>> It has been a horrible year in terms of the war, how vulnerable we all are when we don't create our own homegrown energy sources.

But that is an accelerant as well toward the ultimate goal of getting 100% clean electricity or net zero by 2050.

♪♪ >> Hello and welcome to "GZERO World."

I'm Ian Bremmer.

And today, how new legislation in the United States is changing the global fight on climate change.

The passage of the rather strangely named Inflation Reduction Act revived a sputtering Biden administration and itself represents the single largest climate spending package in U.S. history.

Talking with me about how the new law could help the United States and the world respond to climate change, I'm joined today by U.S. Energy Secretary Jennifer Granholm.

And later, a look at how modern technology is affecting the battlefield in a "GZERO" special report from inside Ukraine.

Don't worry, I've also got your "Puppet Regime."

>> Let's get this party started.

Who's gonna lose their job over this one?

[ Air horn blows ] >> But first, a word from the folks who help us keep the lights on.

>> Major corporate funding provided by founding sponsor First Republic.

At First Republic, our clients come first.

Taking the time to listen helps us provide customized banking and wealth-management solutions.

More on our clients at firstrepublic.com.

Additional funding provided by... ...and by... >> The landmark Inflation Reduction Act, or IRA, has helped breathe new life into a struggling Biden administration.

Now, despite its name, it's not going to reduce inflation.

Senate Democrats knew that well when they named the bill.

They also knew how bad it would make Republicans or Joe Manchin look to vote against the bill nominally aimed at reducing inflation.

Maybe the Stealing Candy from a Baby Reduction Act was a little too on the nose.

The new bill, however, does address climate change and does that by curbing the two greatest sources of greenhouse gas emissions -- transportation and electricity generation.

Of roughly $400 billion in total spending, $370 billion of that, so over 90%, will go towards climate initiatives.

Experts project that by the end of the decade, the bill will reduce U.S. greenhouse gas emissions to 40% below 2005 levels, and that would put the United States about 10% closer to reaching the goal established in the Paris climate accord.

The bill gets there by offering the private sector carrots rather than sticks.

In fact, it's actually structured more like industrial policy than an environmental bill.

For example, creating a national green bank of private funding for clean-energy projects, including in poorer communities.

The bill also provides $3.2 billion in tax credits for carbon-capture initiatives which incentivize oil, coal and industrial sites to capture carbon emissions before they enter the atmosphere and store them underground.

The process can be complex and costly, which is why many fossil-fuel companies have so far avoided implementing it.

But experts project that it could account for as much as a fifth of the emission cuts that are outlined in the IRA.

The bill also provides funding for a simpler way to remove carbon from the atmosphere -- planting trees.

And it includes $20 billion for "climate-smart agriculture" that will enable farmers to store more carbon in their soil and their plants.

The IRA's most interesting innovation may well be its response to a recent U.S. Supreme Court decision that curtailed the Environmental Protection Agency's regulatory authority.

As part of a June ruling, the court determined that Congress must explicitly direct future regulatory action, including by the EPA.

So the drafters of the bill in Congress amended the language in the Clean Air Act to specifically include CO2 produced by burning fossil fuels.

And in so doing, they reaffirmed the EPA's mandate to issue greenhouse gas regulations, which the court had effectively weakened.

On the day the bill passed, Senate Republicans waged a predawn campaign to remove that language but were unsuccessful.

There's more to the bill that I don't have time to get into right now.

Significant tax breaks to both companies and individuals that implement climate-friendly processes or move battery and critical mineral or clean-energy manufacturing back to the United States.

There's also plenty that's not in the bill to the chagrin of climate advocates, like cracking down on industrial meat production.

But my biggest takeaway, aside from the big price tag, is the bill's recognition that companies can't just cooperate in a government push to combat climate change.

The private sector has to lead the way with a few hundred billion dollars worth of nudges from Uncle Sam.

To discuss this historic piece of legislation, its geopolitical implications and the climate crises to come, I'm joined by U.S. Secretary of Energy Jennifer Granholm.

Here's our conversation.

Secretary Granholm, thanks so much for joining me on "GZERO World."

>> You bet.

Glad to be on.

>> Let me start by asking you about this headline piece of legislation.

Not a lot of people were optimistic it was going to get done.

Spend 2 minutes just kind of giving the thumbnail for our audience here on what it's going to accomplish.

>> Yeah.

I mean, I think there's several pieces of this that are very important, several underlying goals.

Number one is to reduce costs for people.

And so this is part of the idea of lessening inflation to reduce the costs of people for their energy usage, as well as prescription drugs, et cetera.

But in my realm, it's really giving people the opportunity, for example, to retrofit their homes to reduce their monthly energy bills.

Significant incentives to be able to install heat pumps or electric appliances, or if people are eager to try out solar panels, there'll be a 30% tax credit on that.

