tv The David Rubenstein Show Peer to Peer Conversations Bloomberg February 20, 2022 10:00am-10:30am EST
♪ david: this is my kitchen table and also my filing system. over much of the past three decades i have been an investor. the highest calling of mankind, i have often thought it was private equity. [laughter] and then i started interviewing. i watch your interviews. [laughter] i have learned in doing my interviews how leaders make it to the top -- >> i asked him how much he wanted. he said 250. i said fine. i never negotiated with him. i did no due diligence. david: i have something i would like to sell you. [laughter] david: -- and how they stay there. you don't feel inadequate now
that you are the second wealthiest man in the world, right? [laughter] ♪ over the past several decades, one of the most dominant political figures in the united states and the world has been john kerry. he served as senior senator from massachusetts, chair of the senate foreign relations committee, nominated for president in 2004, and secretary of state under president obama. now under president biden, he is serving as special envoy for climate change. i had a chance to sit with him and talk about climate change and other issues facing the unitive dish. -- united states. ♪ i went back and looked and very few secretaries of state in the last 100 years or maybe ever have gotten back into government, so why did he want to come back into government for any issue, when you have eight grandchildren, two daughters, you have got a wonderful family -- why did he want to come back and go through this terrible process we have in washington of getting things through consensus? getting people to agree with what you want to do?
mr. kerry: because i want those grandchildren to have a future. it is very simple. we are not on a good track right now. the world is not serious enough about reducing our emissions fast enough, david. the result is that the planet is going to continue to evolve in reaction to what we human beings are doing to it. mostly through fossil fuels. most of the emissions are going up nowadays into the atmosphere and they are creating this increased level of energy that comes from the ocean, goes into the storms, the floods, the rain. all of it is all linked to the changes that we are creating on the planet. so it is very simple. i wanted to come in because i think we have a real chance now to make something happen, and i think glasgow was a major step forward in the effort to do that. david: some people thought you should run for president in this most recent election. i read it in the newspaper, that
you thought about it, but when joe biden decided to run, you decided not to run against him. mr. kerry: i decided before joe biden decided not to run. i thought joe biden had a better narrative than i did. and he is a good friend. we have known each other way back in the early 1970's. i really thought he could win and was the best guy for the job. david: you campaigned for him? mr. kerry: only joe biden can make america lead like america again. david: he gets elected and says, guess what, can you come back and serve again? did you say, i am retired, or do you say, i want to do this? mr. kerry: i was excited by the prospect. i did not know what it would be, specifically. we had to work out the parameters to understand what exactly the dynamics would be. but the idea of having a president who wanted to get back into paris, to make this one of
his top security issues, one of his top issues overall, the idea of having a president who would continue to push as he has been, to help us get something like glasgow, was and is exciting. i felt super motivated by that. david: jim baker once said the best job in washington is actually secretary of state. you were secretary of state for 4 years. now you work in the building where you were secretary of state, but technically not the secretary of state anymore. is it complicated? the man who was your deputy is now your boss? mr. kerry: totally great friend. we worked on the foreign relations committee for years together, works together in the white house. he is doing a great job. the administration is right on track now with respect to what is happening in ukraine. they have been strong and skillful, and i am very happy doing one issue.
david: let's talk about glasgow. many times when you have international conferences, most things are worked out in advance and you have press conferences but the things are already agreed to. but my impression is in paris and glasgow, it wasn't all worked out in advance. mr. kerry: it can't all be worked out in advance. nations have different interests, you have 195 nations, to the table and everybody's voice needs to be accounted for and factored into what you are doing. some of the dynamics don't come together until the clock strikes midnight and you know you have to fish or cut bait. there are always last-minute things that arise in that context. mr. kerry: i understand for people in glasgow, that you were -- david: i understand for people in glasgow, that you were running around in the middle of the night working with the other delegations, trying to cut deals, and in the end people said it was a pretty good agreement that came out of glasgow. is that your view as well? mr. kerry: yes.
