Transcript

Adam Matthews (00:01): Is there a path for the likes of a shell or BP to transition? That means that yes, they are producers of oil and gas at the moment, but are they able to reshape their business to become a very different company in the future? Where, those companies are not doing that and playing that constructive role. Then I think you quite clearly got to ask yourself, is it right to remain invested? If you don’t believe that that company is going to change,

Izabella Kaminska (00:26): It’s not as easy as just divesting because you don’t want to kill the patient along with the disease.

Michael Shellenberger (00:33): Yeah. I have a very basic physical and moral view of energy that I think are easy to understand, which is that uranium using nuclear is better than burning natural gas burning natural gas is better than burning coal and burning coal is better than burning wood.

Claudia Romo Edelman (00:57): Welcome to the Global Goalscast!

Edie Lush (00:59): The podcast that explores how we can change the world. In this episode, breaking our fossil fuel habit.

Claudia Romo Edelman (01:05): We must do it. There is no choice but how do we do it without economic disruption that could be as damaging as the climate catastrophe that we’re trying to advert.

Edie Lush (01:17): Today we’re going to be talking about transitioning off carbon. How do we do it quickly but also safely and fairly? We will speak with three real experts on transition pathways.

Claudia Romo Edelman (01:29): And I am super impressed with the people that we are having in the podcast today. You and I, their listener might not agree with everything they say, but each of them has really thought about the next 10 to 20 years in a deeper way and it is good for us to be able to debate and dialogue.

Edie Lush (01:47): For sure. We’re going to hear from the man in charge of investing the pension funds of the church of England, a leading force in green investing.

Claudia Romo Edelman (01:55): And we will also have an environmentalist who’s viewed by some others as heretic because he says he sees no way to core of climate change without nuclear power.

Edie Lush (02:05): And when we come back we’ll be joined by a special guest, a financial times journalist who’s helped us put this episode together. She is the editor of the FT’s Alphaville financial and markets blog.

Edie Lush (02:17): I can’t wait to talk to her and we will right after this.

Michelle (02:23): Thanks to CBS news digital and Universal Production music.

Claudia Romo Edelman (02:37): Welcome back. I’m Claudia Romo Edelman.

Edie Lush (02:39): And I’m Edie Lush. Claudia, welcome to season four!

Claudia Romo Edelman (02:43): Edie can you believe it?

Edie Lush (02:45): It’s exciting!

Claudia Romo Edelman (02:46): I know our third year of the Global Goalscast! I feel the world is really listening.

Edie Lush (02:54): I know! I was also thrilled, by the way, when capital.com called us influential. I think if we are at all influential, it’s thanks to all of our dear listeners.

Claudia Romo Edelman (03:06): We do have a very influential audience, Edie, those that care that are in positions of power, the decision makers, but also the people that are going to take these forward to our audience is a very influential audience. And particularly those of you who have listened and gotten more involved in the challenge of achieving the sustainable development goals.

Edie Lush (03:29): And today we’re going to talk about the biggest challenge of all: freeing the world from fossil fuels. Fossil fuels powered us to the world we have today. There are so baked into everything that removing them is a huge task.

Claudia Romo Edelman (03:44): Which is why our commitment to including everyone in the conversation is crucial. This podcast is produced by We are all Human. We are all Human is inclusive we need anyone and everyone to play a role and when bringing the voices that should be here to the equation and to say these in terms of the sustainable development goals or SDGs is how do you achieve the global goal 13 which is climate action while also achieving global goal one: eradicating poverty or goal eight: decent work and economic growth.

Edie Lush (04:19): So to help us take on this big question about how to transition away from carbon, we turn again to our colleagues at the financial times. Delighted now to be joined by Izabella Kaminska, the editor of the FTS Alphaville blog. Welcome.

Izabella Kaminska (04:32): Hello. It’s really nice to be here. Thank you for having me.

Claudia Romo Edelman (04:35): Great to have you, Izabella. Now you are more than just a great guest. You’ve actually helped us make this episode and it all began with an item you wrote for the Financial Times Alphaville blog, isn’t it?

Izabella Kaminska (04:50): Yes, exactly. Just a bit of background. Alphaville is the stubbornly contrarian end of the FT, we’re the finance and markets blog has as mentioned and a bit to stay true to our name and give investors something called alpha outperformance. We’re always interested in exploring what investors are missing right now. Hence we end up being contrarian. The big investment trend now being ESG,

Claudia Romo Edelman (05:11): Iza are we know what we’re talking about, what, what is ESG, what does ESG stand for.