So there's the reduction of energy prices at home.

Similarly, the reduction of fuel prices for vehicles by incentivizing the purchase of electric vehicles and for the first time incentivizing the purchase of used electric vehicles, a $4,000 credit in that instance at the dealership.

But, Ian, I think what is really exciting about this from the medium- to long-term strategy is that it incentivizes the manufacturing of this energy sector in the United States.

I say this as the former governor of Michigan watching all of these manufacturing jobs go overseas as we bowed to the altar of free trade.

And now we're saying -- this president has said enough is enough.

We want to partner with business to create a manufacturing sector and the supply chain for that sector in the United States for these clean-energy products, whether they're solar panels or wind turbines or electric vehicles or the guts to that electric vehicle, which is the battery, which includes the critical minerals as well as the anode cathode, all of the materials that are now being manufactured elsewhere.

So this is, to me from an industrial strategy, this ability to incentivize the reshoring of manufacturing is a huge piece of the bill.

So lowering costs, you know, incentivizing the manufacture and then incentivizing the deployment of clean energy across the country to be able to address climate change.

Significant incentives for renewables.

Significant incentives for nuclear, for advanced nuclear, for geothermal, for hydroelectric power, all kinds of energy that help to address the climate crisis, all three of those very important goals.

>> Two, three months ago, President Biden's primary approach to the CEOs of energy companies seemed to be naming and shaming.

It was beating them up.

The private sector wasn't happy about that at all.

Now we're talking very much about hundreds of billions of dollars that are meant to incentivize many of those same CEOs to start investing much more in sustainable transition.

Do you think it's fair to say that that former strategy was less successful than it should have been and there's going to be more attention on the latter?

>> The Inflation Reduction Act is really a strategy about providing carrots to incentivize the manufacture of clean energy in the United States.

The pointing at, for example, the fossil industry, the oil and gas companies was about the price, right?

The price of gas at the time and the fact that they were engaging rather than reinvesting in production.

They were doing a lot of shareholder buyback and the president was exhorting them to invest in production.

And so this act, it doesn't incentivize fossil fuels in that same way, but it does incentivize clean energy.

And those same CEOs, to your point, can diversify and to become, you know, broader energy companies and take advantage of building, for example, offshore wind platforms if you're already doing oil platforms in the Gulf or doing geothermal, since you're -- since oil and gas industry are very expert -- have great expertise in the subsurface.

And so being able to pull heat from below our feet rather than or in addition to oil.

The president has called upon them to increase production right now because of the invasion of Ukraine has pulled Russian barrels off the market and we have had to replace those.

The oil and gas industry will be at record levels in the United States next year.

But the bottom line is this act is about incentivizing the build-out of clean energy, and that's very exciting.

>> How long before we will be able to characterize, classify the United States as a sustainable energy superpower, in your view?

>> This is the biggest investment, especially when you consider that all of the funding will require public-private partnership.

So there'll be private sector investment in addition to the public investment.

$370 billion worth of investment in clean technologies has never been done before.

It is massive and it is likely to be double that if you consider what the private sector will be doing.

And when you combine the Bipartisan Infrastructure Law, which incentivized the advanced technologies like clean hydrogen, like carbon capture and sequestration, like long-duration energy storage, battery storage, that funding, another $62 billion, combined with the CHIPS Act, so there's the Bipartisan Infrastructure Law, sort of the backbone of next-generation technologies, including advanced nuclear.

The CHIPS Act is like the brain because obviously you're funding the semiconductor industry in the United States.

Again, an effort to reshore that capability and then the lungs of it is really this Inflation Reduction Act, which provides incentive for the private sector to really help to deploy this next-generation technology.

All three steps are such a boost to the United States and puts us in a leadership position.

And so while we're, you know, it's going to take some time to build up those supply chains, obviously, but the incentives in there, particularly in the vehicle side for the automakers to bring that manufacturing capability into the United States are very quick, the turnaround.

I mean, we'll see if they're able to keep up with the timelines.

But it is really -- I think people's hair is on fire to be able to meet the deadlines that are specified in the act.

>> How much of a difference do you think this makes for the upcoming COP27 summit in Sharm El-Sheikh?

Do you think that the United States is now in a position to make something more of COP27?

Or are we really looking for the next year, for the year after that on the global stage?

>> Yeah, I mean, it's a great question.

I do think that COP gives us an ability to have some moral authority to say we are putting our money where our mouth is on this and therefore we are going to be still pressing our allies.

But honestly, our allies are there too, because of what has happened.

When you look at the NATO allies, for example, or our European allies who understand how vulnerable we are by relying upon fossil fuels or any technologies from countries who may not -- whose values we don't share.

And so the ability to be able to band together, to find solutions on the technology side, to make sure that countries are energy secure because they don't want to have to rely upon Russia, for example.

