 So before we start, let me just say that I hope this energy at Stanford and Slack, this boot camp, so to speak, has been rewarding, has been educational. I hope you're learning about Stanford. And this session that we are going to enter in the past, I would say, because of who we have as a guest, has been really the highlight for many students in the past. We have with us someone who is very unique. In the history of the United States, there are only two people who have held four cabinet positions in the United States government. Secretary Schultz is one of them. He was the Secretary of Labor, the Director of the Office of Management and Budget in the White House, Secretary of Treasury, and then under President Reagan, Secretary of State. In many ways, he was the architect of bringing the Cold War to a peaceful end and opened up dialogue with many countries, including China and many others. And he has been deeply involved in energy, as you will know now. And right now, he chairs the advisory council of both the pre-condition for energy at Stanford, as well as the MIT's Energy Initiative. So he looks at both of them. But most importantly, he's a Marine, who served in World War II in the Pacific. And I made the mistake last time of introducing him as a former Marine, and he immediately corrected me, there isn't a former Marine. Once a Marine, always a Marine. So it's a great pleasure to have you here, Secretary Schultz. You have had a long history and energy-related things. And what I'd like to do is to first go back to that history, what we learned from that history, and then look ahead to some of the opportunities and challenges we have. Let's go back to your time as Secretary of Labor. And something happened. President Nixon asked you to do something. Tell us what happened. And at that time, we had a quota on imports. And President Eisenhower had thought that we imported more than 20% of the oil we used. We were asking for trouble in national security terms. So there's a quota. And we're starting to bump up against it. So the president asked me, as Secretary of Labor, why me, I don't know, to chair a cabinet task force on what to do about it. So we studied the problem. We had a very good group and good staff. And we made a series of recommendations that seemed obvious, like, for instance, we should have an insurance policy in terms of a big storage of oil. So we'd protect ourselves. We should change the quota system to a tariff system so we get the revenue and not Saudi Arabia. And so a number of recommendations were sort of obvious. And the president pat me on the head, said, thank you. Good report. It was printed, published. Had congressional hearings. Everybody thought it was a good report, but nothing happened. So I scratched my head. I concluded that it takes more than an interesting strategic analysis to get something to happen. Years later, I'm Secretary of Treasury. And here comes the Arab oil boycott. Bang, it hit. It was a huge thing. Gas stations closed on weekends. It was a big impact. And something things got done. And it was fortunate we had all these recommendations. They all got put into effect. So I conclude, number one, it takes some impact to get something done. And two, you'll get something done if you're ready. If you're not ready, the moment might go away. So it's always important to be ready for when the moment comes, you never know when it comes. So those are two things I learned from that. Then later on, when I was Secretary of State, in our State Department has a little science group and working with the Environmental Protection Agency, we became convinced that the ozone layer was depleting and that it would have a gigantic global impact. There were some scientists who disagreed. But I had two private meetings a week with President Reagan and we talked about it and he became convinced that it was a real big problem. And then we did something that nobody ever does anymore. He went to the scientist who didn't agree and put his arm around him and said, we respect you, but you do agree that if it happens, it's a catastrophe. So let's take out an insurance policy. So they agreed on that. That didn't get them on our side, but we got them off our back. And the result was we moved forward with other countries and out of it came something called the Montreal Protocol. We had something that people could agree to do, actually do. And it worked. It really worked. It was astonishing. But anyway, it was a lesson again in how to work with other people to get something accomplished. And this was a global initiative. So another little piece of learning. And then I have come back from office and I've been here and MIT, I have my PhD from MIT and I taught there for a while, so I have a connection to MIT. And they asked me to chair this energy task force and I work with Arun and Sally here. And I see the scientists are really doing things. This is the decline in the cost of solar energy didn't happen by accident. It happened as a result of the R&D that's been doing on here and elsewhere around the country. So we try to get all this together. I think it's very important. But I also think you have to do something that will really get people's attention. And I've been proposing it in the first proposal was a man named Gary Becker who is the conservative economist, Idle. And he and I wrote a piece in the Wall Street Journal calling for a revenue neutral carbon tax. Have a good substantial tax. Use the price system and people will react to it and find ways of doing the things that will reduce their carbon. And we made a revenue neutral so there's no fiscal drag connected with it so it's not a tax, usual sense of a claw in the economy. And also by distributing equal amounts of money to each person, say with a social security number, you make it a progressive tax. And that is caught on every economist you ever heard on is signed on to it by now. And lots of companies have signed on there's a piece of legislation. It's gradually beginning to take hold. And we say to people who don't like government regulation, we say fine, get rid of the regulation and put a price out there. A good substantial price and people will react as they wish. So I keep working on that. But I also enjoy very much talking with Arun and Sally and the MIT field about what the scientists are actually doing and the kind of things that's available because the key to the Montreal Protocol was we had something that you could do. It wasn't sort of an abstract do something, do this and it worked. So if looking at the, from your experience of the Montreal Protocol, which is arguably the most impactful global environmental agreement that the world has ever seen, looking now ahead, if you look at what happened in Paris, Paris Agreement that everyone's proud of, before that. Not everyone. Not everyone's proud of. Before, the year before that, the United States and China, actually that was a very important meeting because Copenhagen did not produce much. So China and the United States got together