New York, New York
Thanks so much, Jason. It's great to be with all of you today. I want to commend the Columbia Center on Global Energy Policy for everything you do to advance the policy conversation on the most pressing global climate and clean energy issues.
We're coming together at a moment when the realities of the climate crisis have never been more clear-and when our ability to address those realities has never been greater.
I. Climate Imperative
July of last year was the hottest month on record. 2023 was the hottest year on record. Last month was the hottest March on record.
And each month in between July and March was the hottest ever recorded on our planet.
Meanwhile, the ocean-which absorbs the majority of the Earth's warming-has been shattering temperature records for over a year.
This isn't a fluke-this is the climate crisis. And it's affecting all corners of the globe.
Let's just take one of the most common-and the most deadly-consequences: extreme heat.
According to a World Weather Attribution study, climate change made the scorching heat wave in West Africa in February ten times more likely.
Last year, one single heat event in India killed more than 100 people…and Iran hit a heat index of 152 degrees Fahrenheit or 67 degrees Celsius-nearing the limit for human survival.
Here in the United States, Phoenix had 31 straight days of temperatures at or above 110 degrees Fahrenheit last summer-contributing to nearly 600 deaths.
And in Europe-the fastest warming continent in the world-more than 61,000 people are estimated to have succumbed to the record-breaking summer heat of 2022.
These are not future projections. This is happening right now.
The economic toll in developed and developing countries alike is staggering.
Meanwhile, global emissions keep rising-reaching a record level last year.
While it's true that we have made progress since Paris…we still have a lot more work to do to ensure a safe future for humanity.
II. Era of Climate Action
President Biden and Vice President Harris have taken on the climate crisis from Day 1…
By rejoining the Paris Agreement and making climate a top priority in international diplomacy…
By mobilizing a whole-of-government approach to cutting carbon pollution across every sector…in power…transportation …buildings…industry…agriculture and forestry…
And by passing the Inflation Reduction Act-the largest investment in climate and clean energy in history.
The law is unleashing private sector deployment of clean energy while boosting innovation to develop the next generation of technologies that we'll need to get to net zero.
In the time that President Biden has been in office, private companies have announced over $380 billion in new clean energy investments.
And just since the IRA passed, over 270,000 clean energy jobs have been created across the nation.
All in all, the Inflation Reduction Act, the Bipartisan Infrastructure Law, and strong new emission reduction standards in the power and transportation are putting America on a path to reach President Biden's climate goal of cutting our carbon pollution in half by 2030.
Here in the United States, we've backed up our ambition with action-and we need to see that around the world as well.
New climate targets-Nationally Determined Contributions, or NDCs-are due to be submitted under the Paris Agreement early next year.
Those NDCs need to be aligned with a 1.5 degree world. And while ambitious NDCs are necessary, they are not sufficient.
They need to be backed up with domestic policies that spur innovation and accelerate deployment of clean energy in countries at all stages of development.
Even as we invest in America to build a clean energy economy-and even as we work with our allies and partners to build more resilient, secure clean energy supply chains-we have no intention of pulling the ladder up behind us.
Every nation deserves the ability to build a clean energy economy that will protect its own citizens and support long-term growth…
The ability to build industries that can innovate, scale, and compete on a level playing field.
The ability to participate fully in building a clean energy future that prevents the worst impacts of climate change and protects the most vulnerable communities.
That's why the United States will continue to drive a virtuous cycle of innovation and investment that lowers the cost of clean energy technologies in a fair and transparent way…
While at the same time we will continue to use our public and private dollars to support countries embarking on their own clean energy transitions-and continue to encourage multilateral institutions to make important reforms necessary to do the same.
I'll have more to say about that in a minute.
III. The Trade Problem
But even as we increase investment at home and abroad, there's still an elephant in the room…one that's producing a lot of emissions…and that is global trade.
We have to take a serious look at our international economic systems, including trade-and harness them for climate action.
Our current global trading system was built to promote open and competitive markets-which it has done well-but it wasn't built to curb emissions.
In fact, by many measures, global trade is a huge contributor to the climate problem.
Emissions from shipping and aviation are a major factor.
These emissions have received a lot of attention and they've been the subject of a lot of productive international cooperation to reduce emissions through the production of sustainable fuels and electrification where possible.
