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[Music]

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[Applause]

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[Music]

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ladies and gentlemen

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please welcome the moderator of the one

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of the last sessions at the habsburg

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stage

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steve clemons

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hey everyone i'm steve clemons it's a

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pleasure to be with you i'm editor

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at large of the hill in washington d.c

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uh i see we've got a couple of our

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panelists online it's great to see you

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uh and we've got people here who i think

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you must be the most obsessed people at

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globesec

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with carbon taxes so great to have you

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here

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let me tell you what we're going to be

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discussing we're going to be talking

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about eu climate diplomacy leadership

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and the carbon border tax we may

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actually broaden this a little up

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because we've got glasgow coming up in

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new november

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uh there's a lot going on both in the

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transatlantic relationship

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uh but but globally within this realm

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and the topic that we're going to be

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discussing today and we have people who

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understand the technical dimensions but

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they also are able to lift up to the big

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political and geopolitical dimensions of

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this um

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and we have three wonderful things with

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me on stage here in person

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it's my first in-person first interview

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here at globe cycle all my others have

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been online but

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great to have with me uh here christian

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engenhofer is the senior research

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associate

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at the school of transnational

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governments at european university

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institute in florence

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and he's also associate senior research

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fellow at sepps in brussels

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so great to have christian with me but

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jennifer hillman my colleague and friend

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from washington d.c

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we were online together just the other

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day for the calorama conversation

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where we discussed exactly this topic

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with pascal amy the former director

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general of the

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world trade organization and senator

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sheldon whitehouse and jennifer pones

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from the jacques de lore institute and

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jennifer we didn't get to talk that day

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but i actually called when we were when

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we were online i said

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jennifer hillman will know the answer to

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this question and then you had already

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slipped off but it's great to have you

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uh here with us and then of course we

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have pascal uh uh

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uh pascal confines chair of the

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committee on environment public health

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and food safety

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in the european parliament he's just

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finished a meeting pascal thank you so

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much for running out of that meeting to

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join us here

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and help us set the stage uh on this

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topic what i'd

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just like to say for a moment and and

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this doesn't have to be where the

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conversation goes

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each of you can ask questions here in

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the room those of you who have the globe

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sec app

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can ask questions online and they will

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be fed to me up here and i hope you will

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do that i know we have

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uh some viewers on zoom as well but let

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me just you know say at the beginning

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that the reason

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that i had the opportunity to help

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moderate a discussion

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previously with people who are real

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experts in this topic i should say i'm

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not

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i can ask the lay question and the silly

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question hopefully some informed

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questions

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but when we had jennifer hillman and

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many other colleagues in the

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transatlantic relationship online

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a couple of weeks ago discussing uh the

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the

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uh carbon border tax with regard to this

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there is a concern i'm just going to put

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on the table

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that europe is evolving in one direction

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and the united states and other

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countries is evolving in another

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direction

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and that the lack of coordination the

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lack of alignment

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even though they most may have carbon

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goals creates real complexities and

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problems in transnational firms and

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companies and regions

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and so i wanted to say just on the

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outset that that's one of my real

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interests

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is it's something i hadn't considered

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but as we talk about greater goals and

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carbon goals

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as we get to glasgow in november that

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this lack of alignment was something at

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least pascal lamy underlined

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as a serious concern from his

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perspective so

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let me ask uh another pascal of course

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chairman pascal

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uh uh uh convene to to join and and help

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set the stage

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for what you see is the dashboard of

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concern as you look at uh

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adjustable carbon taxes border taxes uh

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in this realm

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pascal yeah so uh

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thank you for giving me the opportunity

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to

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to share uh our thinking uh in europe

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about it so uh first

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it will not be a tax it will be

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uh the mirror of the european trading

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scheme

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so if the european carbon price is of

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52 one day

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the eta the the the carbon border

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adjustment

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will be 52 the very same day

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if it's 40 carbon border adjustment will

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be 40

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okay it will be mirroring the price

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paid in the eu second

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it will be the exact mirror on the

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volume as well meaning that if

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part of the carbon is not paid by

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european industry because they still

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receive

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free allocations for part of their

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emission then of course

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we will apply the very same scope for

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imports that give you

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uh two examples of the way we want to

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design

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the carbon border adjustment mechanism

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that will be legally presented

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formally by the european commission the

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14th of july so in

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exactly one month's time we want to have

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it

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wto compatible that's a red line we do

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not want to enter into a trade war on

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climate with our partners

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it's a no-go for us but the other no

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goal

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for us is that we would have a price of

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carbon

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with of 50 60 maybe 70 to 80

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we are as already more than 50 today

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that will be applied to our industries

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and then importers will play zero

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zero on carbon and then that would just

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put out of the market

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our own industry so it's politically

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unacceptable uh for jobs reason and

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acceptable

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and for climate reason that would be

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completely counterproductive and if

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ineffective because that would mean that

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that would be a huge incentive

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for not going green so that's why

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we need as we enter into a new era

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of carbon pricing in europe in the past

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the carbon price was

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let's say 10 15 20 euros bottle you do

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not change anything with this

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now we are at 50 we will probably very

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soon

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go up to 60 and later on to 80.

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at that level of price for some

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industries

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you cannot uh stay on the market

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with competitors paying zero right so

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that's the basic equation

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so i put there all the key elements that

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will drive

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our proposal that will be made

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in the couple of weeks time and again in

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a very cooperative way with our partners

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we do not want to

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be in a trade war we do want to be

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within the space of wto

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if it is within the space of the wto and

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we know how to do it

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then it is within the rules we all

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agreed

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so that's why uh i don't think it's a

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i don't think the the carbon border just

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mechanism as a non-comparative mechanism

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but just as an equitable mechanism to

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make sure that we can move forward the

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climate agenda

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without jeopardizing our industrial

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competitiveness

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we have uh uh jennifer hillman as i

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mentioned the council on foreign

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relations we've got chris you're going

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to come in but i want to ask you one

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question pascal before we move to

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jennifer

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is is the question of you're not a

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bureaucrat you're a politician you chair

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a committee

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you i'm just interested you know just

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given my own washington orientation

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is there kind of a strong robust

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consensus on your committee that this is

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you know all packed up and ready to go

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or are there any elements of controversy

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and and you know difference of opinion

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as you see it

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in this area what are the political

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fault lines that you deal with

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now there is a wide majority a very wide

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majority behind what i see

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behind what i supporting what i said

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meaning

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it has to be fair equitable wto

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compatible

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and if i take the u.s specific case

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if there is no carbon price in the u.s

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for domestic reasons

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then we have to make sure as europeans

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that we take the implicit price of

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carbon carbon

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so the explicit price on carbon is

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either through markets or through taxes

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but you can have implicit price on

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carbon through standards

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if you put a standard on cars or

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standard or aluminium and so on you have

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an implicit price on

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on carbon and then it would be

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fair to have that in the design

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of the carbon border adjustment

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mechanism so that if the us

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put a standard on a certain sector

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a certain commodity

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without putting a price we translate

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the standard into the equivalent of a

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price

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so that we do not double

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price the carbon from the u.s because

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that would be unfair

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from us to you so that's why when i say

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all of that

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be behind this you have a very very

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strong majority

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uh across the board to support this idea

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well thank you

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well let me bring in jennifer hillman

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and jennifer hillman is the senior

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uh fellow for trade and international

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political economies i said at the

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council on foreign relations

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but more importantly she has been a

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trade official of the united states

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the international trade commission the

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u.s trade representative office

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in the worked in the wto jennifer

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probably knows more about trade

