[background noises] think you guys so much. Thank you for being here. Im Lisa Freedman report on the some reporter for the New York Times and im very gratefulul to have 2dollar pans beginning with this one that is really going to drill down into a lot of the things that are covered. First let me introduce our panel all the way to my far right that director at the center and regulation markets at the Brookings Institution. The bernard l. Schwartz chair of policy development and the fellow in economic studies at berkeley and the fellow for the initiative for disabled energy policy. Adie tamer in the center is a senior fellow at Brookings Metro and an expert on infrastructure policy and urban economics. With a particular focus on transportation and digital technology. He hedine is working to better understand infrastructure policies from theic federal levl and how they Impact Economic Development social prosperity and and directly to my left Glenn Rudebusch a senior nonresident senior fellow at the Brookings Institution with a volatility and risk institute. And glenn played a key role in Climate Centers for cash considerations on research and policy but i think all of you for being herere today. I had a larger introduction planned but im think theres much i can say about the Inflation Reduction Act that john podesta didnt go over so im going to repeat a couple of key statistics. Companies have announced over 115 billion in Clean Energy Manufacturing investments in the last year that have created 170,000 Clean Energy Jobs and document more than foreign 70 billion in the supply chain and 10 billion in manufacturing. This isnt just industrial policy but but this is Climate Policy and want to start with President Biden has said he would cut u. S. Emissions 50 to 52 below 2005 levels by the end of the decade. The ira combined with regulations is estimated to get us to about 40 . First lets start with what has happened already. Whatrt do we know about how far the ira has gotten in reducing the emissions. This is the billion dollar question. As you mentioned the first part is what are they intending to do and when you look at the life of models that came out before the ira they take us from 25 to 28 reduction in business as usual to 40 to 44 . And this is the plan. The question is how much does that plan materialized in here its much more complicated because we dont have a central tracking system or Accounting System to see how many emissions are happening what are these investments facilitating in the economy so this is the keyed difference from the europeans because the europeans had a price in 2000 lives of every facility had to publish admissions data. Its easier to count for it and the ira what we need is very good date in very Good Research to see whether its working or not. Allow the Big Investments worked in a much longer timeframe so we cant say yet whether the emissionsr reductions are happening as planned. What we do see a is definitely e ira has catalyzed a lot of Market Forces that existed before h the ira as a conditiono a lowcarbon economy and the Market Dynamics and these original Market Forces in an accelerated way towards decarbonization has attracted lot of investments that we talked about the europeans before. They are worried aloud that companies are deciding to invest in the u. S. Rather than europe echoes of the ira so the biggest effect weve seen so far is the dynamism in the marketplace and investors to put private and public money into the at market. Do we know if its working as an emissions reduction tool. We will have the way to few years to see if cars for instance. Well get a better sense in the power sector is its more visible. Again allowed that depends on permitting like i mentioned before lot of it depends on whether its being taken up bush was baked into the models but we can only see it as it plays out. Thats an excellent point Emissions Reductions are not guaranteed. Does depend on whether people take up the electric vehicles as opposed to combustion vehicles and whether we use the electric heat pumps in solar panels and the like. Adie david bret up in the last panel with john podesta that. Though recognition rate of the ira. What did you see as john seemed to indicate its just a matter of time. You thinkk thats true and is this the failure of the administration or the failure of media and whats happening. First of all thank you and thanks brookings for putting us on and for all of you for joining us today. With the level of humility i think this is going to be a permanent challenge. Youve got all the recipes here to have difficulty breaking through to the public that has a certain amount of skepticism of what government delivers for it. I am reminded and flipping through the brookings cedar key will the prior recovery. And how difficult it was in many the pop of remember they put logos on Infrastructure Projects under the t tyga Grant Program d Others Program and other senate really struggled struggle to break through. Those are publicly owned apps. Now we are talking about tax credits moving through the system where you are often procuring a privately manufactured product for seeing a change in the energy coming into your system and is this clean food delivered by a private Company Along with transmission and Distribution System youve never understood and