But we can't just look at how we move goods around the world-we have to look at what goods we're moving.
And when you seriously account for the emissions embodied inside tradable goods… the emissions from the production processes that create the commodities and manufactured products that we buy and sell on the global market… then traded goods account for about twenty-five percent of all global emissions.
To put it another way, if the global trade of goods was its own country, it would be the second-largest carbon polluter in the world after the PRC.
The United States alone imported over 1 gigaton of emissions from traded products-just in the year 2019. That's the same amount of emissions we expect to reduce in 2030 thanks to the Inflation Reduction Act and Bipartisan Infrastructure Law.
This needs to change if we are to get the climate crisis under control.
Right now, our existing trade policies and the international rules that govern them don't pay enough attention to the emissions embodied in tradeable goods.
We don't have uniform standards or consistent, reliable data about embodied emissions.
Global trading rules incentivize carbon leakage-when manufacturing-related emissions from a country with stronger climate policies shift to a country with weaker policies.
There is no penalty for what I like to call carbon dumping-when high emissions in production are exported back into countries with stronger climate policies.
That's bad news for climate.
It's also bad news for competition-setting up a race away from robust, resilient, and diverse supply chains to those concentrated in countries with lax standards.
We have a system where transparent, well-structured, targeted incentives to spur fair market development and private-sector investment in clean energy are subject to challenge.
Meanwhile, countries collectively spent $1 trillion to subsidize fossil fuels in 2022 alone, and those policies have proven nearly impossible to eliminate despite near consensus on the need to.
Let me give you an example of what can happen when policy doesn't take sufficient account of embodied carbon in tradeable goods.
The U.S. used to be the world's largest producer of aluminum. But after decades of outsourcing and non-market behavior by some countries, only four primary aluminum smelters now remain in the U.S.
Today, over half of the world's aluminum is made in China, where the average ton of aluminum produces 60% more emissions than it does in the U.S.
This is a bad story for the American workers who lost their jobs and the American communities that were hollowed out.
But it's also bad for the world as a whole. Globally, aluminum production is substantially dirtier than it needs to be.
It's what we call a "race to the bottom"-our relatively cleaner industrial base shrunk, while the emissions embodied in our imports swelled.
IV. Announcing Task Force
Instead, we need a smart, 21st century-approach to climate and trade policy that launches a "race to the top" for climate action…a global trading system that slashes pollution, creates a fair and level playing field, protects against carbon dumping, supports good manufacturing jobs and economic opportunity, and rewards every country that's doing the right thing-no matter their stage of development.
We're not claiming to have all the answers…but we're ready to accelerate progress in turning conversations about climate-smart trade tools and policies into practice.
Today, we are announcing a new White House Climate and Trade Task Force, which will have three focus areas.
First, developing our climate and trade policy toolkit-with an open mind about what features and approaches will be most effective at addressing carbon leakage, carbon dumping, and embodied carbon in general.
We're drawing on lessons we've learned from the ongoing negotiations, led by U.S. Trade Representative Katharine Tai, for a Global Arrangement on Steel and Aluminum between the EU and the US.
We're open to proposals from our colleagues on Capitol Hill and policy thought leaders from inside and outside government.
We're ready to deepen dialogue with our partners and allies around the world, from the UK to Australia to the EU as it pursues its Carbon Border Adjustment Mechanism.
Second, the Task Force will focus on ensuring that we have credible, robust, and granular data to implement smart climate and trade policies.
We will work closely with trade partners to develop standardized and authoritative ways of measuring embodied emissions so that each country can harness comparative advantages in clean manufacturing.
And we'll take steps internationally to promote common measurement and high standards on embodied emissions.
And third, the Task Force will identify what more we can do at home and abroad to further position producers to thrive in this new race-to-the-top environment.
Here in the U.S., we want our manufacturers to be the cleanest and most competitive in the world.
As part of that effort, we recently announced $6 billion in grants from the Inflation Reduction Act and the Bipartisan Infrastructure Law to reduce emissions from the industrial sector.
One of the awards will build a new green aluminum smelter that will avoid approximately 75 percent of the emissions of a conventional facility.
It will also be the first new smelter built in the United States in 45 years.
We will continue to build on the success of our Buy Clean Initiative, which harnesses the purchasing power of the federal government to boost lower-carbon construction materials.