i think it was a very forward leaning and strong agreement. it has unanimity about what has -- the single highest raising of ambition. it has unanimity about what has to happen in terms of raising the efforts around the world. we signed on together with the plans individual nations have, and when you tie those to the initiatives that many different countries came together to embark on themselves, altogether, the representative of the international energy agency has run the models, and it actually could get us to hold 1.8 degrees by 2050. that is encouraging. it means you can do things that make a difference, at least in the models. the trick -- not a trick, but the challenge now is that over the course of the next eight years, we have to reduce emissions by at least 45% globally in order to be able to achieve net zero by 2050, and in order to be able to hold the
david: the consensus seems to be that you can't do these things overnight, so you have a period of time that you allow people to change their habits. the consensus is that by 2050 is the time we want to measure the success, right? mr. kerry: yes, but this is not a politically arrived at or ideologically arrived at goal, this is coming from scientists. -- thousands of scientists. they are the ones who tell us, in the last report of 2018, that if we want to avoid the worst consequences of the climate crisis, we have to reduce our emissions and get net zero by 2050. the only way to get net zero by 2050 is to begin now to reduce because there is no curve steep enough to reduce later. you've got to start now. that's why the next eight years, this decade, those scientists
have said to us, to avoid the worst consequences of the climate crisis, you must reduce emissions by 45% over the next 10 years, that is 2020-2030. so we have set our goal -- president biden has set a goal that we will reduce emissions by 50% to 52% over the next eight years. in canada it is 45% to 50%. japan, 45% to 50%. europe, 55% reduction. the u.k., 68% reduction. south africa, 50-something. people have stepped up. we now have 65% of global gdp committed to hold on to 1.5 degrees. but that means you have 35% of that isn't. so, our effort now, david, is called implementation plus. we want to implement the promises that were made in glasgow, and we want to add to them to bring that other 35% of people to the table.
if everybody does what we said we would do currently -- that is without eight or nine countries making an enormous difference to this. currently, we could get to 1.8 degrees by 2050. that is pretty amazing. if we can do that without china india, russia, indonesia, mexico, south africa, saudi arabia, the group of countries we need to come aboard, if we get everybody aboard, we can actually keep 1.5 degrees alive, or minimize the damage that is done. david: the countries you mentioned have not signed onto this yet? mr. kerry: they have signed onto various other efforts. china has a plan in place. it is just that it doesn't -- in our judgment, we need to go further, faster. that is reinforced by the judgment of the international energy agency, that says last
year, coal went up 9% over where we were in 2020. david: around the world? mr. kerry: around the world. david: in the u.s. it went up, too, right? mr. kerry: yes. in addition, there is 300 gigawatts of new coal construction coming online at a time when the international energy agency says you have got to reduce coal plants by 870 gigawatts. so the imbalance of that is dangerous for everybody. it is at the heart of what we have to really try to tackle now. david: one of the challenges has been the developing nations -- some people would say china, even though it is a gigantic economy, is a developing nation, india, they say you in the west have been polluting for a long time. why don't we get a chance to pollute for some time until we get our economy in shape? mr. kerry: because there will not be much of the world left negotiate.
-- to negotiate. it is that simple. it is a reality. no country can solve this problem by itself. if we went to zero emissions tomorrow, we still need china, russia, india and all these other countries on board. i have heard this argument face-to-face with different ministers and people who say, wait a minute, you guys were doing this a long time ago, you have had more euros to do it. -- years to do it. yes, but, it wasn't until 1988 and 1990's, beginning, that this issue arose and we were aware of what we were doing. from that point in time, we have made bona fide efforts continually to be fair and bring people to the table and change the dynamic. david: until glasgow, the chinese were saying, we have a lot of issues with the united states, let's put it all together and resolve all the issues, including climate change. i understand you did some negotiating in glasgow and got the chinese to agree to separate
out the climate issue. is that fair? mr. kerry: we had agreed to separate it out previously. president biden and president xi had talked about it. that has been our point of view from the very beginning here. this is not a bilateral issue. this is not an issue between china and the united states, except to the degree that if one or the other is continuing the problem, we all have a right to push back. but this is a global issue. every country can do things to make a difference here. china is about 30% of all the emissions on the planet. the u.s. is about 10% now. you have india behind us, the e.u., russia, indonesia, and sequentially down to about 2%, and one-point-something percent of all emissions. so, 20 countries, david --
basically the g20 -- 20 countries, not exclusively the g20, account for 80% of all emissions on the planet. so if you can get those 20 countries to work fast enough, we can have a profound impact on the choices that other governments are making, i.e. what happens in africa. we want them to develop. we want latin america to develop. we want south asia to develop more, but we want them to develop clean, smart. that doesn't mean building coal. it means using renewables, moving into new energy, and we have to develop further battery storage, clean hydrogen. we have to -- carbon capture, which would make an enormous difference in utilization of that carbon. there is a lot of research being done but not enough. david: in glasgow they say, you have these incentives, but you are not getting them through the
incentives, $500 billion of total value. mr. kerry: right. david: that legislation has stalled now. in glasgow they say, wait a second, you have all these incentives, but you aren't getting them through congress. so why should we listen to you? mr. kerry: there are people who ask that question. no question about it. i have heard it. the fact is, the infrastructure bill which president biden proposed and has passed and signed into law has in it major initiatives to deal with the planet, with the global crisis. so, for instance, building charging stations around the nation, helping with incentives for the conversion to electric vehicles, building out a grid in america, a smart grid with transmission and so forth, i think it is about $70 billion in there for that. so there are major steps that have already passed. and i know the president will continue to try to fight for the best parts of what he thinks he
can get through on what was build back better -- i don't know if it will be that or something else. we need that for the planet. it is not just what we do in america will matter enormously in what happens in other parts of the world. david: say i am a country in glasgow and i am sitting with you privately, and i say, i know you have the best of intentions and the president has the best of intentions, but donald trump could get elected again. why should i listen to you? we could go through this and have the united states pulling out of agreements again? mr. kerry: i don't believe i have heard that question, but i believe, and i think you will agree with me, there is no way down the road, and i believe president biden has three more years, i think he will be reelected because of what he has achieved, and once we get beyond covid, once we see this transition taking hold -- our economy is doing pretty well.
