e concerned about this, where one parent gets the tax benefits. it is a good idea. the complexity what outweigh the benefits. kevin mccormally is the editorial director at kiplinger. we appreciate the time. that is our show for a saturday morning. join us tomorrow morning at 7:00 a.m. eastern, 4:00 a.m. pacific we will be joined i the president of the american federation of features as we talk about education policy. we will also be joined by the chair of the libertarian national committee to look at the political, ideological, and cultural views of the libertarian party. willie -- we will be joined by the -- the local correspondent from the "washington post." that is tomorrow morning on "the washington journal."

♪ >> next, a conversation in on the latest in batter technology. then, in conversation with biochemist craig venter. then, the world bank president. next, a look at next generation battery technology with washington correspondent steve levine and a director from argonne technology. hosted by atlantic council. jeffrey: welcome everybody and good afternoon. welcome to the atlantic council. we are pleased to have you all

here today. i want to apologize in advance. we had some internet difficulties today. we will be passing microphones back and forth if it is not up and running by the time stephen and jeffrey start. i'm sure it will all work out. i do want to emphasize that this is a very important event today. it is the inaugural event and in our new technology speakers series. one of the things that are new global energy center that we are emphasizing is the critical role that technology will play in helping us to meet clean energy challenges and also the geopolitical and international ramifications of this new technologies.

for this reason, we are thrilled to have and host steve levine and jeff chamberlain this afternoon. we could all stand here and identify the key technological breakthroughs in the past, but our guest today have taken on the challenging task of looking to the future. more specifically, the future of next generation lithium ion -- shows you how technical i am -- batteries. the next generation battery technologies have the potential to have a momentous impact on markets, international politics, and climate change, enriching some countries and governments while exacerbating the economic woes of others. but how close we are to seeing

these developments play out in the real world and what the obstacles are -- that is what we are going to talk about today. our speakers today seek to answer these questions and more. steve levine, who i've known for many many years and was the preeminent energy journalist anywhere. the washington correspondent for quartz and in his long and distinguished career, he has covered geopolitics, energy, and technology and extraordinarily keen eye. his most recent book "powerhouse : inside the invention of the battery to save the world" has provided the inspiration for today's event and there are some copies available outside afterwards.

steve has also written "the oil and the glory." i think he has the tremendous ability to take a very technical subject and write about it in a way that ordinary, nontechnological types like me can understand. in the process of writing this book, steve has worked extensively with dr. jeff chamberlain who is the director of the research facility at the argonne national laboratory. in that role, dr. chamberlain has worked at the comedy edge of -- cutting edge of energy storage and next generation battery technology. i cannot be happier to kick off our new technology series with such a great pair of speakers on such a fascinating topic. the way that this will be handled compared to some atlantic council events is a

conversation really between steve and jeff. steve will start off and introduce the subject and they will talk back and forth. and then, i'm sure we will open it up to your questions a little bit later. so again, thank you all for coming and steve and jeff, it is all yours. [applause] >> it is actually jeff who is going to start out. jeffrey: thanks for the introduction. i will start off. as was just mentioned, i'm jeff chamberlain. i'm a scientist from argonne laboratory. i appreciate everyone coming on this beautiful day to come inside and listen to us talk. i happen to work at a national laboratory and that is a place where your tax dollars are invested to do things for the nation. it happens to be research and it is mostly fundamental research

aimed at enabling that e development of technology that will change our lives, not only our day-to-day lives, but change our lives in terms of gross domestic product in this country and jobs. since we are limited on time, we can dive right into the conversation. maybe to finish that little bit of an introduction, if you have not read the book yet, this is actually quite a surreal thing happening right now. and i hope you have read or will read the book and enjoyed this a reality if that is a word of what you are witnessing because i'm a character in the book. i'm glad to get some chuckles because it is a very odd experience to be a character in a story that other people are reading and black and white. it makes this conversation quite surreal. you will see the evidence of several years of work that steve has done working with me and other people at argonne national laboratory to write a story that i think is a good story in the

book. so enjoy the surreal nature of the book and the surreal moment when you read the book. i will start with a very obvious question and i think that we in the lab are eager to have our stories told and are very suspicious as to whether it can be told in a compelling way when you are doing science and the laboratory. my first question is -- generally speaking, why write this book? why batteries? why science? why technology? steve: thanks, jeff. first, i want to thank ambassador morningstar for having us today and inviting us to be the guests for the inaugural session -- the inaugural technology session for the new energy center here at the atlantic council. why batteries and why argonne? i get this all the time.

you wrote a whole book about batteries? oare you talking about batteries in my tv and my radio and so on? what is the big thing about that? what i saw back in 2010 and 2011 when i decide to do this book was the geopolitics. that was that -- first i noticed that there were a lot of people talking about batteries and this is just a couple of years after the financial crash. this soul-searching going on bringing down the idea that the united states financial system and shenanigans going on in the united states had almost brought down the global economy and put us in trouble.

and could we create an economy that had the foundation of something real that we were making and not bubble -- real estate bubble, a.com bubble, and so on? country after country -- 20 countries glomming on to batteries as the next big thing. real economies could be built on a super battery, taking these batteries that we currently have an making them 3, 4, 5 times better. that being worth tens of billions of dollars by themselves and then, if you can get them into electric cars, build an electric car industry and then suddenly you had a new $100 billion a year industry the size of -- back then, google exxon.

that was a big thing, especially if it impacted nations. if it undermined nations, if the united states, for example, if it won this race among nations created the super battery, created these industries, was using less oil, and china was using less oil, and countries whose power and influence in the world since the 1970's had had distorted global geopolitics because they had oil. opec, russia, they would suddenly by comparison have less power. all of that was very exciting. the proof of that was before -- and we can go into that, later before i actually got you guys to agree to let me in, i told my

publisher that you had already agreed. [laughter] i did that and that was one of my shenanigans. but they bought into that whole thing that i just laid out and it was very exciting for them. so, it's fine. jeffrey: let's put some numbers to this. in the last nine months, there has been an additional excess of three to 5 million barrels a day of oil put on the market through the shale gas or shale oil revolution. could you talk a little bit about that and what the implications are if the super battery can move us around in vehicles, but also could be put on the grid? what is that equivalent to in terms of demand reduction that would be comparable to increase in supply that we have been seeing in the last year? steve: a couple of ways of

looking at that is that one, we have an experiment in motion. we are watching shale oil change geopolitics. it has already change geopolitics and will continue to the degree it has long 70 and -- longevity and traction. it is 4 million barrels a day, going on five, that is come on the market and did not exist three years ago or four years ago and 2011. and it has put opec into chaos. it has undermined vladimir putin and put the u.s. in a much stronger position of internationally. that is the same volume when citibank came out with a report three or four months ago talking about only stationary batteries,

stationary batteries shifting into our utilities and other power companies, being adopted by countries like saudi arabia and japan that currently burn a lot of oil to shave the peak periods of burning oil to create electricity. it just stationary batteries moved into the market, and they had a forecast of how many, how much penetration stationary batteries would penetrate, and by the year 2020, 4 million barrels a day of current low oil consumption would be removed from the market. it is the mirror image of adding the 4 million barrels a day. what you would have if shale oil -- and there's the debate going on right now about how real this shale oil revolution is.

