[applause] thank you all for sticking around for another terrific panel. Let me introduce for the Inflation Reduction Act in the middle samanta is the director of the Energy SecurityClimate Initiative on the Foreign Policy at brookings. Her work is focused on the intersection of Energy Environmental policy and International Cooperation. To my left, senior fellow the Global Economy and Development Program at the brookings institution. He leads the forum on cooperation and artificial in al intelligence and also the u. S. Mca an initiative that focuses on how the United States, mexico canada agreement. The intersection of Technology Trade policy. From 2009 to 2016 is a program from 2009 to 2012 also served as the director at the china center. The special assistant someone i would call to explain. Thank you so much for being here and holding this discussion. Im happy to learn from the panel because ive struggled to get my arms around the International Assessment of the ira. The community has said America Needs to lead and now that the United States has its first significant and really globally significant climate model, nobody likes the way weve done it. Thank you for being with us today. Appreciate it. Japan, south korea, singapore and the general consensus that i got and i paraphrase is we are so glad that you are doing something on the climate. Okay, fine. I think the two things that other countries and europeans in particular were most frustrated with is the size of the subsidies. John podesta said it earlier its the largest claimant bill weve seen in the United States. Its the largest investment in energy and transition that the world has ever seen. And i think that frankly it was kind of intimidating. We are the largest economy. They dont have the ability to do it the way that we do. Of the European Union isnt a taxing authority. It cant use its tax code to provide benefits to investments. So it has to be done at the individual country level land of and theindividuals have differet abilities so its a difficult thing for europe to replicate so that is one reason that they looked at it and were frustrated with the way that it went down. I had a lot of conversations with them about why it happened the way it did. We can talk about that if you want. That was one source of frustration. Second was the protection aspect of it and i think john podesta touched on those. Those protection aspect were aimed at our friends and allies in europe or asia. They were aimed at china as a look at my friend. Theres an understanding china is an important leader in the green energy technology. Everything from solar panels to batteries to electric vehicles, and i get asked this question more than any other are we trading dependence on the middle east regimes for the china or just one thing looking for another and the answer is no for a lot of reasons but thats why use all these protectionist instincts. In addition to the desire to create these jobs here in the United States its part of the administrations general policy to grow the economy from the middleclass outward so both of those were challenging and upsetting to our allies. But for a lot of political reasons, that is the way that it was going to go down and i spent a lot of time over the past year explaining that. How we got here, why it is the way it is and hopefully we can find room in the middle to relate. Thank you. So do we trade our dependence, that is exactly the question before we get into u. S. China and the policy itself. I would love for you to talk about this as well. Its exactly that we are dependent on china. We heard john podesta site all of the figures which im sure you know at the top of your head as well of the dominance in Critical Minerals et cetera. Dealing with Climate Change they are way ahead of us because years ago the bump up in 2015 but even before that, they determined that they had to make enormous investments to deal with their environment and Climate Change impact on the environment. So, they ramped that up dramatically. We did not. Our eight to ten years later the chinese have done a tremendous amount including getting control over the value change, jumping into the set of issues where in many cases the chinese are ahead of us on technology. The production capacities that we have not felt. They have control over supplies that we do not have and they know how to do it. They put the whole system together. For us to go in and not deal with the chinese to cooperate where we can, to buy from them or license the technology from them when we must is simply to delay a hard transition capacity to deal with these problems more on our own. I think the u. S. Government, the Biden Administration recognizes very clearly that we have to develop our own capabilities over time but its going to take time and if we dont seek to learn how they are doing this, license the technology so we understand them better and can build a plant here simply not to delay our transition. I think the chinese are very anxious to export. I think they are happy to sell us stuff and to build a battery plant in michigan but it was perfectly happy to license that Battery Technology to us and show us how to build those batteries. They are well ahead of what we were able to build here. If you go back a ways to the chinese they leapt ahead in their industrialization over the last 30 years because they recognize they have to learn from the United States. Its a very longterm approach and leave you falling further behind. If the chinese have capacity to dominate these industries and we have to sit there and say we can deal with any of them we have to do it on our own and be fairly protectionism for our friends and allies i think that multiplies our problems so we need to be nuanced and not categorical. Can you talk about how the ira affected