unemployment is very low. so the uncertainty right now revolves around covid and a few other things. but let me just say this -- no president in the future would walk into the white house and undo what is going on around the world. this is bigger than the united states, this response. people around the world are retooling. in america, do you think ford motor company general motors, which have completely retooled and are retooling their factories to build electric, du inc. they will suddenly say electric is not the future? electric is the future for automobiles all around the world, that is already happening. the pace with which electric is in demand and being built -- why is tesla the highest valued company in the world? all it produces is electric car is and electric vehicles.
so i think that with the trillions of dollars that is going into clean hydrogen, battery storage, carbon capture -- while companies around the world -- you know this, david, you sit on boards and you have been a ceo -- there are boardrooms around the planet in which the discussion is about esg, environment and social governance. people are concerned about being responsible. the financial sector is going to demand disclosure of risk. people are going to be making risky judgments about the kinds of investments being made. i don't see any politician anywhere in the world and doing what is happening in the private sector today. and that is going to continue. it is going to grow far above what it is today. david: suppose i say to you, i agree with what you are saying, but i am not that able to impact climate change. i am just a capitalist.
i want to be an investor. am i going to make money by investing in this climate change economy, or am i going to lose money? mr. kerry: you will be able to make money. it will happen. a lot of people are already investing in it and making money. i know people who will remain nameless, but they are investor -- invested to the tune of millions of dollars in alternative and renewable energy and they are deploying it around the world. it is cheaper to do that than it is to build a coal plant, than to buy the coal. it is cheaper than fossil fuel today. if people did real accounting, the real cost of fossil fuel often contain the damage to the atmosphere, to the planet. the warming of the ocean, black lung disease, the health effects. the real cost of this is way beyond what is factored in at the pump or anywhere else. you know that so because there are subsidies -- we have $2.5 trillion of subsidies built into
the system. last year it was $440 billion of subsidies to fossil fuel, which is causing the problem. that doesn't make sense, david. so i think you're going to see a seachange. look at what happened to exxon mobil -- three seats on the board of directors have gone to people who care about climate. it has changed what that company is thinking about doing respect to it. david: you are passionate about the subject, i assume it is fair to say? mr. kerry: the negatives that will come with ignoring this further are so identifiable. it is almost like the vaccination issue -- i don't want to get into it too deeply -- when 99% of the people dying are unvaccinated, and 97% of the people in hospital are unvaccinated, you get a message from that. it is the same thing here. we are spending hundreds of billions of dollars cleaning up the mess after a storm that we might have been better off preventing in the first place. all the literature is clear.
all the economic analysis is clear. it will cost us far more not to take action than it costs to take action. so common sense says let's get to work. david: you came to washington in 1985 as a senator. how is washington different than 1985? mr. kerry: night and day. david: because there was bipartisanship? mr. kerry: to some extent. i remember we would get together in the city at night and we would have republicans and democrats of the table, eating dinner and doing some business, too. then the next day he could come into the senate and held on what happened. -- you could come and build on what happened. david: why do you think that has changed? mr. kerry: a lot of reasons, not the least of which is the amount of money it takes to run for office in america now. it is a huge amount of money. it is a constant process of having to get on an airplane and
go and raise money. david: as you look at your incredible career in public service, what are you proud of having achieved so far? mr. kerry: i can't even begin to answer that. i am proud that for 28 years, i have had the privilege of representing massachusetts. we did some very exciting things with health care and children. in the foreign relations committee, ending the war in vietnam with john mccain. he and i worked hard on pow mia to try to put the vietnam war to bed, and to do it the right way, by answering the questions families had about the missing in action prisoners. i am proud of keeping faith with combatants in that effort. many things. that iran nuclear agreement. tragically the president pulled -- i think that was in history.
the president pulled out of that tragically and now, you see , where we are. iran is back. the nuclear weapon is threatening again, and we are in a far more dangerous world as a result of what he did. i am proud of the paris agreement and the glasgow agreement. club dramatically raised the ambition to solve this challenge, in this decade and beyond. mr. carey -- david: you have no regret that you didn't go into private equity or investment banking? mr. kerry: no. life would be easier and different, but no. i have loved every minute i have -- of what i have done. who knows? maybe there is still time to do some of that. david: you have eight grandchildren. what do they call you? secretary? special envoy? mr. kerry: [laughs] depends what mood they are in. but mostly grandpa.