From WXXI news.

This is Connections.

I'm Evan Dawson.

Our connection this hour was made on August 26th, when a mountain of glacial ice and rock collapsed into rivers and streams, and the China Nepal border.

The videos were hard to watch.

Entire villages buried by the torrent that ran for 45 miles.

At least 1400 people are dead, including 84 children.

More than 5000 people remain missing.

Scientists say the climate change contributed to the conditions that led to the ice collapse, which triggered the flooding.

And so the survivors are left with a decision.

Many will try to rebuild.

Others will become climate refugees or climate migrants fleeing to new communities, or sometimes even new countries.

That is the type of climate migration we hear about the most often people fleeing devastation, or maybe moving away from receding coastlines or dangerous conditions caused by climate change.

Rochester and Buffalo have appeared on New York Times list of future climate havens.

And we've talked to people who've moved here exactly for that reason.

But Doctor Claire Brunel writes that there is a second kind of climate migration that is also important to understand.

It involves the movement of industries and technology, and that kind of migration can pull people with it.

It also affects the way we talk about politics and policy.

What do we do to regulate industries?

What do we do to regulate pollution and its effect on climate change?

What's true and what's not?

When we talk about what happens when regulations get passed.

Doctor Brunelle is in Rochester as a guest of the local chapter of the World Affairs Council.

And you can learn more at WAC rock.org.

They are open to your attendance of the event tonight and future membership.

But first, Doctor Bonnell is our guest on Connections.

It's nice to have you.

Thank you for being here.

Thank you very much for having me.

Tell the audience a bit about your own background and how you got to to doing so much work on the subject of climate migration.

Yeah.

So, I am actually from France.

I got to the US as a teenager, and, I am currently a professor at American University.

But the reason I got into climate is because I was trained as a trade economist.

And I, got hired with the French embassy in Washington, DC.

And at the time, the U.S.

was considering regulating, greenhouse gas from power plants.

But they were really concerned that if they did that, then US companies would be at a competitive disadvantage compared to companies abroad.

And so they considered putting some trade policies in place to compensate for that.

And so since I was trade policy attaché, they brought me in.

And that was my first introduction to the economic consequences of environmental policies.

And I got really interested in it.

And then I did my PhD in that and it just got me started.

I remember reading a piece by George Will in the Washington Post, and it sort of evokes the current debate about AI between the United States and China, of course, with AI.

There's a lot of talk about, well, if there's a slowdown here that opens the door for a Chinese advantage.

And decades ago, even George Will was writing about, well, if the United States seeks to regulate fossil fuels, is it giving the advantage to the rest of the world?

Is there an economic cost that we can't recover from?

And we're going to get into the sort of the the why and the reality of that.

But the big picture in reading some of your work seems to be that we really misdiagnosed some of what would happen if we actually started to regulate pretty stringently.

Yes, there's a nuance to that that so far we haven't regulated super stringently.

So there is still the possibility that some of these things might happen when we actually get the price right.

But for now, we do not see, evidence of companies losing competitiveness, closing factories, moving abroad like we simply do not see that in the data.

And if you're watching news on YouTube, you'll see me referring to a number of documents, including, 19 pages of a PowerPoint that doctor Ronell said tonight.

I was joking before the program, I was trying to take notes and I finally gave up and I said, I'm printing the whole thing here because there's too much that I want to talk about here.

But, and some of the slides here, interesting to me.

There was the United States, Japan and Germany and then the rest of the world.

And, you know, we hear about Germany when it comes to cleaner energies.

But to see that show up on a slide.

Clearly, Germany is doing something that we're not really doing.

Is that is that fair to say?

So I mean, Germany, Japan and the US too, right.

Like they're still doing something.

So basically, you know, these environmental policies, like what they're supposed to do is promote renewable energy, encourage firms to innovate in any kind of clean technology.

And then the downside is the downside that we were just talking about, do they actually increase costs for companies and make them move abroad?

On on the positive front, on the technology front.

We have found that policies encourage the adoption of technologies, but that when it comes to the development of new technologies, a lot of it is very heavily focused on the US, Japan and Germany.

And that's not just climate technologies, it's where most technologies come from in all, in all areas.

Right?

And so then the climate, the technologies are developed in just three countries, but they're needed all over the world.

And so one of the things that I don't think it's talked about enough is how do we move the technologies from where they're developed and manufactured to where they're actually needed.

But adoption of those kinds of technologies has not caused the collapse of, for example, the German economy.

Right?

No, they're quite competitive.

Yes.

Yes.

Okay.

Why would they what would you have in mind?

Oh, I bring it up because again, that is the discourse in Washington.

Is I think there's two interesting ideas that I've heard over the years and especially lately.

One as, as I mentioned, is that over aggressive adoption of cleaner technologies, it's going to sink your economy.

And then the second that I wanted to ask you about before we really get going here is so in the AI discourse, those who are doubting the danger posed by AI often cite a couple of things to try to prove that when there is apocalyptic rhetoric, it's always hype.

And one of those things is Covid.

Under the the idea that, well, it was all hype or it was.

I mean, ignoring millions of people who died.

