Following is the unofficial transcript of a CNBC interview with U.S. Special Presidential Envoy for Climate and former Secretary of State John Kerry at the CNBC Evolve Livestream: Innovating Energy, which took place today, Thursday, March 4th. Video from the interview will be available at cnbc.com/evolve.
All references must be sourced to CNBC’s Evolve conference.
BRIAN SULLIVAN: We are here at CNBC Evolve and are honored to be joined by the Special Climate Envoy assigned by the President, Secretary John Kerry. Secretary Kerry, it’s a real pleasure to have you on this important event at an important time, certainly, coming off the events in Texas that literally cost human lives and revealed the failure of the grid there – the energy grid through – harsh weather and simply a system that was not fit to handle the load, all of which of course as we tackle our climate crisis, and look forward to an April 22 virtual summit followed by something in person, hopefully, in Scotland, eight months out. Secretary Kerry, welcome to Evolve. Thank you very much for joining us, sir.
SECRETARY JOHN KERRY: Happy to be with you. Thank you.
SULLIVAN: Alright, you’ve got a number of jobs, obviously. It’s a big job. What would you say would be job number one for you? What are your key priorities and how do you plan to tackle them?
SECRETARY KERRY: Well, the key priority as set by President Biden, is to help all the major greenhouse gas emitting nations of the world. Go to the Glasgow conference in November, and raise the ambition of all of those nations to reduce those emissions and to begin to get on a track that limits the rise of temperature on the planet. That will limit damage, it will limit – it will increase our food production ability, the capacity of people to avoid paying billions of dollars for one storm or another. We need to quickly pull ourselves together to raise the ambition of nations to meet the goals we’ve set for ourselves to do what the science tells us we must do.
SULLIVAN: Well this is geopolitical diplomacy at its finest along with, of course, climate discussions because we know that the number one emitter is indeed China. We are number two behind that. China continues to build coal-based power plants. They will say we have a billion-and-a-half-plus people, we simply need the power however we can get it. How do you address the China issue, if you will, the Russia issue, which is also a large emitter? How do we combine climate diplomacy with political diplomacy?
SECRETARY KERRY: Well, they’re part and parcel, obviously. There’s always politics involved, it’s very complicated. But China has an interest – and they know they have this interest – in trying to provide cleaner air for their citizens and trying to reduce the most catastrophic impacts of climate crisis. And they are doing things. They are the biggest producer of solar panels in the world. They’ve deployed massive amount of solar and renewable in their country. The problem is the size of their economy, and it’s so voracious – its appetite is voracious for growth. So they’ve been providing that power and not with alternative renewable as much as they might be able to, or even with efficient coal. They’ve been, up until recently at least, just building out the coal fired power capacity. Many of their coal plants, by the way, are not efficient. They have been reducing some of them and bringing on, you know, the critical coal technology, but even that lines up with too much emissions as a result. China is the world’s number one at 30% of all the emissions in the world. So we have to find a way for China to reduce, for us to reduce, Europe to reduce – all of the 17 major emitting countries – and then a group after that are going to have to join in exhibiting greater ambition to reduce the emissions more rapidly than we are today. If we don’t do that, we’re going to blow through the 1.5 degrees of limit and the results are going to be much more expensive to us than they would be than taking the actions we need to take now.
SULLIVAN: We saw when they had their lockdowns in the beginning of last year that the skies literally cleared up above China. But, as you know Mr. Secretary, what governments say and what governments do can often be very different things. China will say some of the right things, do you believe that ultimately they will do that? It will have to be in their political and economic best interest for them to do that. Do you think the case can be made that it would be?