and said, okay, if we get together, maybe the world will come along and that led to the Paris meeting where we had the agreement. Now, given that, if you were to look ahead now, I mean Paris Agreement was more of an acknowledgement that there's a problem. It's a very important piece, but there's a problem. If you were to advise the next president or this president as to how to lead for the next decade to address climate change, what would you tell them? Well, I think that it's obvious. First of all, there is a deep problem and it has severe consequences going forward. And with all due respect to the science, which I appreciate, you don't have to rely on science. All you have to do is use your eyes. There is a new ocean being created in the Arctic. Why? The ice mass over Greenland is melting fast. Why? The Great Barrier Reef and other reefs in the Caribbean are all deteriorating. Why? And the answer is always the same. There is no question, no question, that the earth is warming and there's no question that there are consequences that can be pointed out. It's also true that this is a global issue. United States is biggest of this, can't solve this problem by itself, nor can China nor can anybody. It has to be done on a global basis, as with the Montreal Protocol did. So the Paris Accord was not much in terms of commitments to do something, but it was an acknowledgement by the global community that we have a problem. That's the beginning. You can't solve a problem until you've got one. And so that was significant. But I think we now have to find ways to have something you can do to go with the knowledge that there's a problem. And I think if we had, which is not the idea of a tax or a price on carbon, it's quite widely used around the world. And I think that's a way of inducing people to take some kind of action. But then we have to have things you can do to say, okay, I gotta do something, what do I do? That's where all this R&D comes in. And I think we should have a much more strong program of that. It's interesting to me, here at Stanford and at MIT both, but I'm sure it's true in other places, that the private money is about three to one of the public money. But if there weren't a public fund, the private wouldn't come because people see that there's a consequential program going on here and they want to know what's going on and we say, okay, come on in, but pay. I mean, it's pretty good at that. I don't know. So we have a lot of support and the R&D is important. I think it could be more, but still it's important to come up with these answers. And we ought to do more, I think, than we currently do to reach out to other countries and get them engaged in R&D. And they want to. Yeah. I mean, when I was in the government in RPE, an RPE was still being put together and stabilized politically within the United States. But a lot of the other governments saw what we were doing. We created RPE. So a lot of the governments saw what we were doing and they reached out to me and said, hey, can we create an RPE? The Russians, the Japanese, the Chinese. And I said, absolutely. The Japanese are building coal plants. How can they do that? So, and I used to tell them that, absolutely, I will help you. Of course, I can't give you money, but I'll help you think about what kind of people you want, what kind of organizational structure you want, and we should have a network of RPEs all around the world, partnering, competing when they need to, and get the research enterprise in an international way and have these innovations going on all over the world. Now, we happen to have a good scientific infrastructure out here in the US, and so we will do well in the MITs and Stanford's and many other places. But coming back to the international, I want to come back to the domestic later. Internationally, I think the Paris Agreement was an acknowledgement that there's a problem. But frankly, given, we need to acknowledge the urgency of the problem as well, which I'm not sure has been really acknowledged well. If we now acknowledge the urgency of the problem, and which means that we need organization and institution in terms of international governance, if you are to do things like in throwing particles in the air, in the atmosphere to reduce solar radiation, which is now called geoengineering, that could have consequences many parts of the world. Some people, some countries will warm and that'll be to their benefit. They could be flood somewhere else. So we need an international body for governance. And so not just the technology. So if you were to think about the governance, international governance of geo-scale things that we might have to do, how do we prepare ourselves for that? How do we think about it? Well, people have to become convinced. And we do have a vehicle for doing it. That's the United Nations. And the United Nations can be a useful way to go about things. It's not, you in itself can't do anything, but it's a way of organizing people together to get them to do something. So that's the way I would work at it. So who would you, obviously in the impact of climate, all countries in the world are part of it. Would you, if you were to go ahead and do this, some countries like Russia may actually benefit from the warming because the agricultural land goes up. So what would you tell them? Well, they don't benefit because they've had heat waves in Moscow that have been killers. It applies everywhere. Obviously, if you're way in the North and things get a little warmer, you can grow some crops or whatever. And they are working hard on the Arctic, Russia is. They have something like 15 nuclear-powered icebreakers. We have zero. And so we can't complain about them. They are going at it aggressively and intelligently. But I think the UN can be a vehicle and people come together. Actually, there is an Arctic Council, for example. It's just the countries with boundaries on the Arctic that have gotten together voluntarily and it solves problems and works along pretty well. So I don't think we should be thinking that because Russia or China is something of an adversary that we can't work with them. We can work with them. And China, it's tragic what we're doing. And the United States has to take a lead. And the President doesn't believe in the thing. So it shoots it in the barrel. We have to wait for a new President. So if you were to now look at the impact of climate on, let's say, sub-Saharan Africa, there could be adverse effects to the point that there'll be significant migration then. And I think the migration related to climate would be amplified from where they are, whether it's Africa, Asia, and other places. Bangladesh may get flooded and people may move to other parts in the neighborhoods. How would you, if you were the Secretary of State or if you were the President, what would you be thinking about now planning for it and putting some kind of a framework to manage this? Well, let me put this all in a little bit broader framework. I think the world is now on a hinge of