that is the challenge. You pack all of that up where Peoples Trust in civic institutions is way down. And you have an entire twoparty system one side of the coin trying to throw shade of east and public messaging and back home they are more willing to cut ribbonss and facilities in their district. Thats all wrapped up in communication challenges. Frankly i think its far bigger than any administration can solve. Its inherent in the process so i think we have got some kind of the underbrush here to deal with and i say this as a noncommunication expert. We work in infrastructure though and theres a joke on the right side which is a huge actual carbon emitter that freight doesnt things should up your home and never expected to work in but it doesnt its hard to understand why. The ira is a perfect metaphor for what they will try to bring through here. We heard from john podesta this is not going away. I want to get to thego Financial Markets and you were saying and we were talking backstage while consumers are learning about the ira possesses notes that we was available. We see a lot of interest in the Business Community and the venture capitol and as i mentioned vlad affirms have production plants in europe and the u. S. Sending the production to the u. S. Because of the ira. Pete these credits are there and people know that they are there and they are capitalizing on that but i want to go back to your point the announced drops we have seen so far by republican districts. If people dont make that connection. If i could jump in with one thing really quick totally agree. The distinction are local businesses. We will be responsible for of it to thech best we can do showing theres not an awareness on each that companies. Lets come back to this. Glenn youve studied the role they went to sector will play to tell us more and youve done a study recently on the stock Market Reaction to the early assumption that there would be no clean energy measure. Can you tell us a little bit more . And its important in the Financial Sector is under appreciated her often overlooked areamp and the rule and the hour sustainable economy for allocatingll funds or sustainabe investment also towards managing risk. Whats useful about looking at the Financial Sector and sanjay said it would take a decade but we seen some progress over the last year. We wont know for several years may be a decade out the investment projects have gone through leading up to the Emissions Reductions and positive climate effects. So the forwardlooking nature of the Financial Markets gave us an early read on how useful and effective the ira is. Financial markets have been allocating funds managing risk but they also have this aggregation of information so they can leverage that. So there were two events during the just station in the eye or a. There wasio a whipsaw of that lk like all hope was lost july 14, 2020. Excuse me i have ptsd from covering this. All hope was lost in the probability of major Climate Policy seem to go to zero and two weeks later on july 27 of 2020 to the ira was released the entire bill was released so that was a surprise so that makes it a great case study and a greatit event study. Typically the Climate Policy comes out in dribs and drabs thats negotiated. Before why oxman markey was tortured it was a long time before it was put to the test. So its a great study and we see in this research work, its a Brookings Institution working paper and the Hutchins Center with Michael Bauer and ericas coauthors. We are looking at the stock market responds to events where the probability of Climate Policy went to essentially zero it jumps to essentially one. Looking at both the broad indexes and individual firms and you really see the green affirms, it of lowcarbon firms and the low emissions firms measured in terms of emission intensity or a Rating Agency that the greener firms really did much better when the ira was announced. That was a huge jump in relative value,e relative certainly to more carbonintensive firms. You dont expect that. You might expect outside if thats what youre looking for but i think its an early indication that disasters are expected to have important effects in terms of profitability with these firms. You can do a cost channel where the investment was subsidized or demand channel where there Clean Energy Products were being used for instance for the cost channel and demand channel. Makes perfect sense in terms of the pricing perspective. You dont even see dont always see that in the data. I think thats an early sign that the ira is going to have this positive benefits. If its implemented as so. Lets turn to what some of the are and you want to dig in to permit thing but what do you see at this stage that the next hurdles are towards implementing the ira conditions. Its two main things and one is to uptake tax credits on the consumer and not many people are using it. And the second is permitting. We need to bring in a lot of infrastructure materialize those things that theas ira is adding. That could take a long time. We hardly see anything in congress that focuses on reforming it and just to give an example we did a different timeline for a lot of those projects it takes nine years. And thats great. You need to speed it up much more. I think s thats a major challee in the third when baby is unintended