And then the other is climate change and the the amount of of commentary that I've seen in American politics about how well we've seen with the last 20 or for 20 years has shown, which is that, the, the speed that we're moving toward a dangerous future of climate change was all just hype.

It has led me to think that I don't know if human beings, absent something like that, happened in Nepal, which is horrific and tragic and obvious, but I don't think human beings are capable of understanding the long term curve of change that I'm not saying every weather event is caused by climate change.

I'm saying that absent more events like Nepal, which God forbid.

I think people just think, well, it might be a little warmer than usual.

Maybe the grapes ripen a little earlier in the Finger Lakes.

You know, maybe we change where we go on vacation.

But life still feels like it did 20 years ago when they were talking about this a lot more.

Life still feels like it did ten years ago.

It feels like it did 30 years ago.

So is it really happening?

And I don't know until we see waters covering parts of Miami Beach or Manhattan.

How much we're going to have the self-awareness to say, yes, it's happening.

How do you see that?

So, I mean, I agree with you.

I think, the problem is that is access to information, right?

Because in the end, like I agree with you that slow, gradual changes are hard to appreciate.

And I think maybe if you're, like, in a climate haven like Rochester is, maybe you don't see the changes to the climate, but I think there's a lot of other parts of the country, in the coastal area in the south where you can see like right now.

But do they do they concede that that's linked to climate change?

So they will often concede that that's linked to climate change.

What they will not concede is that that is due to human activity, right.

Because then if you don't concede that point, then you agree that, you know, hurricanes are becoming more frequent, that wildfires are becoming more frequent.

But you don't have to do anything about it because it's not your fault, right?

And so that's I think, the the link, the piece that's missing.

Right.

Okay.

That it's due to what we're doing.

And so if we slow down, then we can have an impact.

So the first migration is obvious.

It's human beings.

And it's for the reasons that we've talked about.

The second, how would you define factories, industries, technology.

But how would you how do you want people to understand it?

So it basically goes from what you were saying earlier, right.

Whenever you pass any kind of environmental regulation, the very big political worry.

Right.

Like what the industries lobby the government for is to say, if you do this, you are going to force us to adopt new technologies, develop new production processes, and that's going to be really costly, and we're not going to be able to afford that.

So we're going to close down the factories and we're going to move them to Mexico or to China.

Right.

And that's the big, that's the big concern.

The the reality, that we see is that when you pass these environmental regulations, firms do not move abroad.

There's multiple reasons for this, but it actually has also a positive aspect.

So maybe I can talk first about why they don't move and then we can talk about that.

Okay.

Great.

Perfect place to start.

So the why they don't move, has multiple components, but one of them is that the industries that are very polluting are industries that are very capital intensive.

We're talking big factories, big machinery.

They're not what we call footloose, right?

They can't just easily pick up and go.

Right.

So that's one reason they're kind of stuck a little bit where they are.

The second reason is that environmental cost.

So the cost of adopting of adjusting to these regulations, they're still really small compared to the whole cost of the companies.

So when companies decide where to locate a factory, they're much more likely to do it based on wages in the country or tax incentives in a country rather than environmental cost.

So that's not what the companies often say publicly.

Absolutely not.

Yes, they say the opposite.

But the data shows that in the European Union, steel companies.

Right.

One of the biggest polluting industries abiding by environmental regulation in the EU, which is one of the most stringent in the world, that represents 2% of their total cost.

Right.

Tiny little portion.

And so when they decide where to go, they're not going to make a decision based on that.

But part of this is that, I mean, part of why the environmental costs are still low is because we're not pricing carbon at the right level.

Right.

When we do price carbon at the right level, maybe then the cost will become high and companies will make different decisions.

But then the hope is that at that point, other countries also regulate carbon.

And then we're all on a level playing field.

Okay.

So the critics of your work will say, yeah, you're you haven't gotten the regulation that a lot of people want at a level they want it.

And so, you know, that's like saying, I'm not going to get sick of I you too much sugar.

I had a teaspoon of sugar.

But if I eat the whole cake I'm going to get sick here.

And eventually they will move if they are pushed to move and you concede that that could happen.

So I can see that there's a possibility, right?

Right now, like the EU again, one of the most stringent, they're pricing carbon at about EUR90 per tonne of carbon.

Estimates from the resources for the future, which is a great think in in DC doing awesome work on environmental and energy economics.

They say the price of carbon should be at about 190.

That's because the cost of a tonne of carbon on society in terms of health costs, mortality, agricultural production like it, it represents $190.

And so if you want firms to produce at the level that they should be producing, you need to make them internalize the whole cost that their pollution has on society.

So okay, so I want to get back to some of those numbers, the cost per tonne and how to price it the right way coming up here.

But I want to emphasize a point that you've made here.

Climate policy would become ineffective if production just moves abroad.

That's right.

Anyway, if we do get to a point where simply attempting to regulate does cause movement abroad, then that would be ineffective.

What you are positing is that we can achieve a more effective level of regulation, but there needs to be some international coordination.

So there's not just safe places to land abroad and do business.

Right?

Exactly.

Because the movement abroad is only part of the we talking about this with I. I mean, isn't this the same conversation with the United States and China?

There's a lot of people who are giving up before they even try.