the bears say this is it. you're watching it. it is going to be over next year. and others say actually not. , this will be going to 2020 and onto 2030 or so. if the bears are wrong, and city is right, you would have the same impact that you're watching -- the same geopolitical impact as you are watching the shale oil. the bulls have this compound impact. it is this tremendous, momentous impact that changes our presumptions and presumptions around the world about what happens next. what our foreign policy should be around the world because the underpinnings of it are being pulled -- look like they being pulled out before our eyes. jeffrey: thanks for that. maybe to drive home the point of why we think it is so important

to develop what is called a super battery is the way that some of us tend to think of it is that we are aiming at -- and you heard elements of this in steve's words in the last few minutes of solving a first world problem. what i just heard and realized that knowing steve in the last few years that volatility is a problem and fossil fuels go up and down pretty dramatically when these big shifts happen. if we can develop something like a super battery where we can rely more on electricity and moved to the age electricity to point out -- 2.0 where storage on the grid enables us to be more reliant or less resigned -- reliant on fossil fuels and more reliant on renewable energy costs -- if you have not driven

a tesla, you want to own a tesla. however, it is about $100,000 roughly to buy that car, and not all of us can afford that, especially those who work in a government lab. we want to have a solar array on the roof. we want to be free from the man and get off the grid and have freedom to create electricity and use it at our well. as i'm phrasing this, our phone , we want one that is really powerful. we only need to charge it every week or so. those our first world problems. the beauty of this project, and we could talk about this a low bid by aiming at that first world problem, we actually have an enormous opportunity to solve a third world problem. there are places in the world in sub-saharan africa and india and china where the grid does not exist and they do not have electricity. their version of energy storage and i pictures that i can show you showed children studying by burning a plaintiff would, which -- plank of wood, which is

energy storage and energy release. that is because they do not have electricity. to drive home how important this problem is, yes, we can potentially solve the problem and the cost of fossil fuels. we can help create a 100 billion dollar industry, about the same time, we can improve the quality of life across the world. steve: let me turn the tables on you. so, we laid out the big stakes geopolitically here in the united states. we would like our iphone to last a week instead of a day, but and we would like on another level for those 1.4 billion people around the world who did not have electricity to have electricity. but why aren't we there? two questions. what is the problem and why aren't we there yet?

the second thing is that the answer is that we see out there on both vehicles and on stationary storage -- what is real? jeffrey: ok. i was going to ask him that question. [laughter] darn it. i guess i will start by framing the problem in a way that we have not yet for this audience and that is that electricity is an on demand product. it is the only one that i really know of and i'm aware of that is truly on demand. somewhere there is a knob that turns up and down at a coal-fired power plant or nuclear power plant every time you turn on a light switch. electrons flow through those copper wires in the get to your house and it is truly on demand. imagine if you want to buy running shoes of the stores and they came off the factory line just as you went there with your hand to grab the shoes you want to wear. that kind of consumption does not exist outside of electricity. the problem is that when you

move to wind or sun to create electricity it is no longer on demand. we cannot at this point and maybe we will get there as a human race -- we cannot control the wind and the sun to move the power of and down to our needs. the idea is to create a super battery that is inexpensive and competitive with plants that exist today. they need to be cost competitive and performance competitive and life competitive and safety competitive by having a battery to serve as a buffer zone like a tivo. we want to do the same thing with electricity. we want to democratize the creation and use of electricity in much the way that media has been democratized the last 10 or 15 years. steve and i talked about this a little bit. i'm not a geopolitical expert, but i've read that egypt would not have fallen if social media did not exist. this is how much the media has shifted in the course of my life.

i think we are on the cusp of that happening if the super battery existed with electricity. if we could create and use electricity at our own will. getting to what steve is asking -- what is the problem? one problem is that he is asking a physical chemist that question. a business man or woman might have a different answer, but for us, we translate that right down to molecules. steve does this in his book. do not let that scare you off the book by the way. to be able to store energy in a cheap and reliable fashion which happens right now with fossil fuels, for us, renewable energy is not that different for rom fossil fuels for chemist. chemist look at burning coal oil, and gasoline and your breaking chemical want and releasing energy and releasing a lot of gas and releasing energy. you drive pistons in the vehicle.

it goes straight down to the chemistry of the molecules in which you store though -- that energy. fourr renewable energy in the case of batteries, it is the same thing. it is just long creation and formation and bond breaking. when you break on's, you release energy. there are two big differences. one in the case of batteries instead of getting heat and gas evolution like when you burn gasoline, wood, or coal, you get a release of a cascade of billions electrons that forms the current that can drive an electric motor. that is one big difference, but again, think as a chemist. that is just another reaction. the product of that reaction is difference. it is electrons instead of heat and gas. the other important thing is that if you can reverse that reaction. every time you plug in your phone or computer or electric car if you drive one, you are reversing a chemical reaction right there on your kitchen table or on your desk. we cannot do that with fossil fuels, at least not today.

he cannot capture the carbon dioxide and water that comes out of the exhaust height and reverse that reaction. so, scientists answer the question of why are we not there yet? it is a very complicated physics question of physics and chemistry. can we design systems that are reversible in the case of batteries? and everyone here in the room knows how long a lithium ion battery lasts and your device -- two to four years. that is when you start noticing that this laptop does not last six hours, it is now two. the reason is because you are moving matter around them moving lithium ions inside that battery from one side to the other side from the a note to the cathode. you are actually distorting and changing the physical nature of the material that those ions are moving around in. the big challenge for a

scientist is can we develop an architecture down to the atomic level that does not change every time you move in ion? i like to liken it to bowling. i'm from the midwest. everyone bowless in the midwest. not everyone bowls here in washington. it says that if the object of bowling were to throw the ball down the alley and have it slightly through the pins and not knock over a single one, and those pins in this analogy represent the atoms in a structure inside of a battery and the bowling ball is a lithium-ion, do want that ball to goes through those pins and then come back out to the user when you recharge it without knocking them over. that is a very difficult question of thermodynamics. one reason we are not there is that we are about somewhere between 1/10 and one fifth of energy density of gasoline when you put energy and the battery and use it, we are down 10% to 20% of where we are with gasoline. or coal, if you're talking about the grid.

digging dirt out of the ground and burning it is still a very effective and efficient way to do things. that is the physicists answer. there's a whole series of political and business answers as how you make a shift to the electric age 2.0. steve: i know that just with the stuff and material that are gone -- argonne invented that is at the cutting edge and this is the stuff that if a super battery, at this time, if a super battery is going to be invented, it is thought by people like jeff to have the greatest chance to do that. the trouble is that when you're going from -- the stuff is called nmc, by the way.

justeff described it as watching the bowling pinfall. when you do that and those bowling pinfalls fall, the architecture you set up in the house that you built, so to speak, turns into though as you drive home from here and half the front door is in the back door in the living room is in the bathroom and this really happens in that battery. i know that you are trying to get the atoms to stay in one place. but that is a very, very hard thing to do and the stakes of putting the two pieces together -- those stakes being so very very high. and being so very, very hard to do, you get exaggerator is an hucksters and liars basically, claiming that they have got the answer and give me $50 million

so i can develop that. i want to roll back to that second question. this is one of the things that i suffered personally in the book. one of the sources on whom i had relied for a very big part of the book and was at the closing section of writing the book turned out to be a liar and turned out to be deceiving me and the department of energy and general motors the whole time. and so a lot of people had to recover, but what you have told me is that this is a symptom and a big symptom of what is going on and one problem with batteries -- i want to roll back. can you talk a little bit about that? also, again, what is real and what can we trust that is out there?

