Hello and welcome! To succeed in the transition to a low-carbon world, we need to profoundly change the current rules of the economy. There are several stakeholders: regions, cities and municipalities, international institutions, and development banks. In this video, we will speak about the State's central role to stimulate and drive the transition. We'll discuss several aspects essential to the State's role. The State is on the front line of dealing with climate damage. It is the State's duty to provide long-term stability, and it alone can produce the strategy and plan. The State is the guarantor of the law, and it alone can implement and enforce the standards and regulations to enable the transition. The State is responsible for public interest, and it alone can collect and allocate the fiscal resources to support the transition from a fossil-fuel to a low-carbon economy. Of course, the question of the State's role arises in different contexts. In developed economies, the State plays a central role, even in the most liberal amongst them. In emerging countries, and in the least developed countries, even the concept of State can differ according to their history and culture. Democracy, at least in the way we understand it in the West, does not exist everywhere. Sometimes, civil or foreign wars threaten the State's existence. In this video, we will just look at the economic aspects of the State's role in the transition. We have recently experienced several natural disasters connected to climate change. In France, in spring 2016, the rise of the water level of the Seine and its tributaries is estimated to have cost almost 2 billion euro. The system in France requires owners to take out insurance, and the insurance to include a fund reserved for natural disaster coverage. The State decides whether or not an event constitutes a natural disaster: The insurers can then use these funds to compensate the owners. The wildfire at Fort McMurray in Canada in July 2016 was estimated to be very costly to Canada: mobilising firefighting resources, temporary accommodation for 90,000 people, the stopping of economic activity and therefore tax revenues. In countries where insurance for owners is not obligatory, covering the cost of climate damage will largely fall to the State. In Florida, for example, most private insurers have withdrawn from the coastal real estate market due to the risk of sea levels rising. Half of Miami, a city of 6 million inhabitants, could be underwater by 2050. With no private insurers involved, the State will be forced to cover the costs of natural disasters directly, which is the case in most countries in the Global South. States must act to avoid this, so, promote the transition, but also ensure they have access to sufficient financial resources to cover these costs. We have seen that investment in the transition will relate to many huge infrastructure projects or large-scale roll-out of decentralised solutions: railway and tramway networks, development of light and electric vehicles alongside implementation of charging stations, thermal renovation of buildings, roll-out of solar power kits, solar cooking systems in appropriate countries, and reforestation. These types of projects will require significant investment. To make the cost acceptable to everyone involved, they must be financed over the long term: 10, 20, 30 years, or more. But to ensure that private investors also commit over such a long period, they need to be certain that the tariffs and regulatory framework are sufficiently stable. Generally, it's the State that is best equipped to provide this stability. Macroeconomic instability and political risk are the two biggest hindrances to direct North-South investment, according to a study by MIGA, the insurance subsidiary of the World Bank. Another example is territorial planning. For a successful transition in the South, the construction of medium-sized compact cities must be favoured over congested megacities with saturated transport networks. This can only be achieved through very advanced planning of all networks within these cities and by managing land authorisations in a centralised way. The transition therefore won't work if the State cannot strategise and plan. To quickly move towards a carbon-neutral economy on a large scale, new economic rules must be implemented, placing constraints on industries highly dependent on fossil fuels, in particular. For example, a tax on CO2 emissions, or even standards prohibiting the production and use of products that produce high amounts of emissions, in the automotive industry, the housing sector, and so on. The development and implementation of these standards can't be entrusted to the private sector that would act as judge and jury. On the other hand, only the State is able to have a global vision of all industries and territories, and the economic consequences of such decisions. Lastly, standards are a tool of law, and the State is the guarantor of the law. As such, the State must not only enact laws, but also have the resources necessary to check whether or not they are being applied, and to prosecute those who breach the rules. This has been clearly shown by the recent case of fraud by car manufacturers in Europe. States have significant needs when it comes to adapting to climate change; the UNEP calculates 50 billion dollars per year over about 15 years, just for the least developed countries. It's obviously very difficult to calculate the projected cost, as we don't know exactly when or where climate change is going to hit. What we do know, however, is that the sooner we act to tackle the problem, the less money we'll have to spend. In France, for example, in the coastal areas most exposed to rising sea levels, new building projects are already prohibited, which will help limit the costly consequences of marine submersion. Any investment made by States as of today in risk prevention will allow money to be saved in the future. This spending is often insufficient in both the Global North and South due to short-termist decisions or lack of fiscal resources. It is also essential that the State has enough budgetary resources so that it can assist in the conversion of sectors that are highly dependent on fossil fuels, which will need to be transformed. In the countries of the South where the State is the largest fossil-fuel producer, new income must be found, which could partially come from lowering the number. of subsidies granted. Finally, the State needs the means to collect observational data on climate change, to commission public research, and to include the crucial parts of the transition in its economic forecasting models. All of this obviously requires technical and human resources. In conclusion, public policies are essential to the transition being implemented both quickly and adequately. Importantly, the private sector cannot be a driver in this process. Its priority is not in the public interest, and it would not be appropriate for it to set out the remit. But of course other stakeholders must work alongside the State; we will look at which ones during the next sessions. Thank you for listening!