The artificial intelligence debate sounds like everyone's an expert on China, and everybody knows that China would just never sign a deal or would never even consider it.

And I grant that there's absurd levels of competition, of course, but everybody's just act like, well, why even try?

And I wonder if it's the same thing with climate policy.

It's like, you know, are we going to be able to achieve international cooperation?

So I would argue it's not the same thing, because this is a case where actually China is doing a lot.

China is doing a lot in terms of manufacturing renewable energy, but also adopting renewable energy themselves.

So for a while in the early 2000, China was making a lot of solar panels for the rest of the world, but they weren't doing much to reduce their own emissions by adopting the solar.

That's the narrative.

And that's in this country that largely prevails.

I think it sounds like this China wins because they have poor worker standards, poor health standards, poor environmental standards.

They can break all the rules and they can make everything cheap and dominate.

And what you're saying is that has really changed.

That has really, really changed.

Yeah.

Most of the installations in solar, and other renewables are coming out of China now, like they're outpacing the US big time.

And you know, the, you see, like, progress on this environmental front in China, not just in terms of renewable energy, but also like in 2018, they banned waste imports.

They used to, absorb about half of the world's trash and deal with all this trash for all of us like that, we're producing it.

And in 2018, they said no more.

And they said no more for environmental reasons.

So I think there's a lot that's changing in China.

Now.

We have to take our first very short break this hour.

I'll mention to the audience, I already have an email that I'll share with Claire on the other side of this break.

If you want to email the program, as always, it's Connections.

At cyborg, you can call the program toll free 844295 talk.

It's 84429582552636.

I have a call from Rochester 2639994, and you can join the chat if you're watching on the news YouTube channel.

My guest is Doctor Claire Brunel, who's professor of economics at the American University School of International Service.

She's in Rochester as a guest of the local chapter of the World Affairs Council.

But first, our guest right here on Connections.

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Today on the daily, we look at why President Trump just made a deal to buy billions of dollars of diesel fuel from Russia after years of U.S.

sanctions on Russian oil and gas.

And how much, if anything, it'll do to lower prices at the pump.

I'm Natalie Kittrell.

That's today on the daily from the New York Times.

This evening at six on Wpxi.

This is Connections.

I'm Evan dawson.

I'm going to read an email from Alex.

New York State's Governor Kathy Hochul, by the way, is going to be referenced in this email.

I presume you knew that, but that's okay.

Here we go.

So Alex says, at the risk of being a dreamer, I worry that American companies are going to be caught completely flat footed over the next decade for not properly planning their path to go green.

It's not that we have no green innovation.

I just think that the full court press from China, controlling the majority of extraction and refining industry for rare earth minerals, to say nothing of their electric vehicle industry, and out producing everyone in terms of solar and wind capacity.

Well, I just have a hard time seeing a Hochul administration successfully leveraging state buying power to green a five factories in Jamestown, or a president Buttigieg successfully implementing a federal mandate on building green energy.

What sort of options do you think exist for a traditional Western economy to be able to go green on a massive scale?

That's from Alex.

So, yeah, that's a big question.

It is definitely something that takes time.

And so the earlier you pass the regulation, the better the fact that regulation is currently being rolled back so that, you know, companies like car companies, he was mentioning electric vehicles.

Right.

The car companies now have lower fuel economy standards than they did before.

Everything is being rolled back so they can go back to producing the cars like the good old polluting cars like they did before.

And they're going to be taken over by competition, for sure, of European car companies that are facing more and more stringent standards.

And, you know, the transition happens because of regulation, because in the end, you know, companies are kind of waiting for that to get that incentive.

But there is also another incentive to, change your products and green the products.

And that's consumer demand.

And the consumers are demanding more and more, hybrid cars, electric cars.

And so at some point you got to follow the consumer too.

Well, no, that's interesting.

And I want to think that sort of in I'm going to say in a free market economy, I know we don't have a purely free market.

We have a quite controlled market, but still, I want to think that consumer demand for, more fuel efficiency, especially with the cost of gasoline right now and diesel, all of those things could have upward pressure, and so maybe would start solving some of the problems that Alex is talking about.

But do you share his his skepticism that even a President Buttigieg in the future is going to run into all kinds of headwinds to accomplish some of these kinds of goals?

I think some of the pushback is pushback that the firms are putting on, you know, in order to kind of delay things and be able to do things that their own rhythm, but they're making the transition.

They know that this is where the things are going, right?

Regardless of what the next administration does.

They know that at some point in the future they're going to have to go greener.

And so they are already making these changes.

The regulation would just force them to do it a little bit faster.

And they don't want that.

They want all the flexibility.

But I do think that these things are happening.

In any case, let me go outside of some of your notes for the separate question, and I'm going to tell you again what a non economics professor understanding of a certain condition is.

And then you tell me how you see it.

One of again, one of the narratives in American politics is.

Well, in order to to create more cleaner energy it needs massive subsidies.

And the implication being, you know, fossil fuels exist in this purely free market, not subsidized, not supported by taxpayer funding, you know, and that you would have to rig some sort of a market to get cleaner energy to compete with fossil fuels.

My understanding is that fossil fuels are also heavily subsidized, and that it is a false narrative to claim that clean energy just needs all this help.

