 Good afternoon, and you're welcome. Delighted to see you all. Well, I can't see too many of you, but know that you're all here, and joining us for this IIEA webinar. My name is Alex White, I'm Director-General of the IIEA, and we're really delighted to be joined this afternoon by Bill Nordhaus, Nobel Laureate in Economic Sciences 2018, and Sterling Professor of Economics at Yale University. In 2013, Bill Nordhaus published his acclaimed book, The Climate Casino. And in that book, Professor Nordhaus argued that the world has entered the climate casino and that we're rolling the global warming dice in the absence of effective policies to tackle climate change. A decade on from that book's release and following his important recent research on the climate club and the release of his 2021 book, The Spirit of Green, Professor Nordhaus is going to consider whether the world still has an opportunity, and what a day to be thinking about this and talking about it. He's actually going to ask, does the world still have an opportunity to exit the climate casino and implement policies that will reverse the tide of global warming? So this lecture today forms part of the environmental resilience lecture series, co-organized by ourselves at the Institute here, and the Environmental Protection Agency, the EPA. And in that context, I am delighted to invite, in the first instance before we go to Bill, to invite Andy Fanning, who's Program Manager for Environment and Health at the EPA to provide a few words of introduction on behalf of the EPA. So Andy, over to you. Thanks, Alex. Really appreciate the introduction. And just to reiterate for myself, on behalf of the EPA, we just have to be very thankful to Professor Nordhaus for coming here today. It's a really important area of research. From an EPA perspective, I suppose, we recognize that the three challenges of sustainability across societal, economic, and environmental. And while the EPA focuses primarily on the environmental, when we recognize that we can't effect change without engaging with both the economy and with society to effect change. So for us to be involved and to hear and to continue to learn from our colleagues in other fields is a great pleasure and a great privilege. I suppose you mentioned, as you say, when we come to climate change and Professor Nordhaus, you work on climate change, we're recognizing this denarrowing timeframes for action and they're getting tighter and tighter and the need for more intense action is growing year on year. So with that in mind, learning on how we might lever some additional activity and actions to address the climate issues is always a valuable one for ourselves. I think looking across that this way, the work that you've done over a number of decades and substantially the amount of work that you've done looking from the global commons, from an environmental scientist, the tragedy of commons is a key issue for ourselves. And we recognize that some of these linkups along the way and the work you've done on carbon pricing and the climate club, I suppose, is the one that I'm most interested in, but having seen this on behalf of the EPA, I have to recognize that we are sitting here to learn today. I have the responsibility of producing that state of the environment report. So I always want to learn from new facets and new perspectives that will help us to get there. So I'll pass it back to Alex and again reiterate, our tanks is an environmental protection agency to you for taking the time to be here today. Thanks a million, Andy. So just so's our attendees know, Professor Nordhouse is going to speak to us for maybe about 20 minutes or so and then we'll have a Q&A as is our norm. And you can join that discussion, ask a question by using the Q&A function in Zoom that everybody's very familiar with at this stage. And you can send in your questions at any stage and we also encourage people, if a question occurs to you, just maybe type it up and send it in immediately rather than waiting until the end of the talk. And we get to those questions as soon as Bill has finished his presentation. You can also participate on X, as it's now called, if you like and use the handle at IEA if you're that way motivated. And just to remind everybody that the presentation and the Q&A today are both on the record. William Nordhouse is Sterling Professor of Economics at Yale. His major work focuses on the economics of climate change, developing models that integrate the science, economics and policies necessary to slow global warming. He was awarded the Nobel Prize in Economic Sciences in 2018, quote, for integrating climate change into long-run macroeconomic analysis, unquote. From 1977 to 1979, Professor Nordhouse served as a member of President Carter's Council of Economic Advisors. From 86 to 88, he served as the Provost of Yale and was President of the American Economic Association from 2015 to 2016. Professor Nordhouse completed his undergraduate work at Yale in 1963 and received his PhD in Economics in 1967 from the Massachusetts Institute of Technology, MIT. Bill Nordhouse, it's a great pleasure for us to have you with us this afternoon. And it's my honor to hand the virtual floor to you now for your presentation. You're very welcome. Thank you very much. It's great to be with you. As I was coming here, I said to my wife, I'll see you later. I'm going to Dublin and she said, can I go with you? And I'd say it's a very low-carbon way to talk to you, although not nearly as pleasant as actually being with you in person and on site. So I have a few slides if we can put them up. And you can, so the title is No Exit on Climate Change Question Mark. And I'll really, I don't have an answer to that but I'll discuss with you some of the questions. So for the next slide, we'll show you the key issues I wanna talk about today. I'll give you a quick science a quick update on the science and emissions. I'm gonna talk about why the policies as you'll see in the slides have not been successful and are failing. And then I wanna go off in a different direction. I'm sure many of you have heard much on one and two. I've skipped three and gone onto four which is the potential contribution of artificial intelligence in this area. And that is something that we really haven't thought of very deeply but I've been struggling with and I thought I'd share some thoughts with you. So the next slide will show you some of the science and this is up to date as of November of 2023. And this of course is one of the most important historical monitoring of the atmosphere, the atmospheric carbon dioxide