for example, when wall street forecasts that in the year 2020, our utility industries and power companies are going to be enough -- in upheaval, that stationary batteries will be adopted and widely adopted in the united states, is that true? jeffrey: ok, so that is a good question. this is where we get into the realm of my opinion. all that other stuff i think i would consider fact. what was not said in the introduction is that i left graduate school at georgia tech in 1993 and went into industry for big companies and small companies for most of 14 years including a couple of startups before moving into the national lab in 2008. what you are hearing steve imply here is that one of the great things about working at the national lab is that the basis of our careers that grew up in a national lab system is very different from the basis of careers of the product about theirs, which is the world that

i came from an industry. the basis of the careers in the national labs and universities is to be the true sayers. you do research and publisher science in a juried fashion were other scientists review your sides before it is even allowed to be published. so there is a system in place where the truth really matters. now if i skip them plainly to , the other side of the spectrum, that same thing as is kind of true there. big businesses that i have lasted for 150 years cannot be diminished. when you are developing a product for customer, that truth matters. in my opinion, in the middle of that spectrum where the start of

up world lives and the venture capital world lives, it is not particular the case. when you look at the history of batteries in terms of exaggeration could i would broaden that argument to say it is much beyond batteries because of you were ward mechanisms in the way that reward -- venture capital works. vc want a turnaround of 5% to 10% of their investment. i know this from personal experience and you can read it in books like the innovators. you live quarter to quarter year-to-year based on when you , can next series of investments. i'm quoted in a book saying something like what steve was saying and that it encourages the exaggeration because it is either that or you cannot feed your children. it really does come down to that. when you work in a large organization, it is not quite that way. the customer reliability that the customer has on you as a supplier of technology is so high that it is not worth the risk of exaggerating to the customer.

i'm not sure if that is exactly the answer that you are looking for, but maybe we can continue that part of the conversation. steve: i'm going to go at it again. what do you expect to happen? come out with it, chamberlain. jeffrey: the second half of his question -- what can we expect? i was saying in the green room before we came out here, i've been in the lab for eight years and batteries have begun to take off. in case you don't know, here are some numbers. the lithium ion battery market share is about $15 billion a year right now. well over 90% of that is manufactured in japan, china and korea. that is almost all for portable electronics. the vehicle market is just now taking off and prognostications are that is it going to be an additional tens of billions of dollars of gross the message on -- gross domestic product for

some country or multiple countries. will that happen? that is a great question. the grid prognosticators say it is larger on the grid. significantly larger market for the low hundreds of billions of dollars for the total available market on the grid. one thing that i noticed is that j.p. morgan and other banks have come to talk to us recently in the last few months asking a series of questions that really boil down to one question -- at what point do they take their investors dollars and put it into batteries? i will tell you as a side note it is fascinating that they are asking scientists that question. i think it is the same reason that steve is bringing up -- they do not know who to trust. when it is companies that have vested interest in the success of their company, there is a bit of a conflict there and how that question should be answered. that said, i am beating around

the bush and not answering your question. is it coming? yes. the market has gone from about a billion dollar total available market to a $15 billion total available market. it looks like a traditional freakonomics s-curve when you look at the adoption rate. i would love to show you a graph on this. i personally was shocked when we asked ourselves the question -- why aren't plug-in vehicles being adopted? we realize that looking at the data that the question was wrong. if you plot the amount of free prius's that were sold in 1999 to 2004 versus the amount of vehicles that you plug-in and that is pure vehicles as well as hybrids, the adoption rate from 2010 to 2015 is twice the adoption rate of the previous and light vehicles. i'm in that world and i was shocked by those numbers because i believe that marketing works. i believe in media and i believe in guys like steve. the media was harping on the negativity of the adoption of

these vehicles. guess what? i can show you the data if you want me to. it is twice the adoption rate. it is still small. it is about 1% of light duty vehicles. by adoption rate, i was referring to the united states alone. it does look like the beginnings of that s-curve. maybe more importantly, looking from the bottoms up, batteries alone for vehicles has cracked the billion dollar a year total sales. that is starting to get the attention of the big companies. when will it happen? let me rephrase the question. is it too early to invest? is it too late to invest? or is it just the right time to invest if you are an investor? i think the answer is right there in the middle. it is not too late and it is also not too early. the number of big companies from around the world that are coming into the national labs asked questions not only about investment, but could we perform private research for them is all indicators that that tipping point is arriving soon, if not had already arrived.

and i would like to get onto the next topic before i hand the microphone back to you, but that is -- what i just described touches on another part of the answer to steve's first question which is why is this so hard? why has this not been done yet? i gave you the physicists answer because we are not designed -- have to design atoms and molecules and crystal structures and using it as a building block. the other problem is a business problem. what i mean is -- how do we solve the problem of transitioning from the physics to a full-blown pack device? for those of you who have not been in technology product development, i cannot overstate how difficult problem is. as hard as it is to build a perfect set of bowling pins inside of a battery and adams that do not move, this does it is significant harder to turn that innovation and turn it into a high quality, high profitable product.

it is almost an impossibility. the investment is 10x harder to perform the commercialization. right now, we are relying on startups. startups can and ultimately get gobbled up by acquisition from a larger company. we are competing with the asian world where they operate more socialistic leely or communist where their companies risk is almost down to zero. i'm not saying that we should copy that but that is the , challenge that we face if we want to own a big chunk of this market. steve: so, i want to say and i want to close out that one part and let us shift over and see if anyone wants to ask anything. that's a good point that -- the tipping point has been insight

and it has increased and that is indisputable. you have gm and tesla both saying -- and one of them, gm, already having unveiled a car that will go 200 miles on a charge and both of them aimed at having a model three go 200 miles. both of them in that sweet spot of 30,000 to $40,000 -- a big jump down from that $100,000 car. my wife and i just bought a honda odyssey and that was about $35,000. that is what people will pay. it is not exactly in the mass market, but since 2018, that is three years away. it is very, very close. apple is rumored and reported to be working on electric car.

richard branson, bmw, audi, all them aiming more or less in the same space. they see that this new age is coming in this very short period of time. there are two pillars to winning in the electric age, to winning in the super battery age. one of them is discovery. it is your guys or guys like you are making a super battery. the other pillar is manufacturing them. you mentioned the innovators and steve jobs did not invent the smartphone. he is an ingenious designer and manufacturer and right now, the steve jobs'of the battery world are in asia. you could invent in your guys could invent a super battery and

you already may have gotten a phone call about the super battery -- jeff, come home right now. but will you, can you guarantee that that super battery will be manufactured in the united states? this is the next challenge that the united states really has to grapple with and i think it is grappling with it. what do you think about that? jeffrey: yes. thanks, steve. that is the question that i was beginning to touch on. it is my own believe that the manufacturing problem is more difficult and more significant and more costly than the physics problem. as hard as the physics and chemistry problem is, the commercialization of that physics and chemistry is significantly harder. i will just give a couple minutes of a history lesson about bell labs.

i came out of grad school in 1993. i representative of the area that is beyond bell labs. i went straight into the microchip world and did materials for the the moment of microchips. i know a lot about that world. in case this audience does not know, bell labs has had a hand in almost everything that has change our lives. the microchip, certainly. glass fiber came out of bell labs. satellite technology, cell phone technology. the idea and philosophy of using binary code. the idea of using switches which is what a transistor is, to advance computing which is binary code -- that came out of bell labs. most people know that. what you might not know is that the venture capital world also help bell labs. william shockley, one of the key inventors of the semi conductor, brought with him the invention

because bell labs was licensing the semi conductor at one dollar per license. silicon valley exist because of bell labs. the venture capital model exist because of bell labs because vcs could come and out of place like mel labs which is a monopoly and partly government-funded. if they do not take 10 to 20 years of patient money and being a very, very richman ottley, there would not be a silicon valley. in fact, it would've been to germanium valleys. people in the room might not know that the first transistor was germanium and not silicone. if they do not spend another 10 years, they would've been talking up the germanium treat and startups with a failed deservedly if all the scientific research had not been done at bell labs. the question for groups like this one in the room is -- how do we re-create that innovation ecosystem? i personally do not think that

we grow back and create monopolies that are partially government funded. we are competing with that in asia. the question is what do we do? is there way to bridge the basic gap of core research -- and these of the questions that are being asked in washington and businesses today -- can we envision a public-private partnership that exists outside the fence of the federally run properties like argon national laboratory, where we pull patient money and and bridge the gap between our doing science and handing it off relatively blindly to startups that will try to raise funds to develop a product? can we participate and enliven the product development process outside of the federal spirit -- sphere that is led by the private industry as opposed to

the research and the public industry? that is the question we need to debate. much like sematech pulled them together to elaborate on new manufacturing processes to make the chip ubiquitous and every device that we use today, can we do that for batteries? can we do that for high end with bandwidth semi conductors? i think the answer is yes. but we need the help of think tanks like atlantic council. i do not think that scientist can imagine these things on their own without the think tanks and businessmen and women and the investors. steve: i think we should open it up to questions. could you please have a question. [laughter] and the other thing is -- identify yourself and since we have this problem with the system -- are we up again?