Fossil fuels exists on its own, right?

What's the reality?

Yes.

So the first thing is, yes, absolutely.

Fossil fuels are heavily subsidized.

There are more subsidies that renewable energies are.

And then the second thing is that the price of renewable energy has fallen dramatically in the past couple of decades.

And so now renewable energy is often the most competitive source of energy in terms of cost.

But can it scale?

So scaling I mean, it's going to depend on which one.

But yes, we have the ability to scale the I mean, there's lots of space in in the US, right?

There's a lot of, of pushback like the Nimby.

Right.

The not in my backyard, for for wind in particular.

Sometimes solar, especially in this state, larger solar installations are getting a lot of pushback.

Okay.

From what?

Well, there's a lot of unused agricultural land, and there are.

So there's a number of farmers who are simply understanding that they can get a better price per acre if they put in solar installations.

And they're making that choice, which is there.

Right?

Then there are other larger plan projects, and you'll see political ads, either.

I think in the governor's race, I think Blakeman is running ads on this, but all the Republican in that race, but also, the state Senate in the state assembly level, in more rural communities where, they're talking about, well, we're going to lose all I had a candidate for office on the show, so we're not going to be able to make our own food anymore.

We've going to have too many solar panels out there covering agricultural land.

So that kind of pushback is, is is pretty powerful.

Yeah.

So I mean, it's funny because I was just at a talk at a from researchers at AEW yesterday that were, saying the same thing about data centers.

Right?

You mentioned I, a number of times, like, people are selling their land to data centers, and it's it's mostly agricultural land.

So, you know, it's not, I guess, specific to solar panels, but I think that, you know, I hear the concern and I think that in the end, like, the, the reason we prop up a lot of, food production domestically is because of food security issues, right?

Otherwise, most of our food would come from abroad because it's more efficient, to have it that way.

But, I think that we are not at a stage where solar panels are going to take over all agricultural land, and it might be the case in some specific areas.

Right.

But across the board in the US, I don't think it's a concern at this stage.

Okay.

And before I grab another phone call, Wendy in Rochester, hang there.

Let me just close the loop on this part of the discussion.

So knowing then that fossil fuels, of course, are also very heavily subsidized.

This is where the lay public is going to struggle to say like, well, what's the right kind of policy to do?

Strip away all subsidies and let people compete?

I mean, what what are the right kind of steps to, to make the, in your view, the right kind of transition into the future.

So, you know, you have multiple like tools that you can use.

Subsidies is basically like rewarding people for doing what's right, like evading pollution by adopting renewable technologies.

The other way that you can do it is by taxing the generation of pollution.

Right.

Or what we call the carbon tax.

That's the carbon tax, or what we call cap and trade systems.

So that's what California has.

And the northern, US states, and those put a limit on the quantity.

And then there's a market that decides, on the price.

These rules have been proven to be very effective, in the EU and in the places in the US where they are, being adopted.

And so, you know, we have the policies, we know exactly how to do it.

It's just that the competitiveness concerns usually overtake the whole debate.

And so that's why you need that global cooperation that we were talking about.

All right.

Let me get Wendy and Rochester on the phone next.

Hey, Wendy.

Go ahead.

Oh, hi.

So, you know, obviously we have a problem of a commons of the atmosphere that, nobody's paying for it.

You know, it's nobody's paying for the amount that they're polluting, and it.

And the cost goes to everybody, and the benefit goes to the to the, companies.

But one of the things I was wondering, with people migrating and, and, and, companies migrating, I'm worried that they will bring their, polluting ways our way.

And I know New York has some pretty good laws, but I am wondering if in some ways our water is protected because we're part of an agreement with Canada?

I think it's called like the Great Lakes water quality Agreement.

And whether that the fact that we're not the only, you know, that we're actually supposedly cooperating to keep the water good for everybody in some way helps us not accept bad, practices.

Yeah.

Thanks.

So I want to say two things.

So, first of all, you know, when, you were talking about lake pollution coming, here and I think if you believe or if you argue that as a result of having environmental regulation, companies end up moving and then you say, therefore, we don't want environmental regulation, then what you should you could be concerned about is that everybody else in the world is going to come and set up in the US, where you're free to pollute as much as you want, and then the US becomes a pollution haven, right?

So the the no regulation is really a concern, not just because you're not reducing emissions, but because you might even have more pollution coming your way.

As a result, your research has found that that's also not happening, at least not yet.

Right?

No, it's not it's not like the firms are not relocating because of environmental regulation, at least not yet.

But for the people who argue that they are right or they think that they are, then they should be concerned about the reverse.

If they don't regulate.

Right, that's the one we could lose.

Yeah.

Right.

Okay.

And then, in terms of the water, so the, I'm not sure about the local regulation here.

I'm not an expert in, in the region, but in the United States as a whole, the water is regulated by the Clean Water Act, just like the air is regulated by the Clean Air Act.

And those are policies that have, proven that they're able to reduce emissions in very significant ways.

And, so, you know, I think we should definitely not roll them back.

Right?

It's like we were heading in the right direction.

We need to make things more stringent, not less.

And that's what concerns me a lot about the situation right now in the US.

