(ambient music) – [Narrator] The following is a CUNY TV Special Presentation. – My name is Chase Robinson. I'm the President of the Graduate Center and it is my great pleasure to welcome you to Earth Day at the Graduate Center. What you may not know is that today, April 22nd, is also Lenin's birthday. (audience chattering) Now while the parallels with Marxism may well end there, tonight will touch on the economic, the sociological, the philosophical, and perhaps even the revolutionary, that it is also Nick Stern's birthday must portend something of consequence. In fact, it was Professor Stern who remarked that tonight's pairing of inequality and climate change bridges what has been to date an under examined link. It is this type of radical thinking, then he noted may spark something important. Now especially at the Graduate Center, can such an apparently unorthodox collision of concepts or ideas take place. This is the kind of place I say immodestly where bold thinking about the nature of major social issues so often originates, where critical discussion is launched into public debate.
It's where in just the past two weeks, and indulge me, one of our students was named Guggenheim fellow and another one of our students, a Pulitzer Prize. Tonight's discussion is emblematic of what we do as a matter of course here at the Graduate Center given our commitment to what might be called a disciplinary interdisciplinary compact of sorts across our many programs, our centers, and our institutes. We are very privileged to work in such a distinguished community of scholars and students and our public programming is just one of the ways that we endeavor to enlighten New York City and indeed the world well beyond it. Personally, I couldn't be prouder to be President of an institution where issues of great import are framed in new and creative ways with no better example being what you will witness tonight.
So it's my pleasure to introduce Adam Cummings and Hannah Cummings, Chair and Member of the Board, respectively, of the Nathan Cummings Foundation, the generous cosponsor of this evening's event. Do enjoy. (audience clapping) – So, I am Adam Cummings. – And I'm Anna Cummings and we'd like to thank you for joining us this evening for this very important conversation. The Nathan Cummings Foundation is a social justice foundation rooted in Jewish values. Our new strategic plan calls for us to focus on our grant making over these next decade on inequality and climate change. And a third, which is an intersection of these two issues, our Board recently created new climate guidelines and we're working on developing guidelines for inequality program. Tonight's discussions will very much contribute to our deliberations. – So along with our partners and tonight's distinguished speakers, we share the perspective that the economic, social, and environmental issues we face today are deeply intertwined. We cannot successfully move towards more just world without better understanding how these issues intersect.
We are honored and excited to be here tonight to learn from Professor Joseph Stiglitz and Professor Nicholas Stern, both of whom bring to this forum an incredible wealth of knowledge and insight that we expect will influence how we think about our work on inequality and climate change. Thank you to our partners, the CUNY Graduate Center, and the Luxembourg Income Study Center for being allies in the effort to lift up and address these two intractable issues and thank you to our staff for their deep knowledge, innovative thinking, and for helping to guide our efforts to carry out the mission of our foundation. Thank you. (audience clapping) – Thank you, Chase, and thank you, Adam and Hannah. I'm Janet Gornick, Professor of Political Science And Sociology here at the Graduate Center. I'm also director of the Luxembourg Income Study Center, one of this evening's co-hosts. The LIS Center is the satellite office of LIS, the well-known and heavily used (beeps) data archive that has long provided ingredients for research on economic inequality across countries and over time.
Before I say anything substantive, I'm gonna say a little bit to introduce the evening. Let me remind all of you to please silence your cell phones. That will help to accommodate the live streaming of tonight's program and also the broadcast CUNY TV is also recording it for a televised broadcast which you will be able to see several times next week. So I'll give you a moment to silence your phones. As all of you here surely know, interest in inequality has exploded during the last approximately five years. An enormous conversation is now underway in New York City, in the United States, and around the world, catalyzed by the occupy movement, the global financial crisis, and the Great Recession, and intensified by new lines of scholarship and journalism and political activism, inequality is receiving more attention now than it has in decades, if ever.
And many of us who work in the field of inequality, those of us who've worked in the field for a long time have been watching this burst of attention paid to inequality with interest and some amazement. Most importantly, recently we've been gratified to see that divers initiatives related to understanding inequality are now being institutionalized, and broadened, and structured, thus, for sustainability. So the Graduate Center's committed to contributing to and responding to this growing conversation and as part of our work, we've hosted a series of public programs held on this stage with the goal of helping to shape and sharpen this vast, and lively, and complicated public exchange. We began with a conversation on inequality and economic growth featuring Tony Atkinson and Paul Krugman. That was followed by a lecture on inequality and top incomes by Thomas Piketty, and one on inequality and health by Angus Deaton. Later this year, we'll present a program focused on gender inequality and human rights. And tonight on Earth Day, we're immensely pleased to host this conversation about the connections intentions between inequality and climate change.
As concerns about inequality have grown, as many of you know, so has attention paid to climate change. 45 years ago today on the first Earth Day, 20 million Americans took to the streets to demand a healthy and sustainable environment. Fifth Avenue just outside our door was closed to traffic to accommodate a million marchers heading to Union Square. Today, literally today, Earth Day's being observed by estimated billion people in over 170 countries. A recent Gallup poll revealed that nearly 2/3 of the world's population now has some knowledge about global warming or climate change. And since that first Earth Day in 1970, legal and regulatory developments enacted in many countries have led to important advances in environmental protection, but at the same time we face some frightening realities. Nicholas Stern has warned for years that serious irreversible climate change is now underway and that unchecked, it will threaten the basic elements of life for people around the world, including access to land, water, food, and ultimately, peace.
He warns that in short, we're playing Russian roulette with the planet. The risks are existential. For this evening's event, I asked our four guests to turn their attention to an under explored question: In what ways do inequality and climate change combine, intersect, and interact? Our two moderators will pose a series of questions to Professor Stiglitz and Stern focused on this complex pairing of phenomena. Their questions will consider the ways in which inequality shapes the course of climate change, as well as the reverse, the pathways through which climate change might alter levels, trends, and forms of inequality. By way of a brief introduction, among the key questions are these: Do inequalities deter climate change mitigation, block the development of adaptation measures, or both? How will the damaging consequences of climate change be distributed? Is it possible to limit economic inequalities or carbon emissions, or both, without altering the core institutions of market capitalism? Given that climate is a global phenomenon and that high and rising inequality also has transnational causes, what can single countries achieve if international governance remains insufficient? And how much tension is there between calls for slowing climate change on the one hand and the competing imperative of economic development in poor countries on the other? Our headliners this evening as you know by now are Professor Joseph Stiglitz and Nicholas Stern and our moderators are Deborah Balk and Eduardo Porter.