288
00:10:04,959 --> 00:10:06,800
uh than anyone else at globe sec i think

289
00:10:06,800 --> 00:10:08,399
but on this cut area but when it comes

290
00:10:08,399 --> 00:10:10,160
to these alignment areas

291
00:10:10,160 --> 00:10:12,480
uh jennifer about you know what we just

292
00:10:12,480 --> 00:10:14,880
heard from pascal on this subject today

293
00:10:14,880 --> 00:10:17,360
do you share what pascal amy put on the

294
00:10:17,360 --> 00:10:18,000
table that

295
00:10:18,000 --> 00:10:20,079
he he worries that there's a lack of

296
00:10:20,079 --> 00:10:21,600
alignment geopolitically

297
00:10:21,600 --> 00:10:23,920
and since you have a foot on so many

298
00:10:23,920 --> 00:10:25,120
different dimensions

299
00:10:25,120 --> 00:10:27,040
of this question and you just heard uh

300
00:10:27,040 --> 00:10:29,040
pascal's comment on on what we need to

301
00:10:29,040 --> 00:10:29,839
do

302
00:10:29,839 --> 00:10:31,680
um i'd love to get your sense of whether

303
00:10:31,680 --> 00:10:33,839
united states is anywhere near

304
00:10:33,839 --> 00:10:35,360
that level of sophistication and

305
00:10:35,360 --> 00:10:37,120
approaching you know uh

306
00:10:37,120 --> 00:10:40,640
a price on carbon well first of all

307
00:10:40,640 --> 00:10:42,320
thank you very much it's an honor to be

308
00:10:42,320 --> 00:10:43,760
here and i will say i

309
00:10:43,760 --> 00:10:46,399
i share if you will both pascal's views

310
00:10:46,399 --> 00:10:48,079
i mean on the one hand i agree with

311
00:10:48,079 --> 00:10:50,160
pascal amy that there is

312
00:10:50,160 --> 00:10:52,720
a high risk uh that what the european

313
00:10:52,720 --> 00:10:54,000
union is doing could

314
00:10:54,000 --> 00:10:56,320
create tensions uh with the united

315
00:10:56,320 --> 00:10:58,240
states and with others and i would say

316
00:10:58,240 --> 00:11:00,399
maybe even more particularly with

317
00:11:00,399 --> 00:11:02,000
developing countries who are going to

318
00:11:02,000 --> 00:11:03,760
see this as falling very

319
00:11:03,760 --> 00:11:06,079
very heavily on them and at the same

320
00:11:06,079 --> 00:11:07,760
time i i want to agree

321
00:11:07,760 --> 00:11:10,160
with pascal confident that i think the

322
00:11:10,160 --> 00:11:11,600
european union has done

323
00:11:11,600 --> 00:11:14,640
a very commendable job of working to

324
00:11:14,640 --> 00:11:16,480
make sure that this proposal is

325
00:11:16,480 --> 00:11:19,920
is fair and is wto compatible

326
00:11:19,920 --> 00:11:21,920
the devil is going to be in the details

327
00:11:21,920 --> 00:11:23,600
i mean the issues that were raised right

328
00:11:23,600 --> 00:11:25,279
here at the end this issue where

329
00:11:25,279 --> 00:11:28,160
in the united states right now uh with

330
00:11:28,160 --> 00:11:30,000
the exception of our emissions trading

331
00:11:30,000 --> 00:11:32,000
system in california and a few other

332
00:11:32,000 --> 00:11:34,079
sort of smaller regional arrangements

333
00:11:34,079 --> 00:11:36,480
where the way in which the united states

334
00:11:36,480 --> 00:11:38,000
is getting down

335
00:11:38,000 --> 00:11:40,399
its carbon emissions is entirely through

336
00:11:40,399 --> 00:11:42,000
regulatory mechanisms

337
00:11:42,000 --> 00:11:44,240
uh both through you know again certain

338
00:11:44,240 --> 00:11:46,240
specific regulations with respect to how

339
00:11:46,240 --> 00:11:47,600
power is generated

340
00:11:47,600 --> 00:11:49,519
uh with regulations on emissions

341
00:11:49,519 --> 00:11:51,600
controls on on gasoline fuels and

342
00:11:51,600 --> 00:11:52,800
everything else

343
00:11:52,800 --> 00:11:55,360
as well as incentives for the investment

344
00:11:55,360 --> 00:11:56,320
in renewables

345
00:11:56,320 --> 00:11:59,279
that is very different than a carbon tax

346
00:11:59,279 --> 00:12:01,600
or an emissions trading system and so

347
00:12:01,600 --> 00:12:04,079
and what becomes very tricky is if the

348
00:12:04,079 --> 00:12:05,200
european union

349
00:12:05,200 --> 00:12:08,399
imposes a a a charge

350
00:12:08,399 --> 00:12:11,120
in the form of requiring u.s exporters

351
00:12:11,120 --> 00:12:12,320
to buy

352
00:12:12,320 --> 00:12:14,880
european emissions trading certificates

353
00:12:14,880 --> 00:12:15,519
um

354
00:12:15,519 --> 00:12:18,399
is that price in essence a fair one is

355
00:12:18,399 --> 00:12:20,000
it equivalent to what the european

356
00:12:20,000 --> 00:12:21,600
industries are paying

357
00:12:21,600 --> 00:12:24,000
and is there a fair way to say oh but i

358
00:12:24,000 --> 00:12:26,560
effectively paid at home in the united

359
00:12:26,560 --> 00:12:27,040
states

360
00:12:27,040 --> 00:12:28,959
because of the way in which my industry

361
00:12:28,959 --> 00:12:30,079
is regulated

362
00:12:30,079 --> 00:12:32,560
and and that's where the the rubs could

363
00:12:32,560 --> 00:12:33,200
come

364
00:12:33,200 --> 00:12:35,680
um and again i share pascal amy's real

365
00:12:35,680 --> 00:12:36,800
concern that the

366
00:12:36,800 --> 00:12:39,600
goal on both sides of the atlantic is

367
00:12:39,600 --> 00:12:40,880
exactly the same

368
00:12:40,880 --> 00:12:42,399
to get to net zero i'm going to

369
00:12:42,399 --> 00:12:43,839
interrupt jennifer let me let me just

370
00:12:43,839 --> 00:12:45,440
ask so that i understand again

371
00:12:45,440 --> 00:12:47,120
i'm a layperson we have laypeople in the

372
00:12:47,120 --> 00:12:48,480
audience we also have a couple of these

373
00:12:48,480 --> 00:12:49,839
young folks that are real experts i

374
00:12:49,839 --> 00:12:50,240
think

375
00:12:50,240 --> 00:12:51,680
but are you basically saying that

376
00:12:51,680 --> 00:12:53,839
american firm that has generated

377
00:12:53,839 --> 00:12:56,079
whatever widgets they're producing

378
00:12:56,079 --> 00:12:58,639
in that regulatory order may complain

379
00:12:58,639 --> 00:12:59,600
that they're being double

380
00:12:59,600 --> 00:13:01,360
taxed is that what you're you were

381
00:13:01,360 --> 00:13:03,120
correct correct

382
00:13:03,120 --> 00:13:04,959
you know again and and again i want to

383
00:13:04,959 --> 00:13:06,399
commend the european commission and the

384
00:13:06,399 --> 00:13:08,639
european union for trying to figure this

385
00:13:08,639 --> 00:13:09,120
out

386
00:13:09,120 --> 00:13:11,120
and again it remains to be seen the good

387
00:13:11,120 --> 00:13:12,720
news for everybody is they're starting

388
00:13:12,720 --> 00:13:13,200
slow

389
00:13:13,200 --> 00:13:14,959
there's only four industries that are

390
00:13:14,959 --> 00:13:16,880
you know in there in the very beginning

391
00:13:16,880 --> 00:13:18,160
of this phase

392
00:13:18,160 --> 00:13:19,600
you know and we're going to see kind of

393
00:13:19,600 --> 00:13:21,360
how it goes so we've got steel

394
00:13:21,360 --> 00:13:24,160
cement electricity fertilizer and iron

395
00:13:24,160 --> 00:13:25,600
are the ones that are sort of out there

396
00:13:25,600 --> 00:13:26,560
at the beginning

397
00:13:26,560 --> 00:13:28,800
uh but that's exactly the concern is

398
00:13:28,800 --> 00:13:29,600
that a u.s

399
00:13:29,600 --> 00:13:31,680
exporter of steel is going to get

400
00:13:31,680 --> 00:13:32,720
charged you know

401
00:13:32,720 --> 00:13:34,720
they're gonna be told you have to pay

402
00:13:34,720 --> 00:13:36,000
you have to buy uh

403
00:13:36,000 --> 00:13:38,639
emissions uh certificates and the price

404
00:13:38,639 --> 00:13:39,279
of those is

405
00:13:39,279 --> 00:13:42,000
x um and they're gonna argue that that's

406
00:13:42,000 --> 00:13:42,720
not fair

407
00:13:42,720 --> 00:13:45,040
uh that some that the uh that the you

408
00:13:45,040 --> 00:13:46,959
know european steel industry got a free

409
00:13:46,959 --> 00:13:48,560
allowance so they didn't actually have

410
00:13:48,560 --> 00:13:49,680
to pay as much

411
00:13:49,680 --> 00:13:51,120
that will be one argument they're gonna

412
00:13:51,120 --> 00:13:52,639
make they're gonna argue wait a minute

413
00:13:52,639 --> 00:13:54,720
wait a minute here i'm highly regulated

414
00:13:54,720 --> 00:13:56,399
in the united states in the following

415
00:13:56,399 --> 00:13:57,360
six ways

416
00:13:57,360 --> 00:14:00,320
so i have effectively paid a carbon

417
00:14:00,320 --> 00:14:02,480
price already in the united states and

418
00:14:02,480 --> 00:14:03,360
you aren't

419
00:14:03,360 --> 00:14:05,680
fairly recognizing it that's going to be

420
00:14:05,680 --> 00:14:06,880
the argument from

421
00:14:06,880 --> 00:14:08,800
from u.s exporters that are trying to

422
00:14:08,800 --> 00:14:10,240
get their product in

423
00:14:10,240 --> 00:14:12,240
into the eu and again it remains to be

424
00:14:12,240 --> 00:14:14,320
seen whether they have a good argument

425
00:14:14,320 --> 00:14:17,360
or not i can see pascal about jumping

426
00:14:17,360 --> 00:14:18,639
out of his chair like saying you know

427
00:14:18,639 --> 00:14:20,000
just waiting to wrestle

428
00:14:20,000 --> 00:14:21,760
uh you know those people complaining

429
00:14:21,760 --> 00:14:23,279
down but we've got christian here

430
00:14:23,279 --> 00:14:24,720
christian i think and i'm trying to

431
00:14:24,720 --> 00:14:26,399
understand the technical dimensions of

432
00:14:26,399 --> 00:14:27,279
this somewhat

433
00:14:27,279 --> 00:14:29,920
of a tax that sort of has a ledger where

434
00:14:29,920 --> 00:14:31,600
you've got you know inputs outputs and

435
00:14:31,600 --> 00:14:32,160
they sort of

436
00:14:32,160 --> 00:14:34,639
equal each other but i guess i'm used to

437
00:14:34,639 --> 00:14:36,320
thinking about you know the whole reason

438
00:14:36,320 --> 00:14:37,760
you put this in place is you're trying

439
00:14:37,760 --> 00:14:39,440
to create winners and losers

440
00:14:39,440 --> 00:14:40,959
right you're winners and losers within

441
00:14:40,959 --> 00:14:42,720
the political economy and you try to

442
00:14:42,720 --> 00:14:44,800
create winners that are going to be more

443
00:14:44,800 --> 00:14:47,519
uh uh environmentally sustainable

444
00:14:47,519 --> 00:14:49,760
practices versus losers that aren't or

445
00:14:49,760 --> 00:14:50,720
that pay for that so

446
00:14:50,720 --> 00:14:52,880
i'm interested in what you see as the

447
00:14:52,880 --> 00:14:53,839
impacts

448
00:14:53,839 --> 00:14:57,199
of this kind of tax on getting to a more

449
00:14:57,199 --> 00:15:00,959
sustainable world if you will but also

450
00:15:00,959 --> 00:15:03,360
is the ledger really that balanced is

451
00:15:03,360 --> 00:15:04,399
there not revenue

452
00:15:04,399 --> 00:15:05,839
