[applause] thank you all for sticking around for another terrific panel. Let me introduce for the Inflation Reduction Act in the middle samanta is the director of the Energy SecurityClimate Initiative on the Foreign Policy at brookings. Her work is focused on the intersection of Energy Environmental policy and International Cooperation. To my left, senior fellow the Global Economy and Development Program at the brookings institution. He leads the forum on cooperation and artificial in al intelligence and also the u. S. Mca an initiative that focuses on how the United States, mexico canada agreement. The intersection of Technology Trade policy. From 2009 to 2016 is a program from 2009 to 2012 also served as the director at the china center. The special assistant someone i would call to explain. Thank you so much for being here and holding this discussion. Im happy to learn from the panel because ive struggled to get my arms around the International Assessment of the ira. The community has said America Needs to lead and now that the United States has its first significant and really globally significant climate model, nobody likes the way weve done it. Thank you for being with us today. Appreciate it. Japan, south korea, singapore and the general consensus that i got and i paraphrase is we are so glad that you are doing something on the climate. Okay, fine. I think the two things that other countries and europeans in particular were most frustrated with is the size of the subsidies. John podesta said it earlier its the largest claimant bill weve seen in the United States. Its the largest investment in energy and transition that the world has ever seen. And i think that frankly it was kind of intimidating. We are the largest economy. They dont have the ability to do it the way that we do. Of the European Union isnt a taxing authority. It cant use its tax code to provide benefits to investments. So it has to be done at the individual country level land of and theindividuals have differet abilities so its a difficult thing for europe to replicate so that is one reason that they looked at it and were frustrated with the way that it went down. I had a lot of conversations with them about why it happened the way it did. We can talk about that if you want. That was one source of frustration. Second was the protection aspect of it and i think john podesta touched on those. Those protection aspect were aimed at our friends and allies in europe or asia. They were aimed at china as a look at my friend. Theres an understanding china is an important leader in the green energy technology. Everything from solar panels to batteries to electric vehicles, and i get asked this question more than any other are we trading dependence on the middle east regimes for the china or just one thing looking for another and the answer is no for a lot of reasons but thats why use all these protectionist instincts. In addition to the desire to create these jobs here in the United States its part of the administrations general policy to grow the economy from the middleclass outward so both of those were challenging and upsetting to our allies. But for a lot of political reasons, that is the way that it was going to go down and i spent a lot of time over the past year explaining that. How we got here, why it is the way it is and hopefully we can find room in the middle to relate. Thank you. So do we trade our dependence, that is exactly the question before we get into u. S. China and the policy itself. I would love for you to talk about this as well. Its exactly that we are dependent on china. We heard john podesta site all of the figures which im sure you know at the top of your head as well of the dominance in Critical Minerals et cetera. Dealing with Climate Change they are way ahead of us because years ago the bump up in 2015 but even before that, they determined that they had to make enormous investments to deal with their environment and Climate Change impact on the environment. So, they ramped that up dramatically. We did not. Our eight to ten years later the chinese have done a tremendous amount including getting control over the value change, jumping into the set of issues where in many cases the chinese are ahead of us on technology. The production capacities that we have not felt. They have control over supplies that we do not have and they know how to do it. They put the whole system together. For us to go in and not deal with the chinese to cooperate where we can, to buy from them or license the technology from them when we must is simply to delay a hard transition capacity to deal with these problems more on our own. I think the u. S. Government, the Biden Administration recognizes very clearly that we have to develop our own capabilities over time but its going to take time and if we dont seek to learn how they are doing this, license the technology so we understand them better and can build a plant here simply not to delay our transition. I think the chinese are very anxious to export. I think they are happy to sell us stuff and to build a battery plant in michigan but it was perfectly happy to license that Battery Technology to us and show us how to build those batteries. They are well ahead of what we were able to build here. If you go back a ways to the chinese they leapt ahead in their industrialization over the last 30 years because they recognize they have to learn from the United States. Its a very longterm approach and leave you falling further behind. If the chinese have capacity to dominate these industries and we have to sit there and say