SECRETARY KERRY: Well, any country or any individual would be making a huge mistake with anyone just to set up a structure where you’re trusting that something’s going to happen. What you have to do is be able to verify what’s happening. And in fact now through technology that has been worked on now for a number of years, we have the technological capacity to be able to measure what countries are doing anywhere in the world. Even the measure as fine as getting down to see what a particular business is doing – what the footprint is of a big global corporate entity, for instance. We can measure those things. So there will be a level of accountability entering into this system that hasn’t been there previously. Moreover, it’s in China’s interests, it’s in India’s interests, Korea, Japan, all countries need to quickly begin to enter into this transition. Why? Because, number one, the negative impacts are going to cost more than it’s going to cost to enter into those fields. Secondly, the marketplace is moving very, very rapidly in this direction. And if you’re going to compete with your economy, if you’re going to create the jobs of the future, if you’re going to be able to create the new technologies, new products, you better be in this hunt and you better be in it now. That’s what a lot of corporations are realizing. Which is why last year, a remarkable $500 billion was invested in solar, wind, and electric vehicles. And probably much more than that will be invested this year. So, the future economically, the future jobs are moving in that direction. We know, for instance, in America we have 3.6 million people who are working in in retail. We have more people than that working already than in retail in new energy jobs. We have more people working in solar and wind than we’ve had any time previously. And those numbers are increasing. The Bureau of Labor Statistics says that there are only three entities over the next 10 years that are going to grow jobs. The first is wind. Wind turbine technician about 62% growth. The second is registered nurses, we all understand why that’s growing. And the final one at 51% growth is going to be solar power technicians, solar panel installers. So there’s a remarkable transformation already taking place. And I think nations that are going to compete competitively, that are going to compete in terms of job creation and technology production and sales, need to be moving in this direction and they will be.
SULLIVAN: And those technologies, certainly, can be job creators. And by the way, they are booming and the irony is if you go around the oil country – Texas, Oklahoma, North Dakota – they have more wind turbines than anybody. I sort of semi-ironically – but to build these Mr. Secretary, especially electric cars even smartphones, wind turbines – you need rare earths. You need not only lithium, the best known, you need obscure things like neodymium and atria. These things we’ve never really thought about or talked about, mostly though, are controlled either geographically, or in the processing of by China. Do you have a point of view and a policy perspective on these rare earths, which could be the next oil, if you will, from a geopolitical perspective?
SECRETARY KERRY: Well, if things are going to change, you’re absolutely correct. There is a corner in the market with respect to lithium and some of those other critical rare earth minerals necessary to telecommunications and computing and so forth. But there’s also a transition taking place and people are searching and finding alternative means of doing things. For instance, there are new solar panels now being produced in ways that is increasing the efficiency by 30 and 40%, but not reliant on the exact same silicone as was being used previously. So I think there’s going to be a transition. That is the nature of technology, it’s the nature of competitive marketplace, and the United States needs to actually be putting more effort into the R&D, the innovation, necessary to make sure we are competitive and that we are moving in that direction. I’m confident that we will have the ability to do that. But we will only do it if we begin to build out the new infrastructure in America that actually builds a grid, that takes advantage of artificial intelligence, quantum computing – begins to do the things that create efficiencies that reduce the costs to consumers. That is the future. And I think we’re going to be in it with the Biden’s administration, with Jennifer Granholm at the Energy Department, Gina McCarthy working the domestic component of this new energy picture. We’re going to move much faster than anybody imagines.
SULLIVAN: Well, I’m going to quote a line, Mr. Secretary, from my favorite movie, “The Right Stuff.” And I guess that dates me a little bit, but I’m okay with that at this point. And they say – they’re talking about the space program they said, “no bucks, no Buck Rogers.” And we talk about building out these technologies, can we talk about the money side? This is CNBC and, obviously, money is going to be necessary. Whether it’s public money, private money, or a combination of a public/private partnership. You’ve just appointed your friend, Centerbridge founder Mark Gallogly, as part of sort of a financial Task Force, if you will. Where do you see the financing coming from? Where do you see financing being secured from? Because ESG investing has been hot. Do you think there’s the capital to get this done, sir?