Joseph Stiglitz, a professor at Columbia University, has long been recognized for his economic scholarship for which he was awarded the Nobel Prize in 2001. He has worked on questions about inequality for decades, long before it was fashionable, and he's written extensively on the economics of climate change. He's been a remarkably generous contributor to both discussions, writing in public venues, traveling widely, and appearing on countless stages around the world including ours. We're especially happy to have him here this week in the middle of a book launch. His latest book officially published by Norton two days ago on Monday of this week is called The Great Divide: Unequal Societies And What We Can Do About Them. The book is a call to action and interests on his conviction that economic growth and fairness can be achieved together. Nicholas Stern is a professor at the London School Of Economics, President of the British Academy, and Chair of the Grantham Research Institute on Climate Change.
In 2006, he authored the renowned Stern Review on The Economics of Climate Change. We're extremely honored to have Nick here with us on Earth Day on a day that we know many others would have liked to have his attention. I'm also happy to let you know that as soon as you've finished Joe's book, you'll have the opportunity to read Nick's new book which will be published by MIT Press, amazingly, on Friday of this week. (audience laughing) His book, also a call to action, announces his core point in the title, Why Are We Waiting? The Logic, Urgency, And Promise Of Tackling Climate Change. No one could read this book and feel sanguine about failing to act. Deborah Balk, a demographer, is a professor at Baruch Colleges School Of Public Affairs and a member of the Graduate Center faculty. Her wide-ranging and timely research has addressed an array of overlapping questions related to urbanization, poverty, population, and climate change.
And finally, Eduardo Porter, is also one of our own. He serves on the Advisory Board of the Graduate Center's Advanced Research Collaborative. Eduardo is author of the Economic Scene column in the New York Times. Before his long career in journalism, he studied Physics, earning a Masters degree in Quantum Fields and Fundamental Forces, which I think helps to explain why he has a keen understanding of both economics and climate change. Joe, Nick, Deborah and Eduardo, I turn the evening over to you. (audience clapping) – Good evening. Thank you Janet. Hi Deborah, Nick, Joe. This is a really interesting day to be talking about the interaction, the intersection between these two topics: climate change and inequality. Is of course Earth Day and Mayor DiBlasio took the opportunity to perhaps revamp the previous environmental strategy of his previous mayor Michael Bloomberg to incorporate the issues of inequality and poverty reduction and to what was originally mostly an environmental plan.
So here these issues are being brought together in a very interesting way. Now there is not a lot of research as far as I can tell. There's been not a lot of investigation into the interaction between these two things and to some extent they are very different. Global warming is, climate change is in fact a global phenomenon and the rise in inequality that we've seen over the last several decades has been mostly perhaps a collection of national things. It's increased in a bunch of countries, most perhaps. But if you look at the world as one large country on a planetary level, as Branko Milanovic here from the Graduate Center has found, income inequality has actually declined somewhat as the Chinese middle class has risen. But still I mean, clearly there are issues of equity that come up very very robustly when one talks about climate change. It's the rich of the world who have emitted so far most of the CO2 in the air that is now warming the climate and it's the poor of the world that are gonna be most affected by the devastating impacts. So both of you have really written about this from kinda like different perspectives and I would love to hear your thoughts about the interaction kind of broadly, like what can we say about how climate change affects inequality, and what can we say about how inequality affects climate change, and perhaps I mean we could talk about this later, what is the equitable way to address climate change.
So Joe if you would take this on, I'd be very grateful. – Okay. The most important aspect, you just said, climate change is a global phenomena and so the impacts in terms of inequality are going to be global. If the reason why climate change is going to increase inequality globally and undo some of the progress that's been made in that global reduction in inequality is that the countries that are most affected by it are those in the tropics. That's where the temperature rise will have most devastating effect. Also it's gonna have the most devastating effect on fragile agricultural economies. There'll be country regions where desertification will get worse. Climate change is often talked about as global warming, but there are many other dimensions to it. One other dimension, for instance, is that it has been brought out in the last few years is a lot more volatility in weather, more droughts as we've been seeing in the United States, more periods of freezing, so more hot spells, and it's the fragile parts of the world in which a disproportionate number of poor people live that are going to be hurt the most.
Another dimension of climate change is the rising of the sea level. And then if you look around the world, where would that have the biggest impact? A country like Bangladesh: 135 million people. A third of that country will be underwater and there are poor Pacific islands that will be underwater. So those are among the people in our global society that will be hurt the most. Now what's interesting, as you said, about climate change if you draw a map of the world of who's gonna be hurt the most and you draw another map of who is doing the most, the biggest contributor to climate change, they don't overlap or they didn't used to overlap. Now China and India are coming in with more force, but it used to be, it was basically the developed countries which were contributing to climate change, and it's the developing countries, in particular a lot of the low income countries, that will suffer the most. There's one more aspect that applies both to United States and advanced countries as well as the developing countries and that is the rich the better off are able to cope with the changes better and it's the poor who will be the least able to cope with these dramatic changes.
The affects are obviously much worse in agriculture. It's poor that depend on agriculture, so it's not only the overall inequity of one group causing, the rich causing the climate change, it's the poor have the least capability of responding to these very big changes. Southhampton, some of the beaches may get washed away, and the first row of houses, those $50 million houses will be washed away. And I feel sorry for them. (audience laughing) But somehow I think it's 1%. 50 million, 1% of their wealth, they can bear it. But for most of us, losing that kind of is a big deal. – Nick, would you like to take this on? – Just to underscore what Joe said, climate change has its impacts in large measure through water or its absence: storms, floods, droughts, desertification, sea level rise. It's through water or the absence of it, that the impacts come and extreme weather events are a very big part of that as we saw here in New York with tropical storm Sandy, as we saw in Katrina, and we've seen in the Philippines, and in Bangladesh, and throughout the world.
The extreme weather events are the fundamental manifestations of what happens when you disturb weather systems. Those extreme things happen with greater severity, and they can be more often. So if you want to get a take or a numbers take on the inequality, it helps I think in understanding it to look at natural disasters and 95% or so of the deaths from natural disasters are in developing countries. There, 7/8, sorry, 6/7 of the population with 95% of the deaths. If you look at the cost of those countries in terms of fraction of national income, that fraction is 20 times in developing countries than rich countries, a reflection of Joe's allusion to Southhampton. So you can see that if climate change is a large measure of our actual disasters, and it is in severity and frequency of them, then we can see by looking at natural disasters that they really do hit poor people harder, and we saw that in New Orleans, we saw that in the same year with the typhoon hit Mumbai, within urban communities as well as rural communities. It's the poor people who get hit hardest by these natural disasters.