made are there not offsets that we

453
00:15:05,839 --> 00:15:08,000
should be talking about yeah i mean

454
00:15:08,000 --> 00:15:10,480
you heard it and i i you heard the

455
00:15:10,480 --> 00:15:12,720
concerns and i'm just wondering hearing

456
00:15:12,720 --> 00:15:13,360
this

457
00:15:13,360 --> 00:15:15,839
whether we are not creating a

458
00:15:15,839 --> 00:15:17,760
administrative monster with all these

459
00:15:17,760 --> 00:15:19,760
complications devil is in the detail and

460
00:15:19,760 --> 00:15:20,480
as we go

461
00:15:20,480 --> 00:15:23,519
there are more devils and more details

462
00:15:23,519 --> 00:15:26,639
for achieving what you mentioned

463
00:15:26,639 --> 00:15:30,480
we looked at in the european university

464
00:15:30,480 --> 00:15:32,240
institute we looked at

465
00:15:32,240 --> 00:15:34,399
cement just to do some back of the

466
00:15:34,399 --> 00:15:36,079
envelope calculations

467
00:15:36,079 --> 00:15:39,440
and you see that north africa

468
00:15:39,440 --> 00:15:43,279
carbon intensity is lower than in europe

469
00:15:43,279 --> 00:15:45,519
and if even in ukraine is much higher

470
00:15:45,519 --> 00:15:47,279
but actually the differences between the

471
00:15:47,279 --> 00:15:48,320
europeans

472
00:15:48,320 --> 00:15:51,440
and the and the non-europeans

473
00:15:51,440 --> 00:15:53,680
that's cement is traded in europe mainly

474
00:15:53,680 --> 00:15:54,880
is not that big

475
00:15:54,880 --> 00:15:57,360
so the question for mir is what are we

476
00:15:57,360 --> 00:15:58,639
achieving with this

477
00:15:58,639 --> 00:16:02,000
and getting uh to your question we

478
00:16:02,000 --> 00:16:05,360
put out 10 years ago so we have some

479
00:16:05,360 --> 00:16:07,040
good credentials for carbon border

480
00:16:07,040 --> 00:16:08,800
attacks we put out 10 years ago a book

481
00:16:08,800 --> 00:16:10,079
and arguing for it

482
00:16:10,079 --> 00:16:12,160
but i think by now the time has has

483
00:16:12,160 --> 00:16:14,399
changed we have now the paris agreement

484
00:16:14,399 --> 00:16:15,440
where we have one

485
00:16:15,440 --> 00:16:19,440
agreement of which everybody is part and

486
00:16:19,440 --> 00:16:22,320
what i think the big question for the

487
00:16:22,320 --> 00:16:23,440
future is

488
00:16:23,440 --> 00:16:26,800
how do we incentivize this investment

489
00:16:26,800 --> 00:16:30,240
into the low carbon the green steel

490
00:16:30,240 --> 00:16:33,120
into the green sea green cement green

491
00:16:33,120 --> 00:16:35,040
chemicals and so on and so on so that's

492
00:16:35,040 --> 00:16:36,560
the big questions

493
00:16:36,560 --> 00:16:39,680
i'm a bit worried we are protecting

494
00:16:39,680 --> 00:16:42,720
uh the old industries uh too much and

495
00:16:42,720 --> 00:16:43,360
that's

496
00:16:43,360 --> 00:16:45,759
why my question to uh monsieur garfield

497
00:16:45,759 --> 00:16:46,800
is you know why

498
00:16:46,800 --> 00:16:50,000
do we keep the free allocation why

499
00:16:50,000 --> 00:16:51,680
don't we go over take the free

500
00:16:51,680 --> 00:16:53,199
allocation away because

501
00:16:53,199 --> 00:16:56,000
then the devils the details are much

502
00:16:56,000 --> 00:16:56,720
smaller

503
00:16:56,720 --> 00:16:59,600
and will be much much more easy and you

504
00:16:59,600 --> 00:17:00,000
know

505
00:17:00,000 --> 00:17:02,480
we have a lot of money in the free

506
00:17:02,480 --> 00:17:04,720
allocation we did some calculations

507
00:17:04,720 --> 00:17:08,319
using eu numbers commission numbers

508
00:17:08,319 --> 00:17:11,439
and we talked about free allocation

509
00:17:11,439 --> 00:17:14,959
at the level of 350 billion

510
00:17:14,959 --> 00:17:17,919
in the next nine years that's half the

511
00:17:17,919 --> 00:17:19,520
recovery package

512
00:17:19,520 --> 00:17:21,520
now why do we keep this and that's i

513
00:17:21,520 --> 00:17:22,559
think is a question

514
00:17:22,559 --> 00:17:25,760
for me to mr kraft and maybe jennifer

515
00:17:25,760 --> 00:17:26,559
certainly has

516
00:17:26,559 --> 00:17:28,640
something to say mr chairman what is

517
00:17:28,640 --> 00:17:31,120
what are your thoughts pascal

518
00:17:31,120 --> 00:17:33,679
well you know i'm definitely not in

519
00:17:33,679 --> 00:17:34,480
favor

520
00:17:34,480 --> 00:17:37,039
of keeping the free alliances so i'm

521
00:17:37,039 --> 00:17:38,960
exactly on the same line than the

522
00:17:38,960 --> 00:17:40,720
christian the commission the european

523
00:17:40,720 --> 00:17:42,799
commission will make the formal proposal

524
00:17:42,799 --> 00:17:44,480
we will see what it will be

525
00:17:44,480 --> 00:17:47,280
but of course keeping freezing i would

526
00:17:47,280 --> 00:17:47,919
say

527
00:17:47,919 --> 00:17:50,480
uh uh the free allocation system as it

528
00:17:50,480 --> 00:17:51,360
is today

529
00:17:51,360 --> 00:17:53,600
would be uh completely counterproductive

530
00:17:53,600 --> 00:17:55,360
for the very exact reason that was

531
00:17:55,360 --> 00:17:56,960
mentioned by christian

532
00:17:56,960 --> 00:17:59,840
uh back to what jennifer said i mean you

533
00:17:59,840 --> 00:18:00,799
raised two

534
00:18:00,799 --> 00:18:03,919
potential concerns and i

535
00:18:03,919 --> 00:18:06,480
try to answer and to anticipate this

536
00:18:06,480 --> 00:18:07,280
concern

537
00:18:07,280 --> 00:18:09,760
because we do have the same and we do

538
00:18:09,760 --> 00:18:11,760
want to be wto compatible

539
00:18:11,760 --> 00:18:15,200
so meaning that if you have

540
00:18:15,200 --> 00:18:18,480
free allowances which we shouldn't have

541
00:18:18,480 --> 00:18:19,919
back to what has just said and what

542
00:18:19,919 --> 00:18:22,240
christian said but if ever

543
00:18:22,240 --> 00:18:24,559
we have free allowances still in the

544
00:18:24,559 --> 00:18:25,600
system

545
00:18:25,600 --> 00:18:28,640
of course of course the cbam

546
00:18:28,640 --> 00:18:32,160
will have to incorporate this and to

547
00:18:32,160 --> 00:18:34,559
make requirements for the u.s steel

548
00:18:34,559 --> 00:18:35,280
makers

549
00:18:35,280 --> 00:18:38,640
only on the scope of what is really

550
00:18:38,640 --> 00:18:40,320
effectively paid

551
00:18:40,320 --> 00:18:43,440
by the european seed makers so no doubt

552
00:18:43,440 --> 00:18:44,000
about it

553
00:18:44,000 --> 00:18:47,840
no issue second explicit versus implicit

554
00:18:47,840 --> 00:18:48,799
price

555
00:18:48,799 --> 00:18:51,360
you're right and as i said if there is a

556
00:18:51,360 --> 00:18:53,440
regulation in the u.s

557
00:18:53,440 --> 00:18:56,960
that leads to the greening of the

558
00:18:56,960 --> 00:19:00,160
steel production in the u.s

559
00:19:00,160 --> 00:19:02,799
and that you can demonstrate that it is

560
00:19:02,799 --> 00:19:03,679
equivalent

561
00:19:03,679 --> 00:19:07,280
to the eu system critical price on steel

562
00:19:07,280 --> 00:19:09,760
no issue and then there will be no sebam

563
00:19:09,760 --> 00:19:10,480
so again

564
00:19:10,480 --> 00:19:13,360
i mean we are working on it so let's not

565
00:19:13,360 --> 00:19:14,160
create

566
00:19:14,160 --> 00:19:16,880
uh just a bad buzz about it because we

567
00:19:16,880 --> 00:19:17,360
shared

568
00:19:17,360 --> 00:19:19,919
exactly the same vision but you have to

569
00:19:19,919 --> 00:19:20,880
understand

570
00:19:20,880 --> 00:19:23,600
the starting point the starting point is

571
00:19:23,600 --> 00:19:24,240
that

572
00:19:24,240 --> 00:19:27,679
we cannot ask our industries

573
00:19:27,679 --> 00:19:30,720
to pay 50 60 70

574
00:19:30,720 --> 00:19:34,240
80 euros per turn of co2 and being

575
00:19:34,240 --> 00:19:35,280
competed

576
00:19:35,280 --> 00:19:38,559
by companies being either zero or

577
00:19:38,559 --> 00:19:41,039
having no standard so that's why with

578
00:19:41,039 --> 00:19:42,240
the us

579
00:19:42,240 --> 00:19:45,520
we should be able to find the agreement

580
00:19:45,520 --> 00:19:48,640
based exactly on the current discussion

581
00:19:48,640 --> 00:19:51,760
but with china there will be no standard

582
00:19:51,760 --> 00:19:53,919
and a price of let's say one or two

583
00:19:53,919 --> 00:19:55,039
dollars

584
00:19:55,039 --> 00:19:57,760
and christian was right to say that okay

585
00:19:57,760 --> 00:19:58,880
we have all

586
00:19:58,880 --> 00:20:01,280
uh signed the paris agreement but let's

587
00:20:01,280 --> 00:20:02,559
face reality

588
00:20:02,559 --> 00:20:04,640
we are not all implementing the paris

589
00:20:04,640 --> 00:20:06,880
agreement at least at the same pace

590
00:20:06,880 --> 00:20:09,200
so i can't see how come i can go to the

591
00:20:09,200 --> 00:20:10,159
european

592
00:20:10,159 --> 00:20:12,880
uh uh

593
00:20:13,440 --> 00:20:15,919
sorry as workers in the seed industry in

594
00:20:15,919 --> 00:20:17,360
the fertilizer industry in the

595
00:20:17,360 --> 00:20:19,200
electricity industry and so on and so on

596
00:20:19,200 --> 00:20:20,000
i say okay

597
00:20:20,000 --> 00:20:22,480
you're going to get fired because there

598
00:20:22,480 --> 00:20:23,200
is no

599
00:20:23,200 --> 00:20:26,480
uh equity a fair competition between you

600
00:20:26,480 --> 00:20:27,679
china and the u.s

601
00:20:27,679 --> 00:20:29,520
i cannot do that and politically

602
00:20:29,520 --> 00:20:31,039
speaking no

603
00:20:31,039 --> 00:20:34,000
political leader in the eu will do so

604
00:20:34,000 --> 00:20:34,799
that's why

605
00:20:34,799 --> 00:20:37,520
there is a wide political backing of the

606
00:20:37,520 --> 00:20:38,400
sebam

607
00:20:38,400 --> 00:20:41,840
designed exactly as i just mentioned

608
00:20:41,840 --> 00:20:43,760
let me ask a political question of

609
00:20:43,760 --> 00:20:45,840
jennifer so i have uh

610
00:20:45,840 --> 00:20:47,520
spent a lot of time recently with a

611
00:20:47,520 --> 00:20:49,600
controversial u.s senator at the moment

612
00:20:49,600 --> 00:20:50,480
he's sort of

613
00:20:50,480 --> 00:20:52,159
you know the the senator that everybody

614
00:20:52,159 --> 00:20:54,320
wants to to have to dinner senator joe

615
00:20:54,320 --> 00:20:54,960
manchin

616
00:20:54,960 --> 00:20:56,720
and senator manchin in the united states

617
00:20:56,720 --> 00:20:58,720
is from a state called west virginia

618
00:20:58,720 --> 00:21:00,880
west virginia is a major coal state a

619
00:21:00,880 --> 00:21:02,320
coal producing state

620
00:21:02,320 --> 00:21:05,520
and i'm just interested jennifer in

621
00:21:05,520 --> 00:21:08,640
if we were to take the european model uh

622
00:21:08,640 --> 00:21:10,000
that we're talking about this border

