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First Move with Julia Chatterley
Putin Replaces Russia's Commanding General in Ukraine; Signs of Rising COVID Death Toll Grow in China; Hooper: Expect the Unexpected for Markets; UAE Appoints State Oil Boss as President of COP28; Sinha: India is Taking the Lead on Clean Energy Ambitions; FAA: Corrupted Computer File Led to Air Travel Meltdown. Aired 9-10a ET
Aired January 12, 2023 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move", fantastic to have you with us just ahead this hour. China's crisis, CNN
takes an exclusive look inside the post lockdown emergency. In the world's second largest economy, the death toll clearly rising even has Beijing
please down the scale of the suffering.
Plus, Disney's drama the troubled House of Mouse getting a new board Chairman, from the upper echelons of Nike no less as it gears up for a
fresh revolt from investor Nelson Peltz, who says the Magic Kingdom has lost its sparkle and inflation transformation, the latest pricing pressure
gauge just released here in the United States. And CPI, as it's known slowing for six straight months to an expected 6.5 percent year over year
rate that's down from over 7 percent in November.
It's of course, still at historically high levels. But the lowest rate of consumer inflation in fact, in more than a year. And the big headline
grammar is the month over month reading which fell in December. Why do we really care about that? Well, that's the first drop there in almost two
years low oil prices, a key factor for that the core rate of inflation which of course strips out volatile food and energy, perfectly in line with
estimates too.
We've got all the details coming up. But for now the stock market reaction well, it was initially disappointed. Now it's just plain volatile. To be
fair, stocks, of course had powered ahead this week already in anticipation of a softer pointing picture and we also did not get a further downside
surprise.
We're expecting a lot at the moment. European stocks in the meantime, still on a new year tear with U.K. stocks edging ever closer to record highs. And
we saw fresh gains across the Asia session too, with the HANG SENG outperforming Investors continuing to look beyond China's health crisis to
the economic boost that will come from those locked down lifts. And commodity prices also a key beneficiary of that reopening play.
Both Brent and U.S. crude currently up by almost 2 percent. Goldman Sachs believes all could hit $100 a barrel later this year, as China's economy
ramps up. That could of course mean a further inflationary pulse later this year.
Now, as you mentioned, at the top of the show U.S. consumer prices figures showing inflation easing again, at the end of 2022. Matt Egan joins us now
with all the details. Matt, great to have you with us! I think Investors actually work hopefully for more. It's still at lofty levels, but it is
coming down the direction of movements, right? What does it mean for the Federal Reserve too?
MATT EGAN, CNN REPORTER: Well Julia, it does increasingly look like this inflation fire is getting under control. I mean, it is still a problem but
it's getting better. We now have six straight months of cooling inflation at the annual level of 6.5 percent. You know, that's not healthy, of
course, but it is miles away from the 9.1 percent peak of last June.
This is actually the lowest level of year over year inflation in the United States in 14 months, month over month prices declined for the first time
since this inflation crisis began. So what are the drivers? Well, you can see in your screen energy up, but that has been easing. In fact, gasoline
prices were down and that was huge.
Shelter that is still a problem that is heating up and then we're going to talk about food because food prices remain very high it is over 10 percent
increase year over year. And some of the big drivers include the price of eggs. A lot of people are talking about the skyrocketing prices, not just
in the United States, but overseas as well.
And the latest reading on eggs show that they were up by almost 60 percent year over year in December. That is the biggest annual increase according
to the BLS since September of 1973. So I think that is another reminder here of how gas things are getting better. Yes, energy prices have cooled
off, but there are still some problems here, Julia.
CHATTERLEY: Yes, and especially painful for those that spend the majority of their income on things like food and energy and rent as you saw there,
those prices still increasing at a significant rate. Matt, great to have you with us thank you. All right, another Russian Military reshuffle,
President Putin replacing his commanding general in Ukraine again.
It follows claims from Russian back mercenaries that their forces have captured the town of Soledar in the Donetsk region. Ukraine continues to
refute that claim. CNN's Ben Wedeman joins us now from the City of Kramatorsk in the Donetsk region.
[09:05:00]
CHATTERLEY: Ben, you can tell us what's going on there but I do want to talk about that reshuffle once again in terms of military commander over in
Russia. That's the top commander I believe in Ukraine being demoted after just what three months in control.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: The moment the Russian Military has had to sort of have months of disasters, going back to the
retreat from the Kyiv region, then their defeat in the Kharkiv and finally Kherson. So clearly, the Russian Military leadership feels something must
be done to improve this situation. But what they've done is appointed Valery Gerasimov, who, since 2012, has been the Chief of the Military
staff.