history. We're at a point where things are going to be very different in the future. It's kind of like right after World War II. After World War II, we had some gifted people here with names like Harry Truman and Dean Atchison, George Marshall, Clayton, Will Clayton. And they looked back and what did they see? They saw two world wars. They saw the first one was settled in rather vindictive terms that helped lead to the second. They saw 56 billion people were killed in the Second World War. They saw the Holocaust. They saw the Great Depression and the protectionism and currency manipulation that aggravated it. And they said to themselves, what a crummy world. But then as distinct, after World War I, the United States withdrew. After World War II, they said, we're part of it, whether we like it or not. And they set out to give leadership. Bretton Woods really was the conference laid out the trade rules. And that was attended by 44 countries and the leading boys were John Maynard Keynes and Englishmen. So it wasn't like the U.S., but the U.S. was a convening power and people came and constructed results for this game. And that went on and on. And by the time the Cold War was over, the security and economic commons had been created from which everybody benefited. It's not a bad thing when other people benefit. We don't have to have a win-lose approach to things. Win-win is better. That was our approach. At any rate, that commons is falling apart. And so we're at this hinge of history and here are the things that are happening. The populations of the world are changing radically and rapidly. Every developed country in the world has low fertility and rising longevity. The age structures are being turned upside down. And most are losing overworking age population fairly rapidly. That's true of China, it's true of Russia, it's true of Germany, it's true of Japan. Probably not true of the U.S., Australia and Canada because we're immigration countries, or at least we have been. And we want to keep that, that has been a strength of the U.S. economy. I remember one time, Lee Kuan Yew came here, he was the guy who built Singapore, he was a friend of mine. And he came to San Francisco and I said, what are you doing here, Harry? We're glad to see you. He said, well, there's something going on down around Stanford Coast. You guys, Americans call Silicon Valley. And it sounds interesting and I think I want to find out about it maybe something we could do in Singapore. But the Americans are doing something underneath. I said, how are you going to go about it? He said, in order to learn about something, you have to be part of it. So we're going to start a little Singapore venture capital fund and be down as part of it. And I said, well, what you're going to find when you get down there is there are people there from all over the world. He said, I know that, but it could only happen in America. So that's an edge that we have had in this country and we need to keep it. By all means, it's also true. You go to any agricultural area and they'll tell you we're desperate for people who can pick the strawberries. So we need to have this immigration flow. We don't want to cut it off. But my point is that we're at a very important moment in the history of the world. And your question about migration is part of it because the world population will continue to grow because fertility is still relatively high in Africa in some East Asian countries. And although it's beginning to come down, you give women some education and something to do outside the home and fertility comes down. And so that goes on all over. But still, I think there are many of these areas that are going to be subject to drought due to climate change. So there's going to be migration. And right now, it's not going well for migration. But if we identify the problem, and if I were there, I would be saying here is the problem. Actually, the people who want to migrate fit the age needs of the countries that are losing population perfectly. So we need to reach out and emphasize education and training so that if somebody wants to migrate, they bring something to the party. They're not just somebody who's going to be on welfare or whatever, they work. And they'll do things. And that can be done. But it takes a major effort. But I think it's overriding all this. It's a climate issue. But I think the climate and the proliferation of nuclear weapons that is taking place, they're the two threats to our civilization. Nuclear weapons can wipe you out. And the climate can wipe you out. So we have to work on these. Coming to the United States now, you've always told us, taught us, how to think about energy and the balance between an environment, economy, and security. And any decision that we make about energy has to be balanced in that respect. But as we are now looking at the nexus of energy and climate, it is not just energy, it is agriculture. It is the Department of Interior that looks at land use. It is the Environmental Protection Agency. And if you look at the structure of the United States and the Department of Energy, of course, it's a big chunk of the Department of Energy's nuclear. Two thirds of the budget has to deal with either managing the nukes or cleaning up what we did in 1940s. Given all that and looking at seriously addressing climate change from the United States point of view, how should we think about organizing the US government? And that means not only the executive branch, but also in the legislative branch to address it. And including the states. The states play a big role as well. Well, I think in the federal government, at least in my experience, people will work with a department that gets the finger pointed at. The Montreal Protocol, the State Department led the way. The Treasury Department is a natural leader on things. A lot of the domestic parts of the US government were spun out of the Treasury Department. The Office of Management budget was a Treasury development that was spun out. So people looked at the Treasury. The Coast Guard used to be, we started the, speaking of former Secretary, we started the Coast Guard. In the early colonial days, Alexander Hamilton, our first Secretary of the Treasury, was, most of our revenues were from tariffs and people were sneaking stuff in. So the Coast Guard was started and they're now in the Department of Homeland Security and they're struggling with their budget. I said, you should still be in the Treasury. Then we'd have the money to do the things you want. But Treasury and State are leading organizations, obviously, depends on the money. But what the President wants to do, you can work it out very well. But you have to have a President who understands all this and works with people, not against them. So we have a problem right now. So let's say we have, I mean, who knows what's gonna happen next year in the election. But if there is a change in the White House, we may have an opportunity to do something and as you said, we need to be prepared. So what should