consequences. And you had to be very careful that they costs are low for low income and middle income families. I dont want to put words into your that you indicated to me is that enough and does it require congressional action or can the administration on its own address the transmission modes. I dont think it would be enough. Allowed that happens at the state level in the local level too. Well get the permittingg for instance for new power plant its up to the federal state and localer level. So i think this would be a concerted effort to improve it into speed it out. To give an example we have assistance from natural gas pipeline. We dont have transmission line so that allows lines in with the states were made at the line is going through but they dont get much electricity. With an act in congress that could really prolong things. The other major issue of course john mentioned as well, adie what problems are still remaining . G those are trouble questions. There is a lot of trouble on the workforce for their team has a runon infrastructure work and whats defined as green jobs of the jobs of the saint of work to jobs of those things that were defining green jobs next to each others problematic t too. Folksan cannot agree on what a green job is. We tried our best in the past so by a study we did if years back on judgment side of what could be inclusive to the economy by our estimation they are 6. 5 Million People that already work in her cleaner could be clean jobs. That stretches it and its more more important than the jobs number over 300 unique occupations. This is an exhaustive setpa up. And we need to deliver what the ira promises. John podesta mentioned two numbers and youll quickly find them in a press release as well over 170,000 jobs and this is really the key then you go to the hyperlink. We are talking about announced jobs and went. 5 million over 10 years. I dont know about each of you but i dont want to announce jobs. Thats going to be the question Going Forward is how many jobs are sustainable and try to work with metaphors again or whatever you want to call it. We often talk about construction in the industry of the green job but its mostly constructing a stadium. Those are not sustainable jobs. Its shortterm infusion of cash and good for those workers. We are looking for sustainable employment which has real opportunities. Essentially whats going to happen on the energybased transmission on generation and transmission. It can take time to see how many sustainable jobs we will get here and what is the green nature of them . We have some work that has just come out to make a final point on it at the local level which is really important in delivering jobs there are continuous breakdowns in the Climate Action plan on the actual connections between workforce intermediaries and infrastructure related agencies thatat would employ these folksn the Public Sector site. Increasingly theres a lack of money so even if they have workforce ambitions theres no idea where the money will come from so to connected off the top of the new jobs much of it by other Economic Data tied up in the construction facilities. We wont know the total durable Mount Johnson is not just related to ev and other manufacturing investment but all through c the entire economy. Some are declining the Inflation Reduction Act because of money. Beyond that and what are some of the differences we are seeing in how i states that want to accept money or an ability to do so where is that variation that we are seeing in the local government both with the willingness to embrace the ira and. We are seeing a big mix and workforce is just one of them. I mentioned it in the global media and they say one thing publicly and understandably. I think its been said its your job to vote in one way but you need to protect things. My 2 cents on this is that unlike what we saw in this recovery act went governors actually were sending money back to washington. So far including the state of florida, that is not the general attitude we have seen is that theres a willingness and acceptance. Part of it is because so much is on the ira through the tax code. Also i worked in washington long enough to know that anything can be seen as reduction as so i think we will do state and local being able to take it from the system that they will need to put more laws into place in one final to point again john mentioned the Home Rebate Program and whats going to happen there. The feds have done their job and we are going to know which states are best equipped to get the word out to their Home Retrofit actors that would be responsible to make sure the cache gets back to those consumers and they can make the choices. In terms of implementation certainly there is a lot of implementation hurdles and details to be worked out and theres a political element just like the aca. There is the possibility of a reversal or repeal or partial repeal. That is certainly a possibility. Can we reflect on that for a moment . Should the be a republican elected in a trifecta what are the most likely, well a it was very difficult to repeal the ira and more likely the precedent would be exempted to repeal and do you agree in what is portable and what do you see in the white house and congress . I dont think we will get so much a wholesale repeal. Of course they are