So it's difficult to get numbers on big things like this, but I think those numbers on natural disasters do reflect the inequality of the impact of climate change. But of course there's also the question the other way around which you want us to comment on the relationship between inequality and climate change. We talked about climate change and inequality. And again, you have a strong suspicion that it's powerful, but the numbers and evidence they're quite difficult to nail down. But it is true that more unequal societies have greater emissions per unit of output. There's some data there. It's true that more unequal societies have less recycling. It's true that more unequal societies, if you poll business people on attitudes to action, attitudes to international agreements, they're worse in more unequal societies. – Can I pick up on that? – There are statistical straws in the wind, but of course, looking at those you immediately ask yourself, "Now how would I do this in a more systematic way? "How do I do this in a more formal way?," and that's why it was suggested by the Cummings family right at the beginning, you can see things here that are highly suggestive and what we need is much more detailed research.
We'll start with you. – Yeah. I just want to pick up on one aspect of that which is the politics. Dealing with an issue like climate change, it's a global phenomena. It requires public action. It's not going to be solved just by private action. And so, inevitably, it gets involved in the issue of what is the role of government. More unequal societies tend to have the view that government should be small and small government means less capacity, less willingness to deal with it. There's an interesting statistic that I threw out with my students. I asked them a question. You think of climate changes as being somewhat sophisticated and complicated issue, and you ask, "Do you think that people who are more educated "are going to be more concerned with climate change?" Normally you would expect more educated people will be more concerned about climate change, and that's true in most societies, but not in the United States.
(audience chattering) – Interesting, so… – That the relationship between education and concern about climate change goes the other way and you start to understand, parse it out, it's because disproportionately the wealthy tend to be more conservative in their politics. They want a smaller government and they reason backwards. If we want a smaller government, there can't be climate change, (Nick laughs) and so it follows from their beliefs that climate change can't exist. And with that kind of reasoning (chuckles), we're gonna have a hard time dealing with climate change. – Their education was a little iffy there, the reasoning. – You raised a few issues that I think we'd like to come back to. Before we do that, I'd like to ask each of you to think a little bit about or share with us your thoughts on different kinds of inequality in particular with respect to climate change, and I have in mind like three types: the inequality between people alive today and people in future generations not yet born, inequalities between individuals in rich countries and those in poor countries, and we've heard a little bit about that, and also inequalities within countries in Southhampton and New Orleans are example of that.
But with each of you would sort of speak to which of these is the most problematic for thinking through climate change related issues, let alone inequality issues. But the climate change relationship between inequality, I'd like to, that nexus is what we'd like you to address. And Nick, you in particular, have written very forcefully about how there's no good ethical justification to value our generation more than future ones. So I'd like it if you could start us off on your thoughts with this. – I will, but all three kinds of inequality matter a lot for this question. So, asking me to pick just one is a bit like saying which of the 10 Commandments should we drop first? (audience laughing) – I could tell you that, but (laughs). – Joe will tell you over dinner, I think. (audience laughing) But let me focus on the one you highlighted because the physics of climate change has made this just about as difficult as it could be. This is something that manifests itself with quite long lags.
They can be decades. This is something that's full of uncertainty and humans are not very good at thinking about uncertainty. There some in the audience and one or two on the stage who are not bad, but humans on the whole are not very good at thinking about uncertainty. It takes us well outside human experience, under any definition of human, it could take us right outside the human experience. We could see four degrees centigrade we haven't seen for tens of millions of years on this planet, four degrees average global surface temperature above the second half of the 19th century which we usually take as a benchmark. And of course, as Joe emphasized rightly, it's the sum total of all the emissions that matters. The physics has made this just about as difficult a public problem as it could with lags and the uncertainty, and the scale, and the public good.
But it's the lags that we focus on here and you asked me to focus on. And we have to ask ourselves a question: How do we think about the effects of what we do on people down the track 20, 30, 60, 100, more than 100 years down the track? And that's quite a hard problem than economists and many others behavioral economics psychology have taught us that we're not very good at thinking through long-term consequences of our actions, even for our self, let alone for other people, smoking and drinking being obvious examples but there many more. So we have to ask ourselves and cross-examine ourselves, what should we do and essentially in economics the idea of discounting is usually founded… Discounting, giving lower value, to some benefit of a dollar that comes later than now, discounting, we do it, or we argue we should do it because future generations will be richer and that's a bit like the other inequalities you're talking about cause they're gonna be richer, then a dollar to them.
You can argue, and many people would go along with it, that it has lower value because it's to richer people. But there's another argument which is very common in economics, is you discount because it's in the future. Now it's that that seems to me to have very little in a way of ethical foundation. I mean imagine a life that starts 35 years from now and a pure time discount rate of 2% and that's what a lot of people have actually, in our profession, to our discredit in my view, have advocated. That would be saying that the life that starts 35 years from now has half the value of a life that starts now. I don't see any reason why we should take that kind of thing seriously cause I'm assuming here it's discounting of lives. I'm assuming that person whose life starts 35 years from now has exactly the same consumption as now.
I'm taking the growth of consumption a bit out of it. I'm just asking about pure time discounting. That's a very powerful assertion and I haven't seen any serious argument in favor. If it's a question of the existence of that person where that person may or may not exist, that's a separate question and then the idea that they're half as likely to be there 35 years from now, this doesn't carry any sense. So I think in terms of the basic logic that we try to bring to bear, I don't see any reason and I haven't heard any convincing argument why you should discount lives in that kind of very powerful way. Now that's within the structure of standard economics and consequentialism. If you look at other approaches to moral philosophy, if you look at Kant and the categorical imperative not to treat other people as instruments, that's seems to me to kick in strongly there too. If you look at Aristotelian ideas of what constitutes virtue, if you look at notions of rights of different people, the negative liberty and the language of Isaiah Berlin not to be constrained by collective, or governmental action, or individual collective, the collective of individual actions, I think whichever way you look at it, and I started in a conventional economics way but that shouldn't monopolize our attention, whichever way you look at it, I don't see any powerful reason for doing that, bearing in mind that we're learning for ourselves but on behalf of future generations.