we can deal with any of them we have to do it on our own and be fairly protectionism for our friends and allies i think that multiplies our problems so we need to be nuanced and not categorical. Can you talk about how the ira affected the trade relationships . Its coming with the ira to achieve multiple pieces that has gone to the claimant objective. If you have these multiple important complex objectives, you are going to have a variety of unintended consequences domestically and globally. We solve very quickly that there was a range of provisions in the ira that raised a number of trade detentions the main one we got a lot of focus initially was access to the tax credit for essential either to be assembly. It was going to be north American Partners i think were relieved by that particular outcome and very quickly it became apparent that europeans and japanese and south koreans that this was going to be a problem and it is a violation of certain amounts to essentially get access to the tax credit that is a violation of the nondiscrimination commitment in the wto so it was a straightforward issue and the way that it was drafted essentially as if you had a freetrade agreement with of the theUnited States you could essentially be exempt. So the administration to its credit seemed to be somewhat taken by surprise at the fact that this became a trade problem and the reaction of allies and they moved fairly quickly to address that so weve got to the socalled critical agreement that is being deemed a freetrade agreement under the ira to get around the provision in the protracted negotiations with a similar deal on that as well so theres sort of progress on those fronts and immediate trade concerns get resolved. I think theres a sort of bigger set of trade issues that comes out which is the shift to heavy reliance on tax credits and subsidies to push green transition. Its complex debates because the wta rules we generally have on subsidies have always been contentious and somewhat economically incoherent. Theres sort of a legal approach to them that needs to be understood in the political lens as trying to balance a sort of economic view of subsidies with a realization that it is difficult for countries to absorb even though we make a little economic sense theres those that get upset by these understandably so in the trade agreements that allow the governments to counter veil and neutralize the impact of the subsidy but we are now in a world where the u. S. , t subsidize. The final point i want to make is that. To enable it would also be considered in light of the subsidy for the fossil fuel sector so its not a mutual playing ground. If there were a lot of work by others on the g20 and trying to transition the world of the fossil fuel subsidies that is completely like subsidies that are significantly higher today than they were three years ago for instance. And its also not a level playing field. How do you kind of [inaudible] i want to connect the subsidies. I wanted her back to the claimant from where i sit, the success prides itself on whether it ultimately cuts the emissions or others to cut emissions. Lasorda when we heard all these years amerigas to lead, the assumption is others would rally once the United States had acted on climate. Why is that not happening . Thats an excellent question and i feel like some of the debates that we are having at other events, the claimant weeks ago, are we going to phase out or phase down i have to be honest i find that incredibly frustrating because the demand are still going up. We are arguing whether to seize down they are basically arguing over the exact same thing. We need to reduce the use of fossil fuels and create a phase down. One thing i will say that is a good example it may be difficult for other countries to subsidize at the level we have for any number of reasons, but theres some things that i think are exemplary that when i talk to folks in the European Industry and in other parts of the world they really like, and that is its quite Technology Neutral focused on emissions. The thing that the environment really cares about. For instance, if you look at the hydrogen subsidies, they are not focused on what color the hydrogen is whether it is made from natural gas or solar energy or any other color, and there are too many to count, its focused on the emotions emissionsassociated with it. That is very appealing. I think how the u. S. Is leading. We are leading and policies that allow technology to flourish. Both in the way we are supporting Technology Development is drawn touch on a little at the beginning. We are quite neutral in the way our policy support technologies. As long as they take us to the goal of lower emissions that is a leadership im part of the u. S. That i like and hope is followed. Plus what do chinese leaders think of the ira . What do policy makers how do they view our law . Works for us while the chinese are not surprised by the ira protection especially. They, back in the teens looked ahead and set at some point the u. S. Is going to try to cut back our development our rate of development is going to regard us as a competitor i know take measures to put us out and build up their own capabilities. And our response to that is got to be we are going to develop selfreliant systems. And they started doing that. Very much including the array of areas that are directly related to Climate Change and environmental sustainability. Its not discussed much in china. You quit looking for articles about the ira in china that is not what it is about. Devout competition with