Izabella Kaminska (05:16): ESG stands for environment, social and governance investing, which is all about imparting those values into the investment space.

Claudia Romo Edelman (05:25): So tell us about the blog that you wrote.

Izabella Kaminska (05:27): It was just about sparking the debate and it was related to thinking about the potential social and economic damage that can happen if and when we just bow down to the immediate demands of say, climate activists. Because really climate transition is a balance. It’s a balance between maintaining the economy as it is and getting rid of off fossil fuel addiction. But if we move too quickly, the big risk is that we induce poverty or we create a sort of massive deterioration and living that ironically only makes the environment even worse

Edie Lush (06:00): And this is all happening in a week or in a few weeks when there’s a lot going on. BP has announced that it will be carbon neutral by 2050. Delta announced that it would be the first U S airline to go carbon neutral,

Claudia Romo Edelman (06:13): And also the KKR, Edie, launching a $1.3 billion impact fund. And part of what we will share this episode is how to keep track and how to distinguish between real transition and well, uh, not.

Edie Lush (06:29): So Izabella, let’s get the big picture from you. Why can’t we just say no to fossil fuels?

Izabella Kaminska (06:35): It’s not as easy as just divesting because you don’t want to kill the patient along with the disease. Just think about the Brexit debate. The Brexit debate was all about how we would be opening the door to self-imposed economic damage because of limiting our global supply chains and all these sorts of things are actually instrumental and pivotal in the in the fossil fuel economy. So if we just turn around and say no to that, there is a really big danger that we decrease living standards for everybody that can create all sorts of societal responses that include mass protests, huge amounts of economic destabilization in general. We obviously have to do something about climate change that is not negotiable, but we must also think down the line in terms of what the unintended consequences are. We can’t just think immediately there is going to be an upside from just boycotting BP.

Edie Lush (07:32): So we have to think about lowering emissions quickly while maintaining economic growth, especially for those countries that you mentioned that are starting to grow faster and pull themselves out of poverty.

Izabella Kaminska (07:44): The real challenge is to find a solution that allows us to have both and a lot of people out there think that maybe the pathways is going more towards nuclear options or you need that big moonshot, some sort of innovation that hasn’t yet happened. As far as the current complex of renewable technologies, it’s clear they’re there, they’re available, they’re actually at the moment too much capacity of solar and not enough demand for it. So from that perspective, it is the question of how do we achieve the transition without necessarily hurting the public in such a way that it puts the clock backwards.

Claudia Romo Edelman (08:20): I love the way that you put it, of not killing the patient while you’re killing the disease. So one of the people we spoke to is Adam Matthews.

Edie Lush (08:30): I went to see him at the offices of the church of England in beautiful Westminster London in the pouring rain. Adam is head of ethics and engagement for the churches pension board.

Adam Matthews (08:43): We are pension fund and our responsibility fundamentally is to the 40,000 beneficiaries that we have, which are largely members of the clergy to provide a pension for them to retire.

Edie Lush (08:53): I asked him to explain the investment choices he’s making, balancing the hopes of these retirees with the huge transition the world must make from fossil fuels. In other words, a microcosm of the challenge that we all face.

Adam Matthews (09:06): Well, I suppose my starting point is can a, an oil and gas company transition consistent with the science and the economics of the Paris agreement? Is there a path for the likes of Shell or BP to transition? That means that yes, they are producers of oil and gas at the moment, but are they able to reshape their business to become a very different company in the future? Because at the moment you have a very significant part of the global economy fueled by oil, gas, thermal coal. A growing part of it is supported by renewables, but for us to shift from where we are today to where we need to be, you’re going to need to see companies shift the way that they provide energy into that system. Now if a company comes to me that says, right, okay, we acknowledge that we provide at the moment oil and gas, but we see a role for us to be able to transition from that to start to reduce that contribution of oil to start to transition through gas into renewables and other ways of supporting the energy grid. Then if that’s credible, if it lines up with the science, the economics, then I think that’s an a legitimate path the company can take.

Claudia Romo Edelman (10:10): So to say these another way, you do not just abandon entire industries in an instant. You look inside it industry to separate good corporate citizens from, well not so good corporate citizens. So to do that Adam Matthews and colleagues have created a tool called the transition pathway initiative that any investor can use.