in Hawaii. And this was started in 1950s and is actually done continuously but basically we think of it as monthly. And as you can see from a prehistoric level of a little under 300 has gone to about 420 now. So that is more than half way to a doubling of the CO2 concentrations. You can also see that it's rising more or less exponentially, although it has some wiggles, has a seasonal pattern and some wiggles as well. So, but I won't talk about economics and the key variable I look at on the next slide is the decarbonization of different economies. So I'd like to show you on the next slide the trends in decarbonization. So this shows you the CO2 emissions, GDP or output ratio for the world. And these are reasonably good data now. They're all of them have some measurement errors but I think relatively good data. And this is probably the most important single measure of integrating economics and the environment because it shows you how energy intensive our output is and it shows you on a ratio scale, a straight line is a constant rate of growth or decline. And you can see in the blue dots to a first approximation, there has been a decarbonization in the global economy a little more than a percent and a half a year since 1980. And there are many factors that lie behind this for the changing fuels, greater energy efficiency, movement from manufacturing to services. But the trend is pretty clear. There may have been a slight increase in decarbonization from one minus 1.4% in the first three decades of this period to minus 1.9% in the last 13 years. Although it's just barely visible, I would say in the data that break in trend. But I'd say the best guess is we are decarbonizing between one and a half and 2% a year. And that's good news, but the question is, is that good news enough? And I'll show you on the next slide, but just to a first approximation, you can see it's not good enough because if the world economy is growing at 4% a year and we're decarbonizing at 2% a year, that means CO2 emissions are growing at 2% a year. And so with this graph show, you know we're gonna move a little further along, I'm gonna show you some projections. So we have recently, a colleague and I have recently updated our integrated assessment model. It's called DICE for Dynamic Integrated Model of Climate and Economy. Just think DICE though, DICE is a nice name. And it captures the diciness of the enterprise of the casino aspects that Alex mentioned earlier. And what this graph shows you is from 2000 to 2022, the global emissions of CO2, including some other emissions, other greenhouse gases as well. And then, and you can see that's pretty much follows the trend. Well, this is total emissions, not divided by GDP. So when you see recessions, it goes down. When you see the pandemic because of the global downturn, it goes down. But this is actual total emissions, which is key. And then it shows three different paths that you probably have in mind. One is the Paris Accord, which is actually international policy at this point. It's what was agreed to in the Paris Accord in 2015 and has been updated periodically. It will undoubtedly be updated in COP 28, although whether any additional measures will be taken is unclear at this point. That's the middle line. The top line is our best guess in our modeling as to what happens at current policy. That's to say, countries do not meet their Paris Accords, but continue business as usual, building coal plants, slow increase in renewable energy, little increase in carbon prices or regulations. And then the bottom line in the green shows you the estimated path of CO2 emissions if you were to meet a two degree C target. And the key point, of course, is not a surprise to you but that is a sharp discontinuity from history. And instead of growing at a couple of percent a year, you would have to start declining pretty rapidly in the near future. And to get to two degrees C, at some point it's gonna have to decline sharply sooner or later. But this is a path which gets there in at least cost. So one key point I'd like to make is that even if you take current policy, the Paris Accord, that's kind of extended into the indefinite future, tightening gradually over time, according to the tightening that we've had since 2015, even if you were to meet the objectives of the current and an extended Paris Accord, you would not meet the emissions trajectory that you need for the two degree target. I'll show the exact temperature in a minute, although you do a lot better than you would with doing nothing with the baseline. The two degree target is very demanding. And it's aspirational. It's like a maybe a 25 or 30-foot pole vault, maybe a three-minute mile, I don't know what the proper analogy is, but it's very difficult. And so far we haven't been not very far along. So in the next, so these are the emissions where I'd like to do again using our integrated model. And maybe I'll just take a minute to remind you or tell somebody who don't know what these models do, these dystopic models do. And what they do is they basically are an end-to-end computerized empirical model of the economy, of the emissions, of the temperatures and then of impacts of climate change, linking all these different elements together. So this, for example, would be one output. You take output and you take policy, three different policies, what emissions would look like. And then if you go to the next slide, we see the next slide, then going further to the next module of CO2 concentrations and to temperature, this is what the temperature trajectories would look like starting in 2020 and going out to 2100. And as you can see, they pretty much follow the emissions path. The top path, which is what we call the base path or the current policy path is reaches about three and a half degrees C from prehistoric. Now, the Paris path does gets a little bit of the way, maybe a third of the way down to the two-degree target around three degrees C by 2100. And the two-degree C obviously caps at two degrees C. I'll just back up a mention to say some of the target in the International Accord and the Paris Accord and in many other aspirational other agreements was two-degree C. There was further aspiration to try to limit it to 1.5 degrees C. As you see, if you look to the left there, we are almost surely, almost surely going to hit the 1.5 degrees C sometime later this decade. So that's pretty much infeasible at this stage without either a deep depression or some kind of miraculous technology or policy. But the two-degree C is actually feasible. It's one that we could do with substantial