Remarks at Bloomberg New Energy Finance Summit
Secretary of State
SECRETARY KERRY: Mike, thank you very, very much. Thanks, more importantly, for your extraordinary leadership over the years. I think everybody here knows that Mike Bloomberg has been a pioneer on so many different things, critical issues, and concepts – a great business person and entrepreneur of extraordinary capacity. And he has proven his leadership qualities many times, both as mayor of New York, where he oversaw a 20 percent reduction in the city’s greenhouse gas emissions, and obviously since he has left politics and particularly as the UN special envoy for climate change and cities. And I do look forward to continuing our collaboration on cities. We are going to have a major meeting in China coming up later in the year. And I think it’s fair to say that Mike has long approached the global challenge of climate change with the sense of urgency and responsibility that it demands, and I think all of you will happily join me in expressing our gratitude to him for his leadership. Thank you, sir. (Applause.)
I am very delighted to be here in New York this morning. It’s always a pleasure to be in New York – particularly at this time of year, before the Yankees have had a chance to build a winning record. (Laughter.) Better yet, before they even play a game. On that note, I also promise to wrap this up before the first pitch.
So New York is actually the perfect home for this conference. If you think about it, you can trace the roots of the global energy infrastructure that we enjoy today right here in Manhattan. In 1882, Thomas Edison opened Pearl Street Station. It was the first central power plant in the world – about 60 blocks south of where we are today. And the good people of New York were the first people anywhere to benefit from the safe, reliable delivery of electricity at competitive prices.
One reporter covering the event at the opening tried to explain to his readers what this new-fangled light device looked like, and he described them as: a glass globe about four inches long, the shape of a dropping tear, broad at the bottom, narrow at the neck, in which is enclosed the carbon horseshoe that gives the light.
That’s how far they had to go to describe something. I mean, how about that, folks? In other words, it’s a light bulb. (Laughter.) But back then it was that new, and I think it’s fair to say that we’re experiencing that kind of newness in so many ways now.
If Edison were to come back today, more than 130 years after he flipped that first switch at the Pearl Street Station, he would find that most energy is still being generated in much the same way that he had designed. But he would also find at this moment that the energy revolution that he dreamt about is actually underway.
Now, regrettably, it has taken us a long time to comprehend how our energy use impacts our planet. It took us decades to understand that what can seem like the cheapest sources of energy in the short term actually has insurmountable costs in the long term. And only in the last 20 years has the awareness grown that, unless we harness the power of clean, renewable sources like the sun, the wind, the ocean, the consequences will be absolutely devastating.
Now, today we know – after decades of science, thousands of peer-reviewed studies – to which I might add there are scant, if any, legitimate peer-reviewed studies to the contrary. But the peer-reviewed studies in the thousands – more than 5,000 – indicate that, unless we transition away from the sources of Edison’s time to these low-carbon alternatives, we are going to self-inflict harm to infrastructure, food production, water supplies, ecosystems, health – potentially to life as we know it on this planet. And the fact is, when we talk about the future of energy, we are actually talking about the future of everything.
Now, I know I’m speaking to an audience of experts here today. You know – almost all of you – about the full intersection between energy choices and climate change. But I want to say a few words about sort of where we are, because you don’t have to be an expert to understand how much the world is already changing and in extraordinarily alarming ways.
The past decade was the hottest decade on record. I can remember standing on the floor of the United States Senate, what, now 13 years ago saying that about the prior decade, because the one before that is the second hottest on record, and the one before that is the third hottest on record. That’s 30 years of mounting evidence. And 19 of the 20 hottest years in recorded history have occurred in the past two decades, and last year was the hottest one yet – by far.
Now, you’d think that people in positions of public responsibility would get it after 30 years, and maybe they do. But politics, sheer politics, keeps them from admitting it, which is in and of itself a new kind of irresponsibility. After all, this is really not complicated. Basic physics – the kind that kids learn in high school – tells us that when temperatures go up, glaciers and ice sheets melt faster, and sea levels rise faster.
Just last week, scientists released a report indicating that we may have been grossly underestimating just how quickly all of this could happen: Based on what new models have shown us about the rates at which the West Antarctic ice sheet is melting, if greenhouse gas emissions continue unabated, the rise of the sea could reach five or six feet by the year 2100, end of this century. In other words: Most of lower Manhattan – where Pearl Street Station once stood – could be flooded by the very end of this very century – during the life span of babies born today.
Now, that doesn’t even factor in scientists’ projections of stronger storms, longer droughts, food shortages, food insecurity, battles over water, disease outbreaks, mass migrations, and the potential collapse of entire ecosystems. The EPA released a report just earlier this week detailing the real and serious threat that climate change poses to the health of our families.