>> holden meyer. thanks for the discussion. you mention asia. i'm wondering what is the balance between cooperation by multi-lateral cooperation and r&d and innovation and competition? i know we have some bilateral programs with china and also with the japanese and asian and south pacific council. the geopolitics of this what is , the tension between cooperation and competition in the battery technology space? jeffrey: that is a great question. argon is one of the it's one of -- one of the leaders of the cooperation that is happening with china today in batteries. there is another one being led by the university of michigan in batteries. the essence of the answer to your question is that if you focus on doing the basic fundamental science that is pretty competitive, then collaboration is a good thing.

by the way, this is the way scientists operate. their hole in is to publish. find the discovery, published the discovery. we should encourage that. the more brains and physicist and chemist's that are trying to solve this problem, i myself have been in china talking to scientists about this problem, it is not just an an american phenomenon that scientists want to compete to be the first of publish. the question gets back to the monologue before the q&a session. if the desire is to have profit as opposed to do the research that enables the technology to develop the products that results in profit, then we can carefully troll a line between those two things. if we collaborate with scientists in asia, europe africa solving these fundamental problems, that will speed things along.

but we have to draw the line on where the competition against for developing projects out of that research. there are ways to do that. i do not want to blithely say that is easy to do. it is difficult, but there are ways. steve: the first time that i went to argon, jeff was hosting the chinese minister of science and technology. and trying to act in a conspiratorial way. hide from him the stuff that they presumed he was really after. he wasn't after coming in to collaborate like he said they to take something from us. what i have observed is that there is, from president obama down, this very high-minded statesmanlike notion that we are all trying to change the world we are all trying to save the

world, and can we not all do it together? the formation of committees, groups, that meet every year. but my own experience and jeff may bitterly dispute this, but it is on paper. they are sitting there and they are exchanging their favorite coffee flavor in starbucks, and not delving into the batteries because of the competition. it is so stiff. here in the doe, there is a paranoia almost of paranoia that we are developing this, is the chinese going to get that? so this race, this competition between nations is uppermost.

it is almost a subtext to every decision, every competition, the whole vision. it has it as a subtext. jeffrey: i will not bitterly disputed, but i will add a little flavor to what he is saying. it is kind of on paper, but the reason that it is on paper is because the first thing we do is because we patent our innovations. so yes, he is kind of right when we dipatent it, it has already been written down somewhere. it is either a patent, publication, or both. but is still triggers the spirit of collaboration.

but to protect the taxpayers investment we do have policy in place where we filed those patents before we discuss the science. >> thank you. i am david from the heritage foundation. i have a question. how different is a lithium-ion battery now from 10 years ago? when we look at the tesla battery that they will be making in nevada is there innovation in , producing the same thing cheaper? or is there something fundamentally, chemically, physically improved about it? jeffrey: thank you for that question. it is a very important question. when you go to walgreens to buy an alkaline battery, or you go to pep boys to buy a acid battery for your car, it is dictating a specific type of chemistry in that battery. it is not the case with

lithium-ion, when you say the words lithium-ion the only thing that it is dictating is the counter ion that moves back and forth. you can completely change every material in that battery and still call it a lithium island on battery. this is a source of much confusion in the government and the public. that you can massively advanced lithium ion batteries, but it is still called the lithium-ion battery. the batteries in tesla have nickel cobalt aluminum instead of nickel oxide. does that matter to the average person? no. it holds more energy and is cheaper to make. the other one is even less expensive. but again, that is just going to

be called a lithium-ion battery. down at the materials and physics level there has been a series of innovations that has occurred. right now, what everyone is trying to do is move from carbon to silicon. because silken holds about seven times as much with u.s. carbon does. as the industry moves to that, it is still going to call a lithium-ion battery. folded it on top of that are other innovations. elon musk and tesla are rely ing on innovation. not innovations in the materials. he doesn't want to count on it, it is too risky. there are also innovations that will happening c, it is worth mentioning, but i used to record little cassette tapes of little songs from the radio. that does not happen anymore. but the lithium-ion batteries are made the same way as those cassette tapes. a sheet of plastic so that you

can magnetically store information on that tape. the japanese manufacturers said why don't we just use this equipment that we are mothballing over here? which is very different from saying what happened in the microchip world. what is the best way to deposit these materials? what is the least expensive, least time-consuming quality way? and those innovations are happening right now. once that market cracked $10 billion, the major players got involved. beyond that we are working on , filling the front end of the asian pipeline. can we moved to magnesium or aluminum where you release to electrons. that is really far field frontier science. but there are enormous

innovations that will improve lithium ion batteries, decrease the cost. that is a very important question. steve: i want to get very specific on this, it will take 60 seconds. the question is, has lithium-ion advanced over the last 10 years? i already told the group that a silicon valley startup had to deceive gm, that was there to an ir 200 mile car. it did not have when it said they had. but gm, a month ago, in detroit, unveiled its concept car, the bolt, a 200 mile car.

lg, which supplies gm took the argon material that it had in its volt plug-in. it is partly stable, they have to mix it with another chemistry. when they do that, they make the battery weaker. the battery that is going into the volt is stabilized enough that instead of going 30 miles it goes 200 miles for the same price.

>> my name is hart. in the late 19th century, early 20th century there were a lot of , breakthrough inventions that i do not think relied on government funding. the lightbulb the telegraph , telephone, photographs and so on and so forth. these were mostly in vented and commercialized without large government funding. is there something we can do to emulate what is happening today without government funding? jeffrey: i do not know the history of that particular type of technology as well as you do. i know the history of things like the microchip. that was heavily invested in by the government, especially the military. what makes it different, if i look at history, and let's assume you're correct, that

edison and ford used their own money to get where they needed to go, as far as technology. then, 60 years later that was 40 50, not much case. many think that bell labs -- i do not want you to think of well as a monopoly, they got a lot of money from the government. they hired an army of engineers and tried every single material they can find. edison hired engineers and tried every single material they can find. it is called the episode indisonian

approach, where you take every type of material you can imagine, pass a current throat and see how bright the light is and how long the filament lasts. the same thing with board, his big thing was the internal combustion engine. when you get down to trying to control and move atoms around, at argonne for example, we has something called the advanced photon source, which is a machine where electronics spin around a massive ring at the speed of light. they create really intense x-rays so that you can watch atoms move around inside a material. you can examine a protein and see what happens inside dna. to do that type of research, there is yet to be a company to fund an operation. there is one at berkeley, the

super supercomputers in berkeley that require the public investment to get down to study how do we design better systems at the atomic level so that once that understanding occurs, a product can be developed from it. that is the transition i was talking about. can we ease that transition so that a product can be brought up on the back to the basic research we are doing. steve: the answer to that, is those inventions in those days there were five or six industrial labs in the united states where private industry took it upon itself to have an army of individuals trying every little thing, and they almost do not exist anymore. private industry is relying on things like national labs to do things that they used to do by themselves.

