Semafor World Economy Summit Fall 2024: Day 2 live updates

On SpaceX and Elon Musk: SpaceX has been “phenomenally successful,” Nelson said, but that a Wall Street Journal report alleging that the company’s founder Elon Musk has been in regular contact with Russian President Vladimir Putin since 2022 “should be investigated.” Nelson said he didn’t know if the story was true, but added that, “if its true there have been multiple conversations with Elon Musk and the president of Russia then that would be concerning especially for NASA and the Department of Defense.”

On NASA being apolitical: NASA employees are “wizards” working on incredible new technology for space exploration, Nelson said. That excitement and drive for innovation “brings people together instead of splitting us apart,” he said, which extends to building stronger ties with international partners.

He said his relationship with legislators from his previous stint as Florida senator has helped him secure support from Congress. “You’d be surprised how I got along with [Sen.] Ted Cruz,” Nelson said, adding that he took Cruz out to dinner to talk about NASA. But he stressed that “a handful in the House” have limited NASA’s budget, including a $5 billion cut from the agency over the last two years.

On the Inflation Reduction Act’s successes: “The leading indicator of the IRA’s success, and frankly, the theory of change is bringing back manufacturing jobs to the United States,” Zaidi, the White House’s top climate official, said. “Now we are seeing factories showing up on the ground,” he said, adding that half of solar capacity in the US was installed during the Biden-Harris Administration.

On the political conflict around climate change: “It’s not done – that partisanship,” Zaidi said. “The disconnect is with Washington Republicans, who are playing games with the future of our economic success, and everybody who is living on Main Street watching the sky turn orange or the storm surge.” He said that while “the political economy of climate inaction is deteriorating in America... I’m not sure what the future holds in the Republican caucus.”

On permitting reform: Zaidi said he has some “real anxiety” about bipartisan permitting reform legislation currently in the works. The details on transmissions are important because they are “the life blood of decarbonization,” but he said that the provisions in the legislation that pull back regulatory authority are “challenging” and those need to be worked out.

On the US role in Lebanon: Hochstein said the US should “not walk away” from Lebanon even after securing a ceasefire between Hezbollah and Israel. Speaking on the importance of viewing foreign policy through the lens of economic security, Hochstein said that after an eventual ceasefire, the US should play a role in rebuilding Lebanon to prevent more conflict in the future. “We have to come back with a large enough economic package, because when Lebanon is prosperous, that’s when Iran and its proxies are weak.”

On competing with China over investing in the Global South: In the past, “China didn’t beat the US; we weren’t even there,” he said, referring to the Global South. As a result, he said, after 10 years, “these countries are in crushing debt.” The US needs to “come with real money that is not charity,” when investing in countries of the Global South, Hochstein said. “We don’t have to compete dollar for dollar with China. We have to have a better offer. We will come with better investments that won’t come with crushing debt and that will come with real investments in the economy.”

On sustainable fuel: “The potential with innovation could probably get us to net-negative fuel of the future,” Riley said, pointing to both sustainable fuel and aircraft technology advancements that could today pull airplane emissions down by 85%. She added that the Inflation Reduction Act tax credits means that this shouldn’t put costs on passengers. “We’d like to build markets where the actual sustainable fuel is the preferred product over the conventional fuel,” Riley said.

But, Riley warned, sustainable fuel production is still in very early stages, with United needing 4.5 billion gallons of sustainable fuel to meet its net-zero goals compared to only the 150 million gallons of sustainable fuel produced last year. “We are at stage zero,” she said.

On companies pulling back on their climate goals: Addressing concerns that the hype around sustainability is fading, Riley pushed back on the idea that companies are deprioritizing it, saying, “Companies are beginning to reflect on what’s material to them.” For United, that’s greenhouse gases, she said, and not necessarily plastics, for example. “It’s not a retraction. They aren’t slowing down, but they’re refocusing and prioritizing.”