United States and how the night they just trying to limit development. We were right to go out and more selfsufficient past we are increasing our focus on being able to do that. So in a sense the ira for shooting pain is confirmation of how smart he is. That is as it is. Frankly i am glad we are in this game at a very high level. And i hope will be due at the chinese we are open to benefiting from what they have accomplished. But also at the same time taking substantial measures to prevent them doing to us what theyve done in the past and continue to do too many is unfair trade practices and subsidies to undermine capabilities as you are buying from them. And so we need intelligent policies to limit the damage they can do to us. At the same time we have to recognize we really need to be able to absorb some of the advances they have made and build on them ourselves. Whats described as u. S. Climate policy for china . Its like g lee hoped john kerry can convince the Chinese Government to do more. John kerry is a terrific climate diplomat. Endears primarily with his equivalent in china and he is really committed to Climate Response and International Cooperation on it. The problem as i see it is we focus tremendously on the top line carbon reduction commitments to china will make. What is the percentage is going to be et cetera. It is a fruitless discussion. Xi jinping has said is not just from jon kerrys been saying it for years. He did say when drunk i was in china progress he also said it would drink i was in china but it should not have been a shock its not by any means the first time he said that. China will determine its own pace and timing of karma reductions will do it in a way that fits with chinas conditions they are setting a goal for 2030 or before neutrality by 2060 or before. A lot depends how hot it gets when it hits those benchmarks. I have no doubt they will do a lot on carbon reduction Greenhouse Gas emissions and reductions theyre not going to do because we are pushing them. But below that level on methane on all kinds of other issues theres a lot that can be negotiated in terms of cooperation on a deal of people and tried it with serious players they are very anxious to cooperate with United States barriers to about art much lower you push them on the top line number they push back very hard coal is to my mind one of the biggest failures in china. They have tried for years to reduce coal as a percentage of their energy sourcing. They have made a modest progress and that at best. They continue to build cold up power plants in providence that already have an abundance of coal, do not need it at all. I think its a combination of several things. One we need coal to smooth out when our Renewable Energy resources have gaps the sun dont shine at night the wind dies down et cetera. So we need that as our baseline so that new coal power plants they say will operate somewhere between five and 15 capacity. Just to utilize as a stopgap. Secondly theres clearly a lot of politics with kobe a lot of localities depend on it for employment. Depend on it for building their own gdp they get rewarded for it even if its saying dont do that. Its a multilayered system. By the time it gets down to the local levels politics are complicated. They have a hard time cutting back on coal i think they need to take it much much more seriously than they are. What do you think of the prospects and what would that do global trade relations . Us get back into that question by picking up on your previous question it would be great in why is it not so smooth. If you have been paying attention to the implementation of ambitious Climate Policy particularly in terms of how we dealt with the competitiveness implications it was clearly going to be a deeply challenging and messy process. Focus on targets, commitments, financing where more of that was an unadulterated good thing. I think once you moved out of that space into what the domestic politics were going to be around is what would that politics it will look very complicated. But go back to the obama years you will see a push on a carbon tax in the United States. That was deeply i wouldnt say polluted a big part of that conversation was how do we deal with the implications of a domestic carbon tax for an industry its going to be taxed more we have jurisdiction. A border adjustment. Yes please go ahead. That came up in the various bills that went through the house there was a lot of intellectual effort put into how could you teach different carbon taxes in different jurisdictions together. It was all based on the premise that you could have a project that ultimately allow some comparability of efforts and that would allow for some ability to make assessments about the your own domestic carbon tax import. Its vastly more complicated in this world we are in whether the u. S. Has essentially concluded there is no viable political pathway on that instead the approach is huge amounts of subsidies and tax credits and so forth. That makes it a lot more complicated theres no obvious way to draw benchmarks or to determine when there is an equivalent level of effort in the u. S. That would satisfy Something Like an eu carbon tax. So how you can stitch these systems together we are at the beginning of that conversation is now part of the discussion on the impact of the ira which will come into effect in a couple of years. Your failure to resolve that is ultimately going to mean to put it in blunt terms a deep clash between the systems. You can care about that on institutional level 20 be deeply important at