So the Europeans obviously are moving with alacrity in this direction.

Germany, I think, saw in the first half of this year a 22% increase in solar.

They need it.

It's an existential question, obviously, because they have had such a great reliance upon Russian fuel.

Great Britain, they just completely decided they were going to not use any.

>> No more Russian energy.

>> What does that tell you?

They've got to move swiftly as well.

So for people, it's not just a moral question.

It is an issue of can we get enough reliable energy for our people right now?

And of course, because we're talking about the climate and every one of their citizens is experiencing these extreme weather events.

So, you know, it is -- it has been a horrible year in terms of the war and in terms of eyes open about how vulnerable we all are when we don't create our own homegrown energy sources.

But that is an accelerant as well toward the ultimate goal of getting to 100% clean electricity or net zero by 2050.

>> Now, of course, when we talk about the Russian invasion of Ukraine this year, the Europeans are just doing everything they can to diversify away from Russian energy.

And if that means more solar, so be it.

If that means hydrogen, so be it.

But there's also a lot more coal coming in and being burned by the Europeans, too.

The French are not where they need to be.

They've got a lot of nuclear plants that are shuttered right now.

How much is the United States doing?

>> There is no doubt that I mean, the U.S., obviously we are at record levels of liquefied natural gas exports.

Obviously very important for the Europeans.

The president made a commitment on that.

We are working with them on technology advancements.

But you're right, in this year in terms of fuel switching, they have got to do what they've got to do to be able to keep, you know, keep the lights on.

I totally understand that.

But it does mean that their plans to move toward clean energy, 100% carbon-free electricity are moving fast, too, and everybody looking toward the next generation of nuclear.

So we've been talking, for example, with the Eastern Europeans.

Poland very interested in small modular reactors, Romania as well.

There's a lot of excitement about that next-generation nuclear that we are working with these other countries on as well.

>> How much are you engaged at all with Chinese leadership on the energy side right now to talk about what both countries are actually doing?

Have we lost those contacts, especially since Taiwan?

I know they're not traveling with the pandemic.

How problematic is that?

>> Yeah, I mean, we need to re-engage those conversations.

There was a chill after what was happening with the kerfuffle around Taiwan.

But I am confident that this area can be an oasis of diplomacy since the world needs these solutions.

And so we are hopeful that we can re-engage with the Chinese on the discussions regarding next generation.

For example, clean hydrogen, super important.

All of my counterparts across the world, the energy ministers in all of these countries, are looking for the solutions to bring down the price of electrolyzer-based hydrogen, hydrogen that is derived from renewable sources.

And we want to be able to be in those discussions.

We want to be able to, all of us, find the solution to making sure we have long-duration energy storage for renewables so that we can rely upon clean baseload power.

So we want to be able to engage, I think, with the Chinese once on this.

I think, you know, it's good to have diplomacy in areas where you know we all need to move in a direction.

And I'm hopeful that we can re-engaged with them on this.

>> Let me also just ask you at least a little bit about the Middle East, since we haven't touched on it yet.

Of course, there was also a kerfuffle about whether or not President Biden was going to make a trip to Saudi Arabia.

Do you think that from an energy perspective, these relations are becoming more constructive long term or not really?

>> No, I think they are.

They want to be leaders in hydrogen, in clean hydrogen.

Now, they may derive their hydrogen.

I mean, they could so easily derive their hydrogen from solar, solar powering the hydrogen process.

And that would make them enormously popular, I'll say, among folks who want to be able to use hydrogen as a clean source.

They also could create hydrogen from natural gas.

That's a little more problematic in terms of the CO2 emissions and the methane potential leakage.

So they'd have to address that.

But they have professed to us repeatedly that they want to be a leader in clean hydrogen.

They also want to obviously do solar.

They have enormous resources there.

If you can turn that solar and the excess solar, if they don't need all that solar into hydrogen, that would be an amazing economic opportunity for them.

>> Do you think that Americans on a bipartisan basis understand the need for global leadership as we fight a climate that is increasingly becoming very dangerous for all of us around the world?

>> Yeah, I do think people understand it.

I mean, they know it is global climate change.

It is not just climate change in the United States and that we've got to do our part by leading by example.

We have to do our part by working in partnership with countries who would love to partner on technology road maps to get to their goals of getting to net zero by 2050.

I think they know how critical it is that China, for example, reduces its CO2 pollution.

And we need to continue to press on countries that are big emitters.

We are as well.

But the fact that we've been able to take this action and can reduce -- can say by all accounts that we'll be reducing our CO2 emissions by at least 40%.

The goal is to get to 50% by 2030.

We want to challenge other countries to meet that same -- those same kind of numbers.

And obviously, it's not just us.

It is the globe.

And I will say this, I do think that in China and in India, in all of these countries, but I mean, you see the heat waves that are happening.