All right.

Let me read a couple other emails here.

Rick says, thank you.

And by the way, Rick says, I appreciate the nuance that your guest is providing about climate change and renewable energy.

What I realized several decades ago, and which I've stated on numerous occasions to friends and family who challenge my decision to live in the Rochester, upstate New York area, is that we have the water needed to sustain life, human beings and agricultural.

My question is, how will a warming planet impact the great Lakes, not to mention the Finger Lakes?

As we look to the future, how can we protect this vital resource?

Again, my guest is a professor of economics, so might be partially in your lane, might be a little out of your lane.

But I'll let you respond to Rick there.

Go ahead.

Yeah it is a little bit out of my lane.

But I do think that, you know, the, the access to the, to the lakes is definitely one of the things that makes, Rochester a climate haven.

Right?

Like it is determined to be a climate haven because it's away from the coast.

It doesn't it's not in the path of any of these extreme weather events.

And it has a lot of access, to water.

So that's definitely, a strength here.

But then what is going to happen to the lakes?

I yeah, I'm not a scientist, so I'm not going to, go in that, in that direction.

But I do think that those are resources that need to be protected for sure.

Okay.

And the the larger part of the conversation, which is definitely in Doctor Bruno's lane, is, she's talking about finding the right price for carbon.

She talked about the economic levers that have an effect or don't.

And and analyzing sort of where the United States is vis-a-vis other countries what has been happening, around the world.

So if you are concerned, as you are, Rick, about the future of the Great Lakes, future of our resources, the question everybody should have is what are the policies that actually work to address this?

What are the possible effects and consequences of those policies?

What is just hype and rhetoric and what is actually playing out?

And that's part of what we are talking about here.

The one other email I wanted to get from Greg, I'm happy to add a bit more about the regulations on one of them.

Yep.

Go ahead.

So the difficulty with water is that it is both an economic good.

So, you know, you want to make it expensive so that people consume less of it and you can serve the resource.

But it's also an essential good, right?

It's a human rights.

And so water is heavily subsidized.

And so we can't put the same price on water than we would put on, on other, kind of polluting goods like a bar of steel, for example.

And the, the cap and trade systems where you, you cap the amount of water that you can use and the amount of pollution that you can emit into the water.

Like these systems, they rely on local water resources.

You can't just go and grab water from another region, right?

You can't trade water in that way.

So water is very different from air pollution in terms of regulation.

Okay.

Rick, thanks.

So two more here.

Dallas says, hold on, let me pull it back up.

Your Dallas, he says, doesn't Texas have a lot more green energy than California?

And what does that tell us?

Is that correct?

As you understand it, I am not aware of that.

If that is correct.

So it's possible.

Yeah.

I mean, California is always, you know, the state that everybody talks about, but they're not the only state, adopting renewable energy for sure.

I think California ends up being allowed for regulation often.

Right.

So we try to see what happens in California if it works, and then other people can, can implement it as well.

But, yeah, renewable energy adoption is happening across the country.

Okay.

And Greg writes to say that, to the point that I was making earlier about how whether we notice climate change or whether we only notice when it's directly in our, our impacts or self-interest.

Greg says once gas went over $4 this year after the war with Iran started, more people started to notice the cost of fossil fuels.

Do you agree with that?

Yeah, absolutely.

Yeah, I think so.

And this is compounded by like, you know, greater affordability, issues, that we're having all over the country.

Right.

But yes, I think, you know, this is why we use price as a mechanism to make people conserve, right?

Because when things are more expensive, people consume less of it.

That that's the entire, like, logic behind all of these policies.

And so, yes, like there's people noticing the, you know, the cost of fossil fuels and then, you know, realizing that maybe they should switch to a hybrid car that would be less costly in terms of gas and save them money over the lifetime of the usage of the car.

Like that's exactly what these regulations are meant to do.

Is it strange for you, as a European living and working in the United States to hear Americans say, oh, gas isn't 250 a gallon anymore?

Is that strange for you?

Yes it is.

So I should say I don't drive, so I'm not super aware of the price of gas.

But I do know that, if I have, like, my partner just moved here and he is constantly, like, raving about how cheap the gas is here, at the same time that people are complaining that it's really expensive, the most expensive it's ever been.

But for your partner, yeah, it's a it's a cut in price.

I know, Greg, I do appreciate the email and how we are impacted by our own perspective there.

So I want to shift to how will you find sort of setting the right price for the future.

So if you're working in policy spaces then a part of my read on what you're saying is, you know, we often haven't found the right price for the price of carbon and determining what that actually is and understanding how then to price it, put that into play and what that would look like.

So one, I think a lot of people are wondering is anybody doing it right, like who's doing it best right now?

Oof, so not a lot of people are doing it right.

If you look at the estimates from the UN, FCC, triple C, they basically show that there's only about 1%, of the price of carbon that are what we need in order to avoid two degree warming of the planet.

So we're we're pretty far from it.

The difficulty in setting the price is essentially what you want to do is you want to say the reason we're polluting too much is because our costs of production are really low, because this whole cost that we have on society of mortality and health impacts, we're not even thinking about it.

So we want you to consider higher costs, right?