623
00:21:10,000 --> 00:21:11,039
adjustable

624
00:21:11,039 --> 00:21:13,600
you know tax and we had that kind of

625
00:21:13,600 --> 00:21:14,559
application

626
00:21:14,559 --> 00:21:16,080
in the united states what would happen

627
00:21:16,080 --> 00:21:17,440
to west virginia because what i'm

628
00:21:17,440 --> 00:21:18,880
interested i'd also like to bring into

629
00:21:18,880 --> 00:21:20,000
this discussion

630
00:21:20,000 --> 00:21:22,080
as we go back to that question you just

631
00:21:22,080 --> 00:21:23,039
mentioned china

632
00:21:23,039 --> 00:21:25,760
and we have dissimilar countries also

633
00:21:25,760 --> 00:21:27,039
you know committing themselves to

634
00:21:27,039 --> 00:21:28,400
certain climate targets

635
00:21:28,400 --> 00:21:30,480
and we have a kind of openness on how we

636
00:21:30,480 --> 00:21:32,400
get there jennifer hillman co-authored a

637
00:21:32,400 --> 00:21:34,400
paper i highly recommend to folks at the

638
00:21:34,400 --> 00:21:36,000
council on foreign relations site on the

639
00:21:36,000 --> 00:21:36,880
belton road

640
00:21:36,880 --> 00:21:38,880
uh china's belt and road initiative goes

641
00:21:38,880 --> 00:21:40,080
into a lot of these issues

642
00:21:40,080 --> 00:21:41,760
very worthwhile talking but i'm

643
00:21:41,760 --> 00:21:43,520
interested in how

644
00:21:43,520 --> 00:21:44,640
particularly in the united states

645
00:21:44,640 --> 00:21:46,559
jennifer you help transitions

646
00:21:46,559 --> 00:21:48,640
how do you fund transitions of people's

647
00:21:48,640 --> 00:21:50,640
lives you know the work they do

648
00:21:50,640 --> 00:21:52,400
you know pascal just talked about this

649
00:21:52,400 --> 00:21:55,120
so i don't think america solves this

650
00:21:55,120 --> 00:21:57,440
with the power of a joe manchin until we

651
00:21:57,440 --> 00:21:59,200
begin answering that question

652
00:21:59,200 --> 00:22:02,080
and i'm wondering what your thoughts are

653
00:22:02,080 --> 00:22:04,080
well again i i think the us has taken a

654
00:22:04,080 --> 00:22:05,039
lot of different

655
00:22:05,039 --> 00:22:07,440
approaches to the whole panoply of what

656
00:22:07,440 --> 00:22:09,360
you're raising in your question

657
00:22:09,360 --> 00:22:11,600
i mean one is what are we going to do on

658
00:22:11,600 --> 00:22:13,280
on regulating carbon and

659
00:22:13,280 --> 00:22:15,679
and as you know years ago there was a

660
00:22:15,679 --> 00:22:17,440
you know fairly serious proposals in the

661
00:22:17,440 --> 00:22:18,000
senate

662
00:22:18,000 --> 00:22:19,919
for the united states to establish an

663
00:22:19,919 --> 00:22:21,600
emissions trading system somewhat

664
00:22:21,600 --> 00:22:23,360
similar to the european union system

665
00:22:23,360 --> 00:22:24,240
where we would

666
00:22:24,240 --> 00:22:27,600
auction off um permits to continue to

667
00:22:27,600 --> 00:22:29,280
emit and this would have been something

668
00:22:29,280 --> 00:22:30,799
that the coal producers would have had

669
00:22:30,799 --> 00:22:32,240
to do they would have had to purchase a

670
00:22:32,240 --> 00:22:33,039
fair amount

671
00:22:33,039 --> 00:22:34,880
of emissions certificates and we would

672
00:22:34,880 --> 00:22:36,159
have had a trading system

673
00:22:36,159 --> 00:22:38,640
that went through part way but never got

674
00:22:38,640 --> 00:22:40,080
completely enacted

675
00:22:40,080 --> 00:22:42,880
then the shift was to go to a carbon tax

676
00:22:42,880 --> 00:22:45,280
in the united states and there are still

677
00:22:45,280 --> 00:22:47,840
many proposals out there that may get

678
00:22:47,840 --> 00:22:48,640
support

679
00:22:48,640 --> 00:22:50,880
uh to enact a carbon tax in the united

680
00:22:50,880 --> 00:22:53,280
states again that tax would fall

681
00:22:53,280 --> 00:22:56,400
most heavily on coal producers and

682
00:22:56,400 --> 00:22:58,320
others because of the amount of carbon

683
00:22:58,320 --> 00:23:00,559
that is embedded in what they do

684
00:23:00,559 --> 00:23:02,640
uh and the issue is then what would the

685
00:23:02,640 --> 00:23:03,919
united states then do

686
00:23:03,919 --> 00:23:05,679
in response to try to help those coal

687
00:23:05,679 --> 00:23:07,200
producers but your question

688
00:23:07,200 --> 00:23:09,760
also raises just in general what do we

689
00:23:09,760 --> 00:23:10,480
do for

690
00:23:10,480 --> 00:23:13,520
any american workers that are impacted

691
00:23:13,520 --> 00:23:16,480
by trade you know by imports coming in

692
00:23:16,480 --> 00:23:17,679
that they have to compete with

693
00:23:17,679 --> 00:23:20,480
or broadly and there i think there is a

694
00:23:20,480 --> 00:23:21,600
huge

695
00:23:21,600 --> 00:23:24,080
recognition that we have not done well i

696
00:23:24,080 --> 00:23:25,679
mean we have simply not done

697
00:23:25,679 --> 00:23:28,480
enough to try to figure out how to

698
00:23:28,480 --> 00:23:29,919
transition both

699
00:23:29,919 --> 00:23:31,760
the individual workers and the

700
00:23:31,760 --> 00:23:33,760
communities that are heavily impacted

701
00:23:33,760 --> 00:23:35,919
whether it's heavily impacted by imports

702
00:23:35,919 --> 00:23:37,520
or whether it's heavily impacted by a

703
00:23:37,520 --> 00:23:38,400
new carbon

704
00:23:38,400 --> 00:23:40,320
system we have got to do better than

705
00:23:40,320 --> 00:23:42,000
what we've done what we've done so far

706
00:23:42,000 --> 00:23:44,080
is limited so-called trade adjustment

707
00:23:44,080 --> 00:23:44,799
assistance

708
00:23:44,799 --> 00:23:46,720
that if you can prove that you lost your

709
00:23:46,720 --> 00:23:48,480
job as a result of trade

710
00:23:48,480 --> 00:23:51,039
you can get limited amounts we've seen

711
00:23:51,039 --> 00:23:53,840
now with covid a huge move to expand the

712
00:23:53,840 --> 00:23:55,279
amount of unemployment insurance

713
00:23:55,279 --> 00:23:56,240
benefits

714
00:23:56,240 --> 00:23:58,240
and others but this is going to have to

715
00:23:58,240 --> 00:23:59,919
be part of a broader package

716
00:23:59,919 --> 00:24:03,200
whatever adoption the united states does

717
00:24:03,200 --> 00:24:05,279
for carbon adjustments it is going to

718
00:24:05,279 --> 00:24:06,480
have to include

719
00:24:06,480 --> 00:24:08,480
a significant amount of worker training

720
00:24:08,480 --> 00:24:09,679
uh programs

721
00:24:09,679 --> 00:24:11,360
it's going to have to include investment

722
00:24:11,360 --> 00:24:13,840
in the renewable energy so i mean what

723
00:24:13,840 --> 00:24:16,000
clearly the biden plan is is to

724
00:24:16,000 --> 00:24:17,679
encourage those coal workers to now

725
00:24:17,679 --> 00:24:18,159
become

726
00:24:18,159 --> 00:24:21,520
solar workers or wind workers or those

727
00:24:21,520 --> 00:24:23,360
involved in the production of renewable

728
00:24:23,360 --> 00:24:24,720
energy instead of

729
00:24:24,720 --> 00:24:26,880
being involved in the production of coal

730
00:24:26,880 --> 00:24:28,159
and obviously

731
00:24:28,159 --> 00:24:29,679
there's a lot of work that needs to be

732
00:24:29,679 --> 00:24:32,320
done in order to make those transition

733
00:24:32,320 --> 00:24:35,200
realistic and possible thank you for

734
00:24:35,200 --> 00:24:36,799
that i want to remind everyone that you

735
00:24:36,799 --> 00:24:38,159
can ask questions on

736
00:24:38,159 --> 00:24:41,120
any element of climate or you can ask a

737
00:24:41,120 --> 00:24:41,520
tax

738
00:24:41,520 --> 00:24:43,120
uh obsessed question too because we've

739
00:24:43,120 --> 00:24:44,960
got real tax experts here

740
00:24:44,960 --> 00:24:47,120
on your app or we'll we'll bring people

741
00:24:47,120 --> 00:24:48,720
up here uh in just a little bit

742
00:24:48,720 --> 00:24:50,640
but let me ask you know go to christian

743
00:24:50,640 --> 00:24:52,480
and all of you you know on this kind of

744
00:24:52,480 --> 00:24:53,360
broader question

745
00:24:53,360 --> 00:24:55,679
of how you transition economies and i'm

746
00:24:55,679 --> 00:24:57,039
just intrigued with what

747
00:24:57,039 --> 00:24:59,520
what pascal has a uh what i would call

748
00:24:59,520 --> 00:25:00,799
an elegant

749
00:25:00,799 --> 00:25:03,520
and fascinating construct to look at

750
00:25:03,520 --> 00:25:03,919
something

751
00:25:03,919 --> 00:25:05,760
and i'm always interested if europe were

752
00:25:05,760 --> 00:25:07,600
able to achieve that and put that in

753
00:25:07,600 --> 00:25:08,240
place

754
00:25:08,240 --> 00:25:11,440
does that create uh uh you know that

755
00:25:11,440 --> 00:25:13,760
sophistication that ability that ease of

756
00:25:13,760 --> 00:25:14,480
managing

757
00:25:14,480 --> 00:25:16,559
you know carbons and creating pressures

758
00:25:16,559 --> 00:25:17,520
in the right place

759
00:25:17,520 --> 00:25:20,720
does that create a competitive advantage

760
00:25:20,720 --> 00:25:23,039
long run for its industry and states

761
00:25:23,039 --> 00:25:25,120
versus china versus india

762
00:25:25,120 --> 00:25:27,520
versus the united states that have

763
00:25:27,520 --> 00:25:28,400
uneven

764
00:25:28,400 --> 00:25:30,480
uh deals there so do you i mean i'm just

765
00:25:30,480 --> 00:25:31,600
sort of looking at this as something

766
00:25:31,600 --> 00:25:32,640
that could be

767
00:25:32,640 --> 00:25:34,480
uh does it create for europe certain

768
00:25:34,480 --> 00:25:35,760
competitive advantages

769
00:25:35,760 --> 00:25:37,440
that the rest of the world won't enjoy

770
00:25:37,440 --> 00:25:39,520
because it's just behind you

771
00:25:39,520 --> 00:25:42,320
um christian you know i have my serious

772
00:25:42,320 --> 00:25:43,120
doubts and

773
00:25:43,120 --> 00:25:44,880
you know sorry pascal have to come back

774
00:25:44,880 --> 00:25:46,720
to the free allocation and i fully

775
00:25:46,720 --> 00:25:48,480
understand that's part of the deal

776
00:25:48,480 --> 00:25:51,120
uh to get this done but if you look at

777
00:25:51,120 --> 00:25:52,559
the the current system

778
00:25:52,559 --> 00:25:54,640
we are giving the free allocation to our

779
00:25:54,640 --> 00:25:56,640
existing installations

780
00:25:56,640 --> 00:25:58,720
and if you're going down the route of

781
00:25:58,720 --> 00:26:00,080
green steel

782
00:26:00,080 --> 00:26:01,600
for the audience free allocation

783
00:26:01,600 --> 00:26:03,279
protects incumbents right

784
00:26:03,279 --> 00:26:05,279
yes that that you know protects the

785
00:26:05,279 --> 00:26:06,960
existing installation because they have

786
00:26:06,960 --> 00:26:07,840
a carbon cost

787
00:26:07,840 --> 00:26:10,799
