exactly. And even in Puerto Rico
• 12:37
  Speaker 1: we saw a fifteen percent reduction house prices following Hurricane
• 12:40
  Speaker 1: Maria last year in the most affected areas that was
• 12:42
  Speaker 1: over is economics treated as something distinct from climate change?
• 12:50
  Speaker 1: And do you see this year or perhaps the past
• 12:55
  Speaker 1: two years, as being a watershed in how people view economics.
• 13:00
  Speaker 1: In other words, it's not just how much do I
• 13:04
  Speaker 1: get and am I working? It's all of these things
• 13:08
  Speaker 1: that can contribute to the economic well being of one's country. Yeah,
• 13:14
  Speaker 1: I'd say that wildfires, droughts, storms, and floods are sort
• 13:17
  Speaker 1: of the most tangible impacts on climate change that we
• 13:19
  Speaker 1: see today and seeing them reak such havoc um is
• 13:22
  Speaker 1: sort of elevating the issue for people into the present day. Um.
• 13:26
  Speaker 1: It seemed like a thing that was really far off,
• 13:28
  Speaker 1: but the u N just a few weeks ago came
• 13:30
  Speaker 1: out with this report that said, we're really going to
• 13:32
  Speaker 1: start to see effects of one point five degrees of
• 13:34
  Speaker 1: global warming by and that's something a lot of people
• 13:36
  Speaker 1: who are here today will still be around to see. UM.
• 13:39
  Speaker 1: So the investors that I talked to are usually long
• 13:42
  Speaker 1: term investors. Maybe they'll hold stocks for thirty years, they
• 13:46
  Speaker 1: want to hold them for a really long time. So
• 13:47
  Speaker 1: for them is actually just around the corner. And if
• 13:51
  Speaker 1: they're going to hold forever and not sell, they really
• 13:53
  Speaker 1: want to make sure that their companies are incorporating this
• 13:57
  Speaker 1: risk because it really changes the basis of operations. And
• 14:00
  Speaker 1: it's not even just the risk of the storms and
• 14:02
  Speaker 1: the floods, but the risk that the governments will start
• 14:04
  Speaker 1: to get involved and change all the structures and costs
• 14:07
  Speaker 1: that people are used to and change their business model
• 14:10
  Speaker 1: overnight to sort of combat this effect because it's really
• 14:12
  Speaker 1: going to affect human life. And this is called the
• 14:15
  Speaker 1: tragedy of the horizons, which essentially this concept that the cycles,
• 14:20
  Speaker 1: economic cycles and what we look for in in the
• 14:22
  Speaker 1: finance community happens on a much shorter scale than the
• 14:25
  Speaker 1: true impacts of things like climate change. I think you're
• 14:28
  Speaker 1: absolutely right in that we're starting to see a shift
• 14:30
  Speaker 1: away from that mentality. We're starting to see you know,
• 14:33
  Speaker 1: dots connecting between various climate incidences and you know, various
• 14:38
  Speaker 1: catastrophes and rising costs of of things like living living
• 14:42
  Speaker 1: near the coast. And I think people are starting to
• 14:44
  Speaker 1: put the dots together on these things. But what we
• 14:46
  Speaker 1: really need more is is kind of awareness and education
• 14:49
  Speaker 1: in the market to show that there are short term
• 14:51
  Speaker 1: implications as well as long term implications for things like
• 14:54
  Speaker 1: climate change. And that's where initiatives like the Task Force
• 14:57
  Speaker 1: and CLIMB related financial Disclosures of the TCFD are extremely useful.
