 This is the workshop number two, focusing on energy and environment. I'm Nobuo Tanaka, the executive director of the... We have six panelists. You know them, I don't explain to you, Olivia Pehl and Ali Zeroyli, Leyla Benali, Richard Cooper, Cosmin Ghida, and Tatsuro Masuda. So we will talk about climate issues but this morning we had very interesting preliminary, the Roran Fabius and Patrick Puyane made a very interesting introduction for us about the role of government state and how the ambition must come from the leadership. And the issue of the future of the coal is very interesting one. Certainly renewable energy, nuclear, how can we use advanced innovation technologies? That's certainly the issue. I will use my slide and before starting each of us will make some seven, eight minutes, the initial remark and then open for the discussion, but could you make a slide of mine at the place? Yes, this is my contribution to the group. Innovation for Cool Earth. This is a forum created by former, I mean current prime minister, Abe, five years ago. It is consisting of energy-related people at the steering committee and it is exchanging views and information and making international links of experts for technological innovation for the sustainability. This year, we had just a meeting about a week ago and about thousand people participated from 70 countries and I'm the chairing of the steering committee. So I just want to say the short word, what had happened there and what was the message? This is a picture of this ISAF group and another two groups which concurrent back-to-back held in Tokyo. One is the TCFD summit. TCFD is task force for climate financial disclosure, started at G20 by the Mark Kearney, the central bank of the UK and Michael Brunberg started for the G20 countries about disclosing the risk, financial risk of the corporations for the investors. So Japanese government promoted that substantially in the last about a year and there are 199 Japanese corporations signed up. So this financial sector's pressure is getting very strong. So this ISAF is very back together with this TCFD group. We made a contribution and we made a meeting with Prime Minister in the Prime Minister's office and remind him of how we should move and he urged us, by the way, calling for much more serious effort. He said it should be the unconventional and this continuous innovation is necessary and in the sessions there are many different issues are treated but the subject of this ISAF was bending down the emission trajectory by innovation and green finance. Because the global CO2 emissions are increasing at about 2% per year and which is in line with the long-term historical trends since the beginning of the industrial revolution. That means the gap of this trend and the global goal of net zero emission by 2050 is widening every year. So enormous effort is necessary. So ISAF do a lot of things, but how to bend down the emission trajectory with all possible measures including financial or new technology, etc., is the critical issue. ISAF did a lot about the road maps and this year's road map was decarbonization in the industrial heat sector. Industrial heat is a very tough area. So using more CCUS or hydrogen, biomass, electrification and all possible tools used to reduce CO2 emissions from steel making or cement, etc. Of course, top-ten innovation, there are many different kinds of technologies on the commercial scale from the research and development stage. We pick up several of these innovative technologies and participants voted which are most likely technologies. So these top-ten votes of participants. Another message which is this is interesting. This is the infographics of the excuse me. I'm sorry. This is the top-ten innovation. I'm sorry. And this is the infographics from the this meeting and of course from now we need immediate peak and vigorous decline. So Bob Slay was taken up showing how quick we have to do. And another point which I really raised is the role of women in the climate change mitigation. Climate change is not gender neutral. Women are much more harshly hit by the climate change especially in African countries because farmers are always more women and fetching the water with climate change much more effort required. On the other hand, women can do a lot to change the policy by voting by becoming the business leaders and changing the business model. So women's role for climate change mitigation could be much more stressed. So gender issue and climate issue should come together. So for the financial sector, TCFD is a green financing means climate lens investment. So gender lens investment should come together. That is one of the point which this group has discussed and recommended. I don't want to go too far but I always say revolution has happening in many fronts and one in U.S. Two in the solar power is the cheapest in the future. The third is China's green revolution and fourth is digitalization. But the important fifth revolution which I want to add is this demand side driven transformation. Because TCFD, through TCFD, the money goes to more sustainable companies and they are in a way user of the energy. So if these companies try to be more and more sustainable this may cause the structure of the supply. IAEA or government always thinking from the supply side but demand side driven transformation may change drastically the structure. Another example is RE100, renewable energy 100 corporations. These are the list of corporations but major corporations like Apple, GM, BMW if they require their suppliers to do the same and it is the case. Maybe those companies who stay in the supply chain of the major global corporations will use only renewables in the future. And this may create a huge challenge for the supply structure of the energy. So energy transformation could be driven much more by the users rather than the supplier or the government. So this is one of my points which I want to raise to Roland Fabius's point about the role of the state. The state should kind of prepare the incentives of financial schemes or standards for the disclosures and let corporations or users decide the future. This is one of the message I want to share with you. Another one is that IAEA's energy demand prospect shows that it's not easy to see the peak demand of oil happens. But if demand side change happens quickly we peak demand happens much earlier. So that is what Saudi Aramco is concerned. I told you about this last year I guess but peak demand of oil may happen much, much earlier. I talked with recently the Chinese experts and they say peak demand of oil in China may happen before 2025. It's five years from now. And peak demand of a peak emission of the CO2 may happen even 2022. That is what Chinese say. So their strategy is using more renewables and reducing oil and gas import from Middle East, from Russia and from United States. This is geopolitical strategy of China. But at the same time it's sustainable energy policy. So this is very interesting. To help those producer and gas oil exporters one way is using more hydrogen. This is a very common subject of ISAF and G20 that to make green oil, green gas only hydrogen with CCUS may be exported or used. So hydrogen could be still a costly option. But Japan has been promoting use of hydrogen but China has taken up very seriously these days because of the extra generation of solar and wind could be stored as hydrogen. So as a storage, hydrogen may be used much more substantially in the future. So I stop here in my presentation about this kind of contributions from the ISAF to you. And let's start each individual panelist to present their case. I will take up Olivia first and then Leila will follow. Okay. Okay. There is a echo still. Okay, so I will move very rapidly. I was asked to discuss about biogas which is one part of the solution of the climate change issue. Most of the attention today is focused on solar and wind thanks to their spectacular expansion and cost reduction. But step back and consider the whole energy system and you will find another picture. Modern bioenergy is playing the dominant role. Why? Simply it's simple. Electricity only accounts for less than 20% of total energy consumption worldwide. And bioenergy is the only renewable source that can provide energy for all end-users. And the contribution of modern bioenergy is particularly important in heat. Two thirds of that heat goes to industrial application and the rest is consumed in buildings with a very small remaining fracture in agriculture. As a result at the end of 2017 modern bioenergy encountered for the half of renewable energy consumption. As