and some other way to seduce the men yes

788
00:26:10,799 --> 00:26:11,120
okay

789
00:26:11,120 --> 00:26:13,520
yeah i mean the bribe you know which we

790
00:26:13,520 --> 00:26:15,279
did in 2000 i didn't want to say the

791
00:26:15,279 --> 00:26:16,080
word bribe

792
00:26:16,080 --> 00:26:18,159
but you know yeah you know i'm european

793
00:26:18,159 --> 00:26:19,200
i can't say that

794
00:26:19,200 --> 00:26:22,880
um so you know so what is happening now

795
00:26:22,880 --> 00:26:26,240
is that we are subsidizing or

796
00:26:26,240 --> 00:26:27,919
you know supporting existing

797
00:26:27,919 --> 00:26:29,600
installations for all the reasons which

798
00:26:29,600 --> 00:26:31,440
just jennifer has

799
00:26:31,440 --> 00:26:33,679
explained but once you go down the route

800
00:26:33,679 --> 00:26:36,000
of investing in low carbon cement in low

801
00:26:36,000 --> 00:26:37,200
carbon steel

802
00:26:37,200 --> 00:26:39,520
you don't get this reallocation huh and

803
00:26:39,520 --> 00:26:41,840
that is for me the main concerns if we

804
00:26:41,840 --> 00:26:44,000
want to be competitive in 2030

805
00:26:44,000 --> 00:26:45,919
we need a low carb steel low carbon

806
00:26:45,919 --> 00:26:47,520
cement so how do we

807
00:26:47,520 --> 00:26:50,720
bridge that gap supporting the old

808
00:26:50,720 --> 00:26:51,520
industries

809
00:26:51,520 --> 00:26:54,960
and don't give the same support or

810
00:26:54,960 --> 00:26:57,279
the support to the new industries and in

811
00:26:57,279 --> 00:26:58,559
fact we don't know what these new

812
00:26:58,559 --> 00:26:59,760
industries will be

813
00:26:59,760 --> 00:27:02,880
will still be substituted by plastics

814
00:27:02,880 --> 00:27:05,200
will we have more as recycled steel will

815
00:27:05,200 --> 00:27:06,000
be using more

816
00:27:06,000 --> 00:27:07,840
wood and all this steel gets the

817
00:27:07,840 --> 00:27:09,679
allocation wood doesn't

818
00:27:09,679 --> 00:27:12,960
so that's will be a big challenge for us

819
00:27:12,960 --> 00:27:13,520
to be

820
00:27:13,520 --> 00:27:15,760
competitive in this 2030 perspective and

821
00:27:15,760 --> 00:27:17,600
beyond let's jump back to pascal

822
00:27:17,600 --> 00:27:19,760
and say am i right off i mean respond to

823
00:27:19,760 --> 00:27:21,360
christian as you will but also

824
00:27:21,360 --> 00:27:23,279
answer my question whether the regime

825
00:27:23,279 --> 00:27:24,640
you're building

826
00:27:24,640 --> 00:27:26,480
actually creates a long-term competitive

827
00:27:26,480 --> 00:27:27,840
advantage for those

828
00:27:27,840 --> 00:27:31,200
industries in it in contrast to the u.s

829
00:27:31,200 --> 00:27:32,080
side which just

830
00:27:32,080 --> 00:27:34,720
as jennifer pointed out is so uneven i

831
00:27:34,720 --> 00:27:36,720
mean i mean i talk to ceos

832
00:27:36,720 --> 00:27:38,559
all the time in the united states and

833
00:27:38,559 --> 00:27:40,480
they are either working around

834
00:27:40,480 --> 00:27:41,840
government issues or i talk to the ceo

835
00:27:41,840 --> 00:27:43,039
of occidental via they're going to build

836
00:27:43,039 --> 00:27:44,320
the biggest carbon capture

837
00:27:44,320 --> 00:27:45,520
site but that's going to be a function

838
00:27:45,520 --> 00:27:47,279
of government subsidies so you create a

839
00:27:47,279 --> 00:27:49,200
lot of unevenness there that's why

840
00:27:49,200 --> 00:27:51,520
i'm interested in the in the elegance of

841
00:27:51,520 --> 00:27:53,279
the plan that you're putting forward and

842
00:27:53,279 --> 00:27:54,080
talking about

843
00:27:54,080 --> 00:27:55,200
and i'm just wondering in the long run

844
00:27:55,200 --> 00:27:56,799
whether that also creates strategic

845
00:27:56,799 --> 00:27:59,840
economic advantages

846
00:27:59,840 --> 00:28:03,440
well so it's our conviction and then of

847
00:28:03,440 --> 00:28:04,480
course i'm not talking

848
00:28:04,480 --> 00:28:06,320
only about siberman talking about the

849
00:28:06,320 --> 00:28:07,679
whole the whole thing

850
00:28:07,679 --> 00:28:10,000
uh what we call uh in the european

851
00:28:10,000 --> 00:28:11,440
context the green deal

852
00:28:11,440 --> 00:28:14,399
so i know that in the u.s uh the the the

853
00:28:14,399 --> 00:28:14,799
term

854
00:28:14,799 --> 00:28:18,640
is is uh isn't it's not mainstream but

855
00:28:18,640 --> 00:28:20,240
in the eu it is mainstream where

856
00:28:20,240 --> 00:28:22,240
everybody talks about the green deal

857
00:28:22,240 --> 00:28:24,640
and the green deal means that we are

858
00:28:24,640 --> 00:28:26,000
going to change

859
00:28:26,000 --> 00:28:29,760
more than 50 five zero 50 lows

860
00:28:29,760 --> 00:28:33,120
european lows from now on up to

861
00:28:33,120 --> 00:28:36,399
the end of 2022 and on

862
00:28:36,399 --> 00:28:40,159
the 14th of july the commission will

863
00:28:40,159 --> 00:28:41,600
propose the change of

864
00:28:41,600 --> 00:28:45,440
13 1 three lows out of this 50

865
00:28:45,440 --> 00:28:48,159
and one of them is the sebam another one

866
00:28:48,159 --> 00:28:50,080
is the reform of the carbon market and

867
00:28:50,080 --> 00:28:51,039
so on and so on

868
00:28:51,039 --> 00:28:54,159
so that's massive that's unprecedented

869
00:28:54,159 --> 00:28:55,360
and massive

870
00:28:55,360 --> 00:28:59,440
and of course if we do so of course the

871
00:28:59,440 --> 00:29:02,000
number one reason is climate it's

872
00:29:02,000 --> 00:29:02,480
obvious

873
00:29:02,480 --> 00:29:03,840
it's obvious and i don't have to

874
00:29:03,840 --> 00:29:06,159
elaborate more on this but the second

875
00:29:06,159 --> 00:29:06,559
reason

876
00:29:06,559 --> 00:29:09,279
is that it is not only our duty to do so

877
00:29:09,279 --> 00:29:09,760
but

878
00:29:09,760 --> 00:29:12,880
it is our interest to do so it is in

879
00:29:12,880 --> 00:29:16,559
our interest because uh there are

880
00:29:16,559 --> 00:29:21,120
a few industrial challenges ahead of us

881
00:29:21,120 --> 00:29:24,720
obviously the digital one obviously the

882
00:29:24,720 --> 00:29:27,039
decarbonization of our economy and going

883
00:29:27,039 --> 00:29:29,520
net zero by 2050

884
00:29:29,520 --> 00:29:32,640
and the one the europeans

885
00:29:32,640 --> 00:29:36,399
can win is the decarbonization one

886
00:29:36,399 --> 00:29:38,960
the digital one we are still in the race

887
00:29:38,960 --> 00:29:40,880
but to be honest let's face reality

888
00:29:40,880 --> 00:29:41,520
again

889
00:29:41,520 --> 00:29:44,799
it's mainly about the us and china

890
00:29:44,799 --> 00:29:47,760
the decarbonization one we are leading

891
00:29:47,760 --> 00:29:48,559
it

892
00:29:48,559 --> 00:29:51,120
and the more we put standards in place

893
00:29:51,120 --> 00:29:52,960
the more we've changed the rules of the

894
00:29:52,960 --> 00:29:53,440
game

895
00:29:53,440 --> 00:29:55,640
but again within the game of the

896
00:29:55,640 --> 00:29:57,039
multilateralism

897
00:29:57,039 --> 00:29:59,440
and the multilateral rules we set and we

898
00:29:59,440 --> 00:30:00,320
agreed on

899
00:30:00,320 --> 00:30:02,240
that's the dna of the eu and the

900
00:30:02,240 --> 00:30:04,080
european mindset

901
00:30:04,080 --> 00:30:08,080
the more economic gain we want to to

902
00:30:08,080 --> 00:30:08,799
have

903
00:30:08,799 --> 00:30:10,559
and the big difference so we are we with

904
00:30:10,559 --> 00:30:12,640
the u.s at least today

905
00:30:12,640 --> 00:30:14,960
it was not the case in the past but at

906
00:30:14,960 --> 00:30:16,559
least today we are

907
00:30:16,559 --> 00:30:20,640
100 aligned on what where we want to go

908
00:30:20,640 --> 00:30:22,320
the only difference and it's a big

909
00:30:22,320 --> 00:30:24,480
difference between the us and the eu

910
00:30:24,480 --> 00:30:27,760
is that you are one of the uh

911
00:30:27,760 --> 00:30:31,440
uh most of the largest

912
00:30:31,440 --> 00:30:36,559
uh fossil exporter and producer

913
00:30:36,559 --> 00:30:39,760
we are the largest fossil

914
00:30:39,760 --> 00:30:43,120
importer we do not have any fossil in

915
00:30:43,120 --> 00:30:44,480
europe

916
00:30:44,480 --> 00:30:47,120
very small scale for gas no petrol no

917
00:30:47,120 --> 00:30:47,919
oil and

918
00:30:47,919 --> 00:30:50,159
a coal but we are committed to decrease

919
00:30:50,159 --> 00:30:52,320
it exactly at the u.s right

920
00:30:52,320 --> 00:30:54,320
we do not have shell guys and so on so

921
00:30:54,320 --> 00:30:56,559
because you are an empty continent we

922
00:30:56,559 --> 00:30:58,320
are a full continent with full of people

923
00:30:58,320 --> 00:30:59,120
everywhere

924
00:30:59,120 --> 00:31:01,600
right that's the big difference and

925
00:31:01,600 --> 00:31:02,159
that's why

926
00:31:02,159 --> 00:31:05,440
it is even more and maybe uh it would be

927
00:31:05,440 --> 00:31:06,399
contested by the

928
00:31:06,399 --> 00:31:09,360
by by jennifer but it's even more in our

929
00:31:09,360 --> 00:31:11,919
economic interest as europeans

930
00:31:11,919 --> 00:31:14,640
to go greener and to decarbonize because

931
00:31:14,640 --> 00:31:14,960
we

932
00:31:14,960 --> 00:31:18,080
when you look at the u.s china eu

933
00:31:18,080 --> 00:31:20,559
the eu as a whole so germany plus france

934
00:31:20,559 --> 00:31:21,919
presents and so on

935
00:31:21,919 --> 00:31:25,120
we are the block having

936
00:31:25,120 --> 00:31:28,240
the lead on green patterns on low carbon

937
00:31:28,240 --> 00:31:31,039
licenses we are the leaders there right

938
00:31:31,039 --> 00:31:31,360
right

939
00:31:31,360 --> 00:31:34,000
then second china third ua right so

940
00:31:34,000 --> 00:31:35,679
that's why we consider that it is

941
00:31:35,679 --> 00:31:37,360
clearly our economic interest to get

942
00:31:37,360 --> 00:31:39,279
there and to change progressively all

943
00:31:39,279 --> 00:31:40,080
the set of the

944
00:31:40,080 --> 00:31:42,399
of rules including carbon price

945
00:31:42,399 --> 00:31:44,320
including sebam and so on and so on and

946
00:31:44,320 --> 00:31:46,559
last point from my side very last one

947
00:31:46,559 --> 00:31:50,320
is that the political maturity

948
00:31:50,320 --> 00:31:53,279
in the eu of the debates of the

949
00:31:53,279 --> 00:31:55,519
relationship between climate action and

950
00:31:55,519 --> 00:31:56,799
trade

951
00:31:56,799 --> 00:31:59,840
is now real it was not the case three

952
00:31:59,840 --> 00:32:01,200
four years ago

953
00:32:01,200 --> 00:32:04,159
now it's clearly part of the debate we

954
00:32:04,159 --> 00:32:06,799
do want to have trade we do want to be

955
00:32:06,799 --> 00:32:09,440