and important policies. So the question is how are we gonna move from our baseline at the top in the red to the two-degree C or either close to that, maybe two-and-a-half-degree C or even better, what kind of policies we needed? Well, we can see that they're not needed, but let's move to the next slide and I'll talk about the policies, why they're failing and in a way what are needed, what is needed and what we've done so far as failing. So there are three different parts of a strategy, both national, this would be for the United States, for Ireland as part of the EU or China and other countries to undertake to actually meet these ambitious goals. I won't say this is all you need, but I'd say without these three, you're gonna fail. So one is carbon pricing to put a price on carbon dioxide emissions and this should be harmonized across countries and across sectors. I think the EU is the model of this, it's not perfect model, but it's done a good job in this and basically the only region country in the world that has done this and done this for a substantial period of time. But around the world, if you look, whereas we would need carbon prices in the say 50 to $100 a ton range, the global total now, the global average is about $3 a ton. So we're just far too low to meet our objectives. But part of the reason is that the architecture, the second point, the architecture of climate agreements is flawed because under the current procedures and the conferences of the parties, which is going on, you require unanimity. You require unanimity of everyone from United States and China to the smallest little Belize's and Venato's and other countries. And you can't really seriously think you're gonna have a global policy where there are winners and losers with unanimity in every country in the world. And what we need is more of a climate club, which we can come back to if you like. And then the third, which I think perhaps has not gotten enough recognition is governmental support for green R&D. It's far too low at the present time. It's not been a priority. And I'll just give you one example in the well-discussed Inflation Reduction Act in the United States last year, which had substantial support for climate policy. There was no general support for energy, green energy, R&D. It just was not on the radar screen. I will give you an example on the next slide to show you what the numbers are, just to give you some background on different kinds of energy investment in R&D. If we could have the next slide. This is just one picture, but this gives energy investments and R&D in the international energy agency countries, which are basically almost all the countries who do R&D. And if you look, we'll just go down from left to right. Fossil investment, and this was in 2020 as I remember, 2019 as I remember, was $730 billion. Low carbon investment was pretty substantial in that year at a little over 400 billion. But then if we get down to energy R&D, energy R&D in this area was only 100 billion in all these countries. And if you look at low carbon, so energy R&D includes everything includes fossil investments, includes investment in appliances. But if you look at low carbon R&D, say of renewables and things like that, it was only $40 billion of low carbon R&D in the entire IEA region. And of that, probably a fourth of that was simply automobiles. A fourth of that was probably renewables like wind and solar. So one of the things that you see is this is much, much too low. And this is the third of the planks that are needed to have a successful climate policy. All right, so what I'd like to do in the minutes that remain is I'd like to talk about a new, what is not a new topic to you, but maybe a new topic in this area. And that is, we'll show you in the next slide. Will artificial intelligence come to the rescue? So the first question I wanna ask is, what do economists think will be the contribution of artificial intelligence? And I'll give you a result from the Booth Survey, the Chicago Booth School, has a panel of economic experts and they ask from time to time questions. And this was asked earlier in this year, about six months ago, about what the role of AI would be on productivity growth. Really, they didn't ask it quite that way. But the question was the use of artificial intelligence in the next decade will lead to a substantial increase in growth rates and prevents economies in the two subsequent decades. And they asked, there were approximately, I think 80 answers. And this is what people said. Roughly half the people didn't know and roughly half the people agreed. There was 2% disagree, I think that was probably me, but this is what the landscape was. So as I looked at this, I said, wow, that's really something. I mean, I don't know quite what a substantial increase in growth rate is, but to think that artificial intelligence would lead to a substantial increase in growth rate is really quite a important finding. Now, you don't know whether they really have thought about this carefully or whether they're experts. And the main thing you don't know is what is the substantial increase in growth rate? So for example, if the growth rate, let's say per capita GDP, per capita worker GDP in the US has been growing roughly 2% a year and is projected to grow roughly 2% a year over the next decades in long-term projections, what would a substantial increase be? So I didn't know, but apparently a substantial number of people who have an opinion think it will be substantial, all right? So what I did was, since I didn't really, I was teaching a macroeconomics course this spring. And so I was curious about this because this is a pretty big deal for macroeconomics after the low productivity we've had, if this is really gonna lead to a substantial increase. So I went back to the booth panel and I re-asked the question to a small number of them. I picked people who were experts in this area. There were two Nobel Prize winners, including one who's an expert on productivity in robotics and one who's, and then the leading historian of productivity growth and the former chief economist in the IMF and a couple of other people who've thought very, very deeply about this and asked them the question. Well, the first thing I got back, so I had six respondents and I'll show you the answer in a minute, but I just wanted to point out one thing first. The first thing I noticed is they didn't understand the question. So they were, two of them didn't answer about 2033 to 2053, but over the next decade. Another one's had another kind of confusion. And then when one said, well, I