We want to force you to consider higher cause by taxing you for every tonne of carbon that you emit.

And the way that we want to tax you is we want to make you internalize the full costs.

And so then you need to be able to determine, well, how do I put a dollar amount on saving a life because there's less pollution, right.

That is an entire branch of environmental economics, which is sometimes a little cuckoo.

Right.

Because we're literally determining how much are we willing to pay in order to save a life, right?

To have a life not be, taken by, by pollution.

And it's extremely subjective, right?

Yes.

It depends on what country you look at.

It depends.

For some people, it will depends on, the age of the person that you're trying to save.

But all this, information, the way that we do it is we basically try to figure out through wages, right, how much of a wage premium do you need to take on a job that has a higher mortality risk?

Right.

So a window cleaner at the top of, high rise building a tree cutter.

A tree cutter, right.

Truck drivers.

So these jobs that have mortality risks, basically, we use these data to pull out what part of the wage is the risk premium and therefore, how much are we willing to pay as a society, to save a life.

And usually the amount that the Environmental Protection Agency is using is 10 million per life.

So there's $10 million per life, right.

And that's based on actual wage data.

Yes.

That's that's very interesting.

And so then, the transportation agency will have a different amount, right?

They all make their own calculations.

But in the end, like when, you know, the the problem with the repeals that we're seeing from the, Trump administration right now is that they're considering the the cost that environmental policies have on the firms, right, in terms of adopting new technologies, etc.. They're not considering the benefits, which are the life saves and the health, benefits.

And, you know, mortality from pollution is really large.

It is bigger than mortality from smoking or cholera or some, like, you know, of the, big diseases.

And so then if you're not counting the benefits of saving these lives, then your benefits are going to be really, really tiny and they're never going to overtake the costs.

And so you're never going to think it's a good idea to pass a regulation.

Because basically, in order to determine and, whether to pass a regulation, they compare the costs and the benefits.

If the, benefits are positive on net, then, you know, they they will pass it.

But if you don't count the most important benefits, which is saving lives, then everything doesn't pass the cost benefit analysis.

And no regulation is ever implemented is absolutely fascinating.

We got to take this last break of the hour.

We're going to come back and we're going to continue on this thread trying to find that magic spot, that right price.

As we talked to Doctor Claire Brunel, who is a professor of economics at the American University School of International Service, she's in Rochester as a guest of the local chapter of the World Affairs Council.

They would love to see you at their event tonight, but if you can't make it tonight, they've got future programs and you can learn more at whack rock.org, whack rock, Cork.

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Proud supporter of Connections with Evan Dawson.

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You may not know who Hassan Piker is, but the conservative media certainly does.

Or do they?

The way that I'm portrayed in the media is an America hating, communist Islamist fundamentalist who wants to secretly do jihad and then also at the same time, very woke and gay.

Well, let him tell you who he is on the next morning Edition.

From NPR news.

Tomorrow morning at five.

This is Connections.

I'm Evan Dawson, so we're in pursuit of the right kind of policy for climate, for the future.

The kind of policy that, despite what you've heard, is not going to sink an economy but can actually create more economic opportunity while creating, ideally, a world where we're not going to hit two degrees or even some of the higher or the lower benchmarks of warming.

And our guest is Doctor Clare Burnell.

She is solving all of that for us.

Thank goodness for Clare today.

No pressure.

And then I want to read an email from a listener that I think, you know, Chad saying he's not sure if this is quite on topic.

I actually think it is because we're going to talk about how economists and how those who work in economics think about incentives and how to move behavior.

So Chad says, is there any way to incentive, for example, retail stores, grocery stores, etc., to donate the things they cannot sell rather than destroying them or throwing them into a landfill?

And then he says, if you want to cut carbon emissions, stop making things that are single, use fast fashion, disposable or made to be wasted.

So I actually think that this this is an area where you can help us understand this.

Go ahead.

Yeah.

So the the donating like, you know, leftover foods at the end of the day.

And so if that is a point of great frustration to me, and my understanding is that the reason it doesn't happen is because of legal risks.

Like people don't want to be liable if someone gets sick.

Exactly.

Yeah.

Yeah.

So like, we would need to.

America has a lot of lawyers.

Yes.

Yes I presume Europe does too.

But America has a especially high amount.

People like to sue in the US more than in.

Yeah.

It's pretty litigious.

Yeah yeah yeah, yeah.

Okay.

But then on the single use, I'm entirely with you.

And I think this is where Europe gives a really good example.

Europe, implemented a single use, like a ban on single use plastics.

So that means, like, you know, forks, knives, cups, like, plastic bags.

Anything.

Right.

Like, we just don't have, single use stuff anymore.

And it was not a big adaptation.

It didn't feel like a big, burden on people to, you know, use those alternatives.

The alternatives are actually quite good.

They don't just melt in your hand like the plastic fork is actually, like, it can, it can do the trick.

And so I think, again, like basically the EU was first and moving this regulation, which means that the EU companies or others were forced to develop the products that we need in order to replace the plastics.

And now these products exist and so all the other countries can just pass the same regulation, and they don't have to develop new products.

They can just buy the ones that were already developed in the EU.

Let me continue in the threat of trying to deter or encourage behavior using taxation that you talked about earlier.