open we do want to be wto compatible we

956
00:32:09,440 --> 00:32:10,799
do want to have additional trade

957
00:32:10,799 --> 00:32:13,600
agreements and so on and so on but

958
00:32:13,600 --> 00:32:16,000
we want to be consistent between our

959
00:32:16,000 --> 00:32:16,960
trade policies

960
00:32:16,960 --> 00:32:19,919
and our climate policies that's why we

961
00:32:19,919 --> 00:32:21,840
for instance we are

962
00:32:21,840 --> 00:32:24,559
probably not going to ratify the

963
00:32:24,559 --> 00:32:26,240
mercosur agreement

964
00:32:26,240 --> 00:32:28,320
because we cannot sign an agreement now

965
00:32:28,320 --> 00:32:30,399
with bolsonaro doing what he does

966
00:32:30,399 --> 00:32:32,559
on climate and on biodiversity with

967
00:32:32,559 --> 00:32:33,679
amazonia

968
00:32:33,679 --> 00:32:36,480
that's that's the core now of the dna of

969
00:32:36,480 --> 00:32:38,640
the global vision of the eu and i hope

970
00:32:38,640 --> 00:32:40,880
i hope that the us will be with us on

971
00:32:40,880 --> 00:32:42,720
this well thank you for that i want to

972
00:32:42,720 --> 00:32:44,399
go to jennifer hillman ask her to reach

973
00:32:44,399 --> 00:32:46,880
deep down and find her inner trade

974
00:32:46,880 --> 00:32:47,760
warrior

975
00:32:47,760 --> 00:32:49,919
uh and and ask her you know as she looks

976
00:32:49,919 --> 00:32:51,919
at the wto she looks at

977
00:32:51,919 --> 00:32:53,919
uh companies here and as i'm listening

978
00:32:53,919 --> 00:32:55,760
to pascal talk about what his

979
00:32:55,760 --> 00:32:57,440
hopes are in compliance but you know

980
00:32:57,440 --> 00:32:58,960
just in the way you talked about well if

981
00:32:58,960 --> 00:32:59,360
you know

982
00:32:59,360 --> 00:33:01,519
steel industry can show that it has

983
00:33:01,519 --> 00:33:03,360
achieved equality here

984
00:33:03,360 --> 00:33:04,640
it just sort of seems to be would go

985
00:33:04,640 --> 00:33:06,799
back to what christian said you create

986
00:33:06,799 --> 00:33:09,440
essentially machinery that needs to

987
00:33:09,440 --> 00:33:10,320
that'll be

988
00:33:10,320 --> 00:33:13,120
good business for waivers and you know

989
00:33:13,120 --> 00:33:14,559
political calculations

990
00:33:14,559 --> 00:33:16,000
and i'm just wondering and that leads

991
00:33:16,000 --> 00:33:17,840
you to trade disputes jennifer is there

992
00:33:17,840 --> 00:33:19,039
a way to do this

993
00:33:19,039 --> 00:33:22,840
without just a mountain of trade

994
00:33:22,840 --> 00:33:24,240
disputes

995
00:33:24,240 --> 00:33:26,240
uh i think it's very hard to think about

996
00:33:26,240 --> 00:33:28,799
doing it because again the the basic wto

997
00:33:28,799 --> 00:33:29,760
rules are

998
00:33:29,760 --> 00:33:31,760
you can only put a charge on at the

999
00:33:31,760 --> 00:33:33,760
border a tariff if you will that is

1000
00:33:33,760 --> 00:33:35,519
sort of in your schedule and the

1001
00:33:35,519 --> 00:33:37,279
schedules don't allow

1002
00:33:37,279 --> 00:33:39,679
for this additional tariff to be charged

1003
00:33:39,679 --> 00:33:41,679
on imports because of carbon

1004
00:33:41,679 --> 00:33:43,840
so the only way that you can do this

1005
00:33:43,840 --> 00:33:45,679
fairly is to say that it is the

1006
00:33:45,679 --> 00:33:47,440
equivalent of whatever your domestic

1007
00:33:47,440 --> 00:33:48,799
industry is paying

1008
00:33:48,799 --> 00:33:50,880
so it is always going to require this

1009
00:33:50,880 --> 00:33:52,000
calculation of how much

1010
00:33:52,000 --> 00:33:54,480
does your domestic industry pay for

1011
00:33:54,480 --> 00:33:55,200
carbon

1012
00:33:55,200 --> 00:33:57,039
versus how much are you charging at the

1013
00:33:57,039 --> 00:33:59,519
border so it's hard to see how you

1014
00:33:59,519 --> 00:34:02,080
get out of that um you know sort of

1015
00:34:02,080 --> 00:34:04,320
mechanics of having to do that kind of a

1016
00:34:04,320 --> 00:34:06,240
calculation so uh

1017
00:34:06,240 --> 00:34:08,000
the concern that i would have again i i

1018
00:34:08,000 --> 00:34:09,760
commend the european union i think this

1019
00:34:09,760 --> 00:34:11,679
proposal has gone as far as they could

1020
00:34:11,679 --> 00:34:13,359
possibly go to trying to make sure

1021
00:34:13,359 --> 00:34:15,839
it is fundamentally consistent with

1022
00:34:15,839 --> 00:34:17,599
their wto obligations and

1023
00:34:17,599 --> 00:34:19,440
and for all of the reasons that pascal

1024
00:34:19,440 --> 00:34:21,280
has said the problem is there is going

1025
00:34:21,280 --> 00:34:22,000
to have to be

1026
00:34:22,000 --> 00:34:24,159
these detailed calculations and right

1027
00:34:24,159 --> 00:34:25,760
now the european proposal

1028
00:34:25,760 --> 00:34:27,679
sort of puts those off to sort of

1029
00:34:27,679 --> 00:34:29,599
private companies that would do this

1030
00:34:29,599 --> 00:34:32,239
evaluating of whether or not this is the

1031
00:34:32,239 --> 00:34:33,199
equivalent of that

1032
00:34:33,199 --> 00:34:35,520
in terms of how much the carbon uh you

1033
00:34:35,520 --> 00:34:37,599
know was was burned up in the production

1034
00:34:37,599 --> 00:34:39,679
of a particular ton of product

1035
00:34:39,679 --> 00:34:41,679
uh that is i think gonna lead to a

1036
00:34:41,679 --> 00:34:43,918
cottage industry of of those that are

1037
00:34:43,918 --> 00:34:46,159
doing these kind of evaluations

1038
00:34:46,159 --> 00:34:47,760
and again it gets back to the question

1039
00:34:47,760 --> 00:34:49,440
that christian raised you know at the

1040
00:34:49,440 --> 00:34:49,918
beginning

1041
00:34:49,918 --> 00:34:52,480
is this really worth all of these

1042
00:34:52,480 --> 00:34:53,199
details

1043
00:34:53,199 --> 00:34:56,399
and and again my own sense is um it may

1044
00:34:56,399 --> 00:34:58,640
be necessary as part of the transition

1045
00:34:58,640 --> 00:35:00,560
uh i think what the european union is

1046
00:35:00,560 --> 00:35:02,720
trying to do is to encourage everybody

1047
00:35:02,720 --> 00:35:03,680
to join this

1048
00:35:03,680 --> 00:35:06,000
you know an alternative a completely

1049
00:35:06,000 --> 00:35:07,680
different alternative would be to try to

1050
00:35:07,680 --> 00:35:09,680
create some kind of a carbon customs

1051
00:35:09,680 --> 00:35:10,400
union

1052
00:35:10,400 --> 00:35:12,720
where everybody that is doing anything

1053
00:35:12,720 --> 00:35:14,720
that is the equivalent of carbon pricing

1054
00:35:14,720 --> 00:35:16,640
sort of gets together and says we won't

1055
00:35:16,640 --> 00:35:18,880
charge any of these taxes on each other

1056
00:35:18,880 --> 00:35:20,640
we will only charge them on everybody

1057
00:35:20,640 --> 00:35:22,480
that's outside of the club

1058
00:35:22,480 --> 00:35:24,960
uh that would be an alternative uh that

1059
00:35:24,960 --> 00:35:26,880
would potentially avoid some of this

1060
00:35:26,880 --> 00:35:28,240
litigation

1061
00:35:28,240 --> 00:35:30,480
but again i'm gonna hope that everybody

1062
00:35:30,480 --> 00:35:32,400
is gonna hold off for a while in terms

1063
00:35:32,400 --> 00:35:34,160
of challenging what the european union

1064
00:35:34,160 --> 00:35:35,119
has done

1065
00:35:35,119 --> 00:35:37,440
because of how far they've gone to try

1066
00:35:37,440 --> 00:35:38,640
to make sure that they are

1067
00:35:38,640 --> 00:35:41,200
already wto compatible jennifer does

1068
00:35:41,200 --> 00:35:42,880
china have to be in this

1069
00:35:42,880 --> 00:35:46,800
somehow well china has to be in the mix

1070
00:35:46,800 --> 00:35:48,400
uh because if you look at what

1071
00:35:48,400 --> 00:35:50,320
is happening in china just a step back

1072
00:35:50,320 --> 00:35:52,079
from it if you look at who are the

1073
00:35:52,079 --> 00:35:53,359
largest producers of

1074
00:35:53,359 --> 00:35:57,119
solar of of uh of wind of geothermal of

1075
00:35:57,119 --> 00:35:58,160
hydro the

1076
00:35:58,160 --> 00:36:00,160
the biggest best companies in the

1077
00:36:00,160 --> 00:36:01,520
renewable space right now

1078
00:36:01,520 --> 00:36:04,480
are in china uh and yet what have they

1079
00:36:04,480 --> 00:36:06,079
done if you look at again the belt and

1080
00:36:06,079 --> 00:36:07,440
road initiative thank you very much

1081
00:36:07,440 --> 00:36:08,880
steve for commenting on it but if you

1082
00:36:08,880 --> 00:36:10,240
look at what they've done

1083
00:36:10,240 --> 00:36:11,760
in that bell road initiative they've

1084
00:36:11,760 --> 00:36:14,640
exported 260 coal-fired power plants

1085
00:36:14,640 --> 00:36:16,240
uh which are going to be up and running

1086
00:36:16,240 --> 00:36:18,160
for the next 35 years

1087
00:36:18,160 --> 00:36:20,880
largely used buying their coal from

1088
00:36:20,880 --> 00:36:22,000
china

1089
00:36:22,000 --> 00:36:24,240
and again it is making it much much

1090
00:36:24,240 --> 00:36:25,200
harder

1091
00:36:25,200 --> 00:36:27,359
to think about climate change so even if

1092
00:36:27,359 --> 00:36:28,400
china does

1093
00:36:28,400 --> 00:36:31,280
better within the chinese market itself

1094
00:36:31,280 --> 00:36:33,200
we have to take into account what china

1095
00:36:33,200 --> 00:36:33,760
is doing

1096
00:36:33,760 --> 00:36:35,359
externally and what they're doing

1097
00:36:35,359 --> 00:36:37,119
externally is

1098
00:36:37,119 --> 00:36:39,440
going in the absolute opposite direction

1099
00:36:39,440 --> 00:36:41,280
of of fighting climate change so i mean

1100
00:36:41,280 --> 00:36:41,760
a num

1101
00:36:41,760 --> 00:36:43,920
among the other things where i hope the

1102
00:36:43,920 --> 00:36:45,920
u.s and the eu can get together

1103
00:36:45,920 --> 00:36:49,200
is on some serious financing limits

1104
00:36:49,200 --> 00:36:52,400
to basically say no more financing of

1105
00:36:52,400 --> 00:36:54,320
coal-fired power plants whether it's

1106
00:36:54,320 --> 00:36:56,640
belt and road or anybody else we should

1107
00:36:56,640 --> 00:36:57,520
be saying just

1108
00:36:57,520 --> 00:37:00,880
no financing of of coal-fired power

1109
00:37:00,880 --> 00:37:01,599
plants

1110
00:37:01,599 --> 00:37:04,079
period well great well thank you we've

1111
00:37:04,079 --> 00:37:05,760
got questions coming in

1112
00:37:05,760 --> 00:37:07,200
i want to come back in a moment

1113
00:37:07,200 --> 00:37:09,040
christian understand this 350 billion

1114
00:37:09,040 --> 00:37:09,839
euro fund

1115
00:37:09,839 --> 00:37:11,119
i'm always interested where the pots of

1116
00:37:11,119 --> 00:37:12,400
money or we'll have to go back to that

1117
00:37:12,400 --> 00:37:14,320