On single-use plastics: Riley said she’s “embarrassed” that United is still using plastic cups, but she pointed to how “well-intentioned policies” on single-use products across the world can sometimes “really dilute progress.” Several countries have different single-use plastic regulations, and Riley said United cannot accommodate their service products for every country they serve. The solution to this waste crisis is to ensure governments worldwide have “complementary policies.”

On how hotels can become more sustainable: No client wants to open their hotel door and see someone on a ladder changing a lightbulb, Garris Hand said. Using LED bulbs, which last seven times longer, can improve the guest experience as well as reducing the environmental toll. She said that Hilton also recently instituted digital key cards, so guests can unlock their room doors using their phones, rather than a physical card. Hilton estimates that just that one action on a yearly basis saves 100 tons of plastic from a landfill. Hilton is also working to individualize breakfast servings — such as bite-sized egg stacks, rather than large pans of scrambled eggs — to reduce meal waste.

On the politicization of ESG: She said that it was unfortunate that corporations’ environmental, social and governance policies had become politicized. “When a disaster strikes, a hotel is a pillar in the community. We think of ourselves as a beacon of hope. It’s not as if we just started ESG when it became trendy. We think of caring for the environment and caring for our community as intrinsic to our business.”

On microfinancial services: While countries including India and China have made huge strides in microfinancing services for individuals to build their own wealth, “there is a long way to go,” Simon said, particularly in Sub-Saharan Africa. Expanding these services are even more important as global challenges like climate change, political instability, and migration further deteriorate financial conditions.

On big banks: Big Banks have done a “phenomenal job” at supporting the US’ modern economy, Khalaf said, but that benefit has only been afforded “to the few.” That contradicts with the ethos of the 21st-century digital economy where the internet only “understands the concept of the masses,” which has provided a window for non-banking firms to be part of the modern financial system.

On Big Tech struggling to breakthrough in banking: Big Tech companies including Google, Amazon, and Meta have tried their hand in banking, but despite their large user bases, they have largely been unsuccessful, Khalaf said. “It takes time,” he said. “This is a heavily regulated industry. You cannot move fast and break things.”

On equitable finance: Nsekela said that digital infrastructure has allowed banks to offer solutions that can reach more customers, particularly helping women and younger people in Africa that have historically been excluded from financial services.

On financial literacy: Sirtaine said it was essential to invest in financial literacy, adding that current initiatives have been “absolutely insufficient.” It would help prevent cyber fraud, but public sectors also need to “completely strengthen their ability to monitor market risk” to be able to understand how to communicate these risks to the larger population, she said.

On the growing problem of financial fraud: Around 60% of people surveyed by CGAP in Burkina Faso and 90% of digital financial services’ users in Senegal said they had faced at least one issue of fraud, scams, or data privacy breaches. “Half of these people said they lost money because of it.” This is “fundamentally” shaping people’s trust in new digital financial services, Sirtaine said. That trust, she added, is “difficult to gain... easy to lose.”

On digital payment systems in Colombia: 70% of Colombia’s daily transactions use cash, Prieto said, and digital payments in the country are lagging behind neighbors like Brazil. She blamed that discrepancy on a lack of “universal access to financial instruments and to private payment services.” Rather than relying on private companies to introduce digital payment systems, Colombia’s central bank has unveiled its own. Prieto said that having the government develop such systems is beneficial because “we are actually issuing the rules of a regulatory framework aiming to have a seamless and standardized user experience.”

On East Africa: “It’s a region that is in a great position in the sense that five out of seven countries in the region are among the top ten fastest growing economies in the world,” said Mwangi, who is the CEO of East Africa’s largest bank. Even so, Mwangi said challenges remain: “Given the high interest rates in the developed market, and particularly the US, there has been a drain of investment in the region.”

On the rare earth minerals opportunities: The Democratic Republic of Congo, Zambia, and Tanzania together control roughly 40% of all green strategic minerals, Mwangi said. “That is a huge headroom for growth.”