So carbon tax is in part designed to say, look, we're going to try to move the market by making it more expensive to create carbon pollution.

And at the very least, charging the producers who are causing harm with that pollution.

In the same way, when Chad is asking, you know, is there a way to incentivize stores to change?

Let's say, you wanted to in this, state, I think we banned plastic bags, what, ten years ago?

Something like that.

What was that?

Producer Megan, back when do we ban plastic bags?

I bet it was a decade ago.

And of course, there's this big outcry, like plastic bags at the grocery store.

I need those for cat litter.

Or I need those for other reasons.

And someone's going to email me right now and say, you miss plastic bags.

I'm just observing that we have transitioned.

And now if you saw them at the store, it would feel strange as opposed to it was some sort of life changing event from which we would not recover.

We've made the adaptation.

Could you not use some kind of a tax or fee or sanction to move certain behaviors in the way that Chad is suggesting, whether it's retail outlets or otherwise?

Yes.

So when I'm talking about putting a price on things, I'm basically talking about taxing rights.

I'm talking about doing exactly that.

And I'm I'm glad that you've noticed that the transition wasn't that hard, right?

The adjustment to that new policy wasn't that hard.

I think, you know, often, like, people make a big deal out of it.

And then it turns out like, okay, I just have my my own reusable bag.

It's not a big deal to our indoor smoking ban was 20 years ago.

Yeah.

Yes, yes.

Yeah.

Exactly.

And so yes, you can, you can basically always find a way of taxing in order to change behavior.

Right.

And we, you know, we tax cigarets in order to make sure that people don't destroy their health with, smoking.

Right.

We tax alcohol for the same reasons, right?

We use taxes to change people's behaviors in all areas.

And so there's no reason we shouldn't be able to do it in this one.

Except that when we were talking about donating the food, at the end of the day, we have these legal considerations.

But don't you love American politics?

The more taxes you talk about here, someone's going to say, oh, so you're a socialist?

Well, I mean, I am French, but I'm actually not a socialist.

But yeah, I mean, we like to put prices on things because that's the only way to change people's behavior.

So a carbon tax is not sort of ipso facto socialism anyway.

No.

Yeah.

Yeah.

It's a piece of policy.

So again, in this country, what are their proposals that you see being currently debated.

Or if you were craft if someone said, I'm going to hire you to craft some policy for me, how, how do we find the right level here.

How do we what's the sweet spot?

How do we get there?

So first, I think that we shouldn't let the perfect be the enemy of the good, because in the end, any kind of regulation that gets us at least part of the way is still good, right?

And the way that any regulation ever works.

And I think that is the way that it should work, is it starts off not being very stringent.

Right.

You put the structure in place.

Firms know what to expect.

They know that two years down the road the price is going to get higher.

They have time to adapt.

But at the beginning you make it very, very low cost for the firms, right.

This is how it works in the EU.

This is how it worked in California.

And all the all these price regulations, they always ramp up.

And I think that is the way to go.

I think there is one piece of regulation.

So that is proposed in the US.

I don't think it's a good idea in the US, but it has been implemented in the EU and in a good way.

So, you know, all these competitiveness effects we were talking about usually.

So the basic idea is if you're originally, competitive with your, with the foreign companies, but now you have this extra cost of environmental regulation, then what we do is we put a tax on imports, a tariff, right, a tariff on the imports, so that the foreigners also have an additional cost.

And we're back at level playing fields.

This is a regulation that's considered in the US, but it only makes sense if you have a price on carbon, which the US does not have.

Right.

The EU has a price on carbon.

It is a high price on carbon and competitiveness concerns or definitely, the like front and center of all the political debate.

And so they have started putting a price on carbon, on imported pollution.

So any polluting good coming into the EU has to pay the same price on carbon that EU producers, pay.

Right.

So it's basically using tariffs as a way of achieving an environmental goal.

That policy was long to implement.

It is technically in place right now, but not really.

Probably more next year.

And it is changing the behavior of firms abroad.

Right.

So there are studies that show that Indian, steel companies have started sending all their clean production to the EU so they don't have to pay the tariff.

And instead of cleaning up their production, they basically keep producing the dirty stuff, but they send it to other countries.

So what I'm trying to say is that even when you have a policy that seems like it's very obviously going to, you know, level the playing field and be great for the climate, by forcing other companies to reduce pollution.

It turns out there's always things that can happen and incentives that can change, where basically now the incentive is send all the clean stuff to the EU so it looks good, and then send the polluting stuff abroad.

You have made no change to the climate.

Is it true that in European politics, in, in more right leaning circles, there is criticism of the high price on carbon there and the desire to reduce that for competitive purposes.

Yes, yes, yes, the dynamics are very much the same as here.

Okay.

Yeah.

Okay.

But so far we see Europe maintaining a much higher price on carbon than the United States.

Yes, there are considerations right now because of affordability, which is also an issue, in Europe to try to, lower the burden and or slow things down.

Basically, the EU is on track to achieve the goals that they wanted to achieve with that, carbon price that they have, the cap and trade system.

And so, instead of continuing on that the pace that they're going on, they're going to slow it down, a little bit to lower the burden on the firms, try to, you know, lower costs, like it's all linked to the affordability crisis.