determining the cost of carbonization pathways. It is undoubtedly a world we were not concerned about Clean Technology we would just be essentially taking all that from them we would be happy its clearly but ultimately there is a role for relatively free trade and Carbon Technology between trusted allies and so forth it include the eu certainly. That will reduce the marginal cost of our pathways. If we cant get there and were trade conflicts there is u. S. A products the u. S. Is undoubtedly going to respond in kind with much more pathway had of us. Text essentially said ira was great for europe. What is next in europe . Europe is coming on the ira i have to say particularly european businesses. There are a lot of businesses investing in the United States they are excited about the subsidies they frequently tell me theyre excited about the Carbon Neutrality that i talk about. You also seem european responses to the ira the amendments to the green deal where theyre actually doing some subsidies of their own. On eight smaller scale and a shorter time frame they have less ability to do this. This is happening in europe. In some sense there responding to the ira and the ira like always. I would like to hope this will continue to encourage the energy transitioned not just in europe but other countries as well. We heard the question earlier about what does this mean for the developing world . Not just the wealthy countries we have spent time talking about. Ideally what will happen between the work thats happening in china technologies we may develop and leave here in the United States. Once china does not have a running start on us. All of these technologies will search a bite of acosta. We will learn by doing carbon capturing storage is another one i really think the u. S. Has potential to lead and technology. Ideally we will buy down the cost of these technologies but will learn how to do it will develop economies of scale and supply chain that will help everyone. This will be ideally a rising tide that raises all boats. That is an area i think the ira benefits not just europe, not just asia but the developing world as well. Is to close the loop on chinas admissions growth, how high do you expect admissions to go before they peak in china . You said its one of the central questions. God i wish i knew the answer to it. The emissions in china will leveled off around the early teens have gone up again luckless on the chinese economy itself how rapidly certainly going to be higher or now. China keep in mind is a Greenhouse Gas emissions are equivalent to some of the Green House Gas emissions in the belt countries in the world. And every year its contributing those admissions. How far before they become the largest historic emitter . Frankly think those numbers are squishy. I have heard people say around 2026 or Something Like that. What counts is how much Greenhouse Gas emissions are there going to be that youre going to be around for the rest of our lifetime in the atmosphere . These things do not disappear over time. So what china does obtain now in 2030 where they are peaking assuming they peak then makes a difference. But dont provide numbers on that picture talk about jon kerrys trip he comes home essentially gave a speech while he was in the country saying china is going to cut emissions and its pace. Also did not eat with john kerry but met with a different head of state. Is there much hope for diplomacy and his counterpart are within home and in the case of the secretary some of his own party on negotiations with china. I think theres a lot of room for diplomacy at a lower level. Where you can deal with issues about how do you scale up this kind of technology . Can we get coordinate on Tech Development doing a pilot projects scaling up and can we make standards more compatible between the two countries get the potential to scale up and technology. Theyre all kinds of areas would do good Work Together lower level work on that has taken place now to state level california is very active ties parks no plans to go to california soon . Hoechst Governor Newsom is planning a trip to california soon . Is he . I dont know. My point is there is a lot that can be done in terms of global the equivalent of two we do a u. S. china bargain the becomes a standard for the world i am skeptical about that. The vibes on both sides make that very, very tough at this point. I went back and looked when President Trump announced the u. S. Would withdrawal from Paris Agreement emissions in china went up almost immediately. It is because a local level government had much less pressure felt much less pressure to put the brakes on admissions because of the u. S. And chinese the u. S. Defected is kind of like a pressure is off guys. But we do has an impact. But negotiating the top level be very, very cuff. Samantha was the best thing that could come out this year . Its very controversial country. Oil and gas is front and center. That is a great question. I have seen a lot of frustration loots the oil company. He is also a very large Renewable Energy company the man wears many hats not just as a leader in the oil industry. Ive seen some frustration with the selection. I am quite pleased with the selection. He has a very wide view of the industry that can be useful. Im looking for two things these are in line with what they are looking for as well. One is i would really like to see more solid results for the financing problem for the developing world. This is a really big challenge. A lot of the agreements we have seen on film with south africa, these are taking