the trade relationships . Its coming with the ira to achieve multiple pieces that has gone to the claimant objective. If you have these multiple important complex objectives, you are going to have a variety of unintended consequences domestically and globally. We solve very quickly that there was a range of provisions in the ira that raised a number of trade detentions the main one we got a lot of focus initially was access to the tax credit for essential either to be assembly. It was going to be north American Partners i think were relieved by that particular outcome and very quickly it became apparent that europeans and japanese and south koreans that this was going to be a problem and it is a violation of certain amounts to essentially get access to the tax credit that is a violation of the nondiscrimination commitment in the wto so it was a straightforward issue and the way that it was drafted essentially as if you had a freetrade agreement with of the theUnited States you could essentially be exempt. So the administration to its credit seemed to be somewhat taken by surprise at the fact that this became a trade problem and the reaction of allies and they moved fairly quickly to address that so weve got to the socalled critical agreement that is being deemed a freetrade agreement under the ira to get around the provision in the protracted negotiations with a similar deal on that as well so theres sort of progress on those fronts and immediate trade concerns get resolved. I think theres a sort of bigger set of trade issues that comes out which is the shift to heavy reliance on tax credits and subsidies to push green transition. Its complex debates because the wta rules we generally have on subsidies have always been contentious and somewhat economically incoherent. Theres sort of a legal approach to them that needs to be understood in the political lens as trying to balance a sort of economic view of subsidies with a realization that it is difficult for countries to absorb even though we make a little economic sense theres those that get upset by these understandably so in the trade agreements that allow the governments to counter veil and neutralize the impact of the subsidy but we are now in a world where the u. S. , t subsidize. The final point i want to make is that. To enable it would also be considered in light of the subsidy for the fossil fuel sector so its not a mutual playing ground. If there were a lot of work by others on the g20 and trying to transition the world of the fossil fuel subsidies that is completely like subsidies that are significantly higher today than they were three years ago for instance. And its also not a level playing field. How do you kind of [inaudible] i want to connect the subsidies. I wanted her back to the claimant from where i sit, the success prides itself on whether it ultimately cuts the emissions or others to cut emissions. Lasorda when we heard all these years amerigas to lead, the assumption is others would rally once the United States had acted on climate. Why is that not happening . Thats an excellent question and i feel like some of the debates that we are having at other events, the claimant weeks ago, are we going to phase out or phase down i have to be honest i find that incredibly frustrating because the demand are still going up. We are arguing whether to seize down they are basically arguing over the exact same thing. We need to reduce the use of fossil fuels and create a phase down. One thing i will say that is a good example it may be difficult for other countries to subsidize at the level we have for any number of reasons, but theres some things that i think are exemplary that when i talk to folks in the European Industry and in other parts of the world they really like, and that is its quite Technology Neutral focused on emissions. The thing that the environment really cares about. For instance, if you look at the hydrogen subsidies, they are not focused on what color the hydrogen is whether it is made from natural gas or solar energy or any other color, and there are too many to count, its focused on the emotions emissionsassociated with it. That is very appealing. I think how the u. S. Is leading. We are leading and policies that allow technology to flourish. Both in the way we are supporting Technology Development is drawn touch on a little at the beginning. We are quite neutral in the way our policy support technologies. As long as they take us to the goal of lower emissions that is a leadership im part of the u. S. That i like and hope is followed. Plus what do chinese leaders think of the ira . What do policy makers how do they view our law . Works for us while the chinese are not surprised by the ira protection especially. They, back in the teens looked ahead and set at some point the u. S. Is going to try to cut back our development our rate of development is going to regard us as a competitor i know take measures to put us out and build up their own capabilities. And our response to that is got to be we are going to develop selfreliant systems. And they started doing that. Very much including the array of areas that are directly related to Climate Change and environmental sustainability. Its not discussed much in china. You quit looking for articles about the ira in china that is not what it is about. Devout competition with United States and how the night they just trying to limit development. We were right to go out and more selfsufficient past we are increasing our focus on being able to do that. So in a sense the ira for shooting pain is confirmation of how smart he is. That is as it is. Frankly i am glad we are in this game at a very high level. And i hope will be due at the chinese we are open to benefiting from what they have accomplished. But also at the same time taking substantial