we be doing now to get prepared should there be a new President coming in 2020? Well, we should be doing, working hard on our energy R&D. So we have things to do that are sort of stockpiled and used. It's interesting to me here, for instance, we have our scientists and engineers working on stuff. And we have companies who are paying attention and people say, aren't you afraid in an academic institution to have a company around and I say, no, what do we care? Silicon Valley is just a Stanford satellite. We don't understand these things. And the university is good at basic ideas and getting something so it's usable and scalable, but we don't know how to make a commercial operation out of it. But they do. So it's a good combination. I think this is the combination you want. And I think companies more and more are very much aware of the need to do things in a compatible way. ExxonMobil, for instance, the biggest oil company sponsors a revenue, they're with us on the revenue of carbon tax. Now they do a lot of R&D themselves and they're part of your program. And they come and they bring ideas and they have good people. So we need to work with people. The way we look at it is that if you really want to make impact in energy, you need scale and you need economics to bring down the cost. And at a university, we don't have scales. We don't have factories out here. We don't have plants. Industry has that. But they're looking for new ideas that they may not be able to do in the long term. So it's a beautiful synergy between- Also true in defense. I mean, you've got security and the defense department is really concerned about, I mean, look at Norfolk, one of our big Navy yards. It's flooded and warmer seas are raising and making it difficult. So they know that they have a problem. They're working on it in one way or another. So we have to look at the security needs as well as the economic needs. I'm going to digress a little bit and have a think about your questions because we're going to leave half the time for your questions for Secretary Schultz. I'm going to digress a little bit because of today. We're on the 18th anniversary of 9-11. And as you have pointed out many times, terrorism is not going to go away. We have to manage it in some way. How have we done? And how should we think about managing it in the future? Well, I think it's a good analogy because it's like the energy problem. I used to be in the construction business. So I want to give you an analogy from that. If you ask me as a construction guide to build a bridge across the Potomac River, I sink my piers or out of my steel. I build the bridge problem solved. You can drive a truck over it. If you say to me, build the bridge in such a way that there are no lost time accidents while the bridge is being built, I put up some guard rails and I think I've solved the problem I've lost because it's not a soluble problem. It's what I call a work-out problem. And if you work at it in terms of safety, continuously, aggressively every day, before you go on a vector job, no matter who you are, you have to have a safety briefing. That's not only a briefing for you to do things in a safe way, but if you see anything at all as you're going around the job that looks like a problem, speak up not after you leave the job right now. So we would have jobs that would go for lots of men hours without any lost time accident, but it's because you realize it's a work-out problem. Now I think the terrorism issue is like that. You're not gonna sob it, you gotta work at it. And if you deny the caliphate territory, that's a big thing, that's good. But you can't expect it to go away. It's gonna be there and you have to keep working at it. And it's not pleasant, but there it is. I think this energy problem is like that. It's not gonna sob it, you gotta work at it. And the more aggressively you work at it, the more you're gonna get somewhere. And you will see results like if the rate of warming declines, that's a big result. Right now it's going the other way and it's getting close to being out of control. I think I'm really worried about it. I think the urgency of the problem, you guys remember the pop quiz I gave you and then also the talk by Chris Field on Monday. We have about let's say 10 to 20 years. The next decade or couple of decades are gonna be so important. And this is your contributions will be very important because if you don't take care of the next two decades, we may hit a tipping point that'll be very difficult to reverse. And in fact, the cost of doing that will be much more than what we could do now. We're already close to it. I mean, we already have a big problem. It's here. I have five children. I have 11 grandchildren and I have six and three quarters great grandchildren. I have a granddaughter who's gonna deliver in October. But so I look at these little kids running around and they are curious about everything. The oldest one, a great granddaughter was eight and she called me up on her eighth birthday to tell me she's eight years old. But you watch them, they're curious. Every once in a while, they learn something and look up at you and they'll say, hey, look at me, I just learned something. So you realize curiosity and a desire to learn are built into us. It's in our natural way. So we need to encourage that as best we can. But I look at them and I say, what kind of a world are they gonna inherit? And what can I do to make it better? That's my motivation in life right now. Because I'm almost 99. My future is limited, but their future is way ahead of them. On that note, let's open it up for questions. Who wants to ask the first question? Let's get the mic to this gentleman. Say who you are, which country you're from and ask the question. Hello, I'm Remy, I'm from France. And I would like to, you told us before that you believed in a world where countries could work together to solve climate change. And I wonder, do you truly believe that at least in life till next four or five decades, that especially big countries with big interests in the world, because the United States, India, China, or maybe to the European Union, could really play the fate of the world before their own interests. And what I mean by this is like, if there is an agreement, for example, for the United States, where the United States will lose a little of its position in the world, but it would benefit the entire world, do you think that the US will be ready, like make compromise for the entire world, even if it means reducing its own interest? I think we should have the attitude that if we can do something that's constructive, we should do it. It will benefit us, but it'll benefit other people too. One of the things I don't like about the current way of conducting our affairs, and it seems maybe we get ourselves in a position of saying, you do something that, I'm gonna hurt you to the point where you do something to get rid of that hurt in order to do something for me. That's not the way to go about it. You look for win-win situations