place outside the negotiation room. They work because theyre theresignificant omissions in te countries. Significant investment opportunities. These side deals make a lot of sense the real challenge is the smaller developing countries they do not have a lot of omissions right now. The need to develop from scratch. Theres not a lot of space for Emissions Reductions because they dont have any those are really hard. Those get stuck in the negotiation room or we are really focused on consensus and agreement and those are difficult to do. I would like to see this loosen up. I expect to see them throw money at this problem and tried to catalyze this and get it. I will be looking for that. Also i would like to see i am delighted to see them there. Despite the fact we to phase out face down phase out fossil fuels is how i got everybody there. But the industry does now matters like see that work to reduce its own admissions. I thought everything but its not nothing either. I was at a conference in the emirates last week its a gigantic oil and gas conference. Every single session that was about policy or technology was focused on admissions bar none. What is seen in the process frustration theyre not talking about phasing out the products. Will say the product we stop demanding the product this is a systemic issue im glad to see the industry included what i hope to see his Energy Companies oil and Gas Companies the National Oil Companies and Smaller Companies dont have public spaces do not have as much pressure to do this. I want to see them come on board too and that is something they are wellplaced to do. When deceit not nearly stopped. We know how to stop this. So lets do it. Those are outcomes other things will be going loots of the things im watching closely. Kirks bought youre getting whr questions ready and the ira is sufficient could make in the u. S. What more should the u. S. Do and the un body what can be done . The short answer is clearly not enough. About the investments that is needed to secure or to hold 1. 5 which is approximately an elite. 350 million or so in the ira would breed the markets. What we need to do globally. Theres a huge amount of investments to build that. I am paying attention at the moment. How crucial thats going to be. Theres only so much the cops are going to be able to do and finance that in any event. It is a small part of the total energy infrastructure. Its going to be playing a key role scouting their financing capacity the public money they can bring to the table to enable the Top Investment thats made in the developing world thats happening now. That to me is a key focus. It is a small part of what is ultimately needed here. Puts go on this side. The first question for. Be. Thanks so much. Lets just acknowledge the themes on this panel trade, china, International Cooperation or friend and colleague david dollar worked on were shocked by the news last week of his passing. I want to ask about trade. What you make of these agreements now the japanese agreements and that european agree about Critical Minerals . Are these the new face of trade agreements are these one off these other things are going to go aside or its not going to be doing a lot on trade. I answer some questions but i think theres a couple of elements going on here. If you go back to the effort and the u. S. There was a lot of attention paid to the consistency of the adjustment. What sort of a general consensus thats probably going to be okay. You may mean to look at bringing back an environment or provision for the subsidies that exist and so forth. That was central to the discussion. In the United States its almost quaint to think about being an institutional barrier to doing these actions at the moment. But if you go to europe its not as central to the way they think about their adjustment and the type theyre going to take. The extent the trade rules have become deeply secondary when thinking about these type of actions as a current u. S. Phenomenon. Its increasingly less able to be active because it has been muted not able to develop rules that might be relevant. That view of how seriously we need to take when we think about these actions Going Forward will play out in other countries. But that will mean is a loosening of what we have already seen a lot more subsidies the approach is quite constrained but will also mean they will also be less very concerned about consistency and how that might play out. There is a very strong domestic political constituency in favor of trying to seek the cost with the intensive. Where the key push backs will end up in a trade war near big country like the u. S. Thats what we can handle. To your question a little more specifically this unraveling means going to see more idiosyncratic practical late pragmatic approach that will be problemsolving and the moment but will be challenging from a systemic perspective. Thats not an fti on anyones fti. It is a genuine workaround. As a pragmatic workaround that is fine it undercuts the idea you get access to these. We will see a lot more of that Going Forward. The final thing i will say is this notion of a climate that builds on trade principles to force Energy Efficiency standard has been around for a while. Youve written tons about this. You know this better that idea. That possibly now could play that was constrained towards multi i think thats going to be more central too. Its got a couple more questions and on this site. And in the back one in the glasses . Mower waiting let me ask you on International Finance which is not part of the ira but is a