As nations gather for the U.N. General Assembly and Climate Week in New York this week, how will the evolving relationship between the United States and China on climate play into the success of the Paris Agreement? During today's OnPoint, Elliot Diringer, executive vice president of the Center for Climate and Energy Solutions, discusses the impact the Paris deal is having on the business community and explains how countries can maintain momentum on the deal.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Elliot Diringer, executive vice president of the Center for Climate and Energy Solutions. Elliot, it's always nice to have you here.
Elliot Diringer: Always a pleasure.
Monica Trauzzi: So, Elliot, the evolution of the U.S.-China relationship on climate has been quite dramatic and has taken some significant turns recently. Explain how the current U.S.-China dynamic will play into the next steps in the U.N. process.
Elliot Diringer: Sure. And you're right, you know, it really would have been hard to imagine just a few years ago that these longtime climate antagonists would now be the world's climate champions, and that's a relationship that's evolved considerably over a very short time, but with their joint announcement of their ratification of the Paris Agreement, the U.S. and China have now put us on the verge of bringing that agreement into force and have continued the really strong momentum that earlier U.S.-China announcements propelled heading into Paris. So I think it bodes really well for bringing the agreement into force much sooner than anyone had anticipated and keeping that momentum going forward.
Monica Trauzzi: Is it all wonderful, though, or are there some potential problems ahead?
Elliot Diringer: Well, there are always potential problems ahead. I mean, as far as the agreement itself, parties now need to work out the nuts and bolts. That'll take a year or two, but I don't — and, you know, there are issues there, but I don't anticipate any insurmountable obstacles. Now the attention is going to turn to countries implementing their own nationally determined contributions, and we'll need to keep the pressure on everyone to make as much progress as possible. So there are certainly challenges ahead, but I don't think we — it's been a long time, frankly, since we've seen as much of a head of steam behind this effort.
Monica Trauzzi: So heading into COP22 in Marrakech in November, what will be the main items that need to be ironed out at that meeting, and what would you consider a positive outcome there?
Elliot Diringer: Sure, and we're not looking for any big outcomes from Marrakech. This is not a meeting like Paris was. Parties need to make some progress on those nuts and bolts decisions that they need to deliver, probably latest by 2018, so we'll be watching to see what kind of progress is achieved there. You'll see increasing focus on helping countries implement their contributions, building capacity, particularly in developing countries. A lot of the developed countries are strengthening their support, coordinating their efforts to make sure that developing countries are in a good position to follow through on their commitments. I expect to also see some focus on finance, as we always do. Developed countries are expected to lay out a road map ahead of Marrakech explaining how they will ramp up to $100 billion in mobilized support as they've committed to. So I think those'll be some of the issues getting attention.
Monica Trauzzi: How is the Paris deal beginning to impact investments and steps that the business community is taking, and what signals are we beginning to see from major investors?
Elliot Diringer: Well, I think that's really one of the important dynamics coming out of Paris. I mean, you have the agreement itself, you have the nationally determined contributions, but you also have what we call the signaling effect, the internalization, if you will, of the Paris goals by the private sector and by other actors. A couple of really telling examples, for instance, Warren Buffett in his most recent annual letter to shareholders cited the Paris Agreement as providing further impetus for the billions that Berkshire Hathaway has been investing in renewable energy. More recently, Moody's announced that it is now incorporating the pledges that countries took in Paris into the models that it uses to assess credit risk. So those are both examples of how pillars of our economy really are haring and internalizing the signals coming out of Paris, and that's very encouraging in the long run, frankly. The activation of all these non-state actors, business, mayors and others could be just as important as the actions of national governments in ensuring that we make progress toward the Paris goals.
Monica Trauzzi: We're in the midst of a pretty intense presidential election here in the U.S. What does the next U.S. president need to do to keep the momentum going on Paris, on the international agreement, and also keep pressure on other major emitters?
Elliot Diringer: Sure. Well, I think the most important thing that the new administration needs to do to keep pressure on other emitters is to make sure that the U.S. continues to make strong progress at home and, you know, the momentum that you mentioned is, right now has been a mix of really market and technology and policy forces, and a lot of that momentum is going to continue of its own volition, but we do need to keep pushing on the policy side. You know, I think that any incoming administration will continue to have to rely in the near term at least on existing authorities. We'll have to see what the courts have to say about the Clean Power Plan. If some sections of the plan are invalidated, EPA will have to quickly make those fixes, get a new rule in place and work with states to implement it, but you know, we've always felt that really the aim here needs to be comprehensive legislation, and we're hoping to see whether there's a window of opportunity after the election to start that conversation again. So I think it would be important for a new administration to signal a willingness to explore those possibilities. We want to get to comprehensive pricing. There are different pathways there. Legislation is certainly one of them, and we ought to see whether there may be time to do that.
Monica Trauzzi: Right, because, I mean, it begs the question is the Clean Power Plan the only game in town? If that fails in total or in certain aspects, then what's next and how does the international community then view that? Former EPA Administrator Bill Reilly, he recently said that the CPP is causing concern among the international community and that China's laser-focused on the legal proceedings. Do you think that it will have that big of an impact if it does fail in the courts?
Elliot Diringer: Well, I think you're right, that other countries are watching very closely to see what happens. It won't be a helpful signal if the rule is invalidated as a whole, but I don't think that's likely to be the case. And I think that we need to be thinking not only about measures that could be taken alongside the Clean Power Plan, but yes, what comes next. And there are other parts of the Clean Air Act that an administration could look to to expand and accelerate those efforts, so there are some other tools in the toolbox, but again, I think the best course of action would be to see whether it's time to restart the legislative conversation.
Monica Trauzzi: All right. We're going to end it right there. Thank you so much for coming on the show.
Elliot Diringer: Glad to be with you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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