• 15:02
  Speaker 1: They provide a framework for companies to disclose the risks
• 15:05
  Speaker 1: that they envisioned for that corporation, the long term and
• 15:09
  Speaker 1: the short term operational risks of their businesses, and what
• 15:12
  Speaker 1: the financial implications of that might be. And that's that's
• 15:15
  Speaker 1: crucial for investors. So there is a little bit of
• 15:18
  Speaker 1: a silver lining and all this doom and gloom that
• 15:20
  Speaker 1: we've been talking about today. Can you talk a little
• 15:24
  Speaker 1: bit more about some of the initiatives or or um
• 15:28
  Speaker 1: ways that investors can make a difference or or or
• 15:33
  Speaker 1: business can make a difference in in dealing with the
• 15:35
  Speaker 1: effects of climate change with respect to hurricanes, or maybe
• 15:38
  Speaker 1: even some other issues like agriculture or other things that
• 15:42
  Speaker 1: we haven't discussed. Yeah, I mean the TCFD which Dan
• 15:46
  Speaker 1: brought up. They talk about the rest of climate change,
• 15:47
  Speaker 1: but they also want businesses to spell out what their
• 15:49
  Speaker 1: opportunities are in climate change, right, because when there's change,
• 15:52
  Speaker 1: there's opportunity on both sides. So we definitely need some
• 15:55
  Speaker 1: sea walls probably you know, like we're abandoning areas of
• 15:58
  Speaker 1: New Orleans or something. But you know, the Netherlands has
• 16:01
  Speaker 1: been under sea level for quite a long time, so
• 16:03
  Speaker 1: that's an area where some people are really looking for investment.
• 16:06
  Speaker 1: How do you make money off of a sea wall?
• 16:08
  Speaker 1: I mean, isn't that kind of a more of a
• 16:10
  Speaker 1: government project? But somebody has to supply the concrete. So yeah,
• 16:15
  Speaker 1: I hear a lot of investors talking about concrete. That's
• 16:17
  Speaker 1: a very interesting area. And also there's some swipes of
• 16:20
  Speaker 1: cement and concrete that can be used to store carbon
• 16:22
  Speaker 1: and become a carbon sink that they actually pull carbon
• 16:25
  Speaker 1: out of the atmosphere to create the cement. So people
• 16:28
  Speaker 1: are trying to make even that really good. UM. There's
• 16:30
  Speaker 1: a lot of stuff in electric vehicles, UM, hydrogen fuel
• 16:34
  Speaker 1: cell vehicles, the automakers are really probably the next area
• 16:38
  Speaker 1: that people are looking at after UM energy production. And
• 16:43
  Speaker 1: then there's also in the drought areas, desalination plants so
• 16:46
  Speaker 1: that people can make more water and have water for
• 16:49
  Speaker 1: agriculture and all these areas where there are wre strouts, yeah,
• 16:53
  Speaker 1: and and definitely sustainable agriculture. People are looking at things
• 16:55
  Speaker 1: that do function to cerbant carbon sinks, like the oceans
• 16:59
  Speaker 1: and UM coastal wetlands and forests and trying to see
• 17:04
  Speaker 1: if they can invest more in those areas and make
• 17:06
  Speaker 1: them tangible. But that's something that really hasn't been done
• 17:09
  Speaker 1: that much before. And what we're seeing in the financial
• 17:14
  Speaker 1: community of brand new products and innovations that have been
• 17:16
  Speaker 1: really interesting in raising awareness of both the impacts and
• 17:20
  Speaker 1: the risks associated with things like climate change. Take for example,
• 17:23
  Speaker 1: a brand new concept you know it only earlier, really
• 17:26
  Speaker 1: grew in the last couple of years or so green bonds.