>> thanks. jim woolsey, foundation for democracies. im about halfway through your book. i want to ask a question about geopolitical implications, but it has to do with leveraging battery performance and plug-in hybrids by using natural gas-based fuel. dan cohen of m.i.t. study years ago on how to use natural gas and transportation. it said basically for a family car you want to use methanol. it is much cheaper than it used to be. the numbers all the good. if you have a plug-in hybrid, so you can go 40 miles on your overnight charge of electricity, and then it becomes a regular

hybrid, essentially you are driving a way a hybrid does. but if you're using methanol 85 15% gasoline from natural gas, from natural gas, the way i calculate it, you would be getting -- if what you care about is oil dependence and price, you would be getting a slightly better price and you would be getting about 400 miles per gallon of gasoline. because the only gasoline you are using, the only thing from petroleum is that 5% or 15% for cold weather starting. so i am curious as to why or whether you think we need to stay, for innovation and moving away from oil for vehicles whether we need to stay in the all-battery world.

why isn't somebody working more resolutely to use both electricity from great batteries and methanol from natural gas to get the consumption of oil way down? steve: thanks, jim, for that question. the short answer is that there are inventors and companies -- and argonne and jeff will talk about this -- i am sure who are trying all of these. i am a believer in natural gas car future. it is for this reason.

in economics, does supply create demand, does demand create supply? it goes both ways. one of the most interesting formulations is supply creating demand, and it goes back to -- the way i like to picture it is the cocaine model. did americans become hooked on crack cocaine because we started out being hooked on crack cocaine, and then the medellin cartel responded to that? or did the medellin cartel start pumping cocaine into the united states, and then the market developed from that? transferring that over the natural gas, here we are in a world where we are utterly awash

in natural gas. i checked yesterday. natural gas is $2.86 per 1000 cubic feet right now. it is incredible. and the horizon for this supply is from here to eternity. so there are big thinkers including ed morse at citigroup -- he is ascribing to the cocaine version of natural gas and that is that this surplus pushes itself into the vehicle market over the next pick your number of years. you do end up -- because it is so cheap that -- lng, cng ends up pushing it into the market. i want to broaden out your

question a little bit because it is not just natural gas. it is super capacitors, it is fuel cells. the first time when i rode the bus with david at argonne, david was telling the chinese minister at sign 10 technology, was -- at science and technology was asking sandoval what do you think about twinning batteries with fuel cells in order to get there? jeff: another good question, jim. as a technologist, i am very high on hybridization. i viewed the chevy volt as a platform technology. the

gasoline engine is just a generator or if you could move to natural gas, it makes a lot of sense. we at the lab are doing a lot of research on this. so, to me -- we had all kinds of conversations -- we would have bet years ago that pure electrics were way, way off. the odd thing is -- i learned this enough in my life and i should stop saying it is new to me. you cannot predict the consumer. the analysis from earlier is that the adoption rate is at the double edge of the prius. pure electric vehicles have outsold the hybrid plug-ins. that makes zero sense to me. why you can buy a car that has 80 miles per charge and takes many hours to refill it with energy, or to buy a tesla, which is an amazing vehicle costs 100 grand -- neither of those ideas appeal to me. what appeals to me is i live 18.5 miles from work. i can rely on energy. when i need gasoline to drive my

son down to a baseball tournament in southern illinois, i can do it. a lot of talk about range anxiety -- can i just get a battery of three to five miles per charge? elon musk has figured this out, but it is not public domain yet. the reason every cargoes -- -- the reason every car goes 300 miles is because physiologically that as long as we can drive before we need to take a break get coffee, go to the bathroom get food. we do not want those breaks to be longer than five to 10 minutes usually. there is no system in place, regardless of how many miles you can put in juice in your battery to recharge it. in short, i agree with what you are implying in your question, that hybrids are the way to go. they will still have the global geopolitical implications, the same security implications in terms of energy that we have in our soil and elsewhere inside

the united states. as a technology, that is the -- as a technologist, that is the obvious way to go. but if you look at the adoption, the consumer is doing something different. the early adopters will drive the equation, the battery costs will come down, and we will refer back to these inexpensive hybrids or something. >> thank you so much for the discussion. i am from "china daily." speaking of asia, china -- what china and the u.s. could do, to operate in terms of spending on -- and terms of scientific research, manufacturing, and the promotion of new technology of energy resources -- what is the role of acp in this operation?

also, how did it affect the economy, the politics in the relationship between china and the u.s.? thank you. [laughter] jeff: big question. steve: i will take a stab at this, but then i am handing it straight over to you. only because you are right inside the game, the cooperation , in my own view, will happen after the innovation. after. the competition is too stiff. the stakes of winning are too high for any of the countries to cooperate with each other. you will not have, for example japan handing over its innovations to china, to south korea, or south korea doing so with china, or the united states

doing so with china either. or the united states doing so with china either. look at what happened with lithium ion phosphate. john godunov, the inventor of the nervous system of the batteries in your cell phones, your smart phones, he invented another chemistry. this went on to be reinvented by a bunch of other people, including a company called a123, that built its batteries, that built the factories to make those batteries in china resulting in 30 or 40 other companies who very quickly in china suddenly having exactly the same chemistry, creating

competition for a123. for these reasons, i cannot imagine there being close cooperation at that competitive stage, where there can be collaboration or cooperation -- that is in the rollout of them. because both countries have very high stakes. china, for example, has a premier policy. china is right on the vanguard of cleaning up its air. this is the stage at which you can have in the united states and china cooperating. jeff: thanks for the question. that is a very big question you are asking, and a lot of people are trying to answer that question right now in the government as well as elsewhere in the world of dismissed. -- in the world of business.

i would start by -- in the world of business. i would start by saying we all have to recognize, including our friends on capitol hill, that we live in a world economy. we increasingly are living in a more transparent world economy even with the competition steve is talking about. i will give you a couple of examples. in the battery world, steve mentioned lithium ion phosphate, the a123 batteries. those batteries came out of m.i.t.. they had a problem where they had a $50 million recall. they had almost a billion dollar ipo. that quality problem is it had one product and it bankrupted them. they went out on the market and they split apart the defense part. did dod part went to a company. the rest of it went to a company to wong shun america.

that bankruptcy happened about three years ago. it's plant is now operating at full capacity in michigan, selling almost everyone of its cells in china. look at it in reverse. i finally converted over from android telephone to -- i was a very stalwart person not wanting to go to apple products. but my kids all use apple and it was much easier to communicate guess where they are made. in china. we all love to revere apple as how american company operates. it is built on the backs of folks manufacturing in china. think of those two examples. are either one of those necessarily a bad thing?

i am not a politician, i am a scientist the way i would answer the question is, yes. there is room to collaborate in the research with other scientists around the world. it is a tradition that has been going on for decades, if not centuries. the difficult part comes in, can you collaborate beyond the scientific research? you can, given the examples i have been giving you. a123, making battery cells to ship to china, making product in china to ship to the u.s.. steve: i think we have run out of time. thanks a lot for coming. [applause] richard: thanks, steve and jeff, a wonderful presentation. thanks to everybody here for your excellent questions. i want to tell you, at least we have planned our second of our technology series on april 24.

peter dean, one of our senior fellows here today will be part of that. we will talk about the future of renewables from the viewpoint of the private sector. and where they see things going over the next months and years. i hope you will be able to attend that. we will be sending out notices of that in the next week or so. again, thank you very much for coming. thank you, steve and jeff. [applause] announcer: resident barack obama will meet today with the cuban leader raul castro in panama and the summit of the americas. the two exchanged handshakes and greetings last night amid growing speculation that obama is ready to remove kuiper from the u.s. a list of state sponsors of terrorism.