And you right on solar tariffs.

So United States solar tariffs, if solar panels are more expensive, imports fall and the green transition slows.

Now this administration has said that that's not necessarily what they're after.

What they're after is just creating conditions where there will be more manufacturing in the United States.

So if you want solar, it should be made here.

And so we're going to put a tariff on imported solar in an effort to spur more domestic manufacturing.

What do you make of that?

So I'm going to make a general comment on the ability of tariffs to, relocate manufacturing.

Yes, exactly.

And then we'll talk about the solar piece in particular for, for the most part when tariffs, you know, they make imports more expensive.

So there's an incentive to produce at home domestically instead.

Generally when companies restore to countries like the United States or the EU, countries where wages are high, they tend to automate a lot more.

And so you're bringing the factory back, but you're not necessarily bringing the jobs back.

Right.

Because when it was produced abroad, where wages were low, you were hiring a lot of workers.

But when you move the production back to the U.S., where wages are high, you have an incentive to build a machine to automate.

So the jobs are 1 to 1, but there's not no jobs.

Well, yeah, there's not no jobs, but it could be a really small proportion of jobs compared to what you think.

Right?

If the if the reshoring happens at all.

Yes.

If it happens at all, do we see evidence that the tariffs in general in this new administration, which it's a policy that's really been sort of fluctuating and volatile.

Yeah.

Is there any evidence that in the last two years we've seen a surge in new reshoring of manufacturing surge?

Definitely not some few examples that have been used politically.

Yes.

But a surge.

Absolutely not enough to enough to change the economic conditions of the country, enough to materially.

No no no no no.

Okay.

Is it just too early to see that.

Could that be coming down the road?

Maybe.

But if you think that the tariff policy is not something permanent, right.

Like when you make an investment in a factory, this is an investment that you want to be using for a long time, right?

Yeah.

It's not one presidential administration.

It's not till there's another new policy.

Yeah.

Yeah.

If you think in two years everything's going to change, then maybe you don't relocate the factory, right?

Yeah.

And again, wages, tax incentives, those are very big pools for where to, where to locate your company.

And frankly, you might not even have to wait for a new administration.

I mean, this administration continues to change its own policies.

Yes, yes.

And so going back to the solar tariffs, the solar tariffs have been all over the place.

At some point, there was a discussion about putting solar tariffs of 3,500%.

Okay.

This is a huge amount.

Right.

And so like this would make the solar panels like unaffordable today.

Totally.

And right now, like, you know, we can say what we want about the Chinese economy, but what is happening is that they're producing really cheap solar panels for everyone else in the world.

And there are in that way, subsidizing the green transition all over the world.

If you put a tariff of 145% like it is actually implemented in some on some countries, that means that the panel is now two and a half times more expensive than it used to be.

And so then then, you know, you have less adoption of solar panels.

And what's really important to understand about the solar industry in the US is that you have two parts that are lobbying for very different trade policies, because you have the manufacturers of solar panels.

They want protection from the foreigners so that they can build more solar panels domestically.

And then you have all the industry of installing and maintaining the solar panels.

This is where most of the jobs are in the solar industry in the US, right?

The vast majority of jobs are installing and maintaining.

Even if there's no cheap solar panels, then they're not going to installed, they're not going to maintain, and we're going to lose jobs in that part of the industry.

Right.

Back in 2009, after the 2008 financial crisis, the US, passed the American Recovery and Reinvestment Act.

And part of that was investing in companies like Solyndra who had like, you know, a technology for solar panels that was different from the one that we use today.

And they invested a lot of money on that, but it didn't it didn't like launched in the end.

Part of it was because simultaneously, the price of silicon, went down.

And so the traditional technology we know today, really boomed.

But it's not it's not that easy.

Yeah.

To kind of bank on the right, companies and stuff.

But definitely like cheap solar panels are good for the, for the green transition.

And so the tariffs were very negative in that way down to the last 45 seconds.

If you want to learn more from Doctor Burnell, you're going to have to attend the event tonight with the World Affairs Council of Rochester.

Doctor Ronell is a guest.

Is in general is the the domestic here and the international conversation on carbon taxes and related policies.

Is it going in a healthier or unhealthy direction?

It's going in a very partizan direction, which I think is unhealthy.

Yeah.

But I do think that we're making progress.

Like in, in international, at the international scale, it's just going too slow.

Way too slow, too slow to, to impact the march towards two degrees Celsius.

That kind of too slow to avoid reaching two degrees Celsius.

Too slow to, you know, make sure that countries that can't afford the transition on their own, that we send them money so that they can make the transition, but that also they can handle the cost of adaptation, which is about $600 billion in estimates.

So I have really enjoyed this conversation.

I feel like I've learned a great amount.

I'm sure our audience has as well.

And I want to thank you for making time for our audience on your trip to Rochester today.

Thank you so much, and thank you to everybody who sent questions.

I really appreciate.

That's a very smart audience here.

Doctor Clay Bruno is a professor of economics at the American University School of International Service, a guest of the World Affairs Council's Rochester chapter.

More information a a c r o c.org from all of us at Connections.

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