Edie Lush (10:33): In fact, anyone can use it. It’s very cool. So if you go to their website, you can see who’s starting to make changes, who is aligned with the Paris accord, like Iberdrola the utility company and who isn’t like interestingly enough, Berkshire Hathaway,

Adam Matthews (10:48): we have a range of ways in which we can sort of make interventions, align our investments, incentivize and I think tools like the transition pathway initiative provide a lens for asset owners in particular to understand the transition, to be able to identify which companies within those sectors are transitioning, which ones aren’t, and to really start to sort of use the tools that we have at our disposal be their stewardship one such as our votes on directors, filing of shareholder resolutions or actually reallocating our capital to other companies because I think there’s multiple interventions to be made as asset owners. I think we’re quite uniquely placed to make a number of them and to work in partnership with others, governments, companies, et cetera, wider society and trying to sort of shift at a level that’s related to the the scale of the challenge here. I lead on the engagement of Royal Dutch shell and I do that on behalf of the climate action 100 network, which is a 42 trillion coalition of investors wanting to see companies transition and there we’ve used the TPI tool to really have a very detailed deep discussion with Shell about what’s their path of transition, how do they change from fundamentally an oil and gas company to become an energy provider of the energy solutions for the future market that will exist that will be a low carbon one.

Edie Lush (12:07): Adam Matthews gave me a sense of the scale of the challenge and its importance. If you add up all the actions of all the public companies, they blow right through the Paris agreement goal of holding temperature increase below two degrees Celsius.

Adam Matthews (12:21): We’re looking proactively for positive investments, ones that are in the low carbon transition in infrastructure. That is part of that transition, but also looking at the way in which we sort of invest through things like our passive investments that simply track the market. Well, the market at the moment is a 3.8 degree market as the bank of England governor publicly warned earlier this year. So if we just track that market well we’re tracking and we actually reinforce in a world that really our beneficiaries don’t want to retire into and doesn’t suit our financial needs.

Claudia Romo Edelman (12:55): So instead of tracking the market and reinforcing a 3.8 degree increase in global temperatures, the church is following an index fund that takes climate into account.

Adam Matthews (13:07): We’ve put 600 million pounds of our passive investments from the pensions board into that index to demonstrate it is possible to use forward looking data on companies to differentiate which ones are transitioning, which ones aren’t. And excluding those from the index that haven’t set targets or are not responding to the requests for them to make such targets. And so for us, we’ve begun that process of differentiation and we’ve signaled that passive investments doesn’t mean that you’re passive in your responsibilities and that you can take action. And so I think there’s a multitude of ways that we sort of intersect direct engagement. The way that we align some of our finance, the way that we can incentivize by trying to find positive investments and then the last one I’d say is the way that we intersect with public policy. We’re looking at the way companies lobby through their industry associations and we want to see consistency in that because we think is a key interface with the nature of the regulatory environment that needs to be as ambitious as possible but is constrained by negative lobby and of industry associations.

Edie Lush (14:06): The detail captured in the transition pathway initiative is fascinating. You can look at an industry and see how well it’s aligned with climate goals. Oil and gas, pretty bad, shipping on the other hand, much better, but what’s even more important as Adam explained is that you can single out individual companies within an industry

Adam Matthews (14:26): Where those companies are not doing that and playing that constructive role, then I think you’ve quite clearly got to ask yourself, is it right to remain invested? If you don’t believe that that company is going to change. And for us tools like the transition pathway initiative is provided in a way to really start to differentiate between those that are starting to change their businesses very fundamentally with those that aren’t. And I draw the contrast between the likes of shell, BP and the likes of Exxon and Chevron where quite clearly you’re seeing some moving and some quite simply resisting. And for us we’ve started to differentiate. We’ve started to reallocate our investments away from those companies so we no longer hold Exxon. We no longer hold Chevron because we don’t see it at the moment that they’re part of the transition. And I think you’ll see increasingly investors move in that way. What we’ve wanted to do really was to have a credible, transparent, academically rigorous way of being able to differentiate which companies are moving in line with the transition and which aren’t. And so the index we created differentiates basically companies that are set in those long term targets and those that don’t. And then it sort of will reward a company that sets a net zero target and actually double the investments. So a company like Iberdrola in Spain gets double the investments as a result of that index a company like Exxon that doesn’t have targets that doesn’t disclose to TPI isn’t included in the index.

Claudia Romo Edelman (15:51): That is quite bold, this index. And so one of the big announcements in the last couple of weeks was about BP and now seeing that they are going to be net zero. Lexicon alert! That means carbon neutral by 2050.