thought you said the next decade, that's really hard to answer. So let me get back to you. Another one said, I can't answer that question till you tell me what the projections look like. So finally, after I weaned and cajoled, I got answers, which I'm gonna show you on the next slide from the six experts, so this is what substantial means. Now let me first start on the left there. Goldman Sachs is the only place that's actually done this so far. They have a research team and they estimated that productivity growth would be 1.5% higher over the next decade. So right away, not in the future when this fruit tree is born fruit, but right away. Which I went back and looked at that and that was just very poor research. It wasn't really research at all. It was just making a splash. Okay, so if you look at the six experts, A through F, I asked them about their average, the 25th percentile of where they thought it might be in the 75th percentile. So you can think of that. Let's look at that final bar graph on the right. The green square is the best guess as to what they thought would happen. And that was about three tenths of a percent per year increase and the lower level was zero and the higher level was around one and a third. So which actually seems a not implausible answer and not an implausible range, I would say. So it's small, I don't know if 0.3% per year is substantial or not, but it's not trivial. It is not a revolution in a real sense but it's substantial. But there's a possibility it might be much, much higher according to these experts. So what I'd like to do is ask now, what is the impact of this on climate change? So go back to our original topic in the next slide and I wanna ask, suppose that output grows much more rapidly over the coming decades because of AI and technological improvements, what will happen and particularly what will happen to greenhouse gas emissions and CO2 emissions? And for that, we need to know the direction or the bias of the technology and whether it will be energy intensive. That's the key question. But for example, if the rate of decarbonization doesn't change, then the rate of emissions is gonna grow. Then the emissions growth rate will be higher because so the question, the key question here which has not really been thought of I think at all in the energy area is what is the direction of bias? That's a technical term used among technologists, the bias of energy and of AI technological change. And then the next slide could give you some, let me say I don't know, but let me give you four thoughts about the direction. First, one important point is information is a very low carbon sector. If you look at the CO2 per unit of computation, dollar by dollar versus BTU per dollar or of the information sector as recorded in the national income and product accounts, it's among the lowest carbon intensity every sector. So if that sector just grows, all we do is the growth is just the growth of information. We're just producing more and more bits and that's what that increase in, we have more and more posts on accident. We have one more and more and more online newspapers and so on and so forth. And that's all it is. That's the growth and output. Then that's low carbon and that will not be a big increase in emissions. But on the other hand, another example was let's say, I think this is not implausible that you'll do things like robotic miners that mining is a really dirty job. And let's say we have a lot of low cost, very high efficiency miners mining coal and other things. Well, that's probably bad news. That's probably making coal even cheaper and it might be other fossil fuels as well. So that would go the other direction. Then a third possibility is let's say that the AI is used for programming of energy efficient machines or just improving things, improving the use of existing capital well, that might lead to low energy. But what if it leads to growing disinformation and lack of growing distrust and the determination and the governing institutions and the break up of breakdown of CO2 treaties and the found farewell to climate clubs? Well, that's not good news for global agreements. I'd say as I take all these together, I think probably it will be neutral with respect to energy and greenhouse gas emissions if you have rapid growth and output. But I think the crystal ball here is very cloudy but it's something worth thinking about seriously. I think somebody who's thought about this and looked at where AI will penetrate, it could be various. I guess I'll just go back. I had one thought I forgot to make which is where are robots? Where are robots actually employed now, you might ask? Well, the answer is they're employed aside from our vacuum cleaners and things like that. Where are industrial robots? They're mainly in manufacturing and the largest single sector is in automobiles. So the robots that actually exist now are producing a piece of capital that's extremely energy intensive and CO2 intensive. So I think it's not a clear picture here. I think it's a really interesting picture. I think the question of how big it will be is important and the question of where it will be used is important but the net impact seems to me is probably not positive with respect to climate change. All right, I think I'll leave you with the next slide just to give you an idea of the vast uncertainties here. And then I'll wrap it up because that's what I'd like to tell you about and thank you for listening. Thank you very much. And I suppose I'm just thinking about your points there about AI and where you got to which was kind of pop, you think possibly a neutral impact taking all of those various layers and factors into account as best you can and maybe that should be a source of relief to think that because I mean the potential negative impacts are considerable as you say the crystal ball is a bit cloudy but at least if you're coming in neutral I think we can probably feel some element of relief on that although for all the reasons that you've said it's very hard to, I mean that's actually the first treatment that I've seen of the impact of artificial intelligence on this whole agenda so it's really interesting obviously it's just an emerging area of thought because it's so hard to predict. There's a lot of interest in the climate club so we do wanna ask you about that. There's two or three questions in already about it but do you wanna say something even in general because of the day that's in it as we say so with this uncertainty even as we thought things would finish by in or around the middle of today in Dubai and we were