much as hydropower, wind, solar and all other renewables combined. And four times the amount of wind and solar combined. I wish to underline that all these numbers concern just modern energy and are excluding traditional use of biomass. For example for cooking in developing countries which is causing indoor air pollution and premature death. The dominant role of modern bioenergy is often overlooked. This is why we consider it a blind spot, the overlooked giant of renewable. This is not to undermine the role of electricity of course, just bioenergy as many more competing options. So in order to reach the sustainable development scenario, the IA is considering that renewable would contribute to one third of greenhouse gas emission reductions. You are accustomed to this figure and you can see that bioenergy contribution is representing 7.5% of the gap by 2040. And also you can note that bioenergy can be combined with CCUS in order to provide negative emission. And I hope that we will come back during the debate on the issue of CCS and CCUS. Biomethane, I will focus now on. Biomethane, biomethane will play a major role. In just 7 years, biomethane production has increased by a factor of 7. Most of the growth has occurred in Europe but every region is participating in the global growth. In 2017, 720 biomethane production plants are in operation in the world compared to only 173 in 2010. And spread over 34 countries there are then the 1020 project of upgrading operational plants under construction or planned. Europe is representing as I said an important part and European production is booming. Europe represents two-thirds of the present production. Germany and UK are the leaders but this sector is booming everywhere. And according to the report Gas for Climate, the production may reach 95 BCM in 2050 of which 62 for anaerobic digestion. Outside Europe, biomethane is developing very rapidly in the United States driven by support to advanced fuel. It is a way to reduce methane emissions from waste. This development is strongly supported by regulation, renewable fuel standard, volume obligation and certificate markets. And 82 projects are for timing under construction or planned. And you have to notice that the US is the world leader for bio natural gas vehicle and bio LNG. China will become the giant as well in the biomethane market. It is in China this market is just emerging with only 40 units at the end of 2017. But China launched in 2015 200 last scale project. And this policy aims at first ensuring security of gas supply, fighting against local pollution and also developing rural areas. A three phase policy of industrialization has been decided with an objective to produce 30 BCM by 2030 based on financial incentives and green gas quotas. So let's move to the conclusion. Just in a summary, there are promising developments all around the world. In Europe, the use of biomethane is spreading across the continent, all across the continent with a huge potential of 95 BCM in 2050. In North America, there is a surging production over the recent period, propelled by the US to the first rank of the world for the use of biomethane in vehicles with a significant potential of 30 to 40 BCM, mostly from waste. In Asia, we have to note the recent adoption of the biogas upgrading technology by China and India, this is a game changer. I refer to the objective of 30 BCM for China in 2030, it's less clear for India. And there are also projects elsewhere and just a summary at the bottom of this page, developments of biomethane is linked in every country to subsidies to cost reduction linked to industrialization and also to sustainable resources. Thank you. Thank you, Oribea. Why did you pick up biomethane this time? Because it is ignored as such. It is becoming very popular, for example, in Europe. And in the context of zero of carbon neutrality in 2050, there is no more place in Europe for natural gas. And so the solution is to get larger. I will address the first question, if you don't mind. The first question is, if you assume that if you agree that consumers are leading the change, they have a role in leading this transition by their choices of biomethane, and that technologies and governments are enabling the transition, somebody has to absorb the risks. And this is where the investors come into play. Second question is, if we agree that changes are already happening, and I insist on the fact that the changes have to happen at scale, and I will insist on that for the rest of this workshop. And if we agree that multiple solutions are required, and Olivier has just given us one of the multiple solutions that has to be part of the energy mix, for the institutional investors perspective, where should we invest? And I'll finish briefly my presentation with what is left for governments to do in this area. And I think Mr. Laurent had used a fact that we all agree that carbon pricing has to be agreed on, whether we like it or not. But I think there's an agreement in that regard. And then I'll finish with what is left for companies to do. The energy industry has been pushed to do more with less, to go for more vertical integration and capital efficiency. And this is where here again institutional investors are coming into play in that marriage between finance and energy. So let me start with the first one. When it comes to risks, I think the momentum, I think we can all agree today that the momentum to reinforce the national contributions is possibly the highest ever that we've ever seen. However, and I think it has been highlighted again this morning, it is not sufficient. And there are a few issues that I would like to highlight here again from the perspective of the institutional investors or from the perspective of the energy sector. The first issue that the global climate governance is very, very deeply questioned. And I will not dwell into the details of why it has been questioned. We are living in an era of questioning multilateralism. We are questioning retrade. We are questioning security. We are even questioning, I mean we also have a crisis of leadership. But I guess that's a discussion for another session than this one. But the point is that even in October 2018 when the IPCC report was issued and even if it was alarming enough, it did not accelerate the required changes that are required. So there is I think, and that's probably the change this year, there is a growing realization across the board of the complexity of the task. There is a growing realization of the wide interests and needs of the different stakeholders involved. I mean going from I would say consumers, taxpayers, citizens, vulnerable populations, and of course the industrials, the energy producers and consumers, etc. So from where I sit, I think there is a growing realization that the existing energy system that we have today, which, and I would like to remind you, we took probably a large part of the 20th century to build, has same costs that cannot just simply be written off. The energy system we have today has same costs in it that we cannot write off as, and from the investor's perspective, that's a key part. However, and I don't want to, don't get me wrong, changes are already happening and leading energy companies, leading companies, cities, mayors, populations, economic sectors, I work a lot with the maritime, with the maritime industries, they have been taking concrete actions to either decrease their emissions or fully decarbonize. Shareholders, insurance companies, institutional investors, as you all know, have been raising the pressure to align the corporate strategies with the climate reality. I mean, that's something that we have to deal with. So one of my favorite graphics from the BP's energy outlook shows how long it takes for energy transitions to occur. And our common friend Spencer Dale likes to remind us with his dotted line that you probably don't see here, but it's the big line that you have on the graphic. I don't know why it is shown as plain, but it's the one at the extreme high. With that dotted line, it shows that renewable energy may reach 10% of the world energy demand by 2035. In less than 30 years from the point, it provided 1% of world energy. And if that's the case, if we just extrapolate that trend, it would, it means that renewable energy would have penetrated the energy system more quickly than any other fuel in history. And even then, even with that 10%, if you reach that 10% of renewable energy, you still need 90, you have still 90% to cover. 