But even as we get a more comprehensive understanding of the dangers of our carbon-based economy, we are also getting a deeper understanding of the fact that none of this is preordained. We’re not locked into this disastrous future. We still have time to improve the way that we power our world, and in doing so we still have time to avoid the worst impacts of climate change.
Now, that is exactly why, last December, nearly 200 countries – with the backing, I might add, of CEOs and investors, of state and municipal officials, civil society leaders, religious groups, and just plain citizens – assembled in Paris to deliver a clear signal to all sectors of our economies around the world that the future of energy must be low-carbon. Every country in Paris acted with the conviction – and I might add it’s rare that you get 190-plus countries and 186 of them acting in unison all with a plan to do something about something – all acting with the conviction that if we make the changes necessary to combat climate change we will also unlock a global marketplace for clean energy the size of which the world has never seen before. The technology market of the 1990s which saw enormous wealth created in our country – I represented Massachusetts; we saw a lot of it – that was a $1 trillion market with about a billion users. But the market today that we’re talking about is a multitrillion dollar market already with about 5 billion users, and it can go up to 9 billion if people are correct about population growth. This is a multitrillion dollar market with billions of users worldwide.
And as Michael Liebreich said to you all this morning, we’re already seeing huge changes throughout the global energy industry. Many of you represent that change.
Over the past decade, the global renewable energy market has expanded more than six fold.
Last year, investment in renewable energy was at an all-time high – nearly $330 billion.
And for the first time in history – despite the low price of coal, oil, and gas – more of the world’s money was spent fostering renewable energy technologies than was spent on new fossil fuel plants. That’s a revolution.
And make no mistake: This is not only happening in industrialized countries. In fact, emerging economies like China, India, and Brazil invested even more in renewable technologies last year than the developed world. China alone invested more than $100 billion dollars.
We are seeing a global surge, and as a result, in many places, clean energy has already reached cost parity with fossil fuels. And more and more people are directly reaping the economic benefits of this boom: Upwards of 7.7 million people around the world are currently employed by the renewable energy industry – and more than a million of those jobs have been added since 2014.
Now, all of this is, I hope, incredibly encouraging to people. There’s no question about that.
But the truth is, we still have a long way to go to get to where we need to be.
As I said, renewables made up more than 50 percent of all new electricity installations last year. But because of the existing energy infrastructure already in place, they only generated a little more than 10 percent of the world’s energy. And in a modern world, that’s just simply an unacceptable level of inefficiency.
If we’re going to stave off the worst impacts of climate change, we have to accelerate this transition. We need to get to the point where clean energy sources are generating most of the world’s energy, and we need to get there quickly – certainly, by the middle of this century.
Now, the good news is that, particularly in light of the Paris agreement, we are now on a course to achieve that goal, or be able certainly to achieve that goal, and we’re growing economies all over the world – including here at home – in the process.
Now, obviously, the recent surge in renewable energy development did not just happen by accident. It happened, in part – and I emphasize the “in part” – because government leaders created the policy framework that gave investors and innovators the confidence that they needed and wanted to be able to act.
I think it’s fair to say that here in the United States, President Obama is leading as no other president has yet dared to do. His Administration put in place fuel standards that empowered automakers to invest in more efficient automobiles. We’ve finalized rules that limit the amount of carbon pollution coming from new and existing power plants, making investment in harmful energy far less attractive than investment in cleaner alternatives. And this past winter, in a hard-fought win, Congress did pass a five-year extension of the production and investment tax credits for solar and wind installations, in order to make it easier to get new clean energy projects up and running. And they did that with bipartisan support, both sides of the aisle recognizing that leaving aside their differences and their fight over the evidence, investing in clean energy just makes good business sense.
Now, since President Obama took office, wind and solar power have grown by more than 200 percent. Costs for these technologies continue to plummet and today more than four times as many Americans are employed by renewable energy companies than by the fossil fuel industry.
Let me be clear. Government can provide the structure, the incentives, the framework. But I know – and so do you – that it’s the private sector that will ultimately take us to the finish line. And it will be the private sector – innovation, entrepreneurial activity, maybe something we haven’t discovered yet – the breakthrough on battery storage, a breakthrough on a clean fuel burn – I don’t know what it is, but I trust in the ingenuity and the capacity of the American people and of our allocation of capital and our capacity to make this work.
Solving climate change will require perhaps the largest public-private partnership the world has ever attempted. At its core, the Paris agreement that President Obama and I – and so many of you here, and Mike and others worked for – is about ensuring public-private energy collaboration in every part of the world, for generations to come. Together, what we did was create a framework – based on ambitious, individually determined emissions-reduction targets – that is designed to become even more ambitious as time goes on and energy technology evolves. And the legally binding component of that agreement is the part that requires the review and the technology updating as we go along.