hearing I'm just keeping an eye on the phone here there's nothing yet anyway unless I've missed something in the last 10 minutes or 20 minutes since we started here do you wanna, what's just your impressions today of COP28 just high level? Well, I think high level is I think it's part of a flawed architecture I think it's great that we're getting together and talking it has made over the years it has made many contributions I mean, the conference of the parties is responsible for the Kyoto Protocol which was the only international binding international agreement now it turns out it failed and I think the reason it failed was actually one of the reasons that I thought about a climate club because you look at the structure of the Kyoto Protocol compared to other trees and you see that this treaty in retrospect it's clear and maybe in the prospect but in retrospect it was clear that this was a flawed architecture because of the voluntary nature of it and we have a lot better understanding I mean, I think the IPCC has done a fabulous job it's not part of the conference of the parties per se but it's part of the international architecture it's a completely novel approach to dealing with international problems to have a scientific body that is a kind of international expert group I just can't say how important that is now it's not perfect like anything else it's not perfect and the science is much better than the economics for example so there are many things but with this, so this architecture is good for getting scientists it's good for getting people to talk it's probably good for getting monitoring it's good for ideas but the central purpose is if the central purpose is to have strong climate policies that get us to our targets two degree or one and a half degree even a two and a half degree C target then it has not succeeded and has not succeeded because of the structure of having every country in the world as a voluntary organization it's the structure of international law today it operates under the structure of international law today that's the key point international law today is made up of countries negotiating with other countries like you and I a contractor buy or sell a car or you and I buy and sell a house or Turkish Bazaar with a rug so you can't do that for these complicated public goods issues because there are too many losers there are some winners but there are also some losers and a circumstance where these every country participates and it has to be anonymous it's just a recipe for success and that's not that's that comes from political science that doesn't come from economics or political or common sense well I'd say it's done many things but in terms of the key thing of getting an agreement that will get us to its goals its own goals it is not succeeding to just two questions occurred to me out of that out of what you've just said the first is that of course the broader context for international law generally on public international law has always been the extent to which there can be enforcement of international agreements has always been problematic and I'm not just talking about in the area of climate so we go right back through the decades where there can be international agreements come to countries come together perhaps typically after wars they set up institutions they agree on certain norms and standards and indeed laws and they pass you know they have agreements and treaties which enter into public international law but then there's just inevitably there's a limit on the extent to which you can have enforcement it's not that there's no possibility for enforcement but there are limits on the ability to enforce even agreements that are made solemnly by countries one with the other so it's just not the same as for example where we have domestic laws where we have enforcement mechanisms so just as a general point that's just I think an observation that's just a truism and I suppose the second point kind of linked to that is and this takes us into the area of a climate club I know Al Gore was over in Dubai and he was talking also about the I think I don't know I mean I'm paraphrasing but you know about the broken cop system as well and just the inability the inadequacy of it and I think he was talking along the lines that you're talking about very similarly if I'm right about a climate club about countries who want to go ahead and do really good things should do that and should make agreements and should forge ahead and not be drawn back by the ones that don't want to make change but isn't it a global phenomenon that can't really be solved by you know by even a substantial number of countries coming together because it needs the whole isn't the great attraction of copies that it's 196 countries and no matter how weak the agreement is in a sense at least it's everybody in the room well it's got a broad and shallow you could say broad and shallow versus narrow and deep and I think that's a key issue I think so let me say a couple of was there a question mark at that? No, there were just propositions I was putting out to you that I think are contextual maybe for some of the ideas that you have and just wondering you know whether you think I suppose I kind of put in the opposite argument or putting just querying whether a club of even of a large number of countries would be sufficient to address something that's actually global in nature Well first I think the point you made to begin with about international law needs to be emphasized I mean maybe those of us who are steeped in international law and international agreements are kind of used to it sort of like we're used to winter, right? We're used to the fact that there's no sunlight a lot of the time in the winter and okay so we're not gonna say did you ever notice that the days are short and winter? Wow, but I think the but outside the people who are familiar with this it's a really important point that international law is completely different from domestic law domestic law is by its very nature sort of within certain constitutional limits and limits of enforceability has the ability to pass laws that coerce and enforce certain laws and regulations, taxes, whatever on a population that is not possible globally under what I call the West Valiant System of 1648 each country is sovereign and independent and you cannot under international law force countries to do things without their consent under law. Now it doesn't mean you can't use force to do it but that doesn't seem like a very good way to solve this problem. So what you need is institute you need institutions