not since the height of the cold war have the presidents of the united states and cuba met face-to-face. as barack obama and the cuban leader work to restore relations, they will meet today at the summit of the americas. the meeting offers a chance for new moment to him efforts. in march, the l.a. times reported california will run out of water in one year. governor jerry brown recently announced mandatory water restrictions. food and water watch chair barlow diskette -- discusses the water crisis in cincinnati. barlow: it is like a bathtub. a lot of us sitting around a bathtub with a lot of water. we have blind folds and straws. we are drinking the water fast. we think it is fine because

there is a lot of water for everyone. all of a sudden there is no water for anyone. it is exponential overuse. you cannot see it coming. it is the exponential overuse of something that is finite. there was the world economic forum held for leaders around the world. it was held in switzerland. every year they do research ahead of time about what the major issues are. they talk to 900 experts. they said it is the coming water crisis. it is here in terms of impact. another human meeting from the secretary-general raj 500 scientist together and they said what we are doing is what they call the planetary transformation. a great change to the world and the planet as the melting of the ice age.

in a different study, done through the world rank, -- the world bank the statistic that stunned the world was that two years ago by 2030, the demand for water will outstrip supply by 40%. announcer: food and water watch chair barlow on what she calls the global water crisis tonight at 8:00 eastern on c-span. each year the atlantic and aspen institute cohost the washington ideas forum. bringing together leaders business leaders, journalists, and scientists. at the most recent forum craig vendor was the speaker. an american biochemist and entrepreneur best known for being one of the first ones to sequence the human genome. this is about 20 minutes.

>> we are in an unusual technical situation. he is supposed to be here. he is ill with something. let's see, can you hear me? he is ill with something. he is looking pretty good. craig, can you hear me at all? he is not scary looking. he is just ill. we have a number of backup systems which i think we should employ. if forced comes to worse, i would just tell you what i think he would have done if i could control him like a puppet. what is wrong with you?

>> i did not want to leave sunshine for washington dc. a number of things, it would've made montezuma proud. let me, quickly ask you about -- you have a whole list of things you are doing. the one that intrigues me the most is the notion of a minimal cell. can you explain what a minimal cell is? we have been working on this since 1995. understanding the amount of genes that can be responsible for self replication. we have been working on this for a long time.

we had our first synthetic version in 2010 as you know. we have been working since then to design a cell from scratch. that has the minimal set of genes necessary for replication in a laboratory. >> we humans have 20 to 30,000 genes. you started with a little thing and try to make it smaller. how low did you go? vender: that is put in a way that only you can put it robert. the smallest organism is one that we sequenced it in 1995. it has a little over 500 genes. the goal is, and the problem is

our fundamental knowledge of biology is so limited that we do not know what 20% of the genes can do. it is trying to do a design when you don't know what 20% of the parts do. all you know is they are absolutely necessary. there is a story when i was in seattle on my late uncle, who was part -- lead the boeing design team for the 767 said imagine designing a boeing airplane if you did not know 20% of the parts. he said, what makes you think we knew? robert: you take the genes that you think are necessary for life, you shoot one of them, and say is it still alive? you shoot another one. is it still alive? where are you now in a shooting gallery? vender: the problem with that

method, and that is a good description of what we have done, it turns out there are dual pathways and dual systems that have not yet been totally recognized by modern science. it is hard to get funding to study these things. you can knock out a gene, when you knock it out on your own it doesn't kill the cell, but if you knock out it's unknown counterpart you can do that. if we use the airplane analogy in your triple seven aircraft you can lose one engine and the airplane keeps flying so you can say maybe engines are not necessary until you lose the second one and find out they were very important. it turns out by knowing the structure they knew all the functions.

we thought intellectually, we could say we don't need that function and cannot get out. genes have multiple functions. their counterparts, it turns out, have key functions we were not aware of. it has been more than trial and error. we did it totally by design and that did not get us a living cell. we added back components. we had one team working on shooting them one at a time. and adding them back one at a time in sets. we built these in five different sets. so we could test that one set in the environment of all the others come and looks like it works because there was a counterpart unknown gene in one of the others that counteracted it. this is just trying to get below 500 or so genes. robert: i am so glad this is hard.

this is a little bit like god. there is clay god goes whoosh and there is adam. i hope it takes you 10 years. vender: it may take a while longer. you may remember stephen colbert asking why i thought i could do better than god. i said, we have computers. robert: what would you do, i assume that if you get a cell that you can boot up from a store-bought ingredient and can create a life form, a very simple life form, why do we need one? vender: we don't need one per se. it is a proof of principle. if we actually want to design for building new organisms to make new vaccines, new medicines, food sources, etc.,

we want to get down where we could do design on first principle basis. the other thing that we are doing, other than making a minimal genome, is defrag the genome. if you think of it and computer analogies. 4 billion years of evolution is messy. things get inserted and there is no logic, a lot of randomness. if we are trying to do design to put in a cassette for genes that do sugar metabolism versus methane metabolism we would like to do that as plugging in a cassette and then you have the energy production for the cell. we are defrag in the genome trying to reorganize it. that is more complicated than it might seem. the point is, to get to where we can do design from known components to start to build new things for the future. these are the early baby steps that allow us to start

accelerating the design and building of new organisms for very specific manufacturing purposes. robert: let me run through some of those purposes. pollution eating bugs. feul producing bugs. medicine producing bugs. you and then put them into the air and water and land. the first question that comes to mind is how hungry are we about to be a, or how energy needy, or anxious for freshwater that this would be something politicians would less. do we need this? vender: let me correct your earlier statement. our plan is not to add them back into the environment. i think that would be a mistake. we have sailed around the globe

taking samples every 200 miles in the ocean and sequencing the organisms. 40% of our auction comes from those algae. we would not want those replaced by algae that produce a lot of oil instead of oxygen. these would be organisms that in fact, would not live outside of the laboratory or a production environment. that is an important part of the design. building in kill switches so they cannot survive on their own. we are thinking of industrial manufacturing applications. for example, with sugar you can put that sugar into anything. we are working on designing new pathways that do not exist in nature for making the chemicals that go into plastic bottles. now, that comes from oil. it is a byproduct of oil production. it is adding to the pollution.

taking oil out of the ground. we burn some, others we turn into chemicals, carpets, and plastic bottles. if we make the same chemicals from sugar, we converted it to a renewable chemical and are able to recycle all of the waste and reuse them. we can also make them, we have algae in the desert in ponds that use sunlight and carbon dioxide. they are pulling co2 out of the atmosphere. we need high doses of co2. we have to concentrate it. putting co2 into all these different chemicals in foodstuffs. robert: let me ask you about scaling. you are talking about little things. but we need a lot of fuel or remove a lot of co2. is it a simple matter to scale up? vender: unfortunately, none of

this is simple. the hardest goals will be fuel that will compete with natural gas. anytime you get a new biofuel that comes along in the past all of a sudden the cost of carbon out of the ground gets cheap. that is what makes it impossible to compete. the only way we can compete as if the the government creates a carbon tax so we realize it doesn't matter how cheap it is to burn coal, oil, or natural gas. in the long run, we cannot afford to keep doing it. at that stage, it can be scaled up dramatically. it is not cost-effective to do so now. foodstuffs and says -- food

substances, chemicals for vaccines, etc. levy ask a lifestyle question. if you're running out of food and can create a bug that makes more food, or a bug that creates more freshwater, or you could make more energy, there is a theme. the alternate approach it seems to me would be to do less. have fewer babies eat less, buy less, more gently on the earth. it strikes me like you are a more guy. vender: i can only control how many people have babies in my own local environment to some extent. [laughter] i don't know how to do that globally. we have a tremendous challenge with all the people we keep adding to the planet. within not too long, we could be approaching 10 billion people. it's not sustainable with the