Adam Matthews (16:06): There’s a lot of detail to be filled in and we’re still in dialogue to understand exactly how much of all of their activity is covered by these new commitments. But my expectation is that when there’s a new assessment by the London school of economics TPI team, that this potentially puts them in as a company that could become investible from the index. But we need to go through that independent academic process that’s led by London School of Economics.

Edie Lush (16:29): To be clear. It’s not just the church deciding if BP is joining the ranks of the righteous, but there’s an independent group of sharp pencils at the London school of economics making these assessments.

Claudia Romo Edelman (16:41): Yes, it had to be the LSE London school of economics. That’s my Alma mater!

Adam Matthews (16:47): And I think we’re in a very new phase. It’s going to be those companies that are making the commitments so the ones that investors are going to work with and you’ve actually got and got this sort of alignment of interests as a pension fund along with many other pension funds that we work with. We’re committed to seeing net zero achieved by 2050. We know we can’t achieve all of that by ourselves across multiple asset classes, across the changes that need to happen in society. You’ve got companies like Shell equally acknowledging that they need to make longterm commitments and BP net zero commitment. We have a mutual interest and an aligned interest of making interventions now to drive the transition together in certain ways and those companies making those commitments become partners in that space. And I think companies like Exxon are exempting themselves from that new in effect, collaborative, very different world that I think you’ll see finance aligning to very significantly and potentially very disruptively for a company like Exxon.

Claudia Romo Edelman (17:42): Many oil executives defend their business by saying they are still serving of the mind. Adam Matthews addressed that directly.

Adam Matthews (17:52): Lots of the sectors that demand energy, shipping, aviation, cars, freight, these are all demand side drivers of the energy that these companies provide. If those that are driving the demands start to change, well the new oil and gas sector has gotta be responsive or they’re going to be providing things that people don’t want. And I think the whole focus on the engagement on the investor side, on the sort of finance center has got to shift onto these demand side drivers and really working with them on what is their net zero carbon pathway. How can you basically decarbonize freight traffic across Europe or within key countries? How does that happen? What needs to be put in place in terms of infrastructure? What are the technologies that are needed and how can those companies that have started to move as the energy producers in a positive way and set in similar ambitions, how can they work in partnership with the truck companies?

Edie Lush (18:52): Izabella, you made an interesting observation in Alphaville the other day that divestment can actually undermine climate action rather than foster it. Tell me about that.

Izabella Kaminska (19:02): Well, it’s in response to all these activists sort of coming along and demanding everybody drops investments immediately, but the topic of divestment being controversial has been around for ages. When I was at the UN climate finance talks in 2015 it was already understood then, that perhaps it’s not the best pathway because actually you’re, you’re having to sell those assets to somebody. In many cases, you’re selling those assets to opportunist market players who are not so interested in climate, don’t have the same responsible investing parameters around them. Therefore, are you really helping matters? In the long run, you could say, well, you know, they are starved of financing these bad actors through divestment and we’ll wind up because no one will finance them. But I would say that’s a really risky attitude because if it was that easy to starve out bad players, we would have solved the drug problem by now. Illegal drugs get financing, even though officially no one’s supposed to be financing them and the assets don’t go away, especially the operating ones. So if it really comes down to it, it’s a question of who then buys them and more likely it’ll be the rushes or China’s that come in and acquire these assets. Then you get a regime that takes ownership that doesn’t care at all about de-carbonization.

Edie Lush (20:16): So what do you make of the church of England’s method?

Speaker 4 (20:19): I think it’s a really logical method. I was really struck by the point that you have to stick with these companies and only if they’re not prepared to change, then you leave. It really reminds me again of the Brexit argument. I mean, we hear all the time that.

New Speaker (20:34): You just can’t get away with it!

New Speaker (20:34): Obviously it’s a universal truth that is usually better to stay in a club so that you can help influence that club. So just leaving is not the right policy. That said, I think what the church of England, the good point they make is eventually you get to a point where perhaps you can’t influence that body and then you can threaten to leave and hopefully through the negotiation of threatening to leave you, you change behaviors.

Claudia Romo Edelman (20:58): Hmm. Now Iza I’m just like going to Latinized your name.

Izabella Kaminska (21:03): It’s, fine!

Claudia Romo Edelman (21:07): Tell us you brought something with you, haven’t you like a new voice to the table.

