A climate solution where all sides can win | Ted Halstead

350,544 views ・ 2017-06-08

TED


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I have a two-year-old daughter named Naya
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who is under the mistaken impression
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that this conference is named in honor of her father.
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(Laughter)
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Who am I to contradict my baby girl?
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As many of you know, there's something about becoming a parent
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that concentrates the mind on long-term problems like climate change.
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It was the birth of my daughter that inspired me
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to launch this climate organization,
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in order to counteract the excessive polarization of this issue
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in the United States,
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and to find a conservative pathway forward.
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Yes, folks, a Republican climate solution is possible,
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and you know what?
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It may even be better.
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(Laughter)
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Let me try to prove that to you.
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What we really need is a killer app to climate policy.
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In the technology world, a killer app is an application so transformative
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that it creates its own market,
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like Uber.
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In the climate world,
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a killer app is a new solution so promising
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that it can break through the seemingly insurmountable
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barriers to progress.
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These include the psychological barrier.
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Climate advocates have long been encouraging their fellow citizens
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to make short-term sacrifices now
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for benefits that accrue to other people
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in other countries 30 or 40 years in the future.
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It just doesn't fly because it runs contrary to basic human nature.
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Next is the geopolitical barrier.
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Under the current rules of global trade,
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countries have a strong incentive to free ride off the emissions reductions
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of other nations,
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instead of strengthening their own programs.
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This has been the curse
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of every international climate negotiations, including Paris.
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Finally, we have the partisan barrier.
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Even the most committed countries --
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Germany, the United Kingdom, Canada --
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are nowhere near reducing emissions at the required scale and speed.
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Not even close.
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And the partisan climate divide is far more acute
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here in the United States.
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We are fundamentally stuck,
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and that is why we need a killer app of climate policy
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to break through each of these barriers.
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I'm convinced that the road to climate progress in the United States
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runs through the Republican Party
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and the business community.
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So in launching the Climate Leadership Council,
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I started by reaching out to a who's who of Republican elder statesmen
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and business leaders,
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including James Baker and George Schultz,
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the two most respected Republican elder statesmen in America;
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Martin Feldstein and Greg Mankiw,
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the two most respected conservative economists in the country;
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and Henry Paulson and Rob Walton,
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two of the most successful and admired business leaders.
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Together, we co-authored
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"The Conservative Case For Carbon Dividends."
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This represents the first time
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that Republican leaders put forth
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a concrete market-based climate solution.
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(Applause)
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Thank you.
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(Applause)
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We presented our plan at the White House
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two weeks after President Trump moved in.
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Almost every leading editorial board in the country
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has since endorsed our plan,
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and Fortune 100 companies from a wide range of industries
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are now getting behind it.
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So by now you're probably wondering,
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what exactly is this plan?
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Well, our carbon dividends solution is based on four pillars.
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The first is a gradually rising carbon tax.
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Although capitalism is a wonderful system,
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like many operating systems, it's prone to bugs,
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which, in this case, are called "market failures."
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By far the largest is that market prices fail to take
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social and environmental costs into account.
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That means every market transaction is based on incorrect information.
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This fundamental bug of capitalism, more than any other single factor,
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is to blame for our climate predicament.
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Now in theory, this should be an easy problem to fix.
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Economists agree
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that the best solution is to put a price on the carbon content of fossil fuels,
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otherwise known as a carbon tax.
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This would discourage carbon emissions
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in every single economic transaction,
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every day of the year.
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However, a carbon tax by itself has proven to be unpopular
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and a political dead end.
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The answer is to return all the money raised
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directly to citizens,
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in the form of equal monthly dividends.
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This would transform an unpopular carbon tax
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into a popular and populist solution,
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and it would also solve
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the underlying psychological barrier that we discussed,
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by giving everyone a concrete benefit in the here and now.
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And these benefits would be significant.
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Assuming a carbon tax rate that starts at 40 dollars per ton,
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a family of four would receive 2,000 dollars per year
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from the get-go.
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According to the US Treasury Department,
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the bottom 70 percent of Americans would receive more in dividends
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than they would pay in increased energy prices.
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That means 223 million Americans would win economically
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from solving climate change.
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And that --
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(Applause)
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is revolutionary,
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and could fundamentally alter climate politics.
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But there's another revolutionary element here.
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The amount of the dividend would grow
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as the carbon tax rate increases.
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The more we protect our climate,
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the more our citizens benefit.
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This creates a positive feedback loop,
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which is crucial,
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because the only way we will reach our long-term emission-reduction goals
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is if the carbon tax rate goes up every year.
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The third pillar of our program is eliminating regulations
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that are no longer needed
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once a carbon dividends plan is enacted.