approaches we are using in the consumption of everything. more is the problem. we could have less babies, but unless we are going to roll back populations, which i don't think anybody is advocating, at least not in the political arena, we have to find solutions to more produce more food, more medicine, not at the expense of the environment but a recyclable , sustainable fashion. that is doable. we can support the number of people that we do have, but only if we change how we do it. robert: my last question because we're almost out of time, i'm curious about the ebola story right now. rather quickly, when you watch that story, since you have been involved in virology and dealing with the bird flu as well. what are we doing right at the moment and what do you think we are doing wrong? vender: ebola is primarily a

public health management problem. there has been numerous outbreaks in the past and they've been managed by good containment. because of the location and on the borders in a war area, those containment issues fell apart and it started spreading around. ebola isn't a lethal disease most of the time. i understand a group at harvard has been working on treatment in africa and they are down to around 12% mortality by using good medical practices. yes, it would be great to have a vaccine to treat it, but containment is the most important thing initially. obviously in the future, as we've done with the flu vaccine

we could synthetically make a vaccine very quickly, we can e-mail it around the world. you can use one of our devices to print it and it can be given locally to stop future flu pandemics from ever spreading. that has to be done disease by disease. robert: i would love to tell the audience -- this guy is working on a digital biological converter which if somebody is sick and vomiting and stuff you can scoop up the poop, figure essay what is in the virus is contracted, send the genome to a lab anywhere in the world, and they can come up with a vaccine and send it to you digitally and you can make it where you live. one day soon, never, maybe? vender: one day soon. we can actually do that right now with newly emerging flu vaccines. the u.s. has a stockpile of a

the h7n9 vaccine. it is the first synthetic dna vaccine that my team at the institute did. it proves the paradigm can happen, so we have a stockpile of the new vaccine before a single case has occurred in the u.s. for the first time we are ahead of the game, instead of trying to play catch-up. it's a matter of working out the right to basis of the basis of the disease. one size does not fit all, but the future will be rapidly emailing these around, downloading them, and blocking the transmission, and we should be able to eliminate future pandemics. robert: santa claus has very little on this guy. his presents are huge and fascinating. we are out of time, santa.

everybody say goodbye to him applause-wise so he can hear you. [applause] >> here are some of our featured programs. saturday, president of americans for tax reform says americans are tired of the irs and our tax system and sunday night at 8:00 susan butler on president franklin roosevelt and joseph stalin. saturday night at eight eastern lectures on history. university of virginia professor murray on how civil war veterans unions have changed -- reunions have changed. and on sunday we are alive

commemorating the end of the civil war. >> on tuesday, world bank president jim young kim spoke at the center for strategic studies. guesstimates that in 2030 the world will need 40% more energy and have 40% less freshwater. this is just over 45 minutes. john hamre: let a lovely day. all of a sudden, the cherry blossoms are greeting us.

we always start with the safety announcement. if anything happens, follow my instructions. the exits are right here in front of us, the emergency escape is on that corner. we will go outside and made across meet across the street under the cherry blossoms. please follow me if we have to do something. i will be very brief because we want to hear dr. kim. this is a remarkable man who has done an done exceptional things with his his still short life. i can't believe everything he has been doing. and now he is taking on one of the most audacious goals possible to eliminate extreme poverty by 2030. there so many problems in washington today. we are obsessed with them, whether it is iranian deal isis. but here we have generally a genuinely inspirational opportunity to focus on the

problem. i can't tell you how grateful i am that someone of dr. kim possible talent and energy is willing to lead all of us into a consciousness about what is possible. it is not the problems we are dealing with. it is about the opportunities for our future. i would like to say thank you relatedness after and . would do if your warm applause please welcome dr. kim. dr. kim: good morning. thank you, john, for having us here and for that kind introduction. thank you for being here and for those on the webcast, thank you for watching. this is the second time i have spoken at this beautiful room and i am very happy to be here again. before i begin, i want to pause and remember the 147 students at the college in kenya who were

senselessly murdered a few days ago. schools and universities are sacred ground and all who study there should be safe. as a former university presidents, it hit very close to home. i will actually be talking about conflict fragility and violence a little bit later. just 15 years into the new millennium, the economic development in poor countries and emerging market is truly at critical crossroads. much of the attention of the near horizon, concerns about the slow moving global economy uncertainty about the price of oil and conflicts in the middle ukraine country and eastern parts of africa. we see that the decisions made this year will have an enormous impact on the lives of billions of people across the world for generations to come. 2015 is most important year for global development in

recent memory. in july, world leaders will gather to discuss in addis ababa to discuss how we will finance our development priorities in the years ahead. in september, world leaders will come together with the united nations to establish the sustainable development goals, a group of targets and goals set 42030. in december, world leaders will gather again in paris to work out an agreement based on government commitment to less than the severe short and long-term risks of climate change. at the same time, we witness the emergence of a major new player in developing development, the asian infrastructure investment bank led by china. now with more than 50 countries and regions signing on as members with the right environment, labor, aviation the asian infrastructure

investment bank and the new development bank established can become great new forces and economic development of poor countries and emerging market. we at the world bank see the development bank see potentially very strong allies in tackling the enormous for bringing much-needed infrastructure to the developing world. our mission at the world a group is defined by two goals. to an end extreme poverty by 2030 and boost shared prosperity, a 40% poorest in low and middle income countries. these goals are ambitious and as we think about the development banks, we have to admit there is more than enough work to go around. a 2030, we will likely need 40% more energy and face a 40% shortfall of fresh water pressures that may be further accelerated by climate change. we estimate the developing world will need an additional $1

trillion to $1.5 trillion every year in infrastructure roads, bridges, energy plants and increasingly the facilities. the world bank including the new ones could form alliance is, work together to port development that addresses these challenges, we will all benefit, especially the poor and most vulnerable. it is our hope indeed, our expectation that these new institutions will join the world's multilateral development banks and private sector partners on a shared mission to promote economic growth that help support it. i will do everything in my power to find innovative ways to work with these banks. next week during the spring meeting of the world break group international monetary fund in washington, i will continue discussions with chinese and other officials about the exciting potential for collaborations. ambitions for economic development

couldn't be higher. we no longer talk about billions of dollars for economic development. we are talking about trillions of which means we must be creative dollars, and use our resources to leverage the much-needed private sector investment to build infrastructure and create jobs. the decisions we make this year and the alliances we form in the years ahead will determine whether we have the chance to reach the goal of the poverty in 15 years. good news the good news is the world has made substantial progress already. when the population of 5.2 billion people, 36% at an extreme property. today the world population of 7.3 billion people an estimated 12% live in extreme poverty. over 25 years , we have gone from nearly 2 billion people in extreme poverty to fewer than 1 billion. we still have nearly 1 billion people living on less than $1.25

a day. few of us can even imagine what that is like. let's remember what poverty is. poverty is 2.5 billion people not having access to financial services. poverty is 1.4 billion people without access to electricity. poverty is having to put your children to bed at night without food and poverty is not going to school because in order to survive everyone in the family needs to make a few cents everyday. some say it's impossible, especially in 15 years, but we know it's possible. we know in part because of our success and because we've learned from years of experience about what has worked in particular context and what is not. later in the year i will talk in-depth about strategies to boost prosperity for the bottom 40%, especially in the middle income countries. today i

want to talk about a broad strategy to lift nearly a billion people out of extreme poverty and into the modern world. inside the world group, for the past 50 years we continuously distilled and analyzed our global experience in fighting poverty. as a result our advice to government has evolved over time. we now know our strategic investment advice must evolve even more. our strategy to end extreme poverty based on the best global knowledge available can be summed up in just three words. grow invest, and ensure. let me talk about each one. first, growth. the world economy needs to go faster and more sustainably. he needs to grow in a way that ensures the poor receive a greater share of the benefits of the growth. we can reach the end extreme poverty only if we mark a path today towards a more robust and