but let's take your question here

1118
00:37:14,320 --> 00:37:15,680
and if you'll identify yourself and

1119
00:37:15,680 --> 00:37:17,760
we'll just all respond thank you thank

1120
00:37:17,760 --> 00:37:18,079
you

1121
00:37:18,079 --> 00:37:19,760
very much for taking my question my name

1122
00:37:19,760 --> 00:37:21,599
is slavomir hubatka i'm from technical

1123
00:37:21,599 --> 00:37:22,160
university

1124
00:37:22,160 --> 00:37:25,359
of koshita i want to ask about free

1125
00:37:25,359 --> 00:37:27,440
allocations for industry in europe

1126
00:37:27,440 --> 00:37:29,280
either you use steel industry

1127
00:37:29,280 --> 00:37:32,160
as an example you know in europe steel

1128
00:37:32,160 --> 00:37:34,160
industry is one of the biggest emitters

1129
00:37:34,160 --> 00:37:37,040
of co2 emissions and a little closer to

1130
00:37:37,040 --> 00:37:37,599
the mic

1131
00:37:37,599 --> 00:37:40,800
yeah in europe steel industry is one of

1132
00:37:40,800 --> 00:37:42,160
the biggest emitters of

1133
00:37:42,160 --> 00:37:45,040
co2 emissions and most of their cost of

1134
00:37:45,040 --> 00:37:47,920
emissions is covered by three locations

1135
00:37:47,920 --> 00:37:50,720
is there a plan for a transitional phase

1136
00:37:50,720 --> 00:37:52,320
in which the free allocations are

1137
00:37:52,320 --> 00:37:54,400
reduced to zero for example until the

1138
00:37:54,400 --> 00:37:54,960
year to

1139
00:37:54,960 --> 00:37:58,320
2030 or is this is

1140
00:37:58,320 --> 00:38:00,560
it's not there will be no transitional

1141
00:38:00,560 --> 00:38:02,160
phase or the allocation will drop to

1142
00:38:02,160 --> 00:38:04,079
zero suddenly from year to year right

1143
00:38:04,079 --> 00:38:05,520
and is there a possibility it will

1144
00:38:05,520 --> 00:38:06,240
create

1145
00:38:06,240 --> 00:38:09,920
uh industrial climate immigration

1146
00:38:09,920 --> 00:38:12,560
for example u.s lakoshitsa taking back

1147
00:38:12,560 --> 00:38:13,440
its

1148
00:38:13,440 --> 00:38:15,520
production back to back to america or

1149
00:38:15,520 --> 00:38:17,359
for example arthelomata are moving their

1150
00:38:17,359 --> 00:38:19,280
production into china right thank you

1151
00:38:19,280 --> 00:38:20,720
great christian do you want to address

1152
00:38:20,720 --> 00:38:22,400
it for a moment yeah i mean i probably

1153
00:38:22,400 --> 00:38:24,079
have a similar answer than uh

1154
00:38:24,079 --> 00:38:26,000
pascal you know we're having this big

1155
00:38:26,000 --> 00:38:28,720
package about ets review and all of

1156
00:38:28,720 --> 00:38:29,680
these points

1157
00:38:29,680 --> 00:38:32,480
will be reviewed at some uh you know at

1158
00:38:32,480 --> 00:38:33,520
some stage

1159
00:38:33,520 --> 00:38:35,599
or later certainly we'll have to think

1160
00:38:35,599 --> 00:38:37,440
about what we are going to do with these

1161
00:38:37,440 --> 00:38:38,079
200

1162
00:38:38,079 --> 00:38:40,720
350 billion free allocation which is a

1163
00:38:40,720 --> 00:38:42,720
big part of money to drive

1164
00:38:42,720 --> 00:38:45,760
exactly this uh decarbonization in in

1165
00:38:45,760 --> 00:38:47,359
the future and avoiding what you're

1166
00:38:47,359 --> 00:38:49,119
you've been mentioning but i would like

1167
00:38:49,119 --> 00:38:50,560
to pick up the the point

1168
00:38:50,560 --> 00:38:52,640
jennifer if i understood you uh

1169
00:38:52,640 --> 00:38:54,480
correctly you you see

1170
00:38:54,480 --> 00:38:56,560
you know i tend to agree with you that

1171
00:38:56,560 --> 00:38:59,119
the carbon border chestnut mechanism at

1172
00:38:59,119 --> 00:39:00,000
some stage we will

1173
00:39:00,000 --> 00:39:03,200
need you know five to seven years and

1174
00:39:03,200 --> 00:39:05,839
the question to maybe both of you you

1175
00:39:05,839 --> 00:39:07,920
know is wouldn't it be better now to use

1176
00:39:07,920 --> 00:39:08,640
this

1177
00:39:08,640 --> 00:39:10,960
very sophisticated proposal by the by

1178
00:39:10,960 --> 00:39:12,800
the commission i think everybody agrees

1179
00:39:12,800 --> 00:39:14,000
as a sleeping gun

1180
00:39:14,000 --> 00:39:16,400
to say look it's there we are trying to

1181
00:39:16,400 --> 00:39:18,560
be pr you have it now ready we will be

1182
00:39:18,560 --> 00:39:19,200
using it

1183
00:39:19,200 --> 00:39:22,480
unless you know yeah yeah

1184
00:39:22,480 --> 00:39:24,000
put the pressure and i think that was

1185
00:39:24,000 --> 00:39:25,920
the initial idea in

1186
00:39:25,920 --> 00:39:28,560
the eu legislation to put the pressure

1187
00:39:28,560 --> 00:39:29,359
as thick

1188
00:39:29,359 --> 00:39:31,680
to get let me ask jennifer to quickly

1189
00:39:31,680 --> 00:39:33,040
respond in them and ask christian to

1190
00:39:33,040 --> 00:39:34,000
respond to our our

1191
00:39:34,000 --> 00:39:35,040
questioner jennifer do you want to

1192
00:39:35,040 --> 00:39:37,440
respond to uh to uh

1193
00:39:37,440 --> 00:39:40,000
well again the question raises again one

1194
00:39:40,000 --> 00:39:41,920
one of those devil in the details is

1195
00:39:41,920 --> 00:39:43,599
this exact issue because

1196
00:39:43,599 --> 00:39:45,520
as the the way in which the european

1197
00:39:45,520 --> 00:39:47,520
union is putting out this proposal

1198
00:39:47,520 --> 00:39:49,680
again u.s steel companies or others that

1199
00:39:49,680 --> 00:39:50,800
are exporting to

1200
00:39:50,800 --> 00:39:53,760
to the eu are going to pay this average

1201
00:39:53,760 --> 00:39:54,400
price

1202
00:39:54,400 --> 00:39:56,320
average across all industries all

1203
00:39:56,320 --> 00:39:58,160
sectors average price

1204
00:39:58,160 --> 00:40:01,280
for their carbon for their their own ets

1205
00:40:01,280 --> 00:40:03,119
certificates in order to be importing so

1206
00:40:03,119 --> 00:40:04,000
they're gonna

1207
00:40:04,000 --> 00:40:06,319
you know calculate an average price uh

1208
00:40:06,319 --> 00:40:08,079
and then that price applies to next

1209
00:40:08,079 --> 00:40:10,000
week's imports if you will um

1210
00:40:10,000 --> 00:40:12,400
and and the and the issue then becomes

1211
00:40:12,400 --> 00:40:13,280
if there are

1212
00:40:13,280 --> 00:40:15,599
a lot of free allocations in one sector

1213
00:40:15,599 --> 00:40:16,319
but not in

1214
00:40:16,319 --> 00:40:18,720
others whether again that that creates

1215
00:40:18,720 --> 00:40:20,319
some unfairnesses

1216
00:40:20,319 --> 00:40:22,960
um and and you know the issue is whether

1217
00:40:22,960 --> 00:40:24,880
or not the free allocations are

1218
00:40:24,880 --> 00:40:27,599
in any way creating disincentives for

1219
00:40:27,599 --> 00:40:29,520
the us for i'm sorry for the european

1220
00:40:29,520 --> 00:40:30,720
steel industry

1221
00:40:30,720 --> 00:40:33,440
which as pascal has said is way ahead of

1222
00:40:33,440 --> 00:40:34,480
the rest of the world

1223
00:40:34,480 --> 00:40:37,119
in coming up with green steel and again

1224
00:40:37,119 --> 00:40:38,720
i think what everybody is in

1225
00:40:38,720 --> 00:40:41,280
everybody's interest is in encouraging

1226
00:40:41,280 --> 00:40:42,480
europe to keep doing that

1227
00:40:42,480 --> 00:40:44,960
please help the world develop green

1228
00:40:44,960 --> 00:40:46,319
steel technology

1229
00:40:46,319 --> 00:40:48,000
uh that's where we need to make sure

1230
00:40:48,000 --> 00:40:49,760
that we have the incentives and and the

1231
00:40:49,760 --> 00:40:50,640
question comes

1232
00:40:50,640 --> 00:40:52,480
whether the free allocations help or

1233
00:40:52,480 --> 00:40:54,640
hurt um in that process

1234
00:40:54,640 --> 00:40:57,760
of of encouraging uh the production of

1235
00:40:57,760 --> 00:41:00,640
of green steel within within europe uh

1236
00:41:00,640 --> 00:41:02,319
and whether or not the free allocations

1237
00:41:02,319 --> 00:41:02,720
again

1238
00:41:02,720 --> 00:41:05,280
create a sense of unfairness from u.s

1239
00:41:05,280 --> 00:41:06,560
producers that will say well

1240
00:41:06,560 --> 00:41:08,640
i didn't get a free allocation um and

1241
00:41:08,640 --> 00:41:10,480
therefore the fact that i have to pay

1242
00:41:10,480 --> 00:41:12,800
on my export going into europe creates

1243
00:41:12,800 --> 00:41:14,640
an unfairness

1244
00:41:14,640 --> 00:41:16,000
and thank you for that pascal would you

1245
00:41:16,000 --> 00:41:17,520
like to to quickly respond to our

1246
00:41:17,520 --> 00:41:19,680
questioner

1247
00:41:19,680 --> 00:41:22,720
yeah i mean let's not forget that if the

1248
00:41:22,720 --> 00:41:24,560
starting point

1249
00:41:24,560 --> 00:41:27,760
would be that uh all the key players the

1250
00:41:27,760 --> 00:41:29,280
economic players

1251
00:41:29,280 --> 00:41:32,880
would play the same game on carbonic

1252
00:41:32,880 --> 00:41:35,920
climate action we wouldn't don't be

1253
00:41:35,920 --> 00:41:39,520
in here discussing uh carbon border

1254
00:41:39,520 --> 00:41:41,760
adjustment mechanism okay so

1255
00:41:41,760 --> 00:41:44,720
let's let's not accuse the eu of doing

1256
00:41:44,720 --> 00:41:46,000
something that is just

1257
00:41:46,000 --> 00:41:48,160
trying to counter balance the fact that

1258
00:41:48,160 --> 00:41:49,040
others

1259
00:41:49,040 --> 00:41:50,960
are not doing their job i mean we just

1260
00:41:50,960 --> 00:41:52,160
try to be fair to

1261
00:41:52,160 --> 00:41:54,400
all the others but we have also to be

1262
00:41:54,400 --> 00:41:55,440
fair to ourselves

1263
00:41:55,440 --> 00:41:58,880
okay so uh again it's it's a bit uh

1264
00:41:58,880 --> 00:42:01,119
too easy to say well that the machinery

1265
00:42:01,119 --> 00:42:03,119
invented by the eu brain blah blah blah

1266
00:42:03,119 --> 00:42:05,040
blah now we just try to move forward on

1267
00:42:05,040 --> 00:42:06,800
climate and please do so

1268
00:42:06,800 --> 00:42:09,280
as we do so that we can as christians

1269
00:42:09,280 --> 00:42:10,480
said avoid

1270
00:42:10,480 --> 00:42:12,400
avoid having a carbon border adjustment

1271
00:42:12,400 --> 00:42:14,400
mechanism it's not our best plan

1272
00:42:14,400 --> 00:42:17,440
it's just a mechanism we need to uh have

1273
00:42:17,440 --> 00:42:17,839
it

1274
00:42:17,839 --> 00:42:20,400
fair and equitable and then regarding

1275
00:42:20,400 --> 00:42:22,079
the question because it's very important

1276
00:42:22,079 --> 00:42:23,119
one

1277
00:42:23,119 --> 00:42:25,520
i mean the to my view and then that's my

1278
00:42:25,520 --> 00:42:26,960
personal view here

1279
00:42:26,960 --> 00:42:30,160
uh the best way to proceed

1280
00:42:30,160 --> 00:42:33,599
would be to connect the amount of

1281