90% of the world energy needs will need to come from other fuels. My personal take from this graphic is slightly different, particularly if I isolate the two fastest growing technologies, renewable energy indeed and nuclear. And the conclusion that I take from it, and that's a very quick conclusion that I'm sure Cosmin will probably challenge, is that impactful change really generally occur in these two specific examples. First, when the debate has been depoliticized, aka nuclear, and when there is a combination of intensive R&D, government incentives, but also, of course, enabling market mechanisms, and I'm insisting on this one, and free trade. Only free trade enabled solar panels to move from one continent to the other, and we reached the decreasing cost that we have witnessed in the last decade. The same dynamic is happening at a slower pace, I must say, in other areas. And it is happening, and I think in this order, number one in energy batteries and storage, and we've discussed it last year, I think extensively. It's also happening at a second in mobility, in the area of mobility, and also it's happening third in a process in heavy industries that Tanaka-san has started hitting at in his presentation. But here again, from an investor perspective, this lack of visibility on the sequencing is probably the first missing link that we have in our climate change governance toolbox. So I think we need targeted instruments with optimal risk-returns ratios for the various emitting sectors with various utilizations to really accelerate this transition. So the governments can guide the energy mix, the insurance investments through their toolkit of various policy mechanisms, but I think only institutional investors can help absorb the market risks but also the technology risks that I'm talking about here. So if we all agree that change is already happening at scale, I repeat that, and that multiple solutions are required from an investor perspective, where should we invest? Vaclav Smil reminds us that basically after we increase our energy and power density needs dramatically, we want now to find solutions to totally reverse those past trends. I think a simple way for those of us in this room who are not energy geeks like us, a simple way to say this is basically to address the emissions in different utilizations, different technologies will be required. You will need solar PV, but you also need CSP. You will need solar PV, but you need some storage with it. You will need massive energy efficiency programs and heat recovery in the industrial sector, and you need obviously nuclear. And why I'm pointing at nuclear? Because you have the wider electrification that we want in the economy, and that's beyond EVs. I mean I'm talking about edge computing, internet of things, artificial intelligence, smart homes, etc. That at the end of the day puts additional pressure on the utilities to decarbonize first and to decarbonize faster. So nuclear energy provided 4% of global energy in 2018, that's 2700 terawatt hours. It hasn't grown since 2002. Cosmin, I would be more interested to hear your thoughts about where we stand on research and fusion efficient. I mean is it going to really solve our problem on the utilities side? But in terms of technologies, there are a few counter-intuitive trends that I want to highlight here, which have been really driving investments for more than a decade now. And when I say counter-intuitive, it's really for anyone who believes today that investors, all of them are deserting fossil fuels altogether. So the first, here again, counter-intuitive trend is that we still have massive efforts and massive investments to recover more hydrocarbons in terms of production. We are trying as much as possible to optimize the efficient use of hydrocarbons produced and a lot of money is going into that. A lot of money is going, especially when we try to increase the focus on low costs fuels but also low carbon fuels. And the reason for that is very simple. Today you have less than 20% of hydrocarbon molecules extracted from the earth. That's oil, gas and coal, of course, but less than 20% of that actually turns into useful end-use, energy, plastics, etc. Only 20%. The rest is wasted. So today the industry has realized that and there are tremendous efforts happening to restructure the business models and reward optimizing an efficient use of fuels instead of rewarding the volumes of hydrocarbon produced. So there are efforts, as you can see, of vertical integration at scale into refining into petrochemicals by several large players. That's one example of this effort and I'll cite one last extreme example of the crude to chemical scheme that is being looked at in Saudi Arabia. The aim is really to reach 70% conversion rate from crude to plastics. Second interesting dynamic is happening in mobility and here I'll get into the internal combustion engine. So there are again massive R&D efforts and investments happening in the area of ultra low emission fuels and engine technologies. So with that you can assume that the internal combustion engine can still enjoy a few years of monopoly in the transportation sector. But in parallel there is a drive among cities, among politicians to ensure that transport prices are actually better reflecting externalities, internal costs and other things. So to really have a view on the real cost of transportation, the real cost of urban and road transportation. So with the development of all those technology solutions that we see in Europe and US, smart charging schemes, ride hailing, bike sharing, there are increasing calls especially among cities for the right pricing framework, a fair price framework for the use of public space by these charging stations for the utilization of commodities and the scarcity of resources that go into those technologies. And when you run the numbers, at the end of the day you find that liquid fuels might be actually the winners from these all let's all cost in everything approaches. And I'm just saying. Third point, in addition to solar and wind and storage in its different forms and I think we discussed it extensively last year, but here again I want to highlight in a context of continuously this decreasing cost in storage as well. The uncertainties about which technology will wind, beyond lithium ion and redox flow batteries, concerns about the commodities that are being mined in tricky places in Africa needed for specific storage technologies. And even when regulators show enough, I would say, creativity to reward flexibility, investors remain concerned. They remain very concerned and wary again of regret costs in those technologies. So a couple of points to conclude, what is left for governments to do? I think, and that comes, that came today in the discussion between Patrick Pouyanet, Laurent Fabius, May, but we organized at Epicorp recent strategic industry round table where we brought people from the energy sector and the financing community together in a single room under Shutdown House rule to address the question of what are the instruments that are needed to accelerate the energy transition. And these two communities don't really talk to each other most of the time, so that's why we thought it would be interesting to bring them together. And the very first recommendation that came up was the need to formalize a price on carbon, any price, but just formalize a price on carbon. That was considered as a single most effective mechanism to really enable level playing field between the different technologies and the consumer's choices. But the problem is, in the absence of carbon trading mechanisms, and I'm here thinking outside of Europe and some other places, what is being proposed, for example, in the American Green New Deal, when we start estimating the social cost of carbons, it ended up producing ridiculously wide ranges. So when we leave it to the economists, we ended up having very complex calculations when it comes to carbon prices. And even if carbon taxes should, in theory, be an easy form of carbon pricing. So I agree the calculation is complex. I agree non-marginal changes related to climate change have to be factored in. I agree the tax has to be revenue neutral, but the first steps are required. And you hear that from both communities alike and from the government as well. What is left for companies to do, and I'll finish with that, these two graphics that I'm showing on my slide really summarize, I think, the dilemma facing the energy sector. On I think the left-hand side, you can see energy sector is one of the sectors that provided the lowest returns to shareholders during the last decade just among the S&P 500. It's a fraction of what IT or real estate have provided. The energy