SECRETARY KERRY: Yes, there is the capital. Of course there’s the capital. There’s some $51 trillion of capital in the marketplace now looking for places to go. It’s one of the reasons why SPACs have become so popular – a quick way to market with capital in these areas. And ESG is in every boardroom today. People are discussing both ESG and SDGs as investing, but they’re also beginning to really focus in, as you see with Hank Paulson’s new fund, on specific climate related investments, of which there are enormous opportunities out there. India, for instance, has set a goal of building out 450 gigawatts of new power that’s alternative renewable, but they have a need for about $600 billion of finance in order to do that. All of this is doable with the finance. I am in discussions right now with a number of our largest asset managers and major banking institutions with hopes that we can begin to understand where the capital could come from and how it can go into these sectors. But I have no doubt that we will be able to find a partnership between the private sector investment incentive that exists already to go do this, and the R&D and some of the funding and incentives that will come from the federal government. Also, I think President Biden is planning on a major infrastructure initiative. We need that desperately in America. We need to – look at what happened in Texas. We need to build out our energy grid and we need to have an energy grid. We don’t really have one in the United States that’s a smart grid that connects one part of the country to another. So there are great opportunities here. Huge opportunities for growth. And I think we’re going to see international consortia grow as people find it convenient and financially rewarding to combine efforts in order to do some R&D for one particular technology or another. There’s a huge race on to find bigger and better storage capacity for batteries. That’s the holy grail of the new energy economy, or fusion or fission, or new methodologies for better abatement for direct carbon capture. More efficient electric vehicles. Bigger, better batteries in those vehicles. This is a world that’s just opening up, I think, at a rate that is absolutely stunning. And I think what you’re seeing with the plethora of SPACs that are being deployed, as well as other investing, there’s going to be a race in this direction. And that’s exactly what we need. When America races in that kind of direction with capital moving, that capital allocation is making a decision for all of us. And in the end, that’s going to result with significant wealth being created, significant numbers of jobs. The Bureau of Labor Statistics, for instance, shows us that the largest growth in jobs is going to come in the next 10 years. About 60% are going to be those wind turbine technicians and 51% is going to be the solar technicians – solar panel deployer, installer, I guess is the right word. So I just see tremendous growth coming at us at a pace that will eclipse anything we have seen. And I think as we break out of COVID-19, which we’re all hopeful we’re going to be doing sometime in mid-Summer or Fall, I think our economy is going to begin to take off, the global economy will take off. And if we do it right, we’ll be moving in this direction of reducing emissions and building back better, which means building back green in many, many cases.
SULLIVAN: And again, we come full circle, sir, to sort of the political angle of it because it used to be a wind turbine you would make in the United States, it was too inefficient or expensive to ship. A couple years ago I was in the harbor of Houston and I saw these weird looking ships with tubes and I said “what’s that?” They said, “those are the wind turbines that are being imported from Germany and from China.” I said, “well great now we need this industry to make jobs here in the United States.” How do we, from a financial perspective, perhaps, whether or not – a trade war, whatever you might want to call it. How do we make sure that the U.S. can remain competitive in making some of these new technologies? It is a global economy. We want to be fair to our trade partners. But want to also make sure that growth – part of that growth you just talked about, sir, is represented for the U.S. worker. I know something that’s very concerning to President Biden from a manufacturing perspective. How do we make sure that we find the balance of not being trade protectionist, but making sure that there are jobs in the United States for Americans?
SECRETARY KERRY: Well, these jobs are growing in the United States now, and they can grow even more. Obviously, Congress has an ability to create some of the incentives and tax credit, for instance, that is given for a behavior that you are seeking. It has proven historically to be extremely effective. I know the tax credit was continued even in the Trump administration on solar. We need to do some of the infrastructure development in our country that will make it easier for people to be able to produce here and move their products from one place to another. I think all of these things are in the pipeline right now in terms of the Biden administration priorities. The President is first trying to get the COVID legislation done, that’s urgent. Before the assistance runs out to people. But subsequent to that, there are plans to produce a major infrastructure initiative, which is long overdue in the United States of America. Most people couldn’t even name some major infrastructure project that’s being built out in the United States today. Why? Because most of them are being done at the local level. You know, the Turnpike Authority or Airport Authority like New York is building out both LaGuardia and Kennedy. It’s not happening with federal dollars. So the federal government needs to get involved in helping to leverage the infrastructure build out of our country, and the R&D necessary to create these new products. And immediately, you’re going to see a lot of that building taking place here. I think also supply chain disruption, which we’ve seen in the course of COVID, has encouraged a lot of companies to think twice about being excessively dispersed in that supply chain. So I suspect that there will be even more jobs created in the United States and some of the boardroom decisions will be made accordingly.
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