– Can I just try to reemphasize what Nick said about how important this issue, what may sound like an arcane issue of the discount rate as it's usually put, how do you discount the future. At a very practical level, I was involved in this issue when I was Chairman of The Council of Economic Adviser under President Clinton because there are guidelines into how you evaluate different projects, how do you evaluate, should we do this or that and at that time, the standard discount rate for valuing benefits in the future and risks in the future was around 7%. Let me explain what that means. That 7% means that effectively something that you think is going to have an impact in 20 or 50 years, you say we don't pay any attention to it, and we fought a very big battle which we won and said in the case of climate change, this is a big deal and that you can't use that kind of reasoning for exactly the kind of argument that Nick put forward and we billed in that lower, that we wouldn't discount it. Let me also reemphasize the role of risk here because Nick pointed out that one of the arguments that was put forward is that in the future people are going to be richer.
Because they're richer, why should we subsidize them to make their lives still richer by spending money today? An inherent part of this problem is uncertainty. Not as much as a lot of people think, cause I think we can be fairly sure that climate change is going to be big, the consequences are gonna be very serious. Well what does that mean if it turns out that the consequences are anything near what we think they're gonna be? Then there are gonna be very negative effects on our standard of living 50 years from now and that means the value of saving a dollar then is going to be very high, so we ought to spend a lot of money now to protect us against the future. We pay all the time, we pay insurance premiums. Why is that? Because we don't like risk. This can be viewed as a kind of insurance premium and therefore it makes sense to do it and we argued actually.
I was on the IPCC, Internet Governmental Panel of Climate Change. We actually argued maybe you ought to use a negative discount rate to take into account this kind of risk and the risk mitigation that is involved in trying to reduce the level of emissions. – It's really interesting. We immediately jumped into the idea of competing priorities and trade-offs and because it seems very sensible what I'm hearing, but you might also in a context of a limited budget to address social issues. You also have combating infant mortality, and malaria, and education, which also have returns in the future which will also have an impact in the future, in our future well-being and not making these investments today might again have a cost down the line. So I'm interested in how these trade-offs are managed and kind of like very specifically. You in your book, you suggest a new goal for the United Nations for the Millennium Development Goals to reduce or eliminate extreme income inequality within 30 years and of course we also have the imperative of keeping the global temperatures at no more than two degrees celsius above the preindustrial level.
Is there any tension between these two goals? How do you address it if there is… Can these two things be done in a complementary way? – Well one of I think major changes in our thinking about inequality that has occurred in the last 10 15 years is be use to think about inequality as the big trade-off. Arthur Okun, who was the Chairman of the Council of Economic Advisers under President Johnson wrote a book called The Big Trade-Off. He said you can only have more reduction in inequality if you gave up on growth. The new view is that in fact they're complements. You can get more growth and less inequality, more equality of opportunity, and this is not just a fringe view. This has now become, fortunately, the mainstream view. The IMF has been telling countries all over the world you really have to address the problem of inequality. If you do that, you'll have more stable growth and better economic performance. Well, I view the same thing about climate change. Right now the real problem in the world is what economists say is lack of aggregate demand. There's too little demand, that's why the economy (clears throat) in the United States, and Europe, and the world as a whole are not living up to their potential. So this is really a good time to address the problems of climate change because we have underutilized resources.
If we place the price on carbon, incentivize people in one way or another to realize the real social cost of carbon then there will be more investment at mitigating carbon emissions, more investments to retrofit our economy, more investments to change the structure of our cities to do public transportation, public transit, all these things that would reduce the risk of climate change. So to me, I think in those policies that enhance full employment are one of the most important policies for reducing inequality. So to me, I see all these as being actually complement, and this is a particularly good time for a country like the United States, a rich country, cause we can borrow at a negative interest rate, and interest rate adjusted for inflation. That means we have these huge social return associated with investments to reduce inequality, investments to deal with climate change, and the cost of capital is actually negative. So to me, we can't afford to do all these things.
In fact, (clears throat) we would do better if we attacked all of these things. – Let me give… I agree very much to what Joe just said. – Nick and I don't usually disagree. (audience laughing) – But we sometimes emphasize different aspects and let me emphasize two different aspects. One is that I call this phenomenon the greatest market failure the world has ever seen because the impacts are so big, the impacts on everybody and we are all active in creating that problem through our emissions and that is a huge inefficiency. And if there's a huge inefficiency, we ought to be able to do a lot better by overcoming that inefficiency. We can make future generations much better off. We could actually leave less as it were monetary resource transfers because we've not penalizing so hard through the climate. That's the kind of inefficiency that this would overcome. The second reason, so there's a deep inefficiency in all this around the market failure, (clears throat) the second is that innovation and learning are going to be at the heart of the whole story and we've already seen that by placing a premium on new inventions around solar or reducing the cost of solar, we saw absolutely dramatic change.
We've seen that fuel consumption in cars, with some direct policy and regulation, you've seen how fast things can change. So what we're talking about is launching ourselves down a different path where learning and discovery, the Schumpeterian and other kinds, are gonna be enormously important. So that's again a reason that we can do so much better. And let me give you just one example in policy. We know that fuel subsidies are deeply damaging to all this. We also know, and there's a nice paper from Cody and others at the IMF, that if you look at the distributional impact of fuel subsidies, the top deh-sahr gets about six times as much absolutely as the bottom deh-sahr. So by getting rid of those fuel subsidies there'll be some rise in price cause the poorest people, but you could gain enormously to compensate there, and the absence of a carbon price is very close to to a fuel subsidy.
A $25 a ton CO2, which is far too low in my view with double coal prices… Coal price is $50 a ton or so are ludicrously low. Coal's not cheap. Cole is very expensive indeed if you add in anything like a carbon price and you add in as you should the deeply damaging and the killing consequences of air pollution. So we know from the studies on fuel subsidies, how much better we could do from the point of view of income distribution by getting rid of the fuel subsidies and compensating with the revenue that we retain, compensating poor people. So it's just the same as carbon prices. By not putting on a carbon price, you're subsidizing a very destructive activity. You're letting people throw damaging pollution, both of the particular kind and of the carbon dioxide kind, into the air for nothing. That subsidy: giving something very damaging for free. So you can see both in the big strategy of overcoming the inefficiency, the big strategy in launching down a different path, and in the specifics of the particular kind of measures, why that kind of narrow trade-off is not a good way of putting this.