sector is really today competing with other sectors that are much more attractive for investors in terms of returns. And the problem is that the gap is really wide. As you can see, energy provides less than 10% of return while IT or consumers have provided more than 300% over a decade. And the other problem is that in terms of valuation, some parts of the energy sector seem undervalued. I'm mainly talking about the upstream side of it, but there is always that persistent fear of stranded assets because we don't have the clarity over the climate change trajectory. And on the other side, in the right-hand side, you can see that in parallel, returns are also being squeezed in the different parts of the value chain. I took here the example of the gas sector, but the same is true across the board. So if they really want to survive through the energy transitions and continue to provide an active, attractive value proposition for the investors, energy companies have no other choice than to embark on vertical integration at scale. And that's not only vertical integration, as in the past, to stabilize the earning by benefiting from the country's cyclical profits in upstream and downstream. That's really also to maximize the margins across the value chain. And on top of that, in the national oil companies particularly, the 80% production that Patrick Poignanet was referring to earlier today, they are directed, they are instructed to extract additional value from the sovereign and finite oil and gas resources. So for corporate strategies, I would say that a low-carbon world is retranslating into more integration, more scale, more optimization. And then I would just like to remind everyone that the journey of integration is really a marriage between two different business models, two different operating cultures, returns, expectations, and time horizon. And why I'm saying that is that after the integrated management of this different segment of the value chain, the next step might be to seek, it is actually to seek growth by optimizing the balance sheet even further. And that's the pressure that we are having also in terms of financing the energy sector. So in some areas, I mean, US Shell benefited, as you all know, partly from long-term commitments from private equities. If you start considering oil and gas resources as just any other investment asset class, the same could happen at a larger scale between large oil energy companies and investment funds. So what type of industry structure will we get in that drive for low-carbon world? But I would like to finish on a – oh, I didn't have it here, but I had a nice slide showing that after all, within the infrastructure sector, the energy sector remains the preferred industry for institutional investors. And I'll finish with that. Okay. Thank you very much, Layla. Yeah, I cannot agree more that government should do the carbon price or carbon tax to give the clear message to the business sector. Unfortunately, the discussion more than decades didn't lead us to any official carbon price or carbon tax. That's a problem. It's definitely the best way to reduce carbon, but unfortunately, it didn't happen. So in a way, for the green financing, as you say, one of the criteria for the investors is does cooperation have the internal carbon pricing for the decision of the investment? That is happening. I mean, TCFD, task force for climate – I mean, financial risk disclosure, certainly internal carbon pricing is one of the things they request. And many major oil companies like Total, BP Shell, they are the member signatory to the TCFD and doing even – of course, these internal carbon pricing is really ambitious enough. That's a question, but $40, $50, $60 are set. And an interesting discussion in ISAF in Japan was that last year, exactly the same time, the ISAF meeting, I talk, I raise the issue of internal carbon pricing by saying there is only one or two Japanese companies who had the internal carbon price at that time. Now, the CDP representative told me in the public discussion that there are 70, 70 companies in Japan has now the internal carbon price. So this is a huge difference because, as I said, 200 Japanese corporations are now signatory to TCFD. So TCFD means they should have a kind of energy scenario for the future. Otherwise, they can – sustainability scenario definitely contain – include the carbon pricing. So, eventually this kind of pressure from the financial sector for requesting disclosure will lead the corporations to what is desirable in terms of the carbon pricing. That is my observation. Do you think so? Yeah, I fully agree. And in all the models that I've seen in various energy companies, international and national, you basically have three main frameworks. You always have a cell with carbon pricing on it, whether you feel it or not. That's another question. But conceptually, you have usually two main methodologies. I mean, you either just follow blindly what you have in the ETS. And thanks to Europe provided a sort of framework for a carbon price. That can be used in other areas of the world, here again conceptually. Or as you mentioned, you can just decide to have a flat what you think is an assumption for future pricing. And that's the reason why at the end of the day we end up having that focus that I mentioned on not only low-cost fuels and hydrocarbon, but also low-carbon crude and hydrocarbon. So that's not an idea that just came up yesterday. I mean, I think the major oiling gas producers have been working on that for the last decade or so. But at the end of the day, I think people like to think of the idea of carbon and other fuels as a stock as well. So that's a stock and you need to just put a price on it. And when you decide to deplete that stock today or in 30 years' time, that's an assumption that you have to make. But I totally agree that most energy companies today have carbon pricing assumption. Thank you very much, Leda. One additional question to you is that what do you think about this climate change and gender? Last year it was, what do you think about climate change in Saudi Arabia? This year is what you think about climate change and gender. Well, not much. I don't feel like an expert in the area, to be honest with you. I'll leave it to my male colleagues to comment on it. Okay. Well, let's move to Richard Cooper. Richard, do you have some ideas about this? But you have wisdom and we know, so please show your wisdom. On the gender issue, I'll start out with that. I have two teenagers, both are highly sensitive to the climate change issue. And the son, no less than the daughter. So at this generation, there's a small, very small sample. I don't notice any difference between the two. So as an American on the panel, I should say, because having set through the plenaries yesterday and today, non-Americans should not confuse the U.S. government position under Mr. Trump with the American position. It's very important to understand that people implicitly, more than explicitly assumed that Trump leads the United States. And he does, particularly, but he does not on attitudes toward many issues. And this is one of them. It happens that two weeks after Trump announced the U.S. potential future withdrawal from the Paris Agreement, the Conference of Mayors met representing 1,400 American cities. And they voted overwhelmingly to repudiate Trump on this particular issue, Republicans as well as Democrats across the country. Now it has to be said at once that not all cities have climate change policies. The city that I come from does, but not all cities do. And the polls continue to show climate change is not the most salient issue, but one of them in the attitudes of Americans. The employer I work for, which is Harvard University, has a very aggressive green policy, they call it. I don't like that term, actually, but it has stuck. And they're doing all kinds of things, including something that hasn't been mentioned, geothermal. We have a geothermal house. I have not been given the financial details on the building of the house, but they've drilled way under earth and used the stabilization of temperature in the earth, both for heating in the wintertime and cooling in the summertime. It's experimental and it's designed to show students what can be done. We'll see whether it works. Harvard has no lack of resources, so I'm not sure it would meet any investor standards on that. So in my remarks I will follow the outline that Fabius did this morning. Technology, finance and policy. And on technology, what is amazing and would surprise anyone who has not looked at what's happened in the last 10 