He was the one who oversaw the initial Ukrainian invasion, or rather Russian invasion of Ukraine, which obviously didn't end particularly well,
or rather, at least the first phase of it. But clearly they are looking to somehow change the leadership situation to improve the military
performance, Julia.
CHATTERLEY: And Ben, talk to me about what else has been taking place and the importance of Soledar. And what the latest is that we know there, there
still seems to be disagreement, whether it's the Kremlin, the Ukrainians, those militant forces, the Wagner group over who exactly is in control?
WEDEMAN: Well, we were just on the outskirts of Soledar yesterday, and it's clear. From what we heard, we spoke for instance, to medics who are taking
wounded soldiers from Soledar itself. And Ukrainian still do seem to control part of the city but they are under unrelenting attack by Russian
forces.
(BEGIN VIDEOTAPE)
WEDEMAN (voice over): Medics load a wounded soldier onto an ambulance another casualty from the embattled town of Soledar.
DR. VITALIY KUZMENKO, UKRAINIAN MILITARY MEDIC: It varies depending on the number of casualties on the front lines.
WEDEMAN (voice over): Russian forces mostly troops from the Wagner group, the private military company, claimed to have control of the entire Soledar
territory.
WEDEMAN (on camera): The battle for Soledar may be in its final stages, and it doesn't appear to be going well for the Ukrainians. And if indeed the
Russians do emerge victorious, the villages around it may be the next to fall.
WEDEMAN (voice over): Ukraine's helicopters still flying sorties, its forces aren't giving ground easily. One soldier says it's difficult but
we're hanging in there. Despite the fighting, you guys staying put with her pigs and cows in her home in a nearby village.
IRINA, FARMER: We won't leave she says you can only die once. I will not abandon my house. Her 81 year old mother Ludmilla has lived here for more
than 40 years.
LUDMILA, FARMER: Had a good life here. She says.
WEDEMAN (voice over): Serhiy Goshko heads the Soledar Military administration. I'm delivering aid he says and reminded people they need to
evacuate before it's too late. Svitlana says she'll heed his call. Everyone is tired. She tells me we can't take it any longer. As Soledar burns, there
is little time to waste.
(END VIDEOTAPE)
WEDEMAN: And we've been in touch with officials in the Soledar region they're trying to arrange evacuations of the approximately 500 civilians
still left in that town but they tell us that the road they were hoping to use is under Russian bombardment, Julia.
CHATTERLEY: No - choices for those people. Ben, thank you so much for that report. There Ben Wedeman joining us from Kramatorsk in Ukraine. Meanwhile,
over in Russia, President Putin has begun 2023 by warning Russian citizens to prepare for a long and costly battle in Ukraine. Now the world's
economic toll is showing in the Russian budget as Clare Sebastian reports.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT (voice over): More than 10 months into a war that he hoped to wrap up in days, President Putin is preparing his
people for a long and costly battle.
VLADIMIR PUTIN, PRESIDENT OF RUSSIA: We have no limits when it comes to financing. The country, the government gives the army everything it asks
for.
[09:10:00]
SEBASTIAN (voice over): It's not just the high tech drones and tanks are the new frigate loaded with hypersonic missiles according to an estimate in
July from British think tank RUSI at the height of the fighting in the Donbas.
SEBASTIAN (voice over): Russia was burning through more ammunition in two days than the British Military has in stock impact of that clearly showing
up in the Russian budget.
SEBASTIAN (on camera): Now this was the official estimate for last year, defense spending was expected to have grown by about 30 percent compared to
2021. National Security spending meanwhile, about 20 percent but oil and gas revenues were expected to grow by about a third, they ended up coming
in higher than expected according to the finance ministry, but so did spending tipping the budget into a bigger than expected deficit.
Now this year, we're looking at more defenses spending a rise of about 6 percent. That's roughly in line with inflation. But add to that a 58
percent planned increase in national security spending and a complete reversal of last year's oil and gas windfall. And this means budget cuts.
SEBASTIAN (voice over): Roads, agriculture, even healthcare all getting hit.
ELINA RIBAKOVA, DEPUTY CHIEF ECONOMIST OF INSTITUTE OF INTERNATIONAL FINANCE: The money is not infinite. I like what President Putin says and I
think he understands it's better than anybody else because this authorities were in power already in the 90's when Russia went through severe crisis
default denomination, the devaluation. And I think remember if that were to happen, it will be even faster way for them out of the office.
SEBASTIAN (voice over): Keeping Putin in power and fighting a war is expensive. Next year, Russia has allocated almost as much to national
security, which also includes law enforcement, as it has to defense, according to the budget passed early last month as AI in Moscow may still
intensify its crackdown on protests and dissent. And the experts say even with an EU embargo on Russian seaborne oil, a price cap mechanism in place
and lower energy prices. Russia is not facing an imminent budget crisis.