– Can I just pick up one point that Nick absolutely right about the effects of coal, for instance. Those particular effects, that's the global warming, but the effects of the atmosphere actually have a disproportionate adverse effect on the health of poor people. And so that's another very important aspect of inequality which is health inequality and it's almost a byproduct of dealing with the global warming. You actually improve the health. You get more health equality. – Something like 13 of the most polluted cities or the 20 most polluted cities in the world are in India and the PM2.5s in Delhi are worse than in Beijing. I went from Beijing to Delhi about a month ago and the PM2.5s in Delhi were enough to shut down schools in Beijing. They've closed the schools in Beijing if it had got to those kinds of levels, and of course it's the poorest people who are hit particularly hard. – Nick, thanks for raising the issue of cities and urbanization cause that's a question that we would like to pose to you. So though urban growth and urbanization is often coupled with economic growth, not necessarily in Africa, but most of the world, doesn't future urbanization have the potential to exacerbate inequality and also pose at the same time serious consequences for unregulated emission? I mean this example of high PM2 levels in Delhi and Beijing as well as climate adaptation, so I'm particularly concerned about these poor cities where that's where the bulk of future population will be almost exclusively, and the political infrastructure, and municipal financing is either weak or absent in those types of cities, let alone the small cities that are also growing at even faster rates.
So I would like to know both of your thoughts on remedying for investing in the growth of poor cities that allows us to overcome this dual challenge. Maybe Joe you could take it. – Cities represent a real opportunity because the high density population actually is potentially very good for climate change. New York City is actually one of the better cities in the world. Nick probably has the numbers better than I do, but… – There is a good example, Joe, in New York. There's one number that comes out quite nicely is that New York city has half the emissions per capita in United States and Beijing has twice the emissions per capita of China. If you compare Barcelona and Atlanta, they've got the, you can see where that's going, (audience laughing) they've got roughly the same population, roughly the same income per capita, but the transport emissions in Barcelona are 1/10 of Atlanta. Is anybody from Atlanta here? (audience laughing) Well how many people would rather live in Barcelona than… (audience laughing) – So this is really the point: Cities are an opportunity to reduce emissions, but if you don't manage them right, it can be a disaster and a key issue here is urban sprawl.
Public transportation can help create more dense populations, save on cars which are major source of emissions. Actually the kind of emissions that are related to housing are much low were when you have well structured apartment buildings. So again, they can actually lower the emissions level, but you have to do something about it. And this is where there's a real urgency, particularly in the developing countries, because they're gonna be structuring their cities and once you structure a city, very hard to change. The decisions you make today will be with you for 30, 40, 50 year or more. So that's why it's so important for cities today to think about their future and think about this issue of how do you create the good kind of cities like Barcelona or New York and not the bad kind of cities like Beijing and Atlanta. – I think you're right to be worried because it could go very badly, or it could go very well, and it's really a one-off shot.
I mean we have roughly 50% or so of a seven billion world in cities and towns, 3 1/2 billion people. We're gonna have at the middle of this century 70% of the nine plus billion world, so that's more like 6 1/2 billion. We're gonna go from 3 1/2 million to 6 1/2 billion people in cities in 35 years. It is extraordinary and you move from 50% to 70% of your population in cities only once. And there is nothing more important in the long run and medium-run story of managing emissions than managing that city development. The opportunities are tremendous. You could have unpolluted, uncongested, and nice places to be or you could have nightmares, and the decisions are going to be taken in the next 20 or so years. It's a crossroads really and the cities brings it out in a very very powerful way.
Now as you could tell from my accent, I was born and brought up in London. The Romans laid out a lot of the roads in the UK and some of our roads in London are the same places that the Romans laid them out and some of our subways, our underground system, went under those roads. I mean the long-term effects of these things, the shadow into the future that is cast is very very powerful. So getting our cities right and getting it right over the next 20 25 years is absolutely fundamental. I really don't see the sense of urgency around those kind of questions. We have a tremendous opportunity and there's a big risk that we make a mess of it. – And in a way you raised the question of finance, can we afford it, I'm very much with you. The world cannot not afford doing it. I mean the cost of not doing it is enormous. So then you get to the pragmatic question: How you gonna do it? Now I think the problem is not of lack of savings.
In fact, a few years ago Ben Brune talked about a savings (mumbles). It's not a lack of savings. The real problem is getting that savings from where it exists and putting it to good use, rather than building shoddy houses in the middle of the Nevada desert. That was not the best use of the world's CARE savings and we have alternatives. Now this is where financial institutions have failed. There are some good news. There are some new global financial institutions. Nick and I both worked on the issue of trying to create a new development bank, The BRICS Bank. – [Nick] It's coming. – And it's coming. They announced it in July in Brazil. China, following on that, has created the Asian Infrastructure Investment Bank. These are all institutions that have the potential of recycling some of that savings from where it is and putting into productive use, including in cities.
I hope that happens. – [Deborah] Yeah, so… – I think transparency requires me to reveal I'm on the International Advisory Board of the Asian Infrastructure Investment Bank. – The new Chinese bank or the… – That's not a good way… – Okay, okay. (audience laughing) I didn't know the acronym. I didn't know the… – It was a Chinese initiative. – [Eduardo] Yes. – The shareholding will be allocated at least 2/3 in Asia and that will be divided on the basis of GDP. So there will be a strong element there, not dissimilar from how the World Bank started with the US domination. – Will these institutions have more of an urban orientation than a rural one? I mean because the exist– – They'll have an infrastructure orientation and most of the infrastructure investment will be urban, but it will be through the infrastructure rather than them. But for the numbers we've just been talking about, that's where the really big infrastructure investments gonna be.
– There's gonna be a lot the need for investment in public transport, in sewage, in all kinds of infrastructure, and they make cities work. – But you're going to need the local revenues as well. I mean a decent systems of property tax would be a fundamental importance in helping cities to finance. In China's current tax reforms are really recognized that story because what you've had in China as the size of cities has expanded, population density has gone down. One of the reasons for that is that it was financed or cities were financed locally through the selling of land, so there was an incentive for the local authorities to sell off too much land so the cities expanded in efficient way. So that's an example of the way the structure of the tax system can really buy us the way in which the cities grow. So along with the changes in the financial systems that Joe and I were describing and the importance of investment banks, reforming the structure of local taxation would be very important.