years, how quickly the cost of solar, both versions, photovoltaic and concentrated solar, how quickly the cost has fallen, compared with what it was a decade and certainly due decades ago, and how fast the cost of land-based wind has fallen. And sea-based wind is falling, but it's still much above land-based wind. And the problem with solar and wind, of course, is storage. People talk about batteries. That's too narrow a way to think about it. There are many forms of storage and batteries are only one of them. I know down the river at MIT, they're working hard on batteries for windmills, which are not, they're big at the base of the pylons. They're not for cars, but they're alleged to be much more efficient than lead acid batteries and much less expensive than lithium batteries. But that's being worked on, but we should not forget pumping of water as a storage thing. That doesn't work very well if you live near the desert. There's a lot of sun and a lot of water, but in some parts of the world it works very well. Heat storage, of course, concentrated solar uses heat storage metals, which are heated up to 500 to 700 degrees centigrade, and that retains the heat through clouds and nighttime and so forth. There is hydrogen, which you mentioned, which is a way to store, and particularly if we're looking for motive fuels and thinking ahead, not to next year, but a decade or more. This is a very good use of a way to store energy, and of course there are flywheels, which again come up from time to time, and a physicist will remind you of them, but somehow they've dropped out of the picture in storage, but one can imagine flywheels when we have very efficient flywheels these days. We should not just talk about batteries when it comes to storage, but look at the whole range of potential storage vessels or vehicles. Finance and various numbers have been floated about. I have not tested any of them, but I find the numbers much too large, the ones that I see, but that just may reflect my ignorance, but this is a really, really good time to float securities. Interest rates in Europe are basically negative outside of Italy, and in Japan they're negative for governments, for high quality private or international securities, they're positive but very, very low, and we should increase the capital of the international financial institutions, the World Bank, ADB, Inter-American Development Bank, and so forth, the EIB in Europe, and have them, this is not a strain on budgets, it does imply a guarantee, but this is a very good time to float a lot of fixed interest securities, and according to economic analysis, there's a heavy demand around the world for high quality fixed interest securities, much of which goes into U.S. Treasuries, but it could go into other vehicles as well, so it's a very good time, and we should gin up the international financial institutions, I'm talking about the, not about the IMF, but about what we call banks, but they're not really banks, to engage in this issue more than rhetorically. I know the World Bank has a big program in this to study the issues and make recommendations, they do not do much lending in this area as such, so that could end several, you've mentioned sovereign wealth funds, which is another source of funding, and they're looking around for good yields on secure securities, so I don't see at this moment in time a shortage of finance, it's a question of mobilizing the finance and providing to take care of some of the rith, government guarantees through capital, promises of capital for these international institutions, and policy is the third category, and I was interested to notice that Fabius mentioned carbon tax, I favored a carbon tax for 25 years, as this conference illustrates we, the world, have many objectives besides dealing with climate change, and one of them, in my view, is preserving the international trading system, I see a huge potential conflict between dealing with climate change on a national or in the case of the EU Union basis, and the trading system, because the first thing that firms, private firms and countries will want is protection against competition from countries that do not have a comparable, whatever that means, climate change policy, and once you can see those pressures in the United States, one can see them sometimes openly, much more covertly, within Europe, it's not well noticed that when the ETS, the European trading system, issued permits, they weigh, well, they issued them to nations, and the nations in turn, issued way over, issued them to the steel industry in Italy, to the ceramics and glass industry, and so forth. These are indirect subsidies to these industries, and the way to get around that is to have an internationally agreed carbon tax. The actual number would be a negotiated one. I would start out at $40 and test the waters to see how it would be, and with the proceeds of the tax to be held by each country levying the tax, so we don't get into the issue of international transfers, which raises a whole different can of worms, and countries could do anything they want with the tax, except undermine the purpose of it through subsidies, and so, for example, it could be neutral, revenue neutral, they could give it back to the public in various ways, they could redistribute it, they could hive off a certain portion for R&D on climate change, but that would be up to each country, actually, what they did with the proceeds in my view. My own view is that cap and trade, which is the favored device by environmentalists who accept the principle of market in permits, cannot be made to work worldwide. Europe can make it work, the U.S. were willing to make it work, Canada can make it work, but it cannot be made to work worldwide for reasons we won't go into, but it's an absolute invitation to corruption. You're handing out permits which have real monetary value, and that's a total invitation to corruption around the world, and any U.S. legislator who understood that could not vote for it. If you look at the models of pricing of carbon through cap and trade as in the ETS, they all show that the big canes come from transfers between rich and poor countries, basically, efficient countries that use energy efficiently, and those that do not use it efficiently. And so I strongly favor, I'm interested that Laila mentioned them and this morning on the panel they were mentioned, and cap and trade was not mentioned. I don't know whether that was inadvertent, or whether I'm slowly, very slowly winning the argument. And the final thing I want to say as a matter of agreed policy, whether it's universally agreed is less important, but we should be building no new coal-fired power plants anywhere in the world. We have them, we have a tremendous amount of inertia in the system. We will be using coal for decades because as was pointed out earlier, coal-fired power plant 40 years was mentioned, but with some renovation, 50 years or 60 years they can last. And we have a lot of them around. China is backing out coal as rapidly as it can through many different channels, nuclear, LNG, solar, and so forth. But because of air pollution and harm to Chinese health, they're building coal-fired power plants as part of BRI in other countries. That should be stopped and they should build. I see in my own view is that in the end we'll do solar basically. The end means out several decades and I see natural gas as being the bridging fuel to solar and in particular natural gas is a great substitute for coal in generating electricity as well as other uses. So I see natural gas as the natural, you can call it biogas, any kind of methane basically, as a natural bridging fuel between where we are now and solar power where we need to get to eventually supplemented by some other things. But that's decades away. Thank you. Thank you very much. For this cap and trade thing is an interesting point. I talked to some Chinese people about that and China said they are planning to have cap and trade in the six or seven provinces. Now they are moving out of it. Dropping it. Dropping it because solar is getting so cheap and cheaper than coal, so no need to make any kind of incentives in China. Layla, do you have a comment on him about this tax or carbon price? I think we agree, right? We're agreeing all the way through. So here again, let's not make it complex and let's agree on a price is probably a big word, but at least have some indications and take the first steps here again to get back to the level playing field between the different technologies. And as I mentioned in mobility, the efforts to have all costing approaches are creating perverse