where, if something happens, we both win. That's the way to get something accomplished. And I think the United States should be in that posture and have that point of view. And it's possible to work with China and Russia. I did it, and we resolved a lot of problems. Gorbachev was a fantastic guy. He came after I left office, he came here, sort of to see me. It was a fantastic, beautiful day. The Soviet consulate, where he stayed, looks out over San Francisco Bay on the Golden Gate Bridge, a great site. They rode down Route 280, one of the most beautiful highways in the world. And he came in to Stanford over Palm Drive and he ran the oval. He got out of his car and he looked at me and he said, George, I see you now live in paradise. A little while later he said, you must pay high taxes to live in a place like this. I said, man, are you perceptive? But he asked to have a session with some of the leading lights around Stanford. So I organized a group for him. You had, probably we had to be a Nobel laureate to make the cut. But I had chemists, chemical engineers, mathematicians, physicists, economists, and so on. And we had an earthquake expert. And he said to me, I had a preparatory session with them all. And I said, you have to learn how to say in about four minutes something substantial in your field, what you have to do it in a clipped way. And the earthquake guy came to me and he says, in San Francisco, we had an earthquake of such and such a size. And some of the older things had problems and most of the newer stuff stood up pretty well. In Armenia, they had an earthquake about the same size, about the same time and everything fell down. I said, why don't you just say the first part? So we go around the room and Gorbachev answered in substance to each intervention. It was dramatic example of the guy's metal range. Came to the earthquake. Guy said about San Francisco and without a minute's hesitation, Gorbachev said, we had an earthquake in Armenia about the same size and everything fell down. And he said, you have good engineers, we have good engineers. Our problem is we can't get people to build things according to the engineering specifications. What a penetrating observation and deep observation. But anyway, you can work with people as we did with him. You can work with people in China. When I became Secretary of State, I found our relations with China were to my surprise, not in very good shape. So I went over to China and I sat down with Zheng Xiaoping and my counterpart, Wu Qiqin. And I said, you put on the table everything you wanna talk about. I'll put on the table everything I wanna talk about. We'll make an agenda out of that and we'll work our way through the agenda. And I'll agree to come here once a year. You Wu Qiqin come to the US once a year. There's about three international meetings where we both go and we'll take three or four hours each one of those just for us. We'll work our way through this agenda. And it worked great. We got to the point where he could say to me, George, you're trying to get here and you're doing it like this. This is hard for us if you'll come like this or you'll get it done. It's fine. It's a way to get something done. And Chinese called it beef steak diplomacy. I invited him to my house in Washington for dinner and I had a system where you take a piece of steak about this thick and you have a fire that has just the coals hot. You put salt on it and you put it down on the coals and then after it's there for about 20 minutes or so you take it off and you scrape off the salt. Salt just protects the meat. It doesn't get into the meat. And you turn it over and do the same thing. And we got down in our hands and knees together and we did this. And then you slice it this way and you put the slice in a melted butter and put it on a piece of bread. It is fantastic. So they said, you rig that so that you both got together and solved a difficult problem and it turned out well. So that's diplomacy. And you can do that with people because they want to solve problems too. Next question. Yes, over here. Hi, I'm Jimena. I'm from Mexico. And I was wondering if you had any thoughts on why I assume in recent years ideas like fighting climate change through policies like a carbon tax have become sort of very partisan if it wasn't like this before. Like you spoke with your Wall Street Journal article that you wrote it with a famous conservative economist. I'm sorry, I didn't get that. What was the question the last one? If you have any ideas on why fighting climate change has sort of become a very partisan issue. A political issue. A political issue on a party line. Well, I think it shouldn't be. We should make it, we try to make it something that we can agree on and work on and work with Mexico on it. Pedro Aspe, do you know Pedro? He was minister of finance in Mexico. He's a great, he comes. He's a visiting fellow at Hoover. And he comes here and he tells us what's going on with Mexico. And he and I have written several articles along these lines published in the New York Times and the Wall Street Journal together. And Pedro would be thoroughly on board on the carbon tax idea. Whether the new president will be, I don't have any idea. But certainly it's very important for the US to work with our partners, close partners. I remember when I was secretary of state, first trip I took out of the country was to Canada. And the traveling press said to me, what the hell are you doing going to Canada? Don't you know there's a Cold War going on? I said, who's our biggest trading partner? They said Japan, Germany. I said, you can add them all up together and don't come close to Canada. Or the more, the more telephone calls between Canadians and Americans and any two countries on earth. This is our neighbor. That's why I'm going. My second trip was to Mexico. Oh, at that time, Mexico considered itself part of South America. But gradually with Pedro, a lot of help from Pedro. And then the Salinas administration, they really became part of North America. And we worked out the North America, NAFTA, North America Free Trade Agreement. And it really worked. It worked in terms of trade and economics for all three countries. But more than that, it created a sense of neighborliness and community. And the three presidents would get together and call them the three amigos. And there was a neighborly thing. Like, for instance, when we had Katrina, remember the big flood period down around New Orleans? And they didn't have enough manpower and hook comes, Mexican troops come. Nobody asked for them, nobody. They just came out of a sense of neighborliness. So these things can work if you work at them. So that's the way I would go about it. Question over there, in that corner. And I'll come to this side then. Hi, my name's Josh Rosner. I grew up in Houston, Texas. This question isn't exactly energy related as much as sort of global economics. So having lived through most of the 20th century and then also served as Secretary of the Treasury, how do you view the