issues in terms of some of the specifics but i think its more of an administrative sort of implementing the details that couldor be reversed and any regulations over time could be developed. Give the sure thoughts on what is vulnerable. Fits up to the agencies and the regulatory agencies. I think thats one reason it takes time to be implemented so that something the administration can slow walk. Death by 5000 cuts. You slow walk it so that would hamper it and we have seen in many areas over the last 15 years because congress often doesnt act what happens is we have one administration coming in to implement and i think thats why. I want to inject a positive note. I thought i better inject a positive note began coming up of our study Financial Markets also are important terms of thinking about the Financial Risks and climate risk particularly there has been a lot of discussion about transitional policy induced new Climate Policy in order to implement the Climate Mitigation strategy and transmission risk versus stranded assets potentially. There are Financial Risks and even to the extent that there might be a financial crisis or disorderly adjustment. In our study we did notin see tt for the ira. There were certainly large movements in stocks but it was certainly not disorderly and certainly look like something that was manageable. This was the largest Climate Policy action ever enacted in the u. S. And the largest Climate Policy ever enacted in 10 years. And it happened in a short time period. We have this news come out over a very narrow window. If thats type of the event, that sharp important policy event didnt create a disorderly transition that might give some support to some folks to again the financial regulators in the treasuries that the ncc is worried about and National Financial regulators as well. So it may be the financial risk is more manageable from a c Climate Transition and thats less of a worry Going Forward. We do help to make huge transformation of the economy. Lets look the on the irony gets us to 40ish . Will it go below 2005 levels by the end of this decade and after that the administration has pledged that states will be carbonneutral by 2050. So give it a chance what would the ira 2. 0 look like . Maybe sanjay. As an economist i would strongly favor a but we know politically thats an best not feasible in the u. S. Spirit theres a school of thought that the ira would make it perhaps easier to impose a carbon price. Is that talk like. Its hard because if you look at the political spectrum is 50 at any domestic price. Theres a common price in their endedd significant. For we do see potential as a carbon board tax and the reason being a teeny european model that is rolled up their own a lot of other countries are worried about it and it comes down to a simple question do you want to have your company send products to the European Market and with attacks or a domestic price of some similar method at home read to get the revenue. A lot of the discussions on a bipartisan basis that we could see some way in the u. S. Without a domestic carbon price. When you think about it conceptually their ways it could be done. [inaudible] in certain sectors if you look at what the price would look like when you take into consideration regulations. There are ways around it and its a bit more complex but i do think that you see potential using a Carbon Border Tax on the republican side in the democratic side to a line of europeans and the rest of the world. Agree with sanjay. Carbon pricing in general seems likear a heavy lift and unlikely to happen but a carbon tariff you can put tariffs on all sorts of things. Among all theth taxes tariffs ae the most popular in the u. S. And theres a good chance the adjustment mechanismnc or tarifs would be instituted. Would we then had to attach a plate to the regulation . Do you have to acknowledge the pricing of regulation . May be the question is the optimal level of the carbon tariff would be that you could implement a carbon tariff without any sense domestic carbon price which we put carbon tariffs on solar panels and sort of the opposite of what we do under a carbon tariff. That would be i think an open case and something i think would be implemented. We wouldnt be surprised if it was implemented in the future. Beyond a potential order investment terror pcb is primarily sticking with carrots rather than sticks quick i certainly do that i think there are important, theres an Important Role and we have seen this in california where there was a new law passed about getting disclosure from private and t Public Companies so i thik we have got a lot more to do in terms of understanding the emissions and accounting for the emissions and actually figuring out the sources of both indirect and direct. Back to Public Opinion many reporters including the New York Times had a number of stories on the transition. One that we have looked at to what extent is that all is the money from the ira budgeted as we have been seeing to red states and districts changing opinions about energy or evenan Climate Change . I spoke to folks in georgia who were happy to see the expansion of tcells and manufacturing coming to their state but are suspicious of policies of Climate Change. Im almost embarrassed at this stage of reporting but why is it so deeply ideological and how do you see the irony having impact down the road on Public Opinion . Ill connect the last two questions. If we are going to have an ira 2. 