RIBAKOVA: Well, we did not implement energy sanctions up until now. Right the embargo just came in. So what happens Russian current account surpluses
last year was more than 200 billion. So if you think about it, if you're rested about say roughly 300 billion reserves, Russia already accumulated
more than 200 billion just last year.
SEBASTIAN (voice over): Pressure is still mounting if the EU in G7 lower their oil price kept below $60 a barrel that would likely hurt revenues and
technology sanctions make it harder for Russia to modernize its military. Still behind the propaganda it's clear Russia has a financial plan to fund
this war, even as its people pay an ever increasing price. Clare Sebastian CNN, London.
(END VIDEOTAPE)
CHATTERLEY: From one human cost to another and that is the cost of a hasty U-turn. China's sudden ending of its zero COVID policy, now leading to a
significant rise in pressure on hospitals, funeral homes and crematoriums across the nation Selina Wang saw the evidence for herself.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice over): COVID lock downs may be over in China, but for many there's misery at the end of zero COVID. The virus
is overwhelming hospitals across the country the thick struggle to get help. Patients cramped into every available space, every hallway and corner
of this Northern Chinese hospital.
Not everyone survives the struggle. Rose the bodies filled this funeral home storage room in Liaoning province that we don't know how many died of
COVID. In Jiangsu, families in mourning close flood the gate and instance one family lined up outside right next to coffins waiting to cremate their
loved ones. China has only officially reported a few dozen COVID-19 deaths since reopening.
But satellite images confirm the different reality we see on the ground. These images taken in late December and early January show crowds and long
lines of cars waiting outside of funeral homes in six Chinese cities. The images from the outskirts of Beijing showed that a brand new parking lot
was even constructed. We visited that funeral home; rows of cars were already there.
WANG (on camera): I'm now standing in that new parking lot of this Beijing funeral home. This entire parking lot area did not exist a month ago. And
as you can see the roads are not paved.
WANG (voice over): One van pulls in on loads of body and another follows. A man tells me he waited hours for his brother's body to be cremated but the
weight is nothing he says compared to the crowds from a few weeks ago. Experts say Beijing's COVID outbreak has already peaked.
In December we filled these body bags piling up in metal crates at another Beijing crematorium during the height of Omicron spread in the city. This
video CNN has obtained was filmed by a man who set his father's body with lying in this overflowing Beijing hospital morgue for days. He said his
father waited hours for hospital bed space. By the time a bed opened up, it was too late.
[09:15:00]
WANG (voice over): Cities are now scrambling to set up fever clinics and increase ICU capacity. For weeks it was nearly impossible to buy cold or
fever medicine. They were all sold out because of the huge demand.
WANG (on camera): Drug companies like this major pharmaceutical manufacturer in Beijing; they're going into overdrive to increase supply
after there was a shortage of medicine to treat COVID 19 symptoms. I asked the Vice President if they had received any advance warning from the
government that they were going to abandon zero COVID. So they could prepare to ramp up production. Well, he didn't directly answer my question,
but it's clear that now they are doubling down.
WANG (voice over): The company told us they simply follow government policy. The drug shortage overflowing hospitals and crematoriums, their
images of a country unprepared for the sudden end of zero COVID. So many families in mourning are questioning what their three years of sacrifice
during zero COVID was really all for? Selina Wang, CNN, Beijing.
(END VIDEOTAPE)
CHATTERLEY: OK, straight ahead here on "First Move", carrying India's renewable energy ambitions. We speak to the CEO working to fast track the
nation's power makes we knew is coming up next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move" the volatile pre-market session after the release of today's inline but encouraging to U.S. consumer
inflation report for December. Stock futures currently pretty flat or relatively flat actually note. Take a look at that now even just in the
last five or 10 minutes.
We are now up some six tenths of 1 percent for the NASDAQ. On the news that the pain at the checkout lane east for a sixth straight month here in the
U.S. Consumer prices actually falling a 10th of a percent month over month too, that's actually the first time that's happened since the spring of
2020.
This is the last CPI report before the U.S. Federal Reserve meets again later this month. Markets have been hoping that the Fed will continue to
slow the pace of rate hikes and boost by only a quarter of a percentage point this time around. Today's number perhaps might advance that argument
that said Federal Reserve members continue to insist that they will raise rates throughout the year irrespective of the size.
JPMorgan Chase CEO Jamie Dimon taking them at their word he says the 6 percent base rate not out of the question. HSBC there was an outlier, it
believes we'll see just one more half a percent hike and that's it.