or mechanisms or incentives to get to harness this strange system, voluntary system. Now, I think that's the first thing and I think that unanimity Unanimity can work in certain circumstances it can work for treaties say there are coordination trees for example, what language should air traffic controllers use? If every air traffic controller used its local language you would have a lot of crashes. So pick a language. What is a time zone? Let's all agree on the same time zones. Those are coordination treaties and those are relatively simple but treaties which or agreements which require which have winners and losers are more complicated. And there are two examples. One is a relatively narrow treaty which is a World Trade Organization where countries agree to certain restrictions on themselves with respect to taking protectionist actions. They have certain bindings as it's called in international trade law that they won't raise their tariffs or do different things but it has enforcement mechanisms where other countries can retaliate if they do. So it's not just an agreement where there's agreed penalties for people who deviate from the rules. And that's actually the model for the climate club would be the World Trade Organization. A much deeper treaty would be the EU itself which has got a whole set of different rules and treaties. And what's interesting about the EU the EU is a climate club. The EU has policies and not every country I don't need to tell you and not every country in the EU agrees that these strong targets that are being proposed and being implemented but being part of the club means, okay it's you wanna be in the club you wanna be able to trade you wanna have free, you wanna have market access you wanna have free movement of goods and people then this is part of the cost of the deal. All right, no cost of that. So I think what I use in my thing was you have to take as a given that you can't develop deep and costly international agreements without some mechanism. We know that time and time again from the history of international treaties but there are some models that we can look at because if we don't have them if you look back 20 years if you 20 years or you say this is gonna fail I mean, some people said that 20 years or this is gonna fail the cop mechanism is gonna fail because it requires unanimity or it requires countries to join who don't wanna join like the oil exporters you probably, I don't know maybe I said that 20 years ago I don't remember but other people did and now you have to overcome that and so I think the intellectual challenge here but at first it's intellectual challenge to think about that but then once that problem has been posed then it's a diplomatic and political challenge to see how to implement it. And again, there are many, many wrecks along this road but there are also a few successes and that's what I'd point to. Interesting, very interesting. So we've got some great questions coming in and if you are watching and listening and you'd like to ask a question please do use the Q&A function and we like you to tell us if you have a designation if you're representing an organization if you think of that when you're putting in your questions. So, Kean Donahy, thanks you very much for your presentation and congratulates us for hosting a rock star of climate economics and he needs a number of other things I'm just gonna shorten his question as I read it but it's basically do you feel real climate action can be driven by carbon border adjustment mechanisms or sea-bams or could that lead to trade wars and or apathy? All three, I think the answer is all three. The, just coming back to the point I was making earlier about the success of the World Trade Organization which is as a retaliatory measure when countries say the US puts during the Trump administration puts tariffs on washing machines or whatever then the other country can retaliate that's fair game on that that's part of the treaty and it's gotta be in a particular way temporary degressive and so on and so forth. So that would be part of it but the problem is I think what I worry a little bit about is that this is this is car I don't know if it's car before horse we don't have a horse yet we don't have an international agreement and so I think what you need to do is put the environmental proposals first and say this is what we would expect. So in my own thing you could either do with the Kyoto style of emissions reductions but I think that's very, very complicated. The simplest way to do it would be to have an expectation that country have a minimum domestic carbon price say $50 a ton and if a country meets that then it passes the hurdle. If a country doesn't meet that then it qualifies for some kind of penalty from the group in the club but it has to be some standard it has to be some mechanism for measurement, for determination in the same way WTO their expert or the Canada U.S. international trade agreements there's a mechanism for measuring these things and for determining it not just you think this country hasn't done a slap on a tariff on steel and the other thing, these are very narrow they're really not, they don't get it the problem which is the carbon intensity and the carbon pricing in a country as a whole the main thing that's missed by the current proposals to put tariffs on imports is that it misses domestic production of carbon. For example, almost all of electricity production is not export, I'm sorry very little of electricity production is exported in most countries, leave aside Europe, United States, Mexico, China, India, almost so any carbon dioxide emissions that come from electricity production would simply be exempted from this from these border tax adjustments because they're not part of exports. So what we need is a broader measure as well but I think these have to be part of an agreement they have to be part of an international agreement and of countries that see this as a very, very serious future problem want to find a mechanism to do it realize a mechanism is not gonna exist unless there are strong incentives and this is just one of many incentives but it's a pretty good one. So I've got some questions which we'll do we'll probably do them a little bit more quick fire if it works. Frank Barry, what are your thoughts on the global distribution of carbon tax revenues? Oh, that's very simple. All carbon tax revenues should go to the country where they originate. Okay. Noel Cahill is 4% global economic growth consistent with the two degree warming target. Well, yes, I would say yes but only in the presence of