Izabella Kaminska (21:11): That’s right. Some FT colleagues and I recently chatted with a rubber iconoclastic environmentalist. His name is Michael Shellenberger and his views on the pathway to a low carbon economy diverge in several ways from mainstream environmental thinking.

Michael Shellenberger (21:27): I have a very basic physical and moral view of energy that I think are easy to understand, which is that uranium using nuclear is better than burning natural gas, burning natural gas is better than burning coal and burning coal is better than burning wood. And that, what happens when you go from wood to coal to natural gas to uranium is you’re using a fuel that’s more energy dense, meaning there’s just more energy per unit of matter per mass. And you’re also decarbonizing, you’re also reducing a bunch of conventional pollutants. So if you go from coal to natural gas, you basically eliminate most conventional air pollutants by doing that and you cut your carbon emissions in half. If you go just from wood to coal, we think of coal is super dirty, but if you go from wood to coal, you move the smoke out of the house, right? And so coal might be very dirty, but it’s cleaner than burning wood or dung in your home and breathing the toxic air, which kills about 4 million people a year.

Izabella Kaminska (22:24): And it’s that logical progression on energy that leads Shellenberger his provocative views.

Michael Shellenberger (22:30): In the early two thousands I became very concerned about climate change and thought that the, the mainstream approach, which was to put a price on carbon through a carbon tax or some other mechanism wasn’t going to work because the carbon tax couldn’t be high enough to incentivize the new technologies and a bunch of other political problems with it. And what we thought mattered was to actually have some public sector support for renewables. And so we advocated for a major investment in renewables in the early two thousands that was eventually picked up by president Obama and the United States invested about 150 billion in renewables, energy efficiency, electric cars in the light between 2007 and 2015 but as soon as we started working on it, we realized there’s a bunch of problems with renewables that we were having a hard time solving. There were ideas about batteries and using a hydroelectric dams as backups, but a lot of the opposition to expanding solar and wind farms was coming from environmentalists who were concerned about the impacts on wildlife who were, you know, troubled by the, the noise, the sound they make. And the more that I looked at it, I started to realize that there was just a bunch of problems that I didn’t think that technological innovation could overcome. The first one is just that sunlight and wind are dilute. So to give you a sense of it, in sunny California takes 450 times more land to generate the same amount of electricity from a solar farm as it does from a nuclear plant. Well, there’s no amount of technological innovation that’s going to make sunlight more dense and there’s also no more amount of technological innovation that’s going to make it more reliable. So you ended up having a bunch of challenges that drew me to rethinking some kind of core beliefs. And at the same time I had a bunch of friends who were like, why don’t you take a second look at nuclear? And when I did, I realized that a lot of the fears I had had as a boy growing up at the end of the cold war were misplaced and that this was maybe our most misunderstood technology.

Izabella Kaminska (24:18): I asked him about the anti-nuclear and climate movements.

Michael Shellenberger (24:21): A lot of us that grew up in the cold war were afraid of nuclear war and when the cold war went away, meaning that there really wasn’t much risk of a nuclear war. I think those of us that had a sort of apocalyptic vision then mapped that onto climate change. I’m very concerned about climate change. I don’t have an apocalyptic view. I think it’s a a hundred year problem, not a 10 year problem. I think that we’re going to solve it and that it’ll be a bigger problem for poorer countries that failed to adapt, but that’s also solved by more energy. The second thing I think is that there’s just a kind of radical agenda behind thinking of climate change as apocalyptic, which then justifies all sorts of things that people wanted to do before they were ever worried about climate change. If you read Naomi Klein’s book or George Monbiot at the guardian, there’s a sense of investing in things like community agriculture and mass transit and all sorts of things that might be well and fine, but they’re not things that necessarily move the needle in terms of carbon emissions and I think the third thing is more of a spiritual issue. This is how I end my new book that’s going to come out in June, which is that I think that those of us that are secular, that no longer believe in traditional religions still had a desire to believe in some kind of apocalypse and arguably some kind of higher power. This is why so many people look in environmentalist and they go, boy, that sure looks like a religion because we’re basically treating scientists like priests, we’re treating nature like God, and we’re suggesting that the world will end unless everybody adopts a new morality. You have to stop flying. You have to stop driving cars, you have to stop eating meat. You know, the best science says if you stop eating meat, you might reduce your emissions by 4%, 2%-4% the main event is decarbonizing energy, and the only countries that have done that have done it with hydro and nuclear and only nuclear is really scalable. But then at that moment people say, Oh gosh, no, we don’t want nuclear.