• 17:29
  Speaker 1: Green bonds are essentially normal corporate bonds, but the the
• 17:33
  Speaker 1: issuer has committed to disclosing around the environmental impacts of
• 17:37
  Speaker 1: of the proceeds that have been raised by that bond,
• 17:40
  Speaker 1: and green bones have grown phenomenally. We've seen upwards of
• 17:44
  Speaker 1: five billion dollars worth of green bonds issued in the
• 17:46
  Speaker 1: last three years alone, and those can be financing anything
• 17:49
  Speaker 1: from renewable energy to sustainable agriculture to biodiversity. So we're
• 17:54
  Speaker 1: seeing a real uptick in financial instruments that are helping
• 17:57
  Speaker 1: to convey the message and the importance of of of
• 18:00
  Speaker 1: climate change and environmental degradation, but also showing you the
• 18:03
  Speaker 1: benefits of doing so. All right, last question, Dan and Emily,
• 18:09
  Speaker 1: China or the United States? Which one is going to
• 18:13
  Speaker 1: be bigger in the world of green investment, sustainable finance,
• 18:17
  Speaker 1: whatever you want to call it. Which one is going
• 18:20
  Speaker 1: to be bigger, say twenty years from now. I know,
• 18:23
  Speaker 1: when I was an editor for Bloomberg in China, I
• 18:26
  Speaker 1: was starting to hear a lot about green bonds and
• 18:28
  Speaker 1: that sort of thing. And China likes to make a
• 18:30
  Speaker 1: lot of noise about how it's uh, you know, going
• 18:33
  Speaker 1: to be big on these kinds of issues. What's your
• 18:36
  Speaker 1: take on it. Well, I think China is going to
• 18:39
  Speaker 1: be the market leader in this space, but that comes
• 18:42
  Speaker 1: at a caveat. So when we look at the future,
• 18:44
  Speaker 1: we look at say to fifty, we expect around nine
• 18:48
  Speaker 1: point three trillion dollars worth of investments into renewable energy
• 18:51
  Speaker 1: new renewable energy build globally. Five point five trillion of
• 18:55
  Speaker 1: that will be in in the Asia region and the
• 18:57
  Speaker 1: majority of that will be in China. So in terms
• 18:59
  Speaker 1: of absolute numbers, China will certain lead, but the caveat
• 19:03
  Speaker 1: being when you look at things like green bonds and
• 19:05
  Speaker 1: green finance, China's view of what green is is very
• 19:07
  Speaker 1: different to the rest of the world. When we look
• 19:10
  Speaker 1: at green bonds specifically, China believe is that clean coal
• 19:13
  Speaker 1: is actually a category of financing that that is sustainable
• 19:17
  Speaker 1: and that is green that doesn't fly anywhere else. So
• 19:20
  Speaker 1: they will be the market leader, but they have a
• 19:22
  Speaker 1: slightly different definition of what green is. Yeah, and a
• 19:25
  Speaker 1: lot of the investors I talked to you, they say
• 19:27
  Speaker 1: China is already winning a little bit. They've definitely invested
• 19:31
  Speaker 1: a lot the past few years. Um just put billions
• 19:34
  Speaker 1: into green band issuance into building solar um You know
• 19:37
  Speaker 1: so much that the US did the tariffs on their
• 19:39
  Speaker 1: solar panels this year. They're really the capital for a
• 19:42
  Speaker 1: lot of this renewable energy infrastructure and technology coming out
• 19:46
  Speaker 1: of there, and the US like hasn't really gotten its
• 19:48
  Speaker 1: act together as a government to know that's a lot
• 19:50
  Speaker 1: of investors are worried. It's kind of a missed opportunity here.
• 19:53
  Speaker 1: All right, Well let's leave it there. Dan Shurry of
• 19:55
  Speaker 1: Bloomberg New Energy Finance and Emily Chason of Bloomberg News
• 19:58
  Speaker 1: and the Good Business new Letter at Bloomberg. Thanks so
• 20:01
  Speaker 1: much for taking the time to be with us today.
• 20:04
  Speaker 1: Thanks for having us. Thank you. Benchmark will be back
• 20:07
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• 20:09
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• 20:13
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• 20:17
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• 20:19
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• 20:22
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• 20:25
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• 20:40
  Speaker 1: chasen ch a s A. M all Right. Benchmark is
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  Speaker 1: Bloomberg Podcasts. Thanks for listening and wish all of our
• 20:50
  Speaker 1: American listeners are happy Thanksgiving. See you next time.