effects where you actually favored existing technologies and systems. So at the end of the day, if we want to cost carbon in such a way, let's do it in an integrated way. But let's keep the scheme as simple as possible. Okay, let's move to Kosmin. Thank you very much for this opportunity to be part of this panel. And my presentation, basically, I don't have any slides, but my presentation will be a shameless advocacy for nuclear energy. Why is it shameless? Zero carbon. I'm proud of it. That's why I'm very proud. I'll start with some figures. And basically, today's realities, I think they call for immediate action. And based on IEA data that was vacillated here, energy consumption worldwide grew by 2.3% in 2018 alone. Nearly twice the average rate of growth since 2010. So we're seeing an increasing demand for energy. As a consequence of higher energy consumption, energy-related CO2 emissions also increased by 1.7% at 33.1 gigatons of CO2. Therefore, we are nowhere near the Paris Agreement. And to be honest with you, we will be very far away from it for a long period of time. As an important percentage of CO2 emissions are energy-related, the pace of transitioning then becomes even more difficult. And from my experience in the nuclear industry, two major variables need very fast addressing. Investments in clean energy sources and related financial campaigning. Be it campaigning as a PR initiative supported by the governments to bolster investor confidence in these investments. Or as Layla very well indicated earlier, coming up with the risk hedging mechanisms to make the opportunities attractive enough in today's capital competition. The world energy outlook estimates around 1.1 trillion dollars to be invested in nuclear power by 2040. Which means approximately 46% in nuclear power output. Even though the WEO estimates an increase in nuclear power investments, hopefully nuclear generation will go below 10%. And far less than the required output of nuclear production as per the sustainable development scenario that was shown previously by Monsieur Appet. And I'll take a little bit of a look at Europe. Based on the EU directions of the 2030 framework for energy climate policy, there is a need at least at the European level to reach the targets of decarbonization through means of technology neutrality and common efforts for the application of efficient support mechanisms in areas where market challenges hamper major investment projects as a sustainable transition to clean energy. So this is where I am. I'm a strong advocate for the development of nuclear energy an important contributor to a stable clean energy mix and as a solution for the base load of a clean energy mix. And obviously this cannot not only be achieved by new build and long-term operations of nuclear power plants, refurbishments but more so by extending innovation into research for generation 4 projects. The new type of nuclear reactors that also allow for flexibility and allow for possible hybrid nuclear renewable systems where you can have a small modular reactor coupled with a solar panel and two windmills and they can balance each other out very, very nicely. And Romania, I can tell you very much, endorses this approach. That is why they're supporting the R&D project for a new lead-cooled-based reactor, generation 4 reactor. That's why we're looking at other new technologies such as the molten-solid reactors in France or NewScale in the U.S. And that is why we're part of the clean energy ministerial approach the Nice Future initiative that promotes the benefits of nuclear and it's a branding and international branding exercise to brand nuclear as green energy. And I think that's part of the reality that we need to face. And to endorse that, I'll make a quick allusion to an MIT study that was to decarbonization that was launched in 2018, I believe already, which adds nuclear energy is a firm source essential to achieving a deeply decarbonized electricity sector. For most regions, EU included, meeting the 2050 targets requires a mix of resources, mainly firm resources, fact which should be fully accounted for in decarbonization policies and meeting targets. Policies that foreclose the role for nuclear energy directly impact investments in nuclear energy and directly increase the cost of decarbonization. Policies that support decarbonization via a single source directly impact not only the cost and pace of decarbonization but wholesale markets, generators, energy systems, and end consumers. And I'll invite you to look into the study because they do a very, very good demonstration of this thesis. And out of that I've extracted from the World Nuclear Association the world's, how the world would look like in terms of emissions without nuclear. And in 2018, the world was supplied 2,563 terawatt hours of electricity from nuclear sources. If we didn't have nuclear power and say we've replaced it with coal, I didn't say lignite, I said coal. We'd have an additional emission of 2,276 million tons of CO2. If we were to go to natural gas, we'd be looking at 1,278 extra million tons of CO2 per year emitted. So I think that says a lot. And if a few years ago financing was the last thing to consider, I think now it's actually the first. Because a few years ago we were thinking about the politicization, how if we shut down, we don't shut down security. I think we've proved that nuclear safety and nuclear security is evolving very much and with the new technologies we're right there. And with this realization under COP24, and a lot of the governments looking, turning back and reconsidering nuclear as a green source of energy and branding it as such, or taking policies not for a green source but low carbon energy, which is probably the more scientific way to put, to frame a policy, then it's up to us companies to get to do our job. And unfortunately we cannot really raise a lot of money for nuclear if we don't have state support. Because de-risking nuclear is paramount. And that is from the initial stages of a project. And it has two potential risks. A nuclear project has three risks that need to be looked at. The first one is construction risk, which we've seen recently that a lot of projects have become over budget and not necessarily in time. A lot of the large companies, service suppliers such as Westinghouse or SNC Lavalon can do, even a number of the South Korea and Chinese nuclear companies are pulling out of the lump sum turnkey PC model. We know that the lump sum turnkey PC contract even led to the reorganization of ARIVA, which says a lot about where we are in terms of construction. And that has more to do with the way in which we manage costs in which the services have become more efficient and governments need to be part of a solution, or financial institutions need to be part of a solution to come out with surety bonds or ways to finance also through consumer driven needs, this type of new builds. And here, for example, I'd like to put in light the regulated acid base model and the contract for difference model being used by Hinckley Point in the UK. The second part, which becomes more interesting here, is regulation, regulation and political risk. I think this is probably the number one risk that is pushing investors away from nuclear projects outside of the construction risks from taking equity into nuclear utilities. And this is mainly due to the fact that nuclear is highly regulated, it has become also over-regulated, if I were to say so. You need about pieces of nuclear spare parts weight in paper to move it from one point to another. So I think that we've exaggerated a little bit on the nuclear safety side. We're not saying that the processes are bad but the bureaucracy around it have made it a little bit unpractical. And with each bureaucracy that's being layered up, you hire more people and you print more paper and actually that drives optics even higher. So obviously that needs to be, and it has a financial impact on the project. So here is more of a government's approach to how they manage bureaucracy, but it's also depoliticizing because say you've invested in nuclear, you had an equity stake in a nuclear power plant that was put into function in 2008 in Germany. In 2010, you have just finished your construction, you as a fund manager, you're looking to get a 20-year return on it, and 2010, boom, second year of operation, your plant is shut down because of a natural disaster that had unintended consequences and didn't necessarily realify a problem with the nuclear industry. It was spun off in a political campaign and then created a shutdown for nuclear not only in Germany but