Giuseppe – thank you for that generous introduction – and thanks to all of you for inviting me to share some thoughts with you about the challenge ahead on the global climate crisis.
Here in Washington, it’s 7:30 in the morning on my first full day as Presidential Climate Envoy in President Biden Administration. The early hour is appropriate, because we really don’t have a minute to waste, and there really are no more important and no more empowered audiences than the private sector as we all map the road ahead.
We began down that road back to progress yesterday when President Biden rejoined the Paris Climate Accord, commissioned a team of climate leaders throughout his government with expertise and vision, and with a few strokes of his pen began to restore domestic environmental leadership.
But going forward, I believe it is important for the United States, and for countries and companies all over the world, to travel down that road with humility, and ambition.
Humility because we know that the federal government of the United States, until yesterday, walked away from the table for four wasted years when we could’ve been helping to meet the challenge.
Humility also in knowing that for all our industrial capacity, the United States is responsible for only 15% of global emissions. The whole world must come to this table to solve this problem.
And humility in knowing that today no country and no continent is getting the job done.
At the COP in November, all nations must raise ambition together – or we will all fail, together.
Failure is not an option.
And that’s why ambition is so important.
Success means tapping into the best of our collective ingenuity, creativity, and diplomacy, from brain power to alternative energy power, using every tool we have to get where we need to go. Success means lifting up communities long left behind and creating an equitable recovery.
The road ahead is exciting. It means creating millions of middle-class jobs. It means less pollution in our air and in our ocean. It means making life healthier for citizens across the world. And it means we will strengthen the security of every nation on earth.
And your companies and industries can and must be in the lead.
A zero-emissions future offers huge opportunity for business, for clean, green jobs and economic growth and, to use the President’s words, to “build back better” from the global economic crisis.
A few examples tell the story:
- The highest valued auto company in the world today is Tesla. And it ONLY makes electric vehicles.
- Mitsubishi is building the world’s largest zero emission steel plant – in Austria.
- Heidelberg Cement is working on a plant in Norway that anticipates capturing all its CO2 from concrete by 2030.
- Globally, the cheapest new electric power plant you can install is based on renewables – which explains why it now makes up more than 70 percent of new capacity.
- And green economies will generate new jobs. The EU anticipates 2 million additional jobs with a green economy
- Here in the US, until COVID, we had five years of steady growth in clean energy employment – with over 3.3 million new workers put into jobs across our country (Clean Jobs America 2020 | E2).
- And India has seen a five-fold increase in clean energy jobs over that same period ( ).
But we need to all move together, because today very few are on a trajectory of the steep reductions needed to meet even current goals, let alone the targets we need to avert catastrophic damage.
We know we need to:
- Phase out coal five times faster than we have been (based on the comparison with the trend from 2013-2018)
- Increase tree cover five times faster
- Ramp up renewable energy 6 times faster
- Transition to electric vehicles at a rate 22 times faster
Reaching net-zero global carbon emissions as early as 2050 will take a wholesale transformation of the global economy. And the success of that transformation will depend in large part on leadership from the private sector—firms, investors, and innovators.
The good news, it’s the economic opportunity of many lifetimes.
We’re looking at an unprecedented wealth creation opportunity.
- Since 2015, when the Paris Climate Agreement was signed, solar and wind power have doubled their share of global electricity to 10 percent.
- In most countries in the world, renewable energy is now cheaper than fossil-fueled power plants.
- Global investment in new clean power capacity is set to exceed $10 trillion through midcentury, more than six times the investment in dirtier options.
- Other clean energy sectors, from hydrogen to electric vehicles, could also represent multi-trillion-dollar markets in the decades to come.
Here’s the challenge. Clean energy gets cheaper, but a net-zero transition will become much more complex requiring greater leadership – everywhere.
It won’t be enough to merely keep deploying more clean energy. Major economies around the world will need to design and execute tailored roadmaps to overhaul their own energy systems.
They will need to collaborate on emissions-intensive sectors that cross borders—aviation, shipping, heavy industry, power, and more—to chart a path to deep decarbonization in each. They’ll even have to invest in capturing and storing emissions from the atmosphere and from polluting plants.
Governments have an important role to play in galvanizing net-zero transitions. But they must partner intimately with the private sector, which brings expertise in every corner of the economy, substantial capacity to invest in new infrastructure, and the ingenuity and drive to bring new innovations to market.
In this decade through 2030, the world will need more than $1 trillion in annual investment in clean power systems to speed the energy transition.
I’m an optimist that we can get there.
Sustainable investment funds surpassed $1 trillion for the first time on record, and the boom in ESG investing is only beginning, as fund inflows quadrupled in 2020.
Venture capital investments in innovative technologies to combat climate change also surged to a record high in 2020.
Developing and scaling new and improved clean technologies will be critical to speeding energy transitions around the world. Even though a handful of clean energy technologies, such as solar and wind power, are now cost-competitive with fossil fuels, most aren’t.
The International Energy Agency warns that 42 of 46 critical clean energy technologies aren’t on track. And roughly half of the carbon emissions reductions needed for a swift net-zero transition will need to come from energy technologies that have not even reached commercial markets yet.
Trying to combat climate change without innovation would be expensive, complicated, and unpopular. The good news is, we don’t have to face that choice.
We can solve this challenge as we have so many others – together, through innovation.
That’s why it’s critical for countries to cultivate advanced, clean technology industries. Across energy storage, advanced mobility, next-generation renewable and other clean power technologies, clean industrial processes, zero-carbon fuels, smart systems, carbon capture, and more, we stand at the precipice of a rare opportunity to create new technologies and new markets. The countries that make it a strategic priority to foster these industries of the future will not only help reduce emissions both within and outside their borders—they will also reap the economic rewards of powering the global economic transformation.
The economics of a net-zero transition don’t need to be zero-sum. Countries can collaborate with one another in ways that accommodate healthy competition while also recognizing that our shared efforts to accelerate innovation and a net-zero transition will increase the size of the total economic pie from which we will all prosper. Through close collaboration between the public and private sectors and across national borders, we can unlock new sources of sustainable finance to green capital markets; and develop cutting-edge products and services to slash emissions.
Now, with humility and ambition, let’s get to work to make it a reality on the road to Glasgow and on the road to net zero – the road to defeating climate change and leaving our kids a world that is prosperous, healthy, and secure.
I look forward to your questions – and to your partnership.