Izabella Kaminska (26:15): One of Shellenberger’s iconoclastic views is on carbon pricing, which many economists and environmentalists still believe is essential to shift demand away from fossil fuels.

Michael Shellenberger (26:25): The mantra for like the last couple of decades was that you need a price on carbon. You need a carbon tax. I think that’s gone away a bit in most recent years because it hasn’t worked, but the only reason that anybody could ever say that a carbon tax was the most efficient way to deal with climate change was under the assumption that every country in the world would have the same carbon tax that would be to prevent what they call leakage. Meaning that your industries don’t then go to a place with cheaper energy because they burn coal. Well, first of all, that’s ridiculous. Politically. It’s never going to happen. But also it’s like why would the Congo need to have a carbon price the same as Britain’s? That’s just completely unfair.

Izabella Kaminska (27:03): In Shellenberger’s view, Europe has run a natural experiment that answers the question of how the world can get off fossil fuels. France used nuclear, Germany did not.

Michael Shellenberger (27:13): Well, I think the easiest way to understand it is just to look at France and Germany and we had a natural experiment over the last 20 years. France produces one 10th of the carbon emissions per unit of electricity as Germany and spends about half as much for electricity. Germany has seen its electricity prices rise 50% over the last 10 years. They are going to have spent $580 billion by 2025 and they still only get 37% of their electricity from renewables, whereas France is somewhere around 88% clean electricity. So there you have it. It’s interesting because of course solar panels and wind turbines have gotten cheaper. So why are they making electricity so expensive? Well, I always point out, you know, corn, rice, beans, the commodities that use to make food have gotten a lot cheaper actually over the last 20 years and yet restaurants keep getting more expensive. How could it be because electricity’s a service like going into the restaurant, you know, we think it’s a commodity because it’s the same everywhere. We have electricity wherever we want it. Whenever we went to 24 hours a day, seven days a week. But the way that the electricity grid works in a way that provides cheap electricity is by always having supply and demand in harmony. So you’re always producing just as much electricity as you need. Otherwise you have blow outs from too much or you have blackouts from not enough. Well that gets disrupted as soon as you start adding large amounts of unreliable electricity from solar and wind. Hydroelectricity is different because hydro electricity is reliable. I think it’s the highest form of renewable power. It’s the one renewable source of energy that actually allows countries to industrialize. No poor country has industrialized on wood and dung or solar panels and wind turbines. You need constantly running 24 seven electricity to run factories. If you’re going to compete for an H&M factory or a Nike factory or whatever, Ethiopia is now doing this, they’re taking some of the clothing factories that that labor prices are too expensive in China for. They did it by building a big dam, right, and so then when you see countries that have then decarbonized the rest of their grid, like Sweden and France, they did it with nuclear. We’ve not seen a single country do that with solar and wind and it’s because it’s not possible. The land requirements are too large and the unreliability problems are too disruptive. So everybody says what about batteries? Batteries are greater for your cell phone and your laptop, but are prohibitively expensive for powering the whole grid. Just to give you a sense of it, by the way, nuclear would also benefit from batteries, but it would take 10 times more batteries and thus times the cost to have to back up a grid of solar and wind rather than a grid of nuclear. That’s because the nuclear plants run 90% of the time. Solar and wind are just run 10 to 40% of the time.

Izabella Kaminska (29:55): My colleague Tom Hale asked about the arguments that averting climate catastrophe calls for changing consumption habits.

Michael Shellenberger (30:02): So if I go and say, look, I’m going to imagine this completely different reality, we may call it a utopia, and in my reality we consume 10% of what we consume now and we’re all powered by renewables and we all live in harmony with each other. Sure. Of course. That’s what they say. Is there any realism to it? I don’t think so.

Edie Lush (30:26): Izabella, thank you so much for sharing that interview with us. It’s striking to me how he can take a point that isn’t that controversial and then make it sound like a stick in the eye. Does anyone think that changing consumption habits on its own will curb climate change?

Izabella Kaminska (30:40): I don’t think anyone does think that and certainly he tends to be quite controversial in nature because he’s putting out these pieces, the big think pieces sort of saying, Oh, renewables are not the answer, et cetera, et cetera. But you know, when I met him I thought he did make some very important and compelling points when it comes to solar for example, the backlash from the industry is always, well no solar is coming down in price. What is he on about? But his issue, if you really listen to what he’s saying is that it’s about reliability and reliability is really, you know, you’re not substituting like for like fossil fuels or reliable, no matter how cheap those modular units become, they’re never going to be that reliable and it’s that unknown unknown that becomes the cost in the system. So changing consumption is not going to change things in and of itself for sure. But we have to understand that perhaps there is the bigger point here, which is that all this energy pricing is relative to the consistent needs of society and fossil fuels unfortunately have this reliability factor to them, which only nuclear can really substitute and I think that’s a compelling point.