very ambitious carbon pricing, universal carbon pricing or near universal carbon pricing and very much larger support of green energy R and D. So it's not that itself is infeasible but it just means we have a little more work to do than our carbon pricing. Okay, John Fitzgerald, how much difference does the changing attitude of China to the urgency of climate action make? How much difference did that make? Well, I do think that the international political atmosphere has deteriorated pretty seriously over the last decade or more. I mean, we have two hot wars going on right now. Very destructive and very divisive wars. We have a cold war going on between the US and China. We have a very destructive past president threatening to come again, president of the United States, which is gonna be bad for just about everything I could think of. So I would say the international scene is currently not looking very propitious for climate agreements. Hadrian Bazinay is the EU policy advisor for credit-agricole and the question, two questions, actually a general one, how personally confident are you in humanity's capacity to face climate change? How do you view the world 50 years on? So that's back to your crystal ball. And the second question is, what is your view on climate's impact on financial stability and the best ways to mitigate it? Do you recommend adopting the prudential framework? Well, on the first question, I've no doubt that humans have the capacity to do this. Humans have the capacity for many wonderful things and they have done them in the past. The question is whether our institutions, the institution that we as humans have constructed have the capacity. And I think the confidence of the party structure is not gonna do it. And I think the current, the current political arena, international political arena is not favorable, but there's no doubt that we have the capability. We've done many important things over the, over the, let's say millennia. And the second, you know, financial stability. Well, I think the central banks of, I don't know if this is a green central banking question, maybe it is, but the question is, should central banks take this on? I think the central banks of the world have a lot on their hands right now, getting inflation under control in the near term, fighting the next recession. They don't have the tools and actually don't have the expertise to deal with climate change. So I think they can be supportive. They always should keep their eye on financial stability issues. I don't see this as a major financial stability issue in the near term, but I might be wrong. So I would say this is on the list, but not very high on the list. Liam McCartan says, so what is the answer to your question? Can we exit the climate casino? I think I just answered that. Yes, we can. And if yes, yeah. How well do you mentioned? Yes, whether we will or not, we can. Yes, whether we will or not. But, you know, we've made progress. You know, if your target is one and a half degrees, you probably got to find something else to work on. If your target is two degrees, work harder. If your target is three degrees, you have a pretty good chance. So if it kind of depends what your aspirations are. Yeah. Alexandra Perfilova in UCD says, could you please give an example of how AI might influence decarbonization with respect to the power industry? Might AI be supportive of zero carbon power generation? I thought about this. I actually, I don't have a good answer. I have some small answers. For example, just doing dispatch of low of green electricity. That's a very complicated ITEC area. Doing energy price, electricity pricing, that's really complicated. So some of the technical issues, but those aren't going to get you very far internally. Even if you have 80% of your electricity produced by fossil fuels, that's not going to get you to zero carbon very quickly or at all actually. So Andy Fanning of the EPA, we heard from Andy earlier, pops in a question. What needs to happen to bring carbon pricing to a level where it will be an effective driver? Well, I think the main thing would be some kind of international climate agreement that set that as a standard. And let me just make a general point here. You need to, your policy agreements need to be about policies as much as objectives. So if all the central banks of the world say 2% inflation, but they don't say anything about how to get there. We're just going to set up and say 2% inflation and we don't have the tools to get there. It's not going to do you much good. What we need to do is not only have targets, but we need to have policies. So what needs to be more focused on is the policies and particularly the policies that I mentioned, high carbon prices, subsidies, bent bigger subsidies for green innovation, energy innovation. So I think more attention to the policies as part of our international structure and the prices as part of international structure is what we need. You were, I thought you were less than enthusiastic about the inflation reduction act in your opening remarks, or at least about the adequacy of a lot of the measures in there. On one view, some analysts have seen it as a really very radical step forward and almost sort of has been compared to kind of a new deal and it's big state intervention is back and that it's a very welcome intervention by the state in this huge agenda. I mean, just in principle, do you, even if you think it's not adequate, but do you think in principle it's been the right thing to do? Is this you, Alex? It's me, sorry. Yeah. No, it's okay. I thought it was. Thank you. Well, I'm not, I have some reservations. I have some reservations. One reservation is what I think of the three key policies it was silent on. It was silent on carbon pricing. It was silent on international agreements and it was silent on generalized basic research in energy. So that's a kind of negative. Now, in terms of what it actually did, I'll just say one thing. It focused a little too heavily for my taste on production subsidies rather than upstream technology and research subsidies, particular areas that it wanted to subsidize like wind and solar and EVs. And I think that's probably not, I don't think that's the right way to think, but I think the right way to do is not to subsidize bicycles, but to tax carbon. And so it has, I think the wrong mindset. Now, having said that, if you look at a Congress that hasn't done anything and you say, any step forward is, any step is a step forward. And so that's one way to think of it. But I think in terms of role models or models for how to deal