0 i would argue hard that resilience and adaptation are added to it because that answers the question you just had which is its almost a requirement for anyone whos climate ready and you have twoui options. The person does is remind everyone about the top climate events. Its an effective rhetorical device and i like riding it. What we are seeing is the great work that day was done in the past and others with institution and their peers across town we are seeing more and more americans moving to climate risky locations and not just the growing risk of it. When you mention the investments in arizona and georgia the proverbial states in federal terms. Mixed at the state and local level. The higher fee case or loss relatively speaking of Water Resources in other parts of the country seeing different climate threats. Its easier in my mind what the needs are and what we know is to bring in the other i j. K. A. R. Infrastructure loss had more investing in resilience and adaptation and we have not figured a out at the federal lel the right way toev do this. Adaptation comes down to local landuse decisions which for a bunch of recent around why the typically local decisions. To connect those i think we are seeing a tide change of americans understanding that the climate is changing and it will affect them and their loved ones and they need to do something about t it. That Natural Force can rise above politics. Im hopeful that it will. We will take as few questions and start raising your hands. Whats really important is to take climate out at the ideological debate. And really look at climate for what it is which itst an economic issue and a riskbenefit. If you buy it each front property that will be underwater thats the risk. What we see is oftentimes the extremes of both sides. A lot of climate activists going to the streets and holding up commuters and that creates a backlash against the policies. What we need to focus on as experts and journalists look at it as an economic issue and make it look as if we are her everest because we have more whether benson this is your property and friends and maybe reduce admissions emissions by adapting the local elections up are willing to make the community more resilient. I think that crosses boundaries ideologically if you boil it down to the simple economic aspect. Thats the problem. We did do see ideology playing a role on both sides. To the extent that i dont think we will see in our ira to point out that we can make process like the equivalent of the clean power act drilling down to the regulatory process. We still have more to do on emissions. And a power plant regulations that are being rolled back . Thats also true for the ira the Administration Action taken their. The political loggerheads over Everything Else puts it at risk. Hi the bank of finland im an economist so o id like to see Carbon Pricing going on but its difficult to look at transportation asra the example where we dont have in a emissions trading system but would it be possible to have a limited amount of industry included in some kind of Carbon Pricing . That is not so emotional for people and voters. Sanjay quick two things where you say that the subnational level i think their interest in other states at the industry level thats an interesting question. If we get a carbon tax you might be able to see that if the industry level. Much further down the line. I think we will see that the state level 1. I dont know what the implementation of the but it will be at the state level in some states. Bob weiman and a question about risk. The rating agencies are important for understanding risk. Im unconcerned that things like the ira and other efforts are going to have the effect of reducing Economic Life of assets if we transition gas yet every year billions of dollars are being by the utilities investing in new Gas Infrastructure and in your city new york financing a billion dollars a year on new Gas Industries to mainstay in the Gas Infrastructure but the problem is the rating agencies dont seem at all concerned that the utilities are using 85 year depreciation on assets that the policies are trying to get rid of over the next 20, 30 or 40 years. Is it that they dont believe that the policies will be successful or that they think the cost will go up for the taxpayers and why are these rating agencies worried about the fact that we have these new policies that have had no impact on the utility estimates of the wider assets quick i think these are the early days for rating climate risk. There are a pleased eight, 10 to 15 providers, data providers. Just think about how hard it is to rate credit risk and how we have come across credit crises are one of bank gets into trouble and the Credit Rating agencies have little advance warning of that. Ii think its still early days n terms of accumulating information about the emissions and understanding exactly what the transition will look like. So i dont know about the gas utilities in particular or about but the appropriate trajectory in their assetat prices are givn their regulating nature but theres a lot more still to be done in terms of what the Credit Rating agencies will do. And patrick with german