On the subject of investment banks, we should recognize the two of us learned a lot about investment banking from Jim Wolfenson who hired us both as Chief Economists of the World Bank. We're fortunate to have Jim in the audience here. – So I was interested in stopping for a moment on the kind of magnitude of the investment challenge. I recently wrote a piece about the need for access to energy amongst development countries and it is enormous in some countries. The average Ethiopian uses 50 kilowatt hours. Your refrigerator uses three to 600. So just the average American uses 13,000. So the gap, the development gap, say we waste some, but the development gap remains enormous. And it seems to me that even though we understand this, and this is part of the debate when we talk about climate change mitigation, I do not see the enormous resources given the urgency to address, to provide energy to so many people in the world in a way that does not exacerbate the climate problem. I do wonder whether you know the scale and the speed are there or we know the mechan…
I mean I agree that the Chinese or the non-Chinese new investment bank is a great idea as is the BRICS. But the scale of the task is enormous and I'm not sure that negative interest rates in the United States really cut it for this kind of a mess, but. – I think the hopeful aspect about the problem is that the development of new technologies, solar, other forms of renewable wind, mean that you can expand the energy supply in ways that do not necessarily increase. We don't have to have coal. And of the fossil fuels, we've had a big bonanza in discovering more natural gas. So the combination of moving away from the dirtiest towards the cleanest of the fossil fuels and then moving towards renewables gives us enormous opportunity to provide more energy to the people in the developing countries.
So I think that's the hope. Now the banks, these new banks will help if the rest of the world… if the world would adopt to the commitments it made to give 0.7% of GDP for development. That would help. But one of the important aspects are these countries are growing relatively rapidly and they're saving a lot and they will be able to finance some of this themselves. Ethiopia is a country that's been enormously successful in terms of economic growth. Nick and I have been both very involved in Ethiopia. It's one of the countries that my first trip as Chief Economist of the World Bank and my last trip was to Ethiopia. They are a real success case in development and with that kind of growth, they can use some of the revenue, some of the increase of income and devote it to energy that becomes a positive cycle. In the case of Ethiopia, they have hydroelectric, in addition. So if you look at the potential for renewables, I think we can achieve more energy in a carbon friendly way.
– You didn't choose a very good example Eduardo because Ethiopia is so rich in hydro potential, – Water. – Potentially. Prime Minister Meles Zenawi, who suddenly died two three years ago who Joe and I worked with very closely, set the target of Ethiopia being a middle income country by the end of the next decade and without any increase in emissions. Those are big ambitions, but they have a chance. Prime Minister Hailemariam who took over has that same ambition and I think Ethiopia could well get there. I think India is a bigger problem. By the way, China's consumption of coal went down last year, even though the economy grew about 7%. So Ethiopia will get there and largely on hydro. China is switching away from coal, very powerfully. As a percentage of GDP, it's plateauing. It will oscillate a bit, but then it'll start to turn down. People think that Chinese coal is going through the roof.
It's not, it's plateaued, and it'll turn down before too long. India has a real challenge and I think that the expansion of solar and wind in India and the direct help through India in expanding those two things will be a vital importance and that is something that a number of us are working on, but that is I think the biggest of these examples. India I think (clears throat) is in a very creative mode, but we really do need the help in fostering that change. – Interesting. Now I was just speaking to some Indian economist who argued that too much of the effort seems to be in distributed solar that would like put a solar panel on small-scale households and what they really needed was a kind of like large-scale but the load of that could power factories and things and that didn't seem to be happening. So I wonder whether that – There are some examples that you do have.
I'm hesitant here cause we have Montek Singh Ahluwalia in the audience, the Former Head of the Planning Commission of India. But you're seeing in some places in India solar coming in and being competitive at the generation level without a decent carbon tax. Now coal is hugely expensive for the reasons I described, even though the price of a bag is low, the real cost is very high. But even at those prices, the prices people actually pay rather than the price they should pay for coal, you're starting to see in some places the competitive at the generation level, not just at the delivered. It's true in some parts of Africa. It's certainly true in some parts of Texas. Increasingly, that's becoming the case. I think that technical progress in two areas, in pushing down the price of solar which is already come off by a factor of 10 in the last eight or nine years, further progress in pushing down the cost of solar and further progress in storage I think could transform those possibilities. All that is available I think in the next five years if we really go for it, but we have to, as a world, invest very strongly in that kind of innovation and you've got some champions here in the United States like Elon Musk who's giving it a go. – Yeah.
I mean one of the striking things is that we've been allocating so much of our innovation resources to creating more unemployment (chuckles), to replacing unskilled workers with machines. If we took that same innovative capacity and devoted it to trying to save the planet rather than create unemployment, I think we'd have a lot of success. I think there's every reason to believe that we would actually be able to bring the cost or China didn't spend that much money, and they brought down the cost of solar enormously. So if we just devoted more energy to it, I think we could succeed. – That's without a big technological breakthrough. I mean that was mostly economies of scale, so learning by doing in the process, but not really changing the way that solar panels are made, and that's coming. There's a lot more pushing down on solar prices.
– These national examples are really important and very interesting, but as you both well know that the international community is preparing for this 2015 UN Climate Change conference in Paris in the fall and I'd like to hear your comments on the political feasibility of, not only reducing carbon emissions in order not to exceeds the two degrees celsius ceiling, but also to do so well reducing inequality especially given that no international agreement has been reached in more than 20 years of international negotiations at this point. So are you hopeful that a consensus will be reached in Paris and assuming that you're not completely hopeful, if you could speak to the merits of lesser agreements at the international scale. I'd like to hear your thoughts on that. – Can you let me talk…
I've been to every one of those since 2006 and I don't think it's right to say there's not been agreement or there's not been progress. There's not been nearly enough agreement or not nearly enough progress, but you had the Copenhagen Accord in 2009 out of a cold chaotic and quarrelsome gathering. But you had the Copenhagen Accord and that was turned into in 2010 in Cancun into COP 15 with Copenhagen. COP 16 was Cancun. It was turned into an international agreement where they agreed to set the target of two degrees centigrade. They agreed the 100 billion inflows from rich to poor countries. They agreed in Copenhagen that people would come forward with their targets by the end of January. Copenhagen was December 2009, that beginning of January 2010, and well over 80 85% of the emissions of the world came in terms of countries plan. So I think it's wrong to say there's been no progress. It's right to say there's not been enough progress – [Joe] Can I? – And now if you look at Paris, and I've been doing some calculations with some colleagues at the LSC, on where the numbers are likely to come in and it's very important.