measures to prevent them doing to us what theyve done in the past and continue to do too many is unfair trade practices and subsidies to undermine capabilities as you are buying from them. And so we need intelligent policies to limit the damage they can do to us. At the same time we have to recognize we really need to be able to absorb some of the advances they have made and build on them ourselves. Whats described as u. S. Climate policy for china . Its like g lee hoped john kerry can convince the Chinese Government to do more. John kerry is a terrific climate diplomat. Endears primarily with his equivalent in china and he is really committed to Climate Response and International Cooperation on it. The problem as i see it is we focus tremendously on the top line carbon reduction commitments to china will make. What is the percentage is going to be et cetera. It is a fruitless discussion. Xi jinping has said is not just from jon kerrys been saying it for years. He did say when drunk i was in china progress he also said it would drink i was in china but it should not have been a shock its not by any means the first time he said that. China will determine its own pace and timing of karma reductions will do it in a way that fits with chinas conditions they are setting a goal for 2030 or before neutrality by 2060 or before. A lot depends how hot it gets when it hits those benchmarks. I have no doubt they will do a lot on carbon reduction Greenhouse Gas emissions and reductions theyre not going to do because we are pushing them. But below that level on methane on all kinds of other issues theres a lot that can be negotiated in terms of cooperation on a deal of people and tried it with serious players they are very anxious to cooperate with United States barriers to about art much lower you push them on the top line number they push back very hard coal is to my mind one of the biggest failures in china. They have tried for years to reduce coal as a percentage of their energy sourcing. They have made a modest progress and that at best. They continue to build cold up power plants in providence that already have an abundance of coal, do not need it at all. I think its a combination of several things. One we need coal to smooth out when our Renewable Energy resources have gaps the sun dont shine at night the wind dies down et cetera. So we need that as our baseline so that new coal power plants they say will operate somewhere between five and 15 capacity. Just to utilize as a stopgap. Secondly theres clearly a lot of politics with kobe a lot of localities depend on it for employment. Depend on it for building their own gdp they get rewarded for it even if its saying dont do that. Its a multilayered system. By the time it gets down to the local levels politics are complicated. They have a hard time cutting back on coal i think they need to take it much much more seriously than they are. What do you think of the prospects and what would that do global trade relations . Us get back into that question by picking up on your previous question it would be great in why is it not so smooth. If you have been paying attention to the implementation of ambitious Climate Policy particularly in terms of how we dealt with the competitiveness implications it was clearly going to be a deeply challenging and messy process. Focus on targets, commitments, financing where more of that was an unadulterated good thing. I think once you moved out of that space into what the domestic politics were going to be around is what would that politics it will look very complicated. But go back to the obama years you will see a push on a carbon tax in the United States. That was deeply i wouldnt say polluted a big part of that conversation was how do we deal with the implications of a domestic carbon tax for an industry its going to be taxed more we have jurisdiction. A border adjustment. Yes please go ahead. That came up in the various bills that went through the house there was a lot of intellectual effort put into how could you teach different carbon taxes in different jurisdictions together. It was all based on the premise that you could have a project that ultimately allow some comparability of efforts and that would allow for some ability to make assessments about the your own domestic carbon tax import. Its vastly more complicated in this world we are in whether the u. S. Has essentially concluded there is no viable political pathway on that instead the approach is huge amounts of subsidies and tax credits and so forth. That makes it a lot more complicated theres no obvious way to draw benchmarks or to determine when there is an equivalent level of effort in the u. S. That would satisfy Something Like an eu carbon tax. So how you can stitch these systems together we are at the beginning of that conversation is now part of the discussion on the impact of the ira which will come into effect in a couple of years. Your failure to resolve that is ultimately going to mean to put it in blunt terms a deep clash between the systems. You can care about that on institutional level 20 be deeply important at determining the cost of carbonization pathways. It is undoubtedly a world we were not concerned about Clean Technology we would just be essentially taking all that from them we would be happy its clearly but ultimately there is a role for relatively free trade and Carbon Technology between trusted allies and so forth it include the eu certainly. That will reduce the marginal cost of our pathways. If we cant get there and were trade conflicts there is u. S. A products the u. S. Is undoubtedly going to respond in kind with much more pathway had of us. Text essentially said ira was great for europe. What is next in europe . Europe is coming on the ira i have to say particularly european businesses. There are a