inclusive growth that is frankly unparalleled in modern time. decades of experience tells us that economic growth is the primary driver of the increase personal income and poverty reduction. sustained growth require stability in the form of low inflation, manageable debt levels and reliable exchange rates. government policies must prioritize growth in sectors that increase incomes of the poor. the world bank group will continue to support government to make investments in a broad variety of areas in the fight to extreme poverty. in countries with greater amounts of mineral wealth, governments can encourage growth by investing in improved education systems in and the development of more diverse economy. and most of the developing world, efforts to end extreme poverty will require us to focus on boosting agricultural activity. despite

the global migration, 70% of the world's extreme poor still live in rural villages. they are mostly farmers or work in informal jobs providing services to the rural population. our experience in china shows us that in poor economies growth in agriculture is four times more powerful in lifting people out of poverty than growth in manufacturing services. how can countries follow china's example. it depends on the local circumstances. sometimes it's a matter of giving farmers more control over how and what they produce. this is what vietnam did in the economic renovation of the late 1980s. over the next three decades, these became a top exporter of rice, coffee and tea and its poverty rate fell

from 57 and 25%, helping farmers improved yields, it requires increasing access to better water, electricity. according to one study in bangladesh, six years after constructing 3000 kilometers of roads to connect communities to markets household income increased by an average of 74%. promoting growth in agriculture depends in part on the integrity of the global food systems. at next week's meetings, we will be discussing the paper to develop a strong system, one that raises incomes of the poorest, provides adequate nutrition at the same time combat climate change. that is the growth part of the strategy. the second part of the strategy is to invest. either that, i mean investing in people especially to education and health. the opportunity to get children off to a start happens just once. investments early in life is far greater return than those made

later on. poor nutrition and disease could have lifelong implications for mental and physical health, educational achievement, and adult earnings. clean water and sanitation facilities at home and in school also have a substantial impact on future professional opportunities to help children avoid infections that cause developmental disabilities and ensure consistent school school attendance for girls you and after the beginning of menstruation. investment in the growth of women in particular are is important because they have a multiplier effect on the well-being of an empowered through education, they have healthier children and are more likely to invest in the next generation. in schools, we also must set clear learning standards. the level of learning

among young people today in many countries is alarming. over 50% of young people in kenya who have completed six years of schooling cannot read a simple sentence. over 70% of children in mozambique do not have basic numeracy skills. those low achievement levels have devastating implications for when people look for jobs. we know using new technology can help transform educational outcome. for example, bridge international academy is a software and tablets in schools to teach over 100,000 students in kenya and uganda. after two years, students average scores for reading a high risk and high above their public school appears and the cost per student is just $6 per student per month. one of the most effective ways to encourage investment extreme poor and educational service delivery is accountability. one study found that the doctors

spent only 90 minutes a day seeing patients. according to other research in india, primary teachers in public schools are at 25% of time and primary care doctors are absent 40% of the time. governments and providers create incentives for public employees to do better. those that do so will reap far greater returns on human capital investment. the final part of the strategy is to ensure. this means the government must provide social safety nets as well as systems to protect against disasters and the rapid spread of disease. national social assistance teams protect against cutbacks in employment and promote growth in human capital development. for instance, cash

transfer programs can be substantial and cost effective. brazil's boca familia has cut extreme poverty by 28% for a cost of just 0.5% of gdp. despite successes like this, 870 million people in poverty still do not have any access to social assistance. another critical element is protecting people against catastrophic risk. examples include universal health care schemes, efforts to improve the quality of health care services, disaster risk management and financing tools like catastrophic bonds or

drawdown facilities. for those not in finance this may sound technical. the so-called catastrophic bonds make funding immediately available to countries responding to natural disasters. similar approaches should be used to protect against pandemics. ebola revealed the shortcomings of international and national systems to prevent, detect and respond infectious disease outbreaks. it also showed us the poor are likely to suffer the most from pandemics. the world bank group has been working with partners on a new concept that would provide much-needed rapid response financing in the face of an outbreak. the idea behind the pandemic emergency facilities to mobilize them leverage public sector resources to public funding and market private insurance mechanisms. in the event of an outbreak

countries would receive rapid disbursement which would in turn help contain outbreaks of us save lives protect economies. there is no single blueprint for countries in their efforts to end extreme poverty. the strategy outlined suggest there are clear priorities for the future. first, agricultural productivity must increase. second, we have to build infrastructure that provides access to energy, irrigation. third, we must promote freer trade is specifically provides greater access and enables enables entrepreneurs and lower middle income countries to grow businesses and create jobs. fourth, we have to invest in health and education, especially women and children and finally we have to implement the social safety net and provide social insurance, initiatives that protect against the impact of natural disasters and pandemics. nine months ago the world bank

started one of the most ambitious reorganization in our history. we knew we needed to restructure in order to meet the evolving needs of lower middle income countries. and a world where capital is more easily available, we need to add the greatest strength and that is the ability to marry our vast knowledge of innovative financing to deliver programs on the greatest impact on the poorest. a new global processes crosscutting solution areas and regional unit are working closely with government to develop customized poverty reduction programs. these are based on analysis of a wide range of local factors including demography and location of people in extreme poverty. our aim is to help countries translate global experience into practical knowledge and solve their most difficult problems. we know and in extreme poverty will be extraordinarily difficult. in fact, the closer you are a goal, the more difficult it will be. the most

persistent poverty will be in fraudulent environments. in five years we expect more than half the world's extreme poor will live in conflict affected areas. conflict as we know when we've seen over and over can have devastating effects efforts to fight poverty. joblessness, discrimination, corruption. these factors, for example, made it easier for extremists in the middle east and africa. more violence destroyed elting, bridges, schools, clinics and most importantly lives. the destruction of course cost is more poverty. we can help break the vicious cycle if we implement development policies and programs that promote growth, investors in the capital

and ensure people against risk that can plunge them into poverty. governments must be more accountable to citizens of work to reduce arbitrary treatment at the hands of security forces and the demand for bribes for poor people. this too will help minimize the likelihood of violent conflict and eliminate drivers of poverty. when conflict persists, the hard truth is that poverty reduction is extremely difficult. progress is possible. over the last two years i've made three trips to africa to the great lakes region, to the horn of africa. in these three regions we worked with partners to collectively move billions of dollars to promote regional development. we've taken steps to increase economic cooperation, which we hope will make conflict less likely.

partners have included the european union, african development bank, african union. this kind of collaboration is what gives us hope and a fighting chance to end extreme poverty. still, it won't be easy. development has never been easy. we find encouragement in the record of the past 25 years. we reduce extreme poverty and shown that great gains can be made through the strategies of grow, invest, and insurer. in the fight to end extreme poverty, many countries have conceded in taking something that seemed impossible and made it possible. the end of extreme poverty is no longer just a dream. the opportunity is before us. governments of the world must seize this moment. private-sector partners must step up. the world bank group,

multilateral partners and new partners on the horizon must also seize the moment. we have to now collaborate with real conviction and distinguish our generation as the one that ended poverty. we are the first generation in human history that actually can and end extreme poverty. this is the great challenge and a great opportunity. we will be guided by a half a century of evidence . we can end extreme poverty with a final push must begin right now. thank you very much. john hamre: i wish i could start

every day with that. thank you. dr. kim has a board meeting and will have to leave at 10:25 p.m.. when he said this was not about spending billions of dollars, it is about spending trillions, you are speaking about the profit-seeking private-sector. governments usually know how to work with the nonprofit sector of the private sector, that they do not know how to work with the profit-seeking sector. what are your thoughts? dr. kim: if you look at the numbers, john, official development assistance, foreign aid, was about $130 billion last year.