Claudia Romo Edelman (31:51): Well actually that’s going to be the opening for us to wrap this episode and have a little discussion here. I think that’s very interesting. The voice that you brought us well is controversial, but here we want to emphasize on the value of debate and on the power of dialogue. How important it is to be able to accept that someone else has a different opinion than yours and that societies that are healthy have to learn how to live with that tension of understanding that we don’t all agree on the same things. Too close. I want to say I love that article on the financial times last weekend about how to heal our planet. In particular, my friend Christiana Figueres, who’s one of the architects of the Paris agreement saying these three mindsets to survive the climate crisis are a stubborn optimism, which probably I would fall into, endless abundance and then radical regeneration.

Edie Lush (32:50): So I think at the risk of this becoming an FT kind of love in, that article also pointed out another book by Anatol Lieven, who’s formerly of the FT, and he said that the biggest obstacle to effective climate action isn’t technology or even money, but the lack of motivation and mobilization of elites around the world. Too many countries have residual elites who’ve been shaped by past conflicts and can’t adapt to the challenge that climate change brings.

Izabella Kaminska (33:18): I think you’ve made like fantastic points all around. Um, the only thing is,

Claudia Romo Edelman (33:21): You may disagree with us! This is where we are open about it.

Izabella Kaminska (33:25): It’s one of my concerns is how the likes of Michael Shellenberger are being responded to online. I don’t think it’s very constructive to just call names and throw huge sort of ad hominem attacks that people, but the same goes for the heretics and the climate deniers. It is better to have them at the table than it is to completely ostracize them because then you just create microcosms where people would just continue the bad behaviors regardless. And so Shellenberger’s other point that I think is really important is the one about tax arbitrage and that really, I hadn’t really appreciated it until now, but that is going to be an issue. The main issue therefore becomes one of political dialogue. Unfortunately, where does this lead us to, I’m kind of concerned, but I do think it leads us to questioning weather democracy and sort of free market doctrine is the future path if we are going to achieve these targets. And I think the likes of extinction rebellion have recognized this by bringing to the table this idea of citizen assemblies where effectively the public is invited to take part in legislation but only on a very reduced level. It’s certainly not going to be the sort of old fashioned democracy that we’re used to. And really I think that is the big debate we need to have. And no one’s really having that debate.

Claudia Romo Edelman (34:37): What is the debate that we should actually integrate citizen opinion in the debate about like climate into the government.

Izabella Kaminska (34:44): No, no, I think the debate is whether democracy is compatible with achieving climate directives. Because look at the gilet jaune. I mean it’s not the case 100% that they were only rebelling against a fuel hikes, but that did play a very big role. So the question is, you know, that even if you, if you get rid of the residual elite problem, the remaining leads, if they start to pass on their, their tax, are they going to remain the elite? Are they going to remain in power? If the population at large decides that actually convenience is more important than climate because everybody, you know, is fundamentally selfish.

Edie Lush (35:20): So the one thing I wanted to add was that we’ve already started to see a bubble coming through in ESG investing. And that’s been the possibly even frightening thing because money is moving into ESG and away from these value funds, which is really interesting because as we pointed out, the top Berkshire Hathaway is nowhere in this debate around climate.

Izabella Kaminska (35:43): I think that’s really fundamentally the key issue here is that what are going to be the repercussions in markets when you see this tsunami of capital moving from one sector to the other. And the reality is that there aren’t enough companies out there to absorb that capital. And even in terms of what, well, what happens to any industry when they, they’re given lots of cheap capital. You get over investment misallocation, a lot of scams, Ponzi schemes, et cetera because subsidization has an economic impact. It essentially allows for very bad behavior and that is the risk there because unless the demand comes for those products, you’re going to continue to see this mismatch in terms of the value companies that end up being starved of capital as a result. Well again, that leads us to the old argument I already said about while somebody has still going to buy them and you’re just handing over ownerships of the wrong players that I like the point that Adam Matthews was making that perhaps a better strategy, keeping it within sector, so playing the sector off against each other. I thought that was a really good idea because if you’re not necessarily divesting out of fossil fuels entirely, but using BP ownership to kind of encourage exxon to change its behaviors because if it does, then it will get cheaper funding. Well, that is a good strategy because you’re then using the sector itself to play itself off against.