current global economic climate? So for example, increasingly, in some cases, negative interest rates, declining growth and rising wealth inequality. Well, the big question is economic activity at its level. When you have a strong economy, it solves a lot of problems. Wages have been going up in the US. Unemployment rates for blacks and Latinos are the lowest they've ever been. So full employment does a lot for you. And that's the basic thing we need to be getting at. And there seems to be reason for some concern. You see in a lot of European countries, Germany, for instance, beginning to go down. China, I think, is weakening about quite a lot. There are questions here. A tariff is a tax. A tax is like a claw in the economy. And we have tariffs, namely taxes, spread all over the landscape. It's a very bad thing, I think. Not a good way to go about things. So that may tend to slow us down. We'll have to see. I hope not, but it could happen. So I think there's a threat to the world economy. And that's important. But I don't think it should take away from our concern about the climate, because this is something of long-run significance. And once it takes hold, it can't take it back off again. It's not like the economy can go down, but it can go back up again. It's hard to imagine if it gets much hotter that we're gonna cool it off. I have a hat now that says, make America cool again. But I don't know that it's gonna happen. All right, let me flip to this side. Any questions from here? There was a question right here for quite a while. Thank you. I'm Malbo from Albania. From where? Albania, in Europe. I got it. Okay. It's a small country. So in the previous days, the people who talked gave us about 10 to 20, so one or two decades before we reached the cap, as we know it for carbon. So I was wondering if we can't keep our emissions low and if we can't make it and temperature rises before two degrees. Is there a way back or is the world gonna end after that? Well, the world can get worse and worse. If it gets much hotter, I don't know whether you think the world ends, but water becomes scarce, droughts become more, food becomes scarce. The destruction of the reefs, the Great Barrier Reef and the Caribbean race means the fish used to feed on those reefs. So the number of fish in the ocean is gonna be declining. And that means a lot of fishermen are out of jobs, but it also means a huge number of people depend on fish for their nutrition. And so that begins to go away and you lose these things and it's hard to rejuvenate. I guess they're now working on how they can restore the Great Barrier Reef, but it's gonna be very hard to do. So some of these things that happen are one way streets. It's not like the economy that can go up or down. And that's one reason why it's so important to nip them in the bud when we can and it's really important to do it easily. Now, I was in an interesting political campaign here. I don't do much politics anymore, or campaigning, but a resolution was put on the ballot in California. Resolution 23, and it was put there by some Texas. Where's the Texas guy? Oh, there, Texas. There by a couple of Texas oil firms. And its object was to repeal the environmental legislation in California. And I thought it was a bad idea. And I found a friend named Tom Steyer who thought it was a bad idea. Fortunately, he was a billionaire. He could put up money. So he and I worked, we were cutting this together. And we said, we don't just wanna win. We wanna win big to make a point. And we worked on it very hard, no in 23. And we won big. Among Republicans, among Democrats, among men and women, all ethnic groups, it was a sweep. So these campaigns can work if you really work at them hard. And I'm discouraged to be able to have to say that my party, the Republicans, have not been on board a lot of this stuff. But I think they've gotta get on board because it's obvious that we have a big problem that is global in nature. We have to work at it here, but we have to work at it in a way that is ready to work with people from all over the world because that's the only way you're gonna get anything done. Well, you got Tom Steyer so inspired. He's running for the president. Yeah, I see that. He called me up the other day and I told him, your mantra is you're a problem solver. You've been in the financial world all your life and you've made a lot of money so you've learned how to solve problems there. Instead of talking about yourself in finance, talking about yourself as a problem solver, apply it to healthcare, apply it to all kinds of problems. And so that's the way he's presenting himself as a problem solver and he is a problem solver. He's a good guy, smart. Yeah. So I'm curious to draw our attention. Sorry, I'm here. Where are you? Right next to the other question. I'm Caroline. I grew up in China and US. I'm curious to hear your reactions and I guess thoughts on the recent news on Amazon Fires, especially from the aspect of international governance that everyone was alluding to. You know, obviously there's a lot of international and global pressure on the Brazilian government to act on Amazon Fire through social media and all these spreads of news. But the Brazilian government is almost thinking of it as the Brazil's Amazon, instead of the world's Amazon. So it's a little bit interesting political dynamics going on there as well. So what do you see as I guess the best approach to play this delicate dance between a national sovereignty issue, a governance issue versus international collaboration? And then also my second question is given the diversity of the group in this room, as a generation in the global community, how should we act in our local countries and also in this international stage to help the government make the right decision moving forward? Well, one of the facts that we know is that vegetation takes carbon out of the air. So trees are important in that regard. I read somewhere the Norwegians have a big tree planting program going on, for instance. So the firing in the Amazon is a big issue, a big problem. Obviously, there are big land use issues there and a lot of the Amazon is being destroyed in order to create farmland. And so that's a big issue, but the fires are out of control as far as I can read. And so it's a big problem. And Brazilians are, the president of Brazil says, get off my back. It's my problem, not your problem, but that's the whole point here. This global warming issue is our problem. Wherever we're from, we're all gonna be affected. And we have to look at it that way. Here. Hi, I'm Tal from Israel. You mentioned earlier that the way we see it, the world is in sort of a turning point, a historical turning point. And from my perspective, it seems as if one of the characteristics of this era is the rise of populist regimes all over the world, even in developed countries. And I guess that if we depend on that to solve all the problems we're talking about, we might be in trouble, right? If we depend solely or if government is a