Why did 200 countries come together to make this commitment?
Well, I know from my conversations with people in Paris that one reason was more and more have come to understand the responsibility – the fundamental responsibility we have as public people – to preserve our planet for future generations.
But that’s not all that motivated it. Beyond that, everyone also understood – as everyone in this room understands – that clean energy is one of the greatest economic opportunities the world has ever seen, and more and more people are starting to realize that too. And when you build infrastructure, whatever kind of infrastructure it is, and one of the virtues, obviously, of solar is you don’t need the old-fashioned grid form – you have distributive power and other opportunities available to us.
But the fact is that infrastructure is one of the best returns on the public investment there is. For every billion dollars in the United States we’ve put into infrastructure – and by the way, we’re not today, which is a tragedy, actually almost negligent, beyond description – but for every billion dollars, you create 27- to 35,000 jobs. Imagine what would happen if we were doing what other countries are doing – investing in our own infrastructure and building out. That’s another story, but it is related to this challenge of our grid because we don’t have a grid in America. We have an East Coast, West Coast grid, we have a Texas grid all of its own, we have a little line up in the northern part of the country, and a great big hole in the middle of America where you can’t reach Americans and sell solar power from one place or wind power from another.
But we are committed today, I believe forever, because we now know that in the long term, carbon-intensive energy is one of the costliest investments that any civilization could choose to make. And the fact is that current business practice in no way properly reflects the real cost of energy. The final invoice for carbon-based energy includes a heck of a lot more than the cost of building and operating a power plant. It’s time to demand an accurate cost accounting with respect to energy choices. Any assessment needs to fully account for the externalities – which, in the case of dirty fuels, are enough to at least double or triple the initial expenses.
For example, any real cost accounting has to include the price of environmental and agricultural degradation; or hospital bills for asthma and emphysema patients – greatest single cause of the hospitalization of children in the United States of America in the summertime is environmentally-induced asthma, and we spend billions on it. Millions of deaths are linked to air pollution caused by the use of fossil fuels. Those are real costs which a lot of people have worked very hard to hide.
We also have to include the costs of rebuilding after devastating storms and flooding. A few years ago, the damage from Hurricane Sandy inflicted on New York and New Jersey cost $70 billion to repair. In the past four years alone, extreme weather events in the United States have cost our country nearly $230 billion. That is more than the annual budgets of Alabama, Alaska, Colorado, Connecticut, Delaware, Georgia, Hawaii, Indiana, Iowa, and Kansas – combined.
So we can’t afford to continue to be oblivious to these costs. And this is just a glimpse of what the future could have in store if we fail to act. Massive increases in the cost of maintaining infrastructure to control flooding and withstand storms. Power outages. Labor productivity losses due to extreme heat. All of this and more has to be added to the cost assessment of high-carbon-source energy.
Ladies and gentlemen, no matter what country you live in, the cost of investing in clean energy now is far cheaper than paying for the consequences of climate change later.
And it’s because of this that nations around the world are now setting their own ambitious emissions-target reductions. Countries are now working to turn those pledges into real, on-the-ground action and concrete projects, and foster new directions for economic growth in a low-carbon future. And as we work together to achieve our targets, those betting on renewable energy are going to win big.
This is not conjecture. It’s written right into the targets that even the world’s largest developing and fossil fuel-dependent economies have already announced.
By 2030, India plans to get 40 percent of its power capacity from non-fossil-based sources. That will require bringing 200 gigawatts of additional renewable power online. Let me just add that American companies are already bidding on those projects – and frankly, winning large and lucrative deals.
During the same timeframe, China has set a target that will require the country to add between 800 and 1,000 gigawatts of non-fossil energy, and it has already begun to act on that goal. To put that into context – that is almost as much energy as the entire generation capacity of the United States today – total, from all sources. That’s what’s coming online.
These are just 2 of 188 national targets that have been announced. Now, you may have read in the paper recently about how some even oil-rich countries like the United Arab Emirates are committed to diversifying their energy use, and in particular, increasing the share of renewable energy in their fuel mix at unprecedented rates.
So the direction in which the global economy is moving is not up for debate – no debate. The world is already moving straight towards the low-carbon future that we need. And the question is simply: Will we get there fast enough?
Now, there are – and there continue to be – some very loud, powerful voices opposing progress every step of the way. Just consider that despite the fact that Miami’s elected officials are already struggling to manage the impacts of climate change, and despite the fact that reputable scientists project that the city of Miami could be an island – and a small one at that – by the end of the century if emissions continue to rise as they are today, despite that, the government of Florida is currently suing the Obama Administration over the limits that it has placed on carbon pollution from power plants.