[09:20:00]
CHATTERLEY: As we say in the news business one and done. Kristina Hooper joins us now she's Chief Global Market Strategist at Invesco and joins us
now. Kristina, happy New Year, great to have you on the show. What do you make of today's inflation reading; perhaps the motion of movement, the
direction of movement here is perhaps the bigger issue?
KRISTINA HOOPER, CHIEF GLOBAL MARKET STRATEGIST, INVESCO: It's great to be with you happy New Year and this is a great way to start the New Year. This
was certainly not a great CPI report. But it was a good one at it met expectations slightly exceeded them, and shows that inflation is moving in
the right direction.
But it raises the question, how much is enough for the Fed, because markets are excited about this. But the Fed might not believe it's enough, I'm of
the opinion that it will believe we're moving in the right direction.
And that combined with some concerning data that shows the impact of tightening on economic activity, and I'm pointing to the ISM, PMI reading
we got last Friday, that showed new orders dropping more than 10 points might give the Fed pause, no pun intended, and encourage them to hit the
pause button by the end of the first quarter.
CHATTERLEY: Wow, OK, we'll come back to that. But are you saying then for at least the next interest rate meeting, you're in the camp that says they
may just go a quarter of a percentage point?
HOOPER: I do, I think the most likely scenario is 25 basis points at this upcoming meeting, and then another 25 basis points in March, and then
they're done.
CHATTERLEY: Wow, so that would take us I'm just quickly doing the math to four and three quarters to 5 percent in terms of base rates. I think that's
way off what JP Morgan, Jamie Dimon was saying, which is that they may need to go up above 6 percent.
Is it that softening that you're seeing that you mentioned within the data that you think that they're going to look and compare the inflationary
forecasts and profile versus the growth outlook and make that decision? And perhaps that's now where the focus concentrates the growth perhaps rather
than the prices?
HOOPER: Well, I think growth will become an increasing concern over the course of the year, what we saw was fast and furious tightening in 2022.
And it takes time for that to show up in the economic data. So we don't know how much damage the Fed has done to U.S. demand to U.S. economic
activity.
But we did get a little insight in that report that I referenced last week. So I certainly think that's a growing consideration. But I also think that
we can't take the Fed at its word, because it is responding to data and it continues to be committed to being data dependent.
And so even though they're talking tough now, that's a result of concerns that financial conditions might ease too much prematurely. So they have to
be hawkish in their rhetoric. But that does not suggest to me that we can assume they're getting anywhere near 6 percent.
CHATTERLEY: I just wonder what it means to even if you're correct, and that they do signal and indeed pause in the first quarter of this year. Do rates
then stay steady for the rest of the year to your point that they don't then want to perhaps ease off and reduce some of the tightening that
they've done before?
They're very sure that inflation is going to come down the way that they're hoping to. And I guess the offshoot to that is how do stocks react? How
does bond react? And how should Investors react in that environment?
HOOPER: Well, that will be one of the kind of key questions that are asked and answered this year, is will the Fed actually start cutting? I think
they are inclined to not cut this year, I think they'd like to get to a point on where they can stay for the year. However, that is subject to
change and above all else, the Fed is data dependent.
So how will stocks react if the Fed doesn't cut? Well, and it's a mixed bag, because if the Fed doesn't cut, it means that there hasn't been enough
damage to the U.S. economy. So I would anticipate that after a rally fueled by a Fed pause, what we're likely to see is a more stable stock market that
doesn't move up a lot this year, because there's not a lot to drive it. It won't be seeing a reduction in the Fed funds rate, but the economy will be
relatively solid.
So we're unlikely to see a dramatic earnings revision period. We'll certainly see some downward revisions to earnings, but nothing dramatic,
assuming that we don't see a lot of damage to the economy. I mean, right now we're just trying to figure out how much has been done because of this
really extraordinary level of tightening?
[09:25:00]
CHATTERLEY: Yes, I feel like we've been in that state now really for sort of 2.5 years, perhaps even longer since the pandemic. Just to understand
what the impact that the sort of knock on impact of whether it's monetary policy now or fiscal policy and you just have to wait for that.
There's just that time lag that you discussed, we just showed very briefly, and you're invested resolutions for this year. And I was gratified to see
that you do think overall, though, 2023 will be a better year for Investors than 2022. Just briefly, because I have about a minute left those
resolutions for Investors this year, what should they keep in mind?
HOOPER: Well, I think above all else, Investors need to understand that they shouldn't be fearful that this is the kind of environment we should
have expected given all that we've experienced over the last few years. There have been extraordinary and extraordinarily difficult times, for the
economy, for markets for Central Banks.