Edie Lush (37:03): And going back to your point that you were making that in 2015 actually becoming an active shareholder in these companies and trying to push from within is the right direction.

Izabella Kaminska (37:13): Yes, because as a shareholder you have the capacity to vote down direction that you don’t approve of and also just the threat of leaving is much more powerful than leaving itself.

Speaker 2 (37:27): And now three facts and actions to impress your mother-in-law around the dinner table. This episode, they come from Cassie Flynn, strategic advisor on climate at the United nations development program.

Claudia Romo Edelman (37:39): I love their new game. They’re always inventing new ways to attract the audience. Younger audience. Have you played Edie?

Edie Lush (37:45): I have! Haven’t you?

Claudia Romo Edelman (37:46): You have? Well you can download it on your phone and decide which actions will mostly help the climate.

Edie Lush (37:53): And it has a real purpose as Cassie Flynn will explain after giving us the facts.

Cassie Flynn (38:00): Fact number one, we know that the world is getting warmer and as scientists are measuring the temperature rise, they tell us that we must stay below 1.5 degrees to stay safe. The troubling news is that we are already at one degree and just at this one degree rise we are already seeing these impacts like wildfires in Australia. More category five storms in the Caribbean and droughts in Africa. There’s a very small window between one and 1.5 degrees and we must take bold action immediately. Fact number two 2020 is the year that countries around the world are meant to submit their pledges under the Paris agreement. It’s a make or break moment. These pledges will outline what every country will do to address climate change like reducing their emissions or reducing the risk of climate impacts like storms and sea level rise and drought. And the first round of pledges were submitted in 2015 and they were way off. They got us to about three degrees rise. That’s way over the 1.5 degree level that keeps us safe. So now five years later in 2020 countries are meant to submit an enhanced version before cop 26 in Glasgow. The stakes could not be higher. Fact number three, more people participated in a climate March or protest in the last year than ever before. People are taking to the streets. Students are hosting walkouts and sit-ins, and this really derives from the realization that we are running out of time to change the future and more and more people are asking, what can I do to help solve the climate crisis? And here are my actions. Number one, don’t give up hope, the stakes are high. It feels so overwhelming, but we have seen incredible changes in the last few years and we can’t give up. What we do today will affect every generation to come and we can solve this problem. Action number two, we need to talk about systemic solutions. And I say systemic because while it’s fantastic that people are talking about flying less or using less plastic and other really good habits, we must change how the world gets its energy. We need to change the way we grow food. We need to change our relationships to the ocean and forests and this has to happen at an unprecedented pace and scale. Action number three, everyone in the world should be voting on what their government should do. Please, please, please go to www.mission1point5.org That’s M I, S S, I, O, N, number one P O I N T number five.org and vote on what you think your country should do to address climate change. The UN and the university of Oxford are going to analyze all of these votes and then going to deliver tailor made reports to world leaders. We’re going to put reports on these world leaders desks that say how countries voted on the solutions. And the idea is that we can help to encourage world leaders as they’re making these critical decisions on climate change.

Edie Lush (41:10): Thanks to Cassie Flynn for those facts and actions. If you miss that website address, you can find it in our show notes.

Claudia Romo Edelman (41:17): And thank you Izabella for joining us.

Izabella Kaminska (41:20): It was a real pleasure and thank you again.

Edie Lush (41:23): And thanks to our guests Adam Matthews, Michael Shellenberger and Cassie Flynn.

Claudia Romo Edelman (41:28): And thanks for listening. Please like and subscribe via iTunes or wherever you your podcast from, and follow us on social media at GlobalGoalscast. See you next time. Bye.

Michelle (41:41): GlobalGoalscast was hosted by Edie lush and Claudia Romo Edelman. We are editorial gurued by Mike Oreskes, editing and sound production by Simon James. Our operations director is Michelle Cooperrider and our interns, Brittany Segura and Tarryn Rennie. Music in this episode was courtesy of universal production music, one of the world’s leading production music companies, creating and licensing music for film, television, advertising, broadcast, and other media, including podcasts, original music by Neil Hale, Angelica Garcia, Simon James, Katie crone, and Andrew Phillips. Thanks to CBS NewsDigital.