necessity to solve these issues, we might not make it in time. So which alternative mechanisms do you see as potential solutions? Well, I think the tax on carbon is something that can work anywhere, and it could be applied in Israel or anywhere else. But then the Israelis have a formidable research capacity. And there are a lot around here from Israel. And we should be counting on the Israelis to be part of the research community on this subject. I'm looking at you and say, hey, I got a song for you. This goes back to the 1940s when I was in college. Back in the days when daddy had a mustache. Back in the days when daddy had a beard. When he kissed the ladies then they said, brush me off again. Those were the days, those were the days indeed. So there's your song. All right, over there. Hi, I'm Kush from India. So in your talk you said that the responsibility of the question of climate change does not fall only on the US and R&D is something that we need to focus on right now to address it in the future. So in this context, how would you suggest that other countries which do not have as much economic resources to invest in R&D, how should they go about addressing the question of climate change and how can they contribute to the fight for climate change? Well, India produces a lot of bright people and there are many around here. So India could work on this subject and I'm sure be a productive contributor. But India is also a country that is on the rise and I think it's very important that as you are on the rise, obviously you're gonna use more energy that you think about where that energy's gonna come from. And if it comes from coal, it's a big problem. You do have a nuclear enterprise and I worry a lot about nuclear weapons. I support nuclear power plants. And there's a lot of work being done on them. And the small nuclear reactor, I think, may be something that's coming. People are afraid of big nuclear reactors because they see Fukushima and they see earlier green problems and react. But the small nuclear reactor could be buried. It serves a relatively smaller community so you don't have the power grids that are very vulnerable. There's a lot to be said for it. And at least I listened to people talking about it. This thing is close. Would you agree? I agree with you, in fact. I think that's a power source that ought to be considered because it's absolutely clean. And you can bury it, you don't have to refuel it for a couple of years and it works. In fact, under President Bush, we had the one to three agreement with India to provide nuclear technology. And that is being revived now. There's an agreement between the Modi government and the current government to build six nuclear plants in India, which I think it's really important to do that. But I think we should have it. We should get David Mulford, who was the former US Ambassador to India, who was the architect of that agreement in a discussion on the international front. He's over to Hoover. We had something better the eight months ago. We had Matt Santana here, the owner of the Tata Enterprises. If he did that, he could do something, he could do it. Yeah, that's right. Over here? So as we all know, there's an incredible, oh, sorry, I'm Chris, I'm from California, right across the bay in Oakland. So as we know, there's an incredible amount of inertia with regards to fossil fuel energy sources. And a lot of livelihoods depend on that both here and abroad. I'm curious what your thoughts are from both an economic and international perspective. How we go about transitioning workers, families, people's lives away from fossil fuels. Is this something that will take more economic incentive, more government, a combination of both? Do you think it should go? Well, I keep talking about the carbon tax. And the carbon tax is a way of putting the price higher. And then you have to compare the cost of that to the cost of solar energy or wind energy or something else. And I think that's one way to go to get less people. Then you say, well, a lot of people working in the fossil fuel industry, what about them? Well, I think we have to provide transition opportunities for them. And one of the things we have in California, as fellow Californians is, we have a crummy K through 12 education system. And that's not just for that system. The lack of good fundamental education carries with you through all your life. And it's very clear that in the future with artificial intelligence and 3D printing and so on, we're gonna have different kinds of jobs available. And people have to be retrained. And you retrain somebody much better when they have a good K through 12 education than if they don't. So that's something I think we all wanna work on here in California. There was a question somewhere around here. Yeah. Hi, I'm Bowen and I was born in South Korea and I grew up in New York. So my question is, since we only have two decades left, so it's really on all of us and also the children now. What do you think, which aspect of education do you think can be improved so that once the children grow up, they are fully prepared to enter this field? And collaborate together? I'm sorry. How should the children education be? What kind of new things should be included? Once you... Oh yeah, so which aspect of education do you think should be emphasized so that once the children now grow up, they're fully ready to enter this energy field to tackle the issue that we have now? Well, I think that a good basic education is the key. When you were a kid, you didn't study energy, you've studied read and write and write and take classical things and that gives you the brain power when you take on a substantive, subjective kind of time to really dig into it. And so I think that should be the focus of education. But probably as you have part of your education making you conscious of what the problems are around you in your society, the climate is one of them and I got some attention. We didn't have iPhones, we didn't have televisions, we used to read newspapers. So that was another source of education. Oh, you could read. I can read. That's right. Any other questions over there? Whoever has the mic actually has the question. Hi, I'm Siddharth from India and Australia. This is a very general question, almost a live question. You mentioned that the world is about to enter great change in energy and healthcare in a lot of areas. But this is a very confusing and full of contradictions sort of place. As a young person who sort of wants to do something with technology and make some difference, how would you navigate that? Well, I think that the Stanford students, as I have experienced them, and I've had two grandchildren go through Stanford. And we have a home on the campus. So I'd say, get some of your friends together and bring them over and we'll have a little barbecue. And we'd say hello to everybody and then we were flies on the wall. And the thing that impressed me about Stanford students is they're smart, obviously. But you got a sense, they want to