mostly in Europe because we have to be pragmatic about it. I think that up until two years ago, the European Commission was afraid to say the N word and here we're talking about nuclear. And secondly, we also had a very difficult time. We've had a full industry shutdown. So the new focus should stem from aligning economic welfare with long-term interests of the society because we're talking about decarbonization, we're talking about security of supply and maintaining our lifestyle. We still want to have zero emissions but as Professor Masuda said earlier, we still like it to be cool in this room and I think that's very important. Thank you. There's a lot of uphill battle for the nuclear. I cannot agree more. It's a tough, after Fukushima accident. It is really challenging. Let's move to Masuda-san. We have 20 minutes to go so keep it in less than 10 minutes. I'm sorry. Very well. Thank you very much Tanaka-san and thank you for coming all. I'll be talking about some issue of generational divide on the climate agenda. Climate change is the result of accumulation of CO2 emissions or greenhouse gases in the atmosphere well over the last 200 years. Assessment report 5 of 2014, they covered long range from 1970, 50 to 2011. This is the magnitude of period we have to cover and that means what we do today with all these efforts do not necessarily benefit the generation, mature generation here except the younger ones. And that means why we work like a hell if we cannot get the benefit of deleting climate risks? That is a big issue. Already climate change is eating into the heart of the system. Today and yesterday, there is an enormous typhoon hitting the heart of Japan. We call this super typhoon Hagibis. Seven million people evacuated for precursor measures centering Tokyo area can imagine seven million people evacuated and already several people have died and it is the largest ever hitting Japan over the last 60 years and this could be the norm in coming years also. Climate actions, mitigations in particular are of very long term nature because of 200 years scale could be shifted to another 100 years or so and it's not, unfortunately, it's not appealing to politicians. Politicians, I sympathize with politicians because they face with so many agenda, employment, pension, education, healthcare, building infrastructure, all these agenda and because they are pressed with the pressure of re-election and election, they like to shift their attention to rather short term issues which they can sell to the voters and quite often the long term issues could be set aside or left behind unless there is many room to accommodate all these demand. However, however painful we have to deal with climate issues not sitting aside and we have to overcome the generational divide and that kind of issue I know there are a lot of questions to what Greta Thunberg said, UN and I saw many articles and videos in YouTube and elsewhere telling her what you have said is brainwashed or exaggerating the risks but it's not the way to persuade younger generations. I saw many big speeches in the UN Climate Summit, big speeches 100 times gathering several hundred people, several thousand people but speeches don't mean anything unless underpinned by concrete actions and the history shows very sad record. For example, if you remember there was a famous Rio summit in 1990 many head of states came in Rio and wrote a wonderful declaration of action oriented one. They committed they will decrease CO2 emissions to 1990 level by the end of the 20th century in a matter of 10 years they promised they signed. But did it follow the actions? No, nothing happened rather more CO2 emissions accelerated because of economic growth everywhere and real action was taken in 1997 at COP7 of Kyoto Protocol but Kyoto Protocol took 80 years to be effectuated because of signatory they need ratification by many countries so already 15 years has passed with no actions after Rio summit in 1990 and we should not repeat all these mistakes made what greater said at UN nation shocked me because I was part of energy policy making together with Tanaka and others and I am partly responsible for that and I think we have to do something and we cannot leave all these younger generations left behind or keep the generation gap and narrowed because we are responsible for the next generation and future generations I am suggesting something very wild yes our generation was challenged by this young little girl from Sweden on 23rd September at the United Nations that challenge should be responded with sincerity and with concrete steps on top of what we have agreed upon in Paris in 2015 how Japanese government can respond to her accusation yes Richard Cooper said no coal fire plants but my mother country is now constructing or planning 44 coal fired power plants because of cost issues because of economic growth first it is natural for the government and industry desire for that option but this is not the answer for the future generation there should be a coordinated response not regretting in the past but coordinated response to this young little girl representing future generation next year at the UN climate summit and that should be widely shared by the entire population of the planet then that will be the first step to narrow the gap between us and the forthcoming generation thank you thank you Masuda-san for kind of confessing our sin but let's move to thank you Arisa-san for waiting so long but you will share with us about the great success story in Morocco about renewable energy I guess thank you thank you thank you thank you this situation at this time created a real pressure on the economy of countries and on the international community especially on developing countries and the most vulnerable like the US where countries are less advanced and the most vulnerable are the countries to find an alternative to these fossil energies most of the countries in Morocco didn't want to make up for their ambition and their desire for social and economic development and above all they should respond positively to the aspirations of their population against the eradication of poverty and therefore the economic development and the development of their life in Morocco started to analyze and decrypt the different trends especially the trends around renewable energy technologies of renewable energies and we understood at this time that seeing the huge investments in R&D, especially in Europe but also in China and the US there was a positive trend around these technologies and so thanks to the vision of Saint-Majesté the King Mohammed VI Morocco proved to be brave and brave at this time by engaging this time which today in posteriori is a very conclusive judicious and pertinent to all points of view but at the time, let's remember it it wasn't totally obvious I won't really talk too much about since we all know it and I think the last year it was on board so this time it allowed us to see an expansion of the objective of 42% at the horizon of 2020 and 52% at the horizon of 2030 but I will develop a lot more on the current situation and the great potential that can represent renewable energies for cooperation and regional integration that's the point I will really focus on and I will try to be quick I mean today the paradigm has completely changed me it's completely metamorphosed since ten years ago it was a manichean choice between renewable energy and fossil energy fossil energy sinned by the lack of interest around environmental issues but presented an advantage to the economic effect that was certain compared to renewable energies sinned by this lack of economic competitiveness and we see that at the time everyone was focused on fossil energy and people didn't talk too much about renewable energies can we imagine a moment to come back to fossil energy because what would happen there would be such a pressure on the price that it has also the growth that it is currently at a ton but it would have a negative impact on the current growth so the pressure avoided by the massive investment in renewable energies since I remember the renewable energies whether it's the wind when it's sold for everyone when the sun shines for everyone if it's exploited it's for the good of those who transform it and the people who benefit it's lost for everyone so the renewable energies are marked by fossil energies as there is no competition around renewable energies and so this improvement of the economic per-equation around the renewable from the multiplication of investments and so from the scale that is engendered which means that the more investments are made the lower