with climate change, it was, I was less than enthusiastic, yes. Do you think, this is me again, do you think if there ever were to be a climate club along the lines that you've explained is necessary? What are the politics of the US being in that club or likely to be in that club? And that's a very generalized question. Well, that's a really good question. I think the US is very jealous of its sovereignty. And so it's only gonna join such a, and it's turned down many treaties over the years as you all know. I think first place it would have, it would require significant realignment of US politics away from the conservative opponents, and as, which happens from time to time. So it would require alignment. And then it will require a recognition that some international agreement would be necessary. If you think about it, the US has joined many international agreements. Many of them were ones that it sponsored itself, the UN, the four great international institutions, IMF, World Bank and so on and so forth and World Trade Organization. So I think in a way it has to, from a US political point of view, it would be very helpful if it originated from the United States, but that's gonna require people like Al Gore who are willing to do it. I've just had one thing. I think one of the big, I was a very, very big admirer of Barack Obama. And I think he knew all about this, but I think one of my big disappointments is that in all his speeches on climate, he never mentioned carbon pricing. He didn't mention that as an important policy. He was all in favor of cap and trade and so on, but he actually didn't get it. And he knew that the point of cap and trade was to get the carbon prices up, but he never said it. So the educational platform that the ability to influence opinion, he didn't exercise. And this is one area where as a result, we're still a long way behind. Thank you. We had a number of other questions. We did have a question earlier on, from Anthony Brogan, who had perhaps a somewhat detailed question to come to at the end of the hour, but he mentioned that the University of Exeter released a major climate tipping points report at COP28 last week. And he's wondering, how can economists quantify the potential climate losses from catastrophic tipping points like the collapse of the AMOC, the Atlantic Meridional Overturning Circulation that includes the Gulf Stream? Like how can the economists map that or quantify that given that it's something that COPs have failed to address up to now? I'm sorry, it's sort of introducing a slightly new agenda point, but he did take the trouble, Anthony, to ask that question. I wonder if you have a thought on it. I do. I thought a lot about tipping points. First place, we first need to have the science clear. We need to have a clear understanding of what will lead to certain tipping points. For example, what climate trajectories will lead to reversal of the North Atlantic Deepwater circulation on what timeframe, with what probability distribution, that's question number one. Or a second one I'll talk about is the Greenland Ice Sheet. What's the trajectory for the melting of the Greenland Ice Sheet and is it reversible? So all the tipping points that are mentioned in this very, very interesting and important literature. First stage is the scientists need to inform the downstream analysts, what is the geophysics of this? Okay, then once that is done, I think it's a manageable project. Most of these have actually been analyzed in the economic, in the integrated assessment literature. And I'll just mention one which I did, which was an analysis of the Greenland Ice Sheet. It was an integrated assessment, integrating policy, the tipping point in the Greenland Ice Sheet, the irreversibility of the Ice Sheet, what would needed to be done over what timeframe. So these are issues that can be addressed and in some cases have been addressed. And I think that with maybe the one exception of the Western Antarctic Ice Sheet, which may already be beyond the key tipping point, most of these are either reversible or the ones that have not reached the irreversible tipping point. So I think this is important work. This is work that is underway. There's already, it was a paper by Tom Dietz. I'm sorry, I forgot his first name. Yeah. And I think I know who you're referring to as well, but it's not coming to me either, so. Yeah, and on tipping points, which was a pretty good survey, so. EPA actually had a really good event on that within the last year as well here at the EPA here in Ireland. I had a great speaker on that here some time back. So most interesting and it just serves to illustrate the, if I may say so, a sheer breadth of your knowledge and understanding of these issues, not just from the point of view of economics, but obviously the science too. And the international law and the governance and all of the politics of this all sort of rolled up together. Yeah, Simon Dietz. Simon Dietz. Simon Dietz, I'm sorry. That wasn't my quick moment. That was one of our people watching. Key and Donahue has just shot that in here. It was a great paper on tipping points. Yeah, terrific. Listen, thank you so much for your time. Once again, I want to express our appreciation for having you with us here, both on our behalf in the Institute and the EPA and all of our viewers and listeners, if I can call them such who are still with us through this really interesting and fascinating hour. And there's so much more that we could talk about. You've given us more food for thought. You haven't said an awful lot about COP. It's almost like today because it's almost like as if your expectations are not that high of what's going to happen today. So I think that's, you've eloquently made the point that that system looks like it's broken. And whatever comes out of today is not going to be anything like the last word anyway. So I don't know if you want to have another last word, but it's my pleasure to thank you for having been with us for this hour and for your presentation and for answering those questions and observations. Well, I would say I very much enjoyed today. I want to say about Q&A sessions. Sessions were half of it. I talk in half of it, I listen. I don't learn anything when I talk, but I learn many things from questions. And I really like the sessions with the Q&A. So to you, Alex, and to the many people who've asked these very interesting questions and difficult questions, I'm very grateful. And it's been a real pleasure to be with you again. Thank you very much. And I really do hope we'll see you again at some point in the future.