John Morton, Pollination Partner & Former Senior Energy & Climate Director at the National Security Council under President Obama joins the Yahoo Finance Live panel to discuss the Biden administration's climate plan and rejoining the Paris Climate Agreement.
ZACK GUZMAN: Also want to focus on another pressing issue here for the incoming Biden administration. That, of course, would be climate change. Interesting to see an open letter from some top CEOs here in the US getting a lot of attention for what it says about climate change. The note penned by CEOs including Salesforce's Marc Benioff, Amazon's Jeff Bezos, and Ford's Bill Ford, echoing Biden's own stance that embracing clean energy means jobs for America.
And the importance of the issue of climate change was also stressed by United States Special Presidential Envoy for Climate, John Kerry, in his first appearance on the global stage yesterday. Take a listen.
JOHN KERRY: It is our fervent conviction throughout all of our administration, every agency is now part of our climate team. And only together are we going to be able to build the resilience to climate change that is critical to save lives and meet our moral obligation to future generations and to those currently living in very difficult circumstances.
ZACK GUZMAN: So for more on the big push here to address climate change, I want to bring on our next guest. John Morton is Pollination Partner and Former Senior Energy and Climate Director at the National Security Council under President Barack Obama. John, thanks for taking the time here to join us.
I mean, it's an interesting new position that John Kerry is going to be heading up. And you heard him addressing some of this right there. What are your expectations for maybe day one, or past day one, but the quickest changes here to come under the Biden administration to address the issue of climate change?
JOHN MORTON: Yeah, look, I mean, I think we're seeing it already. You said day one. What are we are at now, week one? And every day, we've seen new action and new activities, whether they're executive orders or kind of restructuring of the White House and State Department and bureaucracy, the teams that will oversee and help coordinate climate policy.
So we've seen really, really ambitious and bold action in even the first week, and not coming from the traditional places where climate is a priority, like the State Department or the White House. We've seen it in transportation, at Treasury Department, within the new special office in the White House that Gina McCarthy is going to be heading up. So I think we're seeing, really, a fundamental rethinking of how to integrate climate planning into the White House and into the administration's thinking. Very consistent with what Biden and Harris said they were going to be doing on the campaign trail.
AKIKO FUJITA: John, one of the things that caught my attention yesterday in John Kerry's testimony, or at least his speech, at the World Economic Forum was speaking directly about not just investments domestically, but also internationally. He talked about international finance. There's a lot of thinking that potentially the US could use what I guess would be considered the Development Bank, but International Development Finance Corporation, to really fund clean energy projects, much like China has done through Belt and Road. How do you see that materializing, and what specifically are you looking for on that front?
JOHN MORTON: So look, I was the chief operating officer at OPIC-- formerly OPIC, and now DFC-- for five years under the Obama administration. That is a wonderful agency that helps US businesses expand into fast-growing overseas markets.
And I think what Secretary Kerry-- what Special Envoy Kerry is pointing out in his remarks, and certainly President Biden and Vice President Harris have been saying, is that the response to climate change is a significant economic opportunity. It's not simply an environmental necessity and a moral necessity for us to act. But there's actually an economic benefit to us moving-- from a jobs creation standpoint, from a technology innovation standpoint, and from a long-term economic development positioning for this country.
And look, 90%-- 95% of the world's consumers live outside of the borders of the US. So if we want to be competing in the technologies and the markets of the future, we have to be looking outside of our own borders for growth markets and areas to sell our, hopefully, US-driven technologies, innovations into. And the Development Finance Corporation, formerly OPIC, is a phenomenally effective agency at financing and helping grow US businesses in overseas markets. So I expect to see a lot more activity from them in these fast-growing, low-carbon economies going forward.
AKIKO FUJITA: You mentioned this is an economic opportunity. But of course, we've also seen it used as diplomacy, if you look at the case of somebody like China. Does the US see the climate issue as sort of in a competitive standpoint when you look at how China has been engaging other markets, especially developing nations, on the energy front.