critical parts of the Biden Administration credit policy. The administration has made promises it has not been able to keep. What you make they have not even pledged to the gcs the u. S. Did not even pledged . Is there any way for the u. S. To meet its promises . I will be fast with that. Its difficult to get anything through congress the house does not have a speaker right now. We cannot seem to fund the government we are looking at another shutdown. The only way to make a pledge is if they could find a way to redirect at their funding. I do not know the particulars behind that. But an appropriation looks less than likely. I do not want to put all of this on congress right now because in the past it seems this administration has not fought for many theres a billion dollars im going to mess up the original asked. A sliver of what was asked for. Thats likely the administration. Do you think that is true . Is an excellent question. Think the administration has a lot of fish detroit a difficult bolt environment. Certainly wish on this front and others they would have been able to do more. What went on on the inside as to who fought, how hard for a walk . I dont have a feeling to that. I will say theres been so much to do. A fairly narrow clinical road through which to drive. X in the back . Is your mic working now . Take two. I am eric and with the institute for governance and sustainable development. My question is for joshua but for everyone. You spoke about wto whose mechanisms are available to state parties. I am wondering to what extent do the provisions of the ira make the u. S. More vulnerable to challenges to legal challenges breakfast take one more will have a couple left. Thanks. You alluded to this earlier the u. S. Has the opportunity to lead technologies with cabin and so forth. The current generation announced solar manufacturers to gigawatt capacity the current generation of fleets in china is 20 30 gigawatt capacity. As a lot of economies of scale a lot of learning effects. Are we dog chasing a bus that is accelerating . And if so what is a chinese reaction to that . Legal implications . Good question i do not know. I am trying to think through i was a negotiator for investment treaties we had establishment clauses. You were protecting investment but i dont that extended to the types of tax credits i would have to look at that, that is a good question for. Can we catch up . I am not optimistic over the short run. That u. S. Has tremendous technological dynamism enormously creative. Chinese have a big head start they continue to be very rapid in Technology Look at tvs as a whole in a lot of areas i stop they can produce for less money and on a large scale they keep improving the products. They are going to be directing that very rapidly as much as they can towards exports. Exports to europe for higher end stuff but also within their belt and wrote initiative of pushing out more a more Clean Energy Clean transportation and that kind of thing as a component of that it has gotten much cheaper than we can do. We have to figure out how we can leverage what we are doing where we can pray to have her own Creative Industry go to work but i have the problem that as mentioned earlier of the workers. What a labor force we have for that. At the higher end, are weakening enough people with the necessary education and skills coming to the United States to live here . Weve been very good at that in the past we are not as good as that recently. We really need to address that. Ive a lot more questions im sure you do too. Here is what we have to stop thank you all so much. This was a great discussion. Thank you. [applause] [applause] [inaudible] its hard to summarize the whole day. The one thing that is clear is a lot is being done. But a lot remains to be done. I am really encouraged by the ambition we have seen in folks with the ira and what it can mean for the rest of the world as we work toward trying to secure the whole planet of the next generation. We are can going to continue doing what we can. Bumping up work on the climate and monitor the ira and for the rest of the world and tracking progress toward the net zero ambition that we have. I think you can follow our latest Research Analysis commentaries and our dedicated website on planet policy you can also sign up to receive updates. Also climb check out the podcast here and last but not least i like to thank all who work hard to make today possible central communication led by andrea rizzo to sitting there in the back and all other people that i can name and a short print of time that we have it. I would also like to thank for her leadership working with other to bring us together. And to you all for sticking with us the entire morning put a round of applause again and then we will adjourn. [inaudible] [inaudible conversations] c spans a washington journal live form involvement you to discuss the latest issues of government, politics, Public Policy from washington d. C. And across the country break coming up Tuesday Morning the hills Michael Schnell talks about the latest on the host speaker battle and the vote on the house floor university of maryland professor of peace and Development Talks about the latest in israel Hamas Conflict at the fight in gaza will talk about u. S. Aid to ukraine and israel with jim gilmore former u. S. Ambassador to an organization for security and cooperation in europe. Washington journal tone in the conversation live at seven eastern Tuesday Morning on cspan, c spent now or online at cspan. Org. 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