So stick with a plan, think about the long term, don't be rattled, and probably the best lesson we learned from the global financial crisis was to
not get scared and get out because that essentially enables Investors to lock in losses and prevents them from participating in any recovery.
So stick with the long term, sometimes that's harder, but try not to listen to the noise, have a plan, be very well diversified. That's also an
important part of this. Different asset classes will perform differently in different monetary policy, environments in different economic environments.
So that's an important part of the process as well. And of course, try to save and invest more. That's always a good New Year's resolution.
CHATTERLEY: Yes, it is. I definitely feel calmer for speaking to you in January shares. So that's good news. Kristina, great to have you with us
thank you so much. Kristina Hooper, Chief Global Market Strategist there at Invesco! All right, my "First Move" after this, stay with us.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to "First Move"! Disney naming Nike's Executive Chairman Mark Parker as its new Chairman, he is taking over the Disney
board as the company prepares for a proxy battle with billionaire activist investor Nelson Peltz.
Paul R. LA Monica joins me now. That's not the only challenge of course that Disney faces Mark Parker not to be mistaken for Peter Parker of
course, because that's Spider Man. What do we know about this gentleman other than his leadership at Nike? He certainly gets the importance of
finding his CEO at Disney fast?
PAUL R. LA MONICA, CNN REPORTER: Exactly. And I think Julia that really is the most pressing concern for Disney right now. Bob J. Peck being forced
out remembers he succeeded Bob Iger who is back as CEO at Disney.
Oh, yes, Bob Iger that is not a permanent solution. So I think that Iger and Parker again, not Spidy although Disney does own Marvel, after all. You
know, they need to go and figure out who needs to leave the company for the long haul?
And are it yet another internal candidate someone at Disney already perhaps in the Marvel Studios or other movie businesses, or is it someone external?
Disney has not hired an outsider in a very long time, Iger, obviously succeeding Michael Eisner.
So I think that's the big question right now, whether or not Disney needs fresh blood, new blood or if there's someone within the company that Mark
Parker can identify as the logical successor for the long term for Bob Iger so that Iger doesn't have to come back for a third time.
CHATTERLEY: Yes, and counting. The other thing about Parker, of course, as well is that he's been on the board since 2016. So he understands, you
presume the sheer challenges that the entire industry faces, whether it's a high costs.
There's disruption of streaming, just predicting, quite frankly, what happens going here on out? Last year, turbulent year for all of these
names, not really much hasn't really changed this year unless you look at the share price, because they're having a renaissance. What do you make of
this bounce back that we're seeing in all of these shares quite frankly?
MONICA: Yes, it's, fascinating, Julia. Obviously, the broader market has had a nice start to 2023, and you know a decent rebound. But you're right.
Shares of Netflix have really surged. I think there are hopes that the company is turning things around that the advertising model might work for
them.
And also, let's be honest, I read a story yesterday about how the weaker dollar could be a boost for Netflix and other multinational firms? Netflix
really harped in their third quarter earnings report on how the strong dollar at the time in 2022 was hurting profits and sales?
So now that the dollar has been declining, versus many other global currencies, you would think that that should help Netflix and other
multinational companies, including those in the media business.
CHATTERLEY: Oh, that's such a great point. Yes, the higher value of their overseas earnings as the dollar strength sort of Peters back or pulls back
versus some of these foreign currencies a great point. Paula R LA Monica, always great to chat to you thank you!
MONICA: Thank you.
CHATTERLEY: All right, from one top level of shakeup to another, this time involving COP28, the Head of one of the world's largest oil producers, has
been named President of the Climate Summit that takes place in Dubai later this year.
The United Arab Emirates appointed Sultan Al Jaber to the position. Jaber also served as Special Envoy for Climate Change for the Gulf State. Becky
Anderson joins us now. Firstly, Becky, fantastic to have you with us! I've seen some lively comments, quite frankly, about this choice.
But he also does, I believe, and you can correct me if I'm wrong head up there renewable energy investments too. And quite frankly, this is where
the money is generated. And if we don't have money for the transition, it's not happening. What do we make of this decision?
BECKY ANDERSON, CNN ANCHOR, CONNECT THE WORLD: Yes, you're absolutely right. Look on the face of it this is a controversial move. The President
Designate of COP28, the first serving oil executive ever to take on the lead role in shaping the world's climate agenda that isn't lost on climate
activist.
You'll have been - you'll have been seeing the same comments that I am. They've already seen big oil is having significant influence, not least
through the fossil fuel lobby at some of these big events. One NGO already calling for Dr. Sultan to step down as the CEO of the National Oil Company
here which is known as ADNOC he's not going to step down sources tell me by the way.