We are now as a world about 50 billion tons, the CO2 equivalent per annum. We would need in 2030, which is the date for which the numbers are coming in, we would need in 2030 to be 40 or below to be on anything like a decent chance of two degrees centigrade. Those numbers I forecast, I think with some confidence for Paris, will add up in 2030 not to around 40 or less but probably in the mid-50s, so perhaps 10% higher than now, when in fact we need to be 20% lower than now. I think there'll be some tweaking up, maybe we'll get a bit closer to 50, but I think it will be above 50 if you add up all these contributions for Paris. Now you might say well that's a failure. I don't think it's a failure. It's a lot better than the considerably higher numbers it would've been there. This is about controlling risk. But it's not enough, the two degrees centigrade. So it's very important in Paris that we have a mechanism for ramping up, that we agree how to review the situation after a few years and agree that there'll be a process of ramping up.
So that dynamics afterwards would be very important. It will be dependent on flows going from rich to poor countries, so how strong that dynamics can be it'll depend on innovation, how strong that dynamics can be. But that is the form of a Paris agreement. It's gonna come in with numbers higher than two degrees and it's got to embody a mechanism for ramping up. I think that would be very much worth having. Success or failure, this is about degrees, but it will fall well short of two degrees. But still, in my view, worth having. I ought to declare an interest to is that I'm one of the friends of the Chair, of Laurent Fabius, the Foreign Minister of France who is the Chair of that COP and I'm also on the Advisory Committee to the Executive Secretary of UNF triple T, Christiana Figueres. Just like the AIB, I thought I should tell you about involvement. – Let me probably talk about a politically and feasible way of trying to get a better agreement. The approach that was started in Kyoto was a approach where every country was allocated a certain amount of emissions.
It was a commitment to reduce from the current level, but also like giving gift to each country of how much emissions you can do. There's money associated with emissions. There's a price of emissions now, we know the current price, the price should be something like $50 or $75. So when you give somebody the right to emit, our country the right to emit, you're giving away money and the countries know that. So you're dividing a pie with a price tag on it and that's very hard to agree. So there's an alternative framework of negotiations which is over a carbon price. Every country would agree to put into place a set of policies that would ensure a given carbon price that would provide incentives for reducing the carbon emissions. There's only one issue then you're debating which is the carbon price, much easier than debating this complicated cutting of the cake into different pieces. Particularly the way it was done in Kyoto where you said those who polluted more in the past get to pollute more in the future, that didn't resonate a lot with a lot of countries.
Now I think this is actually not likely to succeed, but I think it's a better framework. But one aspect where I think there could be progress is, I hate to use the term but a Coalition of the Willing. (laughs) The countries that are willing to make reductions in whatever form, whether through a carbon price or through an agreement about how much they're gonna reduce to make what is towards a real commitment to reducing carbon towards the two degrees centigrade goal, they would do that and would announce that any country, any imports from a country that isn't part of this coalition would be charged what is called a cross-border tax. In other words, they would be charged a tax reflecting their emissions.
We had some discussion with WTO. I think this would be WTO legal. Countries can do that and that would provide some incentives. Because if America doesn't have a carbon price, then exports from the United States would face a tax whenever they went to any other country and I think that would incentivize United States, our voters, to join the club. Rather than the revenue from that tax going to some other country, we would charge the tax and we would get that revenue. So I think that's a framework in which we might be able to go ahead, at least from a theoretical point of view. Some countries have talked about a willingness to do this, but so far the Coalition of Willing, it doesn't seem to have very many willing. (audience laughing) (Eduardo laughing) – I love to hear your thoughts about where United States might fall in this division of the willing and the not. Willing, I mean the current administration seems finally to have been done taking concrete steps using its regulatory powers because it cannot use Congress. But I was looking as I prepared for this talk, I was looking at some polling numbers of how people reacted to climate change, how worried they were, and the United States is notoriously low in that. The number I found was 40% thought climate change is a major threat and every other country, advanced countries anyway, it's way off the charts compared to this.
I was wondering this sort of perhaps fits something that you mentioned a little bit ago about how inequality might affect these attitudes. I was wondering whether, given the point that inequality seems to reduce support for public goods because rich people can like buy themselves out of the problems of climate change or others, that this might be contributing to American resistance on whether there is an instance where the rich are setting the terms of the debate in the United States in such a way that kind of impedes us to move more forcefully. – Very much so. I think that's a real problem and that is one of the important feedbacks between inequality and climate change and with that high degree of inequality, very hard to make progress. Now the good news is there are parts of the United States where it's not true and that really shows you the extent to which these are almost cultural ideas. In New York City, almost everybody understands climate change and that's true no matter where they are in the income scale.
There are parts of the United States where that's not true. And if we're gonna get a permanent, if we're gonna address in a permanent way climate change, we can't just rely on these regulatory changes cause if we have a hostile Congress and a hostile President, that could be reversed. One of the reasons why it's so important in this coming election that we try to make sure that whoever gets elected is committed to both the issues of equality and the issue of climate change. (audience clapping) (Eduardo chuckles) – I've learned Eduardo that to comment on policies and politics in the United States with an English accent is (Eduardo laughs) (audience laughing) – [Eduardo] Dangerous. – Hazardous activity. I've testified twice to Congress and each time it turned into a discussion of China where I was trying to explain how China was changing and I think one thing that is beginning now.
.. China has been changing for a while on the… I've been working in China for more than 25 years and China has changed remarkably on these issues in the last five, six, seven years. I think that that is beginning to be understood in United States and I think that the agreement… It wasn't an agreement actually, it was a joint announcement on November 12th in Beijing with President Barack Obama and President Xi Jinping about the importance of climate change, about what they intended to do about their own emissions in their countries, and the recognition that this was a real potential growth story that the low carbon story was the growth story in large measure. That was a very important announcement. So I think we actually have a less quarrelsome world on this issue. There's still quarrels.
Don't overdo it. But it's less quarrelsome than it was and I think one of the reasons for that is the enormous changes in China and the significant changes in the United States. That change of course was manifested in November 12th in that way. But also we have to recognize just how heterogeneous United States is. I think the Pew Foundation did a survey three four years old now arguing that more than half of the US GDP was in states or cities with reasonable climate change policies. Jerry Brown got reelected in California as Governor with 60% of the votes at a time when there's a great swing against Democrats. Now I'm not saying that it was because of the environmental policies, but it was in the presence of the environmental policies. So again, I say I'm very cautious about doing this in English accent.
