WEBVTT 00:00:00.542 --> 00:00:02.252 Kimberley, Tim, welcome. Tim to you, first. 00:00:02.252 --> 00:00:07.173 How are climate policies impacting global trade? 00:00:07.173 --> 00:00:08.800 What are some of the key themes here? 00:00:09.384 --> 00:00:13.513 Well, as we see the world take concrete action to get closer to 00:00:13.513 --> 00:00:17.183 net zero, countries and companies can't ignore the fact 00:00:17.183 --> 00:00:21.271 that we trade a lot of carbon embedded in the products that we 00:00:21.271 --> 00:00:25.233 sell globally, and a lot of those things like steel, cement, 00:00:25.233 --> 00:00:27.902 and so forth, are very energy intensive. 00:00:28.236 --> 00:00:32.198 So countries are focusing much more now on this trade in 00:00:32.198 --> 00:00:36.619 embodied carbon in products and looking at ways in which we can 00:00:36.619 --> 00:00:40.540 decarbonize that, as well as countries' own industries. 00:00:40.915 --> 00:00:43.043 Talk to me if you would about carbon competitiveness. 00:00:44.210 --> 00:00:48.590 As this increased linkage between trade and climate 00:00:48.590 --> 00:00:53.636 happens, and we're here today ahead of the first-ever Trade 00:00:53.636 --> 00:00:59.184 Day at COP, we see companies and countries really more exposed if 00:00:59.184 --> 00:01:04.147 they are trading a lot of these energy-intensive products. 00:01:04.564 --> 00:01:08.151 As particularly developed economies make it harder or more 00:01:08.151 --> 00:01:11.696 expensive for those products to be sold in their markets, 00:01:11.696 --> 00:01:14.866 countries and companies that don't up their game on 00:01:14.866 --> 00:01:17.619 decarbonization will increasingly find their 00:01:17.619 --> 00:01:21.081 competitiveness reduced, and them being cut out of these 00:01:21.081 --> 00:01:22.373 global supply chains. 00:01:22.957 --> 00:01:26.377 Kimberley, how will these new trade policies play out, do you 00:01:26.377 --> 00:01:29.672 think in the decade to come, what scenarios do you imagine? 00:01:29.798 --> 00:01:31.382 Yeah, it's a complex question, 00:01:31.382 --> 00:01:34.302 so to help us understand how both trade policies will play 00:01:34.302 --> 00:01:36.930 out, as well as climate policies, we mapped the two 00:01:36.930 --> 00:01:39.182 against each other to create four scenarios. 00:01:39.599 --> 00:01:42.852 In our first scenario, you have climate on track. 00:01:42.894 --> 00:01:45.313 This is where you have lots of good trade cooperation, 00:01:45.313 --> 00:01:48.274 you've scaled green goods, trade, and services. 00:01:48.274 --> 00:01:49.484 You've got green markets. 00:01:49.901 --> 00:01:52.904 You've also got development cooperation syncing up and 00:01:52.904 --> 00:01:55.740 working nicely with corporate supply chain efforts. 00:01:56.366 --> 00:01:59.244 Now then, in our second scenario, this is a bit more 00:01:59.244 --> 00:01:59.869 complicated. 00:01:59.869 --> 00:02:02.205 You've got what we call a fractured effort. 00:02:02.539 --> 00:02:05.875 You've got countries looking to create climate clubs, but those 00:02:05.875 --> 00:02:09.212 outside the climate club may be not so happy-- you've got trade 00:02:09.212 --> 00:02:12.632 tensions, maybe some trade wars, and you've got really unbalanced 00:02:12.632 --> 00:02:13.716 levels of investment. 00:02:13.716 --> 00:02:16.928 So developed countries have got quite a lot of green investment, 00:02:16.928 --> 00:02:19.430 but developing countries may be a bit left behind. 00:02:19.848 --> 00:02:23.101 In that context, we see emissions only coming down by 00:02:23.101 --> 00:02:26.855 2030 by 30%, which puts us off track for the Paris Agreement. 00:02:27.397 --> 00:02:30.692 In the last two scenarios, we have exponential disasters, 00:02:30.692 --> 00:02:32.485 which I think the name is clear. 00:02:32.485 --> 00:02:35.697 It's really a world where you've got trade wars, you've got 00:02:35.697 --> 00:02:38.324 resource conflict over critical minerals supply. 00:02:38.700 --> 00:02:42.245 You've also got conflict in key supply chains like food and of 00:02:42.245 --> 00:02:44.539 course a drying up of green investment. 00:02:45.039 --> 00:02:47.333 And the last scenario is a little bit more nuanced. 00:02:47.542 --> 00:02:50.336 Here, you have what we call collective avoidance. 00:02:50.628 --> 00:02:54.215 You actually see countries push off their climate policies to 00:02:54.215 --> 00:02:57.594 midterm targets and focus a little bit less on those 2030 00:02:57.594 --> 00:03:01.014 targets that we need, which itself actually ends up drying 00:03:01.014 --> 00:03:02.307 up green goods markets. 00:03:02.307 --> 00:03:05.435 You don't get that green premium that businesses are looking to 00:03:05.435 --> 00:03:08.521 get from climate policies, and therefore, green trade policies 00:03:08.521 --> 00:03:10.356 are left a little bit to the wayside. 00:03:10.940 --> 00:03:13.860 We hear so much about collaboration, about private and 00:03:13.860 --> 00:03:15.528 public sector working together. 00:03:15.528 --> 00:03:17.989 In your mind, what is the best way to do that? 00:03:17.989 --> 00:03:18.865 What does that look like? 00:03:19.407 --> 00:03:22.285 I think as a lot of these policies are going to start to 00:03:22.285 --> 00:03:25.330 evolve over the next couple of years in quite a rapid manner, 00:03:25.330 --> 00:03:28.249 it's critical that businesses and governments talk to each 00:03:28.249 --> 00:03:31.294 other about the balance that they want to achieve with these 00:03:31.294 --> 00:03:31.711 policies. 00:03:31.961 --> 00:03:35.381 I caveat that as businesses talk to governments about how to get 00:03:35.381 --> 00:03:38.551 both climate and trade policies right, we really need to see 00:03:38.551 --> 00:03:41.512 businesses setting strong science-based targets, targets 00:03:41.512 --> 00:03:44.140 themselves, to give that legitimacy that they are 00:03:44.140 --> 00:03:47.143 seriously themselves moving towards net zero in their in 00:03:47.143 --> 00:03:49.145 their business and their supply chain. 00:03:49.437 --> 00:03:52.190 But then once they've done that, that does give them a little bit 00:03:52.190 --> 00:03:54.525 of credibility to come to governments and say look when 00:03:54.525 --> 00:03:56.903 you set these trade policies, when you set these climate 00:03:56.903 --> 00:03:59.447 policies, this is the balance that we're looking to achieve. 00:03:59.447 --> 00:04:02.367 Think about this from a regional or global perspective, and not 00:04:02.367 --> 00:04:04.369 just from that domestic market perspective. 00:04:04.702 --> 00:04:05.995 Kimberley, Tim, thank you so much. 00:04:06.537 --> 00:04:06.913 Thank you.