It is not going to be acceptable for leaders in any country to ignore that.

And people around the world understand what is causing these extreme weather events and they are going to demand action.

There's only so long that people can stay under a weeks-long, months-long heat dome that is killing people before people rise up.

And so, you know, every country has to do their part.

>> Secretary of Energy Jennifer Granholm, thank you so much for joining.

>> You bet, Ian.

Thanks so much.

♪♪ >> For the last six months, the war in Ukraine has dominated headlines.

In this "GZERO" exclusive, we speak with a Ukrainian fighter who details how one common piece of consumer technology has found its way onto the battlefield.

"GZERO World's" Alex Kliment reports.

>> One of the most important weapons in the war in Ukraine is the drone.

Russian and Ukrainian forces alike are using them on the battlefield to find enemy positions and strike military targets.

Some of them are large military-grade combat drones like these, which Russia has bought from Iran, or the Turkish-made TB2 drones used by the Ukrainians.

But some of the biggest blows in this war have come in a pint-sized package.

Both sides are using small consumer drones, the kind you can buy at a local electronics shop.

>> 80% of drones that Ukrainian army uses now were commercial drones that were produced to film weddings, vacations and all this kind of situations.

And we're using these drones for aerial reconnaissance.

We're using these drones to hit Russian tanks.

>> Oleksii, who asked us not to use his last name, is a Ukrainian drone operator.

When Russia invaded Ukraine in February, he cut short a Colorado ski vacation to fly home and join the fight.

For troops on the ground, he says, the sound of these drones is terrifying.

[ Propellers whirring ] >> You have to adjust your mind to identify this sound.

So when you hear it, it means you're in trouble.

It might mean two things -- whether your location has been discovered by the enemy or you're going to be shelled in 5 minutes.

So I hate this sound.

>> The use of consumer technologies in major conflicts is nothing new.

In World War II, Allied forces used civilian vehicles, planes and famously fishermen's boats during the evacuations at Dunkirk.

>> Dunkirk.

In the port were ships of every shape and size, taking off the men of the BEF and their French comrades.

>> And the war in Ukraine continues in that tradition of using whatever is at hand to gain an advantage.

>> Wars like this, you have to be efficient about it.

This is an attritional war.

Ultimately, this is a test of the ability of either -- both of these societies to prevail against each other in a whole societal test of strength.

So being able to do things efficiently at low cost that are good enough is a really huge advantage.

>> Experts say there are drawbacks to using consumer drones on the battlefield.

They tend to break down more easily than military drones.

They are easier to hack and they have more limited capabilities.

Still, both the Russians and the Ukrainians have deployed these drones to devastating effect in this conflict.

>> A device that is able to generate 80% to 85% of the capability of a much more expensive system that will take 10 years to bring on board but that can be available effectively tomorrow is just enormous.

>> But even as new technologies change the face of war, one thing remains constant.

>> People are dying in the way that could break your heart and your mind.

And I have no words to explain this, especially in English, but even in Ukrainian.

>> For "GZERO World," I'm Alex Kliment.

♪♪ >> And now time for something a little different and a little lighter, a little feltier.

I've got your "Puppet Regime."

♪♪ [ Cellphone rings ] >> Hello.

>> Angie, darling, it's BoJo.

I'm going nuts over here.

My seven children are driving me mad.

>> Ja, das ist why your girl "Big Ange" never had kinder.

>> Look, I need a job.

Do you have any advice, seeing as you also retired from public life?

>> Honey, you did not retire.

You were ousted.

They are not the same.

>> Oh, details, shmetails.

Anyway, what should I do?

>> Follow your bliss, Boris.

Cheers.

>> My bliss.

But the only thing that ever truly made me happy is -- Wait.

What makes me really happy?

Because I'm BoJo and I want you to know that these are the breaks.

Okay, let's get this party started.

Who's gonna lose their job over this one?

[ Air horn blows ] [ Meowing ] I must say, being a cat really isn't so bad.

I've probably got at least three political lives left.

Right?

[ Cat meows ] Oh, quiet, you.

This is not working.

What's a job I can get with my raffish charm, casual dishonesty and uncanny sense for exploiting people's worst impulses?

Wait a minute.

I've got it.

As someone born in America, I am proud to announce my candidacy for president of the United States.

>> "Puppet Regime"!

>> That's our show this week.

Come back next week.

And if you like what you see or even if you don't, you say, "Ah, I want someone other than a Cabinet secretary," I got you covered.

Check us out at gzeromedia.com.

♪♪ ♪♪ ♪♪ ♪♪ >> Major corporate funding provided by founding sponsor First Republic.

At First Republic, our clients come first.

Taking the time to listen helps us provide customized banking and wealth-management solutions.

More on our clients at firstrepublic.com.

Additional funding provided by... ...and by...