But there are lots of bits of the United States which really do encourage, particularly around innovation, some states and cities. But also that growing willingness to engage in a collaborative way on the big issues with China I think is a fundamental importance. – So Joe you've argued that market forces alone are not gonna solve the problems of either inequality or climate change and climate change is a clear negative externality, so all sorts of policy instruments would be really helpful here. But in the absence of them, or in the absence of strong enough policy instruments, I'm wondering if you can comment on the role of civil society, and I know Nick you touched on that in your new book, and also on the role of corporate leadership and private philanthropy and where you think those… Private philanthropy, for example, has made huge strides in public health investments in Africa or on reducing educational inequalities in the US.
So where do those three other nongovernmental pieces play and how do they interact with the governmental piece? – Well I think they have a number of roles. I mean one of them is, you might say, civic engagement, getting (chuckles) particularly in America, getting that number 40% who understand that there's climate change and that it's real, getting that higher. That's a big (chuckles) challenge, but it won't happen on its own. I think that's one of the important roles of civil society foundations. A second one is we've talked about the role of innovation. Some of the most important innovations have been actually supported by foundations. The Rockefeller Foundation was absolutely pivotal in the discoveries of hybrid seeds that led to the green revolution. The pointed research on these issues can really succeed and as they say some foundations have made in the past really important contributions.
A third is you mentioned corporate responsibility. There are a number of corporations who realized how important these issues are and some of them have done it on a… have tried to deal with it on a small scale like making sure they're green light bulbs. But I think more than just putting green light bulbs in, when they build a building, there's sort of a pride in the number of hotels, hotel chains that they want to make sure that they're energy and efficient. See? There's competition going on now among various hotels to say we're more energy efficient, not only energy-efficient, we're more carbon efficient. So there are a whole… And this is partly motivated by civil society looking over their shoulders, giving publicity to who are the good actors and who are the bad actors. And just we have laws affecting the extent of pollution that some of our oil companies are responsible for. Civil society's been important in pushing back against that, making sure that we have stronger laws, while the oil companies have been pushing to make sure that they get weakened. That's an important battle and one side has a lot of money.
We can't make it equal in money, but we can make it more equal by having civic society, engagement, foundation support, and after all, our congressmen are worried about votes and that they realize that people are really concerned about the issue, and they're more likely to respond. – We've got five minutes to go, so I wonder if Nick you would like to take this on? And if either of you have concluding remarks, finish off. – Joe's spoken about NGOs and firms. Let me say a word or two about individuals. There are tremendous margins of efficiency in the refrigerators you use, in the cars you drive. We could save a great deal. 30 or 40% or more of the world's food is wasted in developing countries mostly with rotting, and insects, and so on before it gets to harvest in rich countries, mostly, around the supermarket and after the supermarket in our own homes. So there's a tremendous amount of wastage through the energy usage, through (mumbles) or imperfect badly insulated homes and so on. So there's a tremendous amount that individuals can do on that. They can recycle and reuse much better.
A lot of the things that people find when they do that are actually quite attractive. (beeps) When you take your Christmas tree to the recycling place in January, (beeps) you stop and have a chat and some people talk to other people on public transport. I don't do that very much, but I observe that other people, (audience laughing) other people do. I mean a lot of these things make for stronger communities as well as direct individual contributions. 30% of emissions come from coal. I mean you should look at your energy sources that don't use coal and you can put pressure on that. 15% of the world's emissions comes from meat, so you can think about that. Chicken, a tiny fraction of beef, and pork's slightly better than chicken and better than but, be careful about advocating pork in New York. (Eduardo laughing) (audience laughing) What I'm saying is people should think about all those things: their energy, and their recycling, and their transport, and what.
.. On all these things are choices that people can make and I think just being aware of those choices, you don't have to push people or heavy them. But people are aware of the choices, they discuss them. I think they change what they do. In politics: advocate, vote, organize. And in your investments, look for portfolios that are different. Let me just give one example is that AP4, which is a big Swedish public pension company, they had big holdings. They said we'll look industry by industry and we'll drop the ones that we've got that are behaving irresponsibly on some front or other including the carbon, one. And they did that and they told people why they were doing it, so you get a lot of direct incentive structure and they found that their portfolio improved in terms of returns and risks. So you can put pressure in those kinds of ways. So there are lots of things that individuals can do that will make a difference, not only in terms of what they emit, but also to the politics and finance of the societies they live in.
But there's no substitute for leadership. I mean these are big market failures. They require public policy. Individuals could put pressure on that, but you need responsible leadership as well. – Joe, you wanna say anything? – Well let me just end on a note that we mentioned earlier that there's a real urgency on both the issues of inequality and the issue of climate change, and even more because of the way they interact, that the decisions that we're making today bake in what's gonna happen for a very long time. We began say in the United States on the issue of inequality. We changed the structure, began to change the structure of our economy: deregulating, throwing taxes at the top, a whole set of changes in the structure of the economy around 1980. The result of that is we went from an economy that was growing quite fast and where we had shared prosperity where every part of our economy was seeing their income increase but those at the bottom had their income increase more than those at the top, we went from that to a slower growth but a growth where all the benefits went to the top.
Unless we change our policy, things are gonna continue to get worse and worse. The same thing is true about climate change. Nick has given I think a somewhat optimistic view of what's gonna happen in Paris. That's the commitments that people make. We know that after Kyoto, they didn't live up to the commitments. And we know that even though those commitments are not going to make the goal of getting two degrees that the world has agreed on as setting for itself. So the decisions we're making today about our cities, about our lifestyles, all those decisions are baking in the climate that we're gonna have in 30, 50 years. That's why the legs are long and we can't… These are not just making a decision where I buy the wrong kind of lettuce today and I say, "Oh, I made a mistake and I correct it tomorrow." These decisions have long consequences and that's why it's so important to at least begin on the right route today and why Earth Day is a good day to try to remind ourselves that we have only one planet.
If we had a lot of planets and things didn't work out right, (audience laughing) we could say, "Okay, we'll go on to the next," but we don't have that choice yet. So in the meanwhile, I think we should plan to try to preserve this planet, this earth, and do what we can. And in doing that, I think we'll get a better society. – Thank you very much, Joe, Nick, Deborah. Thank you all for being here. (audience clapping).