I spent 28-plus years in the United States Senate, and I saw this opposition many times. We almost had a carbon trading mechanism a few years ago, and I watched one of the coal companies start to spend money and scare the hell out of my colleagues. This opposition is not new and it’s not unexpected. Those of us who’ve been engaged in the fight against climate change for decades know that even the strongest science isn’t enough to convince some people to change course, especially people with money at stake.
No lawsuit or election or business deal is going to undo the progress that we’ve made to date, my friends, and it’s not going to divert us from the path that we have forged towards a clean energy future. I am convinced of that. The markets are already moving – that’s the reason why – because smart people who understand how to gauge investments against the future and do their risk analysis and make some pretty sound judgments have already made their decisions. And that’s what we banked on in Paris.
Now, it’s certainly possible for shortsighted policies and bad investments and opposition to slow us down. And that’s why I am so grateful that more and more business leaders are lending their voices to this fight. I attended the first big UN climate conference that was held in Rio in 1992, and I recently read that of the 5,500 delegates at the summit only 13 were representing the business sector. That’s not 13 percent. That’s 13 people – 13 people. And when we gathered in Paris last year, we were joined by more than a thousand representatives from the business community, some of them the biggest corporations in the world.
The private sector is today demonstrating an extraordinary commitment to transforming global energy use. And it is because of your leadership that I am so confident about the future. Make no mistake; it’s not going to be the government alone that gets us there, as I said. It’s going to be innovators, workers, entrepreneurs, those of you who’ve been hammering away at this challenge for many years, and frankly, because of that, who have, without a lot of incentive heretofore, compressed the cost pricing now to where it is almost competitive. It’s taken patience. It’s taken guts.
So my message to you today is pretty simple: Double down on what you’re already doing; continue to pursue cleaner, more sustainable forms of energy. And as you do, be confident that in the United States and governments around the world, you will have partners in this effort. We know that implementing the targets that our countries have set and accelerating our global transition to clean investments at all stages from venture capitalists to pension funds, to project developers, to green bonds – we know this is happening. And government’s job is to facilitate those investments and make them as easy and low-risk as possible – not to choose the winners, but create the framework within which you make your judgments and put your money where your thoughts are.
Now, there are a number of ways that we can work together to accomplish this mission. For example, many countries, particularly in the developing world, have incredible potential for renewable energy development – from abundant sunshine to windy coasts. I just met – had the Nigerians in my office this week. And while we can do a lot to augment their production of oil and gas, which we will do, by the way, for years yet to come – we all know that – but they are interested in diversifying and in moving and trying to find ways. They have abundant sunshine and they want to move to solar.
A lot of these countries also suffer from electricity shortages and high prices. In Jamaica, a single kilowatt hour costs nearly four times as much as in the United States. And that’s why last fall, we launched a program that provides millions of dollars in early-stage funding for developing renewables in the Caribbean and Central America, in order to help ease the costs associated with getting the new projects up and running.
We’re also helping to finance clean energy development – for example, through the U.S. Overseas Private Investment Corporation, OPIC. Last fall, OPIC approved a quarter of a billion dollars in financing for Google’s Lake Turkana Wind Project in Kenya, which is the largest single private sector investment in Kenya’s history. And once it’s constructed, the Lake Turkana wind farm will be the biggest wind installation in all of Africa.
There are opportunities literally everywhere you look. And government entities around the world are deeply committed to working with you and to unleash more investment in more places as quickly as possible. So that’s a promise. But I’ll tell you what, it’s also a way to make history. And it’s also a way to meet this challenge.
When he wasn’t working towards one of the thousand-plus patents that he accumulated over the course of his career, Thomas Edison somehow found time to reflect on his success. He concluded there are three great essentials to “achieving,” as we call it – to “achieving anything worthwhile,” as he also put it: “First, hard work; second, stick-to-itiveness; and third, common sense.”
My friends, today it’s clear that the transition toward a global, low-carbon economy is in full swing. And every person in this room – indeed, every person on the planet – has an interest in making sure that that transition happens as quick as possible.
If, together, we continue to put in the hard work, if we stick to the revolutionary course that we’re on, if we refuse to get sidetracked by those who cannot see beyond the outmoded and downright dangerous energy sources of the past, and if we have the common sense to respond boldly to the urgency of this moment, then we will unlock the enormous potential of these opportunities for our businesses and our communities.
Not only that, folks, but I got to tell you, like Edison with his light bulb, Marconi with his radio, Bell with his telephone, the Wright Brothers with their flying machine, we have an opportunity to transform the way people live – and in doing so, a more important task, which is to safeguard the future for generations to come. I can’t think of anything else that meets the test of something worthwhile than that.
Thank you all very, very much. (Applause.)