leave the world a better place than they found it. That's one of the big motivations. I want to do something worthwhile. And I think that's wonderful. That we need to encourage that attitude. Question over here, yeah. My name is Emmanuel and I'm from Nigeria. So my question is about like energy and how we can actually stop this problem of pollution and global warming. So for instance, one of the thoughts that I have is that we can change human behavior towards energy. For instance, we can see that as an economy is growing, there is a growing demand for energy. So is there a point where we can reach a steady equilibrium where we don't need to grow so much so that we don't pollute the environment much more? And what do you think about the strategy of reducing human consumption of energy and kind of flattening growth to further preserve our environment versus allowing growth to keep going and trying to find like newer technologies to accommodate for the growing amount of energy? I think we don't want to lose sight of the importance of growth. Growth is what gives people jobs and wages. Growth is what brings people on the fringes of the labor force into the labor force and gives them jobs. So we have to find a way to get where we want to go. Having the energy to provide for growth but we can change the energy mix, that's the key. So I would not want to cut off growth in order to save on energy. One last question. Who has the mic over there? Yeah, go ahead. I'm, my name's Leah Pold. I'm a dual citizen of the US and Mexico. And we touched on educational policy and not just in terms of energy here during the stock and something I've seen in both countries and in other places is that sometimes the very institutions that sometimes need to change to accommodate things like new energy mixtures and new educational policies resist these for political reasons. So from an institution like this, what can we do to aid these institutions in changing the way of thinking or can they be circumvented? I think one of the things that you want to do politically is to get subjects out of the partisan arena and into the nonpartisan arena. I'll give a few examples. In the Reagan period, we suggested, the President suggested, a sweeping tax plan. It'll wind up as a 1986 tax act. Taxes are very sensitive politically. But he suggested it and it didn't, what was called Treasury One was put forward. And it was an expression of his ideas but it didn't go anywhere much. But the Chamber of the Ways and Means Committee and the House of Representatives, a Democrat named Danny Rostankowski, got into the concept. The concept was clean preferences out of the system and a lot of the tax rates commensurably. And the House passed a bill, it wasn't really too good a bill, but it passed a bill. In our constitution, everything has to start in the House of Representatives, so it starts in Ways and Means. Then it was picked up by a brilliant guy named Bill Bradley. He was a senator, a Princeton graduate, a great basketball player who played for the Knicks and then became a senator, he's a friend. And he got a hold of this thing and he started working on it. And a terrific Senate bill passed and that's what prevailed in the conference. And it wound up passing the Senate 97 to three. So it became nonpartisan. Somebody asked President Reagan if it bothered him that two Democrats introduced his legislation. You know what he said? It passed, didn't it? So there was an attitude there and I think a lot of these things, we need to get out of this habit of making everything partisan and seeing what politics you can make out of it. And get back to solving problems and cause things to be put, a problem to be put in a kind of nonpartisan category. And all we're trying to do is do the best we can with this problem. It used to be like that, it didn't now, but we got to get back to those days. Well, Secretary Schultz, one last word of wisdom to all the students over here who are entering Stanford. Well, I think there are a few things got out of my experience in the Marine Corps. I remember in boot camp at the start of World War II, Sergeant hands me my rifle. And he says, take good care of this rifle. This is your best friend. And remember one thing, never point this rifle at anybody unless you're willing to pull a trigger. No empty threats. That's boot camp wisdom. And I think it's a good way when you're no empty threats, but also be known as somebody who does what you say you're going to do. So then if you're dealing, as I was dealing with members of Congress, and I'd say if you will vote for this, I'll do this, that works if they trust you to do what you say you're going to do. So in that sense, the key word is trust is the coin of the realm. And I think as we work at these problems, as you work on your lives, remember that trust is the coin of the realm. Very important piece of wisdom. Then I remember one time in the Marine Corps when I was out in the Pacific, we had taken this island and there was an island next door to it where the natives were. And they made grass skirts and log canoes and so on. The Marines wanted to go over and buy them and send them home for souvenirs. So I made a deal they could go over for two hours. And I went over and I watched. The natives were having a great time bargaining. They enjoyed it. And the Marines were trying to make deals. So guess what happened to the prices? I had to step in and say, set a price and let the Marines decide whether to buy or not. But later on, I'm testifying before congressional committees, they said, aren't you sorry you haven't made a deal yet on something or other? And I said, I'm not interested in a deal. I'm only interested in a good deal. So the person who wants a deal too much is going to get his head handed to him every time. So you're interested in a deal, interested in agreement, but only a good agreement. It's got to make that, pass that test. So that's another piece of wisdom to pass along. But remember, trust is the coin of the realm. And if we're going to get things done anywhere, and you've got to be able to work with people that you trust. If you don't trust them, it's hard to work with them. If they keep changing their minds all the time. And also, if you're going to get something done, don't issue empty threats. Remember when President Abrams said if the Syrians were chemical weapons, they're going to get clobbered and they used them and nothing happened. He destroyed himself. So he violated boot camp wisdom. So no empty threats, trust is the coin of the realm. But I'm glad to see so many people from all over the world and from different things here at Stanford, interested enough in energy to come here and spend an hour talking about it. Because this is a subject, no matter what discipline you are in, it's going to affect your life and big time. And particularly, the climate change issue is one that we need to have on our minds and work out as best we can. Thank you all very much for the chance to talk. Thank you. Thank you all. Thank you.