But drill down and you're right to point out there is a deeper story here. This oil executive has been instrumental in shaping a cleaner energy
pathway here in the UAE. One that is embedded let me tell you Julia in the economic growth picture for the future as the country eventually weans
itself of oil. Let me just give you a sense of what he's been up to over the last sort of couple of decades?
[09:35:00]
ANDERSON: His first Chief Executive role was back in 2006 to launch MASDA (ph). Now this is what you were talking about the country's renewable
company, which is today the second largest renewable investor in the world. They had real first mover advantage; I remember when that was launched back
in 2006.
And nobody was talking about renewable and not many people outside of the industry were talking about renewable at the time. And they really got
first mover advantage on that. He's also been the Special Envoy on Climate Change since 2020.
And in 2021, you might remember he was out front regionally, in committing to net zero emissions by 2050. Have a listen to what Dr. Sultan said, at
big oil and gas event or energy event here in the UAE in November of last year.
(BEGIN VIDEO CLIP)
SULTAN AL JABER, CEO, ABU DHABI NATIONAL OIL COMPANY: We have connected all our operations to zero carbon nuclear and solar power. We are electrifying
our offshore operations to cut their carbon footprint in half. And we are pressing down harder and harder on our methane intensity, even though we
already have one of the lowest levels in the world, maximum energy minimum emissions.
(END VIDEO CLIP)
ANDERSON: And you will hear that line again maximum energy minimum emissions. Let's just have a look at that. The argument here and in many of
the oil and gas producing countries around the region, is that if the last year as shown as anything.
It is the energy security is a major issue and unplugging the current energy system, they argue before building a sufficiently robust alternative
puts economic and climate progress at risk and doesn't allow for a fair and equitable transition for oil. Look, this will not suit everyone, for sure.
But if you want buy in from the industry, and you want the industry's experience, it may just be that given the energy industry, fossil fuels
included a seat at the top table, and that's what Dr. Sultan has at the COP28 meeting. That may just in short, some progress and after all, it is
progress that we need as the clock is ticking, Julia.
CHATTERLEY: Yes, and quite frankly, it may be an unpopular view to provide but I couldn't agree more. I think there's an argument to be made that
we've under invested in fuel, fossil fuels, gas, whatever it is in this transition period, and it left us very vulnerable with what's happened in
the last year.
They need to be at the table like everyone else, Becky, thank you great to have you on Becky Anderson there! OK, coming up after the break from a new
top boss at COP28 to renewable energy in India. I speak to the CEO of Renew Power, who's working to increase India's role in the fight against climate
change. Stay with us that's next.
(COMMERCIAL BREAK)
[09:40:00]
CHATTERLEY: Welcome back to "First Move"! With an ongoing focus on the clean energy transition in 2020 India was the world's third largest emitter
of carbon dioxide by volume that's according to the United Nations.
And yet, thanks to vast investment in renewable, the nation can generate just over 40 percent of its power from clean sources. And that's where our
next guest comes in. Renew Power is a major player in India's renewable energy market.
With a portfolio that includes more than 120 winds, solar and hydro energy projects across nine Indian states. When you say is it's on track to reach
net zero by 2040. The company recently joined forces with LNT, one of India's biggest engineering firms to jointly develop, own and execute and
operate green hydrogen projects in India, among many other projects.
Now Head of the World Economic Forum in Davos next week, Renew CEO says it's time for India to take the lead on climate action along with the
United States. Sumant Sinha its Founder and CEO of Renew Power and he joins us now.
Sir fantastic to have you on the show I'm very excited to get your views and to understand what you're doing? Too often we talk about the United
States, what China's doing? What the EU is doing? We don't often talk about the ambitions of India. So spell it out for us, please, where is your
country headed?
SUMANT SINHA, FOUNDER AND CEO, RENEW POWER: Yes, sure. Thank you so much for having me on the show. Look, India is actually to our efforts - on
shaping and dealing with the climate change issue. India is a growing country. We are already as you rightly said the third largest emitter of
carbon dioxide.
And if we just continue to grow as we have been and follow the path that every other country has followed, which is really carbon intensive, then
that would not be good for global climate change efforts.
So in that respect, it's actually very heartening that the Indian government has taken a very, very positive and robust view on really
decarburizing India, as we grow further. The target the government has said is that by 2030, we should get to about a total capacity of 50 percent
coming from non-fossil fuel sources.
And really reducing the carbon intensity of our GDP growth by a considerable amount close to about 40 percent and so I think India's taking
some very fundamental decisions, to essentially decarbonize our future economic growth in a way that is really very helpful for global climate
change efforts.