And even as we continue our efforts to build out transmission and get clean energy projects up and running faster…we will also explore novel policy levers to help secure affordable supplies of clean electricity for energy-intensive manufacturers.
V. International Support
But we're not just about positioning America to compete.
Everything we're doing to implement the Inflation Reduction Act…deploy the clean energy that's already available…and develop and scale newer technologies…all of that is increasing supply and lowering costs for the entire world.
The Boston Consulting Group projects that the Inflation Reduction Act will drive down the cost of certain clean energy technologies by as much as 25 percent.
It's important to understand what the Inflation Reduction Act is not doing.
President Biden's Investing in America approach is not intended to industrially target any sector, including the clean energy sector, in order to dominate the global market.
We are not over-subsidizing domestic industry at any cost, or creating an oversupply of clean energy products, or trying to drive competitors out of the market.
The fact that our transparent, well-structured, targeted incentives are now subject to a challenge at the WTO by the People's Republic of China-which has spent decades engaged in non-market policies and practices that have distorted the global market for clean energy products like solar, batteries, and critical minerals-is beyond ironic.
Through the Inflation Reduction Act and other investments in clean energy-including strong support for research, development, and demonstration-we're making clean energy technologies more accessible to more nations…speeding deployment…and lowering emissions globally…all while creating high-quality production and encouraging high labor standards.
The Rhodium Group found that for every ton of carbon pollution reduced at home because of the Inflation Reduction Act, we'll slash up to 2.9 tons of carbon pollution outside of the U.S.
That's in large part because of how our investments will lower costs for next-generation technologies like clean hydrogen electrolyzers.
In addition to creating benefits outside our borders, we're supporting a range of international initiatives to support developing countries in securing the capital they need to decarbonize industry and invest in their clean energy future.
At COP28 in Dubai, Vice President Harris launched the Clean Energy Supply Chain Collaborative to work together with like-minded countries to create high-quality, secure, and diverse clean energy supply chains for several critical technologies, including batteries, electrolyzers, and sustainable aviation fuels.
We also announced up to $568 million in new lending from Treasury through the Clean Technology Fund to support clean energy projects in eligible countries.
Led by Treasury Secretary Janet Yellen, the U.S. continues to support the important evolution of Multilateral Development Banks, including the World Bank, to effectively tackle 21st century global challenges like the climate crisis.
This is being discussed at the Spring Bank Meetings this week in D.C.
And as we approach COP29 at the end of this year, countries need to work together to set a new collective, quantified goal to boost global climate finance…moving beyond the $100 billion goal set at previous COPs.
We have an opportunity to reimagine a goal that's ambitious…realistic…and that's more effective in expanding the ecosystem of international, domestic, public, and private contributors.
We can draw some inspiration from the Convention on Biological Diversity framework that was agreed in Montreal in 2022-which focused on international support and mobilization while capturing the range of finance that is required to unlock the needed trillions in private sector investment.
We're serious about supporting climate and trade policies that work domestically, crafted in partnership with the labor movement…the climate movement…U.S. industry…and Congress.
We're serious about helping developing countries secure the financing and resources they need to build strong, sustainable economies.
And we're serious about mobilizing a global coalition of partners and allies who are ready to build a modern international trade system that confronts the climate crisis head-on.
VI. Conclusion
As I see it, we have two choices.
We can maintain the status quo-a race to the bottom-with trade policies that reward countries that use dirty production and non-market practices to gain a competitive advantage.
Or, we can work together to create a race to the top in global trade…one that rewards countries that are leading on climate action through transparent, market-based policies and practices.
A system that's coordinated…consistent…and sends a powerful market signal to countries and companies alike.
A new global dynamic where cutting emissions isn't just the right thing to do, it's the only thing to do to compete and thrive.
The stakes couldn't be higher.
But I believe if we make the right choice, we can create and maintain millions of good-paying jobs in the clean energy economy of the future…
We can mobilize billions in private investment in countries around the world…
We can maximize the impact of billions of dollars in taxpayer-funded domestic and international climate investments…
We can accelerate technological innovation and position nations to overcome the challenges of today and tomorrow…
And we can protect our planet for ourselves and for our children.
All of this is possible-as long as we do it together.
So let's start today. Thank you.