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This is a key selling point to Republicans and business leaders.
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So why should we trade
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climate regulations for a price on carbon?
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Well, let me show you.
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Our plan would achieve nearly twice the emissions reductions
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of all Obama-era climate regulations combined,
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and nearly three times the new baseline
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after President Trump repeals all of those regulations.
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That assumes a carbon tax starting at 40 dollars per ton,
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which translates into roughly an extra 36 cents per gallon of gas.
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Our plan by itself
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would meet the high end of America's commitment
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under the Paris Climate Agreement,
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and as you can see,
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the emissions reductions would continue over time.
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This illustrates the power of a conservative climate solution
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based on free markets and limited government.
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We would end up with less regulation
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and far less pollution at the same time,
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while helping working-class Americans get ahead.
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Doesn't that sound like something we could all support?
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(Applause)
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The fourth and final pillar of our program is a new climate domino effect,
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based on border carbon adjustments.
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Now that may sound complicated,
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but it, too, is revolutionary,
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because it provides us a whole new strategy
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to reach a global price on carbon,
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which is ultimately what we need.
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Let me show you an example.
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Suppose Country A adopts a carbon dividends plan,
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and Country B does not.
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Well, to level the playing field
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and protect the competitiveness of its industries,
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Country A would tax imports from Country B
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based on their carbon content.
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Fair enough.
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But here's where it gets really interesting,
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because the money raised at the border would increase the dividends
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going to the citizens of Country A.
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Well, how long do you think it would take the public in Country B to realize
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that that money should be going to them,
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and to push for a carbon dividends plan in their own land?
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Add a few more countries,
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and we get a new climate domino effect.
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Once one major country or region adopts carbon dividends
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with border carbon adjustments,
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other countries are compelled to follow suit.
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One by one the dominoes fall.
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And this domino effect could start anywhere.
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My preference, strongly, is the United States,
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but it could also start in the United Kingdom,
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in Germany or another European country,
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or even in China.
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Let's take China as an example.
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China is committed to reducing greenhouse gas emissions,
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but what its leaders care even more about
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is transitioning their economy to consumer-led economic development.
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Well, nothing could do more to hasten that transition
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than giving every Chinese citizen a monthly dividend.
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In fact, this is the only policy solution
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that would enable China to meet its environmental and economic goals
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at the same time.
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That's why this is the killer app of climate policy,
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because it would enable us to overcome
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each of the barriers we discussed earlier:
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the psychological barrier, the partisan barrier,
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and, as we've just seen, the geopolitical barrier.
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All we need is a country to lead the way.
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And one method of finding what you're looking for
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is to take out an ad.
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So let's read this one together.
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Wanted: country to pioneer carbon dividends plan.
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Cost to country: zero.
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Starting date: as soon as possible.
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Advantages: most effective climate solution,
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popular and populist,
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pro-growth and pro-business,
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shrinks government and helps the working class.
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Additional compensation: gratitude of current and future generations,
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including my daughter.
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Thank you.
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(Applause)
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Chris Anderson: Just one question for you, Ted.
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I'm actually not sure
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I've seen a conservative get a standing O at TED before that.
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That's pretty cool.
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The logic seems really powerful,
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but some people you talk to in politics
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say it's hard to imagine this still getting through Congress.
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How are you feeling about momentum behind this?
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Ted Halstead: So I understand that many are very pessimistic
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about what's happening in the United States with President Trump.
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I'm less pessimistic; here's why.
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The actions of this White House, the early actions on climate,
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are just the first move in a complex game of climate chess.
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So far it's been a repeal-only strategy;
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the pressure is going to mount for a replacement program,
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which is where we come in.
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And there are three reasons why, which I'll go through real quickly.
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One, the business community is fundamentally parting ways
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with the White House on climate change.
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In fact, we're finding
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a number of Fortune 100 companies supporting our program.
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Within two months, we're going to be announcing
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some really surprising names coming out in favor of this program.
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Two, there is no issue in American politics
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where there's a more fundamental gap between the Republican base
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and the Republican leadership than climate change.
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And three, thinking of this analogy of chess,
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the big decision up ahead is: Does the administration stay in Paris?
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Well, let's pan it out both ways.
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If it stays in Paris, as many are pushing for in the administration,
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well then that begs a question: What's the plan?
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We have the plan.
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But if they don't stay in Paris,
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the international pressure will be overwhelming.
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Our Secretary of State will be asking other countries for NATO contributions,
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and they'll be saying, "No, give us our Paris commitment.
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Come through on your commitments, we'll come through on ours."
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So, international, business and even the Republican base
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will all be calling for a Republican replacement plan.
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And, hopefully, we've provided one.
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CA: Thank you so much, Ted.
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TH: Thank you, Chris.
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(Applause)
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