So I think it is very taking the lead on really ramping up our renewable energy and our clean energy ambitions in a way that is going to be very
helpful for dealing with climate change in the future.
CHATTERLEY: It breaks down into three things for me. Its government policies and matching policies to the commitments that we've seen many
nations around the world now pronounce. There's what the private sector can do, and companies such as you can do to push us in this direction.
And then for me too, what citizens they can do to perhaps help in that effort, particularly on the demand side of energy. So, talk to me about
that matching, because I know this is one of the things that you've said, as we head towards COP28.
You want to see more commitments from governments, such as the Indian government, but others as well to match those commitments. But it also
comes from the private sector, surely, too, because they have more ability, money at this moment to engage in transition and provide transition
finance.
SINHA: No, you're absolutely right. I think this is not a battle or a war that can be won by any one sector of society or the economy working by
itself. It is something that requires an all of the above kind of effort.
Clearly, governments are important in shaping policies and setting ambitions. But ultimately, as you rightly said, it is the corporate sector
that has to come through. We are the ones that actually have to make it happen on the ground.
We're the ones that actually have to manufacture the equipment, get it shipped to the sides, put it up, make sure that we connect to the grid, you
know, manufacture the power in a way that is less carbon emitting. And then of course, we have to raise capital. And you know our colleagues on the
financial side have to make sure that capital becomes available to make all of this happen because our sector is a capital intensive sector.
[09:45:00]
SINHA: So I think all parts of civil society have to come together. And I think the role of individuals is also very important, as you rightly said,
because ultimately, you know, it depends on how we actually make decisions on our daily lives and so on.
But equally, how we actually put pressure coming together on both governments and corporate to make sure that everybody grows in a more
decarbonized manner going forward. So I think it really everybody has to come together and making this happen.
CHATTERLEY: Yes, I mean, you wrote a brilliant Op-Ed in November last year, when you were talking about this idea of jumpstarting sort of corporate
decarburization. Just tie that to your business and what you do at renewable?
And I know you have all sorts of projects going on, but for me the vision seems to be a way that you can provide a steady stream of power, energy to
whoever requires it. And that comes from solar and wind. And we know there's a challenge with the stability of that, be it geographical and be
it timing.
SINHA: Yes look, I think clean energy or supplying clean electricity rather, to corporate really is the first step in the decarburization
journey. And I think it's the most, it's the easiest step for them today.
And the further sort of benefit that corporates now have is that clean electricity generated from either wind or solar has now become cheaper than
any other source of electricity for them, essentially electricity that they can buy from the grid.
And so therefore, it's really very much in both the commercial interest as well as in their overall positioning themselves for the decarburization
journey standpoint, to go for clean electricity. So I think that is something that most corporate are now looking at very seriously.
And that's really what I was talking about that we are now finding a lot of traction from corporate coming to us and buying power directly from us,
whether Indian government companies or companies from outside of India as well.
But then beyond that, I think the whole evolution is happening very rapidly. Clearly, green hydrogen is a terrific opportunity to really
broaden out the footprint in terms of carbon emission reductions in the broader energy sector value chain beyond just electricity.
And we are seeing really shipping companies that generate almost 7 to 8 percent of global carbon emissions, really moving rapidly in that
direction, as our steel companies as our cement companies, and as our aviation companies.
So those kinds of technological solutions are now becoming available, and are really rapidly evolving, and really basis, you know, becoming grounded
on green hydrogen, all of these opportunities are really becoming quite viable.
And I see the future unfolding fairly rapidly over the next two to three years, I think faster than longer than a lot of us actually tend to
anticipate. So I think corporate will really move forward and drive the decarburization agenda, I think faster than we've actually anticipated so
far. And that's really, really positive for all of us I think.
CHATTERLEY: Wow! I love your optimism. I think it's fantastic. And obviously the Indian Government, with this latest approval, a $2.3 billion
deal to try and make India's sort of nascent hub for green hydrogen technology.
Talk to me, just briefly, if you can about your plans there. And why you're such a believer in this because I was even at a conference in the middle of
last year and the debate on this one was really high. There were plenty of people there that still aren't convinced that that green hydrogen is the
way to go. Why are you so convinced?
SIHNA: Yes. You know, first of all, just a word about the Indian government. Clearly, under the Prime Minister's leadership, there is a
really, very significant swing towards really trying to become a leader in green energy and green energy technologies globally.
Which is why we're actually encouraging production of a lot of equipment, whether it's solar panels, or wind turbines, and now electrolyzes, within
India, so that India actually can emerge as a manufacturing hub for these kinds of technologies and equipment, and then become a supplier of
equipment globally.