the prices so without competition I repeat it between the different countries so it's a real cooperation vector between the countries and I will give you some concrete examples of cooperation that were initiated by Morocco and that have allowed to launch a certain dynamic so we remember that the COV21 committed a strong addition a strong mobilization of the greenhouse effect and here in Marrakech the COV22 wanted to be the COV of the action so the participating countries and the member countries had to prove the ingenuity of imagination to conceive concrete actions and make great words concrete actions that will have a real impact on the development of renewable energies and directly reduce greenhouse gases 5 countries were associated during the COV22 in Marrakech to increase the part of the renewable energies in their energetic mix by integrating the renewable energy markets between these 5 countries are France, Germany, Portugal, Spain and Morocco which initiated what is called the 7 Roadmap Sustainable Electricity Trade Roadmap between these 5 countries we followed a series of benefits that gave the political comfort necessary to these different countries since these different studies with the support of the World Bank of the European Commission and the UEPM have allowed to show that each of the countries at different levels could generate tens of billions of benefits by integrating the renewable energy markets and this ended the signature of a new declaration to the European Commission in December and then I just came back from Madrid last week where the final discussions around a binding between 5 countries are almost finalized and which would give the signature before the end of the year of an engagement between these 5 countries to integrate the first part which is the cross-border green corporate PPA between these 5 countries so it is a very important news that will allow a massive development of renewable energy since the more the network is enlarged the wider the renewable energy to end a very important last action and I have in the sense of Mr. Masuda since we also had to come out of the big non-productive discussions and during the climate action on the 23rd of September my president Mr. Mustafa Bakoury next to the president Mr. Malaoui the president of Ethiopia the president of Abad launched a new initiative to benefit the less advanced countries and small state-of-the-art which aims to accelerate sustainable energy in these different countries with two major announcements from the beginning of next year which is for the real birth of this initiative which I remind you has been selected among more than 250 proposals made to the General Secretary to be presented on the 23rd of September and already benefited from the support of more than 80 countries and institutions so the announcements are the accompaniment of a list of 10 countries for the development of ENR mainly in Africa and the second is the development of a power center for sharing expertise and strengthening of the capacity I will finish here saying one last thing we have a conviction or deeper that renewable energy are a real factor of political and economic cooperation how many wars we have because of the rarity of resources and because of the race of countries and the competition between countries to seek these resources political cooperation around renewable energies comes from the fact that no country can benefit from resources from another country when the sun shines in a country it shines in this country and therefore the lack of competition around renewable energies gives the whole sense to the political cooperation economic cooperation because maybe for the first time the most advanced countries have a chance the chance is that when the wind blows or when the chance is to get out of the defects they have known in terms of fossil energy how many countries export their fuel their raw oil and no matter the oil or the refined fuel today, thanks to renewable energies it is impossible to do it transformation and added value industry is linked to this transformation and must be localized and can only be localized other than in this country that's why we talk about economic cooperation and thanks to the impulse that his majesty mainly in Africa the meaning of the African age who says that if you want to walk fast walk alone if you want to walk far walk with the others takes all its meaning in today global politics which begins in Morocco through Mazen for the development of political and economic cooperation around renewable energies thank you very much Alisson yeah I think renewable energy in Morocco is a really great transformation in the economic system in this area and especially the regional integration of the grid line is a very interesting example and probably a model for the northeast Asia that is my argument Japan, Korea, China especially between China and Japan we are serious problem political dispute is getting to the very critical level even so we have a power line grid connection with Korea, China, Russia I mean economic cooperation and collaboration may lead us eventually toward peaceful well Europe is not as peaceful as before but we may move into the kind of integration in the future so I really wish you a great success by the way we have now minutes left if there is any question I will give you the floor thank you I just want to add one thing we talked about big power but we should talk also about decentralized power today it's amazing what's going on we have projects on wind and solar but also we are helping farmers to switch from diesel pump to solar pumps we're talking about 300 megawatts today installed just for solar pumping we are talking about helping people to reduce their energy consumption energy efficiency is a key also at the same time as renewable energy we need to have this approach with energy efficiency another point when you mentioned and Mr. Appert talked about biomethan here in this city in Marrakesh you can visit the station transfer the treatment des eaux biogas coming from those water treatment station and that's why we are looking for all technologies as Mrs. Ben Ali talked about many solutions are here but we have centralized ones with a very low price we're talking about 3 cents per kilowatt for the wind, 4 cents per kilowatt for PV it's amazing what's going on the price and Mr. Kopa mentioned that it's very important how the impact for power is one thing but power for the population directly many solar roofs in the industry are on the development today in Morocco we're talking about thousands of megawatts that can be installed in the future just decentralized and it's as important as the other part thank you thank you very much for very good input to our discussion just as Mr. Masuda-san said we need action not only discussing the things like this can we visit the plant biogas plant in Marrakech as a group that is much more interesting than discussing the issues for in an endless manner please Chairman, very rapidly I think biomeitin production is on the verge of rapid development the reason is I'm involved in an enterprise in Montreal that does urban waste management all kinds of urban waste and we started five years ago to produce biomeitin and we do produce it we do collect it we do clean it bring it to pipeline quality and then we re-inject in the pipeline and through swaps and through North America it has become on our P&L the first line for revenue and contribution to the EBITDA so it's a real success and in South America nowadays it's they're going through a privatization of this industry and we are attracted of course by that so are the funds, the large funds because they see in urban waste equipment installations the same thing as they saw when I was in the electricity sector as a huge potential for them to invest and we've done that in Chile and Peru and Colombia all over South America. Secondly it's another very different remark I do agree fully with you Chairman that it's a very good idea to interconnect Siberia with North Korea and South Korea because in Siberia there's a huge ideal potential and that would I think support peace efforts between the North and South Korea that were my two remarks. Thank you very much the time is up but I think we had another interesting discussion starting with Bio Meton and congratulations Olivier that was a very interesting input and we have certain discussion about this issue Well thank me for the six panelist for the interesting discussion tonight and Chairman's role thank you you most welcome let's see the Bio Meton plant next year visit also some solar farms maybe that is much more fun