I'm wondering how these issues cross over right now, because to your point, it's really not just about sort of the traditional agencies anymore. We have seen the climate policy adopted across the board in this administration.
JOHN MORTON: I think the transition to a global low-carbon economy represents the single-most predictable and consequential economic transformation in human history. We know it's coming. We see it coming. We understand that the shift is going on. 3/4 of the world's GDP now in terms of countries have indicated that they are going to be shifting to a net-zero posture by the middle of the century.
So this shift is ongoing. It's been signaled. There's no question about whether it will occur. The question is the speed at which it will occur-- and who will be the winners and losers from a technology standpoint, a business standpoint, sector standpoint, and indeed, as you raise, national standpoint. So we should see this as a competitive race, and we should adjust our policies accordingly to see this as a race for the future technologies of the world.
We know that electric vehicles are the future of technology. We know that renewable energy is the future of energy. That's a fact. So how are we going to compete in those markets?
ZACK GUZMAN: John, I mean, clearly, there's going to be a lot of winners in those spaces. I'm thinking of the losers here too, though, right? Because you think about-- let's just use a local example. On a state level, West Virginia obviously one of those states still levered quite heavily to coal-powered power plants.
And you think about the economies, the local economies impacted by this too. If you switch over overnight to electricity, how difficult does it become to maybe retrain some of those workforces and get states like that to come on board with this, considering if it doesn't work out you've got a lot of people who had put food on the table in that space now saying, all right, now I'm a bit out of luck here?
JOHN MORTON: Look, it's an extremely difficult issue. And it's obviously affected US domestic politics for many decades, and continues to. If you look at the state from which Former Majority Leader McConnell hails from and his position on coal in particular, that gives you a good indication of the stickiness of the issue.
Here's the situation. This transition is going to occur. The question is not whether, but how quickly, and who will win. And right now in the US, the two fastest growing job segments according to the Bureau of Labor Statistics are solarvoltaic installers and wind turbine technicians.
So the question isn't whether we need to transition. The question is, how do we take care of affected communities? That's the issue that you're raising. And stay tuned for an executive order, I believe, tomorrow-- or it could be Thursday-- from the new administration about how President Biden is going to be dealing with those issues.
He's going to be putting together a task force, essentially, to come up with very specific suggestions on how to address affected communities, in particular in the coal community. And I believe they've been focused on this. Stay tuned for that announcement in the next 48 hours.
AKIKO FUJITA: Yeah, reports already suggesting that President Biden is going to move forward on a plan to ban new oil and gas leases on federal land. I want to get back to what Zack mentioned in the intro to you, which is how corporate CEOs have really been lobbying the administration about wanting to be a part of the conversation. It feels like they see the regulation that is about to come down on the issue of disclosures, climate risk for these companies. How do you think that regulation should look like?
JOHN MORTON: I think it's-- look, information is is the sunlight that disinfects markets, right? Right now, we're not dealing-- we always assume we're dealing in kind of full information markets, and there's perfect information markets. There isn't.
We've got this great unpriced externality that has been hanging over our head for years and years, and it's called carbon. And we as consumers of financial products and as investors need to have greater clarity on the extent to which our investments are unpriced. And there's carbon risk in those portfolios.
I would expect, as we've seen from Secretary Yellen, as we've seen from the Fed-- and we've certainly seen from Biden and Harris themselves-- that the issue of climate risk disclosure within financial institutions is going to move from what is now a relatively voluntary, haphazard set of coalitions to a more mandatory requirement in the years ahead. And that, from my perspective as a consumer, is really good, because we need to have better insights on the extent to which our financial holdings as retirees, et cetera are invested in sectors that have a high degree of climate risk.
Carbon is this huge unpriced item currently in financial markets. And that can't hold much longer. Europe's already moving in the direction of requiring disclosure. And I think the US will soon, too.
AKIKO FUJITA: Yeah. And we've heard from a lot of these executives who say that investors are increasingly seeking that transparency as well. John Morton, it's great to have you on today. He's Pollination Partner and Former Senior Energy and Climate Director at the NSC under President Obama.