In addition to what we're doing domestically, in terms of trying to move towards clean energy. And keep in mind that India currently imports almost
$150 billion worth of fossil fuels. The government has taken a view that we have to move towards energy security. And that is the direction in which
really, a lot of these decisions are being based on.
Now the $2.3 billion program for the National Green hydrogen mission is really a step in that direction to see how we can first of all, convert the
Indian economy from being fossil fuel dependent, to really becoming a little bit independent of it, and also then eventually become an export
destination for green hydrogen.
So I think that's the general effort here. But the reason I'm excited about green hydrogen is because you know, electricity accounts for only a quarter
of the entire energy consumption. And energy, or as you know, carbon emissions come from all of energy, not just from electricity.
So it's very important for all of us to find ways and means to address the balance three quarters of energy consumption is when and decarbonizes that
part of the value chain. And green hydrogen really is the basis around which we can actually develop a number of solutions to actually get there.
[09:50:00]
SINHA: Separate from that, the world currently consumes almost 100 million tonnes of green hydrogen, which is made through very high methane emitting
process, which is actually very negative and damaging for the environment. So even just moving that, from methane based hydrogen manufacturing to
electrolysis, or clean energy base, hydrogen manufacturing, itself will be a very significant move forward in our climate change efforts.
You know, before even looking at the benefits of getting into a lot of the other areas around as I said earlier steel, shipping and aviation and so
on. And as I said earlier, green hydrogen really the basis for all of that.
CHATTERLEY: Absolutely. And just to be able to emphasize, that was the point of even just shifting what we've got in gray hydrogen today to green
hydrogen in the future. You've left me very enthusiastic. And I'm being told off because I could talk to you for another hour. I have to let you
go. We'll reconvene very soon, sir. Thank you so much for your time, Sumant Sinha there the Founder and CEO of Renew Power!
And I believe he's going to be in Davos as well. So I'll see you there perhaps. So as I mentioned there, I'm going to be in Switzerland next week,
some doubt as to whether there'll be any snow of course, in our coverage.
But as you can see some on the official Davos webcam, but expect plenty of news coverage, at least, and interviews with key business leaders and
politicians. So that's Davos, the International Economic Forum next week on "First Move".
And of course, I'll be at the mercy of the Federal Aviation Administration to get there which is still piecing together what happened on Tuesday, when
flights were grounded the latest on that next.
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CHATTERLEY: Welcome back to "First Move"! And it's a volatile open this Thursday stocks at the moment as you can see lower. Investors were I think
optimistic to some degree about today's inflation print for December but a lot of the good news was already in the price. And that's what you're
seeing today.
Now in earnings news, shares of American Airlines more than 5 percent higher. The carrier lifting its Q4 profit forecasts on strong demand and
higher fares and that's good news for the airlines.
Now here's the bad news. The U.S. Federal Aviation Authority is still trying to determine who was responsible for yesterday's travel chaos? One
quote damaged database file triggered a system outage and delayed thousands of flights. Pete Muntean joins us now from Washington D.C. Airport with the
latest. A corrupted file what else do we know?
PETE MUNTEAN, CNN CORRESPONDENT: One file, one damage database files here Julia. That's what took down the NOTAM system which is so critical for
pilots. It gives them that add on information that they need before they can take off about the airport they're taking off from the airport they're
going to the route along the way.
They can't leave without it. And so the system had this meltdown yesterday not only the main system but also the backup system according multiple
government sources telling us this. FAA says it's still trying to determine where this file came from?
[09:55:00]
MUNTEAN: There's an internal review taking place right now at the Department of Transportation level also at the FAA level that led to this
90 minute ground stop nationwide. We have not seen a nationwide ground stop airports paralyzed since the 9/11 terrorist attacks.
What the big questions are now is how this took place, in the first place? Why the FAA got to this point, and whether or not its systems are a cane
and outdated? This sets up a really interesting backdrop Julia, about the FAA reauthorization bill that FAA needs for its funding coming up soon.
This will no doubt come up. A lot of critics out there even on Capitol Hill saying that the FAA needs to deal with this. So this doesn't happen again.
CHATTERLEY: Some intense debate required certainly. Pete, great to have you with us. Thank you, Pete Muntean joining us there. Now finally, as I
mentioned earlier, I'm about to head off to the World Economic Forum in Davos. There will certainly be plenty to talk about when it comes to the
state of the global economy.
A freshly trimmed Romeo will be waving me off as you can see; he's happy knowing he won't fall into a snowdrift and vanish now, and hopefully
neither will I. I'll see you from the Swiss slopes next week "Connect the World" with Becky Anderson is up next.
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[10:00:00]
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