00:42:33,599 --> 00:42:36,880
free allocations to the ex

1282
00:42:36,880 --> 00:42:41,760
the the effective green investment

1283
00:42:42,240 --> 00:42:45,359
made by a company x so let's somebody

1284
00:42:45,359 --> 00:42:46,800
mentioned arcelormittal

1285
00:42:46,800 --> 00:42:48,960
i think it was in the question if

1286
00:42:48,960 --> 00:42:50,480
arcelormittal

1287
00:42:50,480 --> 00:42:53,440
invest in green steel i don't know let's

1288
00:42:53,440 --> 00:42:53,760
say

1289
00:42:53,760 --> 00:42:56,480
one billion euros or one billion dollars

1290
00:42:56,480 --> 00:42:56,880
then

1291
00:42:56,880 --> 00:42:59,839
you have free allocation to compensate

1292
00:42:59,839 --> 00:43:01,200
because of course

1293
00:43:01,200 --> 00:43:04,319
of course if you have to pay i take the

1294
00:43:04,319 --> 00:43:06,880
the theoretical example of arcelormittal

1295
00:43:06,880 --> 00:43:07,680
in europe

1296
00:43:07,680 --> 00:43:10,640
if you have to pay your allocation

1297
00:43:10,640 --> 00:43:12,160
because it's not free anymore

1298
00:43:12,160 --> 00:43:15,040
so you have to pay 50 euros per ton of

1299
00:43:15,040 --> 00:43:16,640
co2 you aim it

1300
00:43:16,640 --> 00:43:18,640
plus you have to pay the green

1301
00:43:18,640 --> 00:43:20,079
investments to invent

1302
00:43:20,079 --> 00:43:23,119
green steam then you pay twice and then

1303
00:43:23,119 --> 00:43:25,440
it's unfair actually you won't do it

1304
00:43:25,440 --> 00:43:27,359
so that's why we need to make sure that

1305
00:43:27,359 --> 00:43:28,800
if you invest

1306
00:43:28,800 --> 00:43:31,119
for real in a new industrial process

1307
00:43:31,119 --> 00:43:32,560
decarbonized

1308
00:43:32,560 --> 00:43:35,520
then you keep the free allocation if you

1309
00:43:35,520 --> 00:43:36,480
do not

1310
00:43:36,480 --> 00:43:39,119
then you pay the carbon price that's to

1311
00:43:39,119 --> 00:43:40,240
my view the right

1312
00:43:40,240 --> 00:43:42,800
balance uh to strike and that's will be

1313
00:43:42,800 --> 00:43:43,520
for the

1314
00:43:43,520 --> 00:43:46,800
uh reform of the carbon market uh

1315
00:43:46,800 --> 00:43:49,200
uh which will be presented in a month's

1316
00:43:49,200 --> 00:43:50,880
time by the european commission

1317
00:43:50,880 --> 00:43:53,040
terrific we have a minute and 42 seconds

1318
00:43:53,040 --> 00:43:54,800
but we've got a very good question from

1319
00:43:54,800 --> 00:43:55,920
jason poon

1320
00:43:55,920 --> 00:43:58,079
uh on the app desk how can you assess

1321
00:43:58,079 --> 00:44:00,160
the carbon emission of products

1322
00:44:00,160 --> 00:44:01,599
involving many countries in their

1323
00:44:01,599 --> 00:44:03,920
production chain will it uh imply

1324
00:44:03,920 --> 00:44:05,520
massive administrative costs

1325
00:44:05,520 --> 00:44:08,000
so i i i love this question because that

1326
00:44:08,000 --> 00:44:09,520
is a really we've been talking about

1327
00:44:09,520 --> 00:44:10,079
steel

1328
00:44:10,079 --> 00:44:12,240
and big commodities but this is actually

1329
00:44:12,240 --> 00:44:13,760
talking about the complexity

1330
00:44:13,760 --> 00:44:15,599
of our world today that is in all the

1331
00:44:15,599 --> 00:44:17,040
widgets we carry around

1332
00:44:17,040 --> 00:44:19,200
so um let's let's just have quick slices

1333
00:44:19,200 --> 00:44:20,319
of this snapshots

1334
00:44:20,319 --> 00:44:22,000
uh we'll start with uh christian would

1335
00:44:22,000 --> 00:44:23,599
you would you your thoughts yeah

1336
00:44:23,599 --> 00:44:26,079
we are starting with basic materials ah

1337
00:44:26,079 --> 00:44:27,119
it's steel

1338
00:44:27,119 --> 00:44:29,200
aluminum and so on we are not talking

1339
00:44:29,200 --> 00:44:31,040
about cars where you have a lot of

1340
00:44:31,040 --> 00:44:34,240
embedded so that's doable uh i say this

1341
00:44:34,240 --> 00:44:36,240
just after we have had the airplane deal

1342
00:44:36,240 --> 00:44:36,960
right on

1343
00:44:36,960 --> 00:44:39,359
boeing airbus and the complexity of who

1344
00:44:39,359 --> 00:44:40,480
makes what where

1345
00:44:40,480 --> 00:44:42,319
that's probably gonna that's probably

1346
00:44:42,319 --> 00:44:45,359
easier than that deal huh huh

1347
00:44:45,359 --> 00:44:48,880
jennifer will know okay great jennifer

1348
00:44:48,880 --> 00:44:50,000
hillman your thoughts

1349
00:44:50,000 --> 00:44:51,760
again i i think the answer to the

1350
00:44:51,760 --> 00:44:53,920
question is if you were trying to apply

1351
00:44:53,920 --> 00:44:56,079
this carbon text to very downstream

1352
00:44:56,079 --> 00:44:57,599
products to cars

1353
00:44:57,599 --> 00:44:59,599
or par or products that had components

1354
00:44:59,599 --> 00:45:01,200
from all over the answer is yes it would

1355
00:45:01,200 --> 00:45:03,119
be very very complicated and i think

1356
00:45:03,119 --> 00:45:05,280
that's why again the eu has been smart

1357
00:45:05,280 --> 00:45:07,280
uh they're starting with just sort of

1358
00:45:07,280 --> 00:45:08,880
basic commodities that tend to be

1359
00:45:08,880 --> 00:45:09,359
produced

1360
00:45:09,359 --> 00:45:11,520
in a single facility or by a single

1361
00:45:11,520 --> 00:45:12,640
company

1362
00:45:12,640 --> 00:45:15,280
and those companies definitely can make

1363
00:45:15,280 --> 00:45:16,880
these calculations i mean

1364
00:45:16,880 --> 00:45:18,480
in the united states this kind of data

1365
00:45:18,480 --> 00:45:20,240
has been collected for decades

1366
00:45:20,240 --> 00:45:22,720
under our various clean air provisions

1367
00:45:22,720 --> 00:45:23,440
and so

1368
00:45:23,440 --> 00:45:25,760
if you're limiting it to you know again

1369
00:45:25,760 --> 00:45:26,880
basic steel products

1370
00:45:26,880 --> 00:45:28,800
aluminum products cement products

1371
00:45:28,800 --> 00:45:29,920
fertilizer products

1372
00:45:29,920 --> 00:45:32,400
the answer is yes you can easily and i

1373
00:45:32,400 --> 00:45:34,560
think fairly readily determine

1374
00:45:34,560 --> 00:45:37,839
how much uh ghg gases were emitted in

1375
00:45:37,839 --> 00:45:40,640
the production of that particular ton of

1376
00:45:40,640 --> 00:45:43,680
steel cement you know glass if you start

1377
00:45:43,680 --> 00:45:45,680
to go much further downstream

1378
00:45:45,680 --> 00:45:48,560
it does get to be much harder uh i'll

1379
00:45:48,560 --> 00:45:49,680
say this i'm gonna give uh

1380
00:45:49,680 --> 00:45:51,520
our mr chairman pascal confident the

1381
00:45:51,520 --> 00:45:52,720
last uh word

1382
00:45:52,720 --> 00:45:54,480
but in in doing so referring back to

1383
00:45:54,480 --> 00:45:55,839
this conversation

1384
00:45:55,839 --> 00:45:57,440
that the french ambassador hosted on

1385
00:45:57,440 --> 00:45:59,119
this topic with pascal amy

1386
00:45:59,119 --> 00:46:01,040
and senator sheldon whitehouse i'll tell

1387
00:46:01,040 --> 00:46:02,800
you that senator sheldon whitehouse am i

1388
00:46:02,800 --> 00:46:04,800
invited to possibly join today but he

1389
00:46:04,800 --> 00:46:05,920
couldn't make it

1390
00:46:05,920 --> 00:46:09,119
said he he actually applauded uh this

1391
00:46:09,119 --> 00:46:09,839
mechanism

1392
00:46:09,839 --> 00:46:12,640
thought it was great and lamented that

1393
00:46:12,640 --> 00:46:14,079
the u.s government

1394
00:46:14,079 --> 00:46:16,079
wasn't as aligned with europe on these

1395
00:46:16,079 --> 00:46:18,160
issues with so pascal that is a point in

1396
00:46:18,160 --> 00:46:19,040
your corner

1397
00:46:19,040 --> 00:46:20,880
from one of our politicians so last word

1398
00:46:20,880 --> 00:46:23,359
pascal

1399
00:46:23,599 --> 00:46:25,680
well uh you know a carbon border

1400
00:46:25,680 --> 00:46:26,800
adjustment mechanism

1401
00:46:26,800 --> 00:46:30,880
is in the biden platform but to china

1402
00:46:30,880 --> 00:46:32,800
so that's interesting because actually

1403
00:46:32,800 --> 00:46:34,240
the u.s

1404
00:46:34,240 --> 00:46:37,680
the u.s administration will be somewhere

1405
00:46:37,680 --> 00:46:39,599
in the middle that's why kerry when he

1406
00:46:39,599 --> 00:46:40,960
came to europe

1407
00:46:40,960 --> 00:46:44,160
said i'm not against i have questions

1408
00:46:44,160 --> 00:46:46,319
which i think is the right way to have a

1409
00:46:46,319 --> 00:46:47,920
good relationship between the you and

1410
00:46:47,920 --> 00:46:48,480
the u.s

1411
00:46:48,480 --> 00:46:50,880
you challenge us we challenge you within

1412
00:46:50,880 --> 00:46:52,880
a but in a cooperative

1413
00:46:52,880 --> 00:46:55,040
and a positive mindset because at the

1414
00:46:55,040 --> 00:46:56,079
end of the day

1415
00:46:56,079 --> 00:46:59,280
what we want is the exact same goal

1416
00:46:59,280 --> 00:47:01,280
well with that i'm going to close this

1417
00:47:01,280 --> 00:47:03,040
session i want to thank pascal confed

1418
00:47:03,040 --> 00:47:03,599
chair

1419
00:47:03,599 --> 00:47:05,200
of the committee on environment public

1420
00:47:05,200 --> 00:47:07,119
health and food safety at the european

1421
00:47:07,119 --> 00:47:07,760
parliament

1422
00:47:07,760 --> 00:47:09,520
jennifer hillman who's had every cool

1423
00:47:09,520 --> 00:47:11,760
job in trade in washington d.c and

1424
00:47:11,760 --> 00:47:12,800
probably

1425
00:47:12,800 --> 00:47:15,040
geneva with the council on foreign

1426
00:47:15,040 --> 00:47:16,640
relations senior fellow for trade and

1427
00:47:16,640 --> 00:47:17,359
international

1428
00:47:17,359 --> 00:47:19,200
political economy there and again check

1429
00:47:19,200 --> 00:47:21,599
out her report on china's belt and road

1430
00:47:21,599 --> 00:47:23,839
quite interesting and here with me uh in

1431
00:47:23,839 --> 00:47:25,839
the room christian engenhofer

1432
00:47:25,839 --> 00:47:27,920
of both the european university

1433
00:47:27,920 --> 00:47:29,119
institute in florence

1434
00:47:29,119 --> 00:47:31,119
and the anceps in brussels thank you all

1435
00:47:31,119 --> 00:47:33,200
very much big and thank you to those who

1436
00:47:33,200 --> 00:47:34,559
ask questions a big round of applause

1437
00:47:34,559 --> 00:47:38,319
for our panel and

1438
00:47:38,319 --> 00:47:39,760
in five minutes we're going to continue

1439
00:47:39,760 --> 00:47:41,920
with vasilov havel transatlantic

1440
00:47:41,920 --> 00:47:43,599
dialogues the russia challenge

1441
00:47:43,599 --> 00:47:45,599
where to now and i see some people have

1442
00:47:45,599 --> 00:47:49,040
arrived for that so thank you all very

1443
00:47:50,839 --> 00:47:53,839
much

1444
00:47:54,450 --> 00:47:56,319
[Music]

1445
00:47:56,319 --> 00:47:58,400
you