industry and trade in d. C. You mentioned workforce because its repeatedly been a number one challenge for our companies in germany and the less. Theres not enough awareness on the federal state and regional level up this problem. Green tech is wrapping companies cant find a the work that they need to produce whathe they need if they need more engineers and more for shop workers at an electronics and mechanics and its one thing to acquire programs from the ira and its another thing to set them up to visit not happening not to the degree that we need soap talking about an ira to point outyears down the line potentially what is an avenue here because the way we see it right now itll be a challenge to make this transition work. Yeah thanks and not a surprise that the germans are noticing we arent as good at this. Many of the workforce programs in multiple Different Countries in europe. Americans are trying to play catchup here to learn. Just to remind folks in the spirit of what you are speaking about the vast majority of these jobs do not require a four year degree. Its not necessary. Wages exceed average certainly in those hundred plus occupations and across the Infrastructure Sector in whats called the skilled trade the higher wages at every skill level but they also do extensive amounts of onthejob training both skills that dont require a formal education and its done at the workplace whether through partnerships or others but its a lot to like your in america is more tumult decades in the Education System the overpromoted four year degrees at the expense of other skill development. We are now seeing the benefits of that. There were some benefits and this is one of them. What you are experiencing firsthand is how do we do with . There a real opportunities here and ill finished with one quick concept. We need new kinds of metropolitan or regional scale partnerships with the local Government Workforce intermediaries and employers pay both inside the Public Sector has been mentioned and the infrastructure in the privatesector to. We really dont have that kind of system yet but the good thing is even the federal government including the department of labor have regional work for systems that can address this. Thats one area to keep your eye on and id be happy to talk to your college who needs this work. We put out some research on that. There are billions of dollars available for Workforce Development inside the eide j. A. Has effectively the ira but more dye j. A. A. Thats orders of magnitude more than you need so theres a lot of money available. The challenge is to it passes the buck to the states specifically the state department of transportation. They have two decide to spend less on capitol projects and more and Workforce Development and that inherently brings culture change so theres a lot of misinformation around dollars. Second row. John mulligan is krevans your project. We talked aboutit rating agencis but we talked about florida and california and the narrative that you could substantiate that a lot of these are on the brink of being a disaster way. The industries havent been effective as they imagined they woulds be. Or aspired to be produced there a way in which a they can increase their effectiveness and legislation and regulation . I can start. When asked earlier about the attitudes around the politics of climate ensures how to do something here. When you loose insurance on the home is quick way to understand Climate Change. We have been doing some work in california around climate risk and extremely granular with data their private firms that offer this data is emerging models and local governments do not know what to do with it. This is clearly an emerging field and can lead to conversation. The other short part of the answer is i dont think we are anywhere a close to what we need to do. Not even close. California has been grappling with this and they have not been able to all of their insurance models had to be looking. They didnt allow forwardlooking models so thats problematic. Spending does anyone think they have the perfect final question . Im the one from the world bank and it doesnt mean that im representing the world bank. The ice is broke and im Carbon Pricing and John Podestas presentation there was not one mention of that and i want to mention one issue that we havent talked about yet regarding what kind of model has the u. S. Policy had toured the world and is it a good model . And the next question is whether poor countries could do something similar to what the u. S. Is doing. Typically the u. S. As a model for much of the world. Its a long issue. We have one minute to wrap up so it is a model for other countries including poor countries . I think its not a model for developing countries because they dont have the funds. I think what they will benefit from is the technology and to transfer the technology to these countries so they can leapfrog on them. Staying in terms of Financial System that requires public seed money for the world bank and leveraging privatesector investment. The funds can come from the International Community but they also have two worry about the risk that may be undertaken. Will have a million more questionsnd for you and i want o thank all of you for very great discussion. [applause] [inaudible conversations] [inaudible conversations]