WEBVTT - Jeremy Grantham Discusses Sustainable Investment (Podcast) 0:00:02.200 --> 0:00:06.399 This is Masters in Business with Barry Ridholts on Bloomberg 0:00:06.480 --> 0:00:10.039 Radio this week on the podcast What Can I Say? 0:00:10.200 --> 0:00:15.240 Jeremy Grantham, he is a legend, Uh, the founder of GMO. 0:00:15.400 --> 0:00:18.680 He is literally the G in GMO. He is the 0:00:18.760 --> 0:00:21.840 chairman of the firm as well as sitting on the 0:00:21.880 --> 0:00:26.759 asset Allocation Committee. Um. He has had a fascinating career. 0:00:26.800 --> 0:00:30.400 I could have spoken him for hours, um, but we 0:00:30.520 --> 0:00:33.479 only had him for a finite amount of time before 0:00:33.600 --> 0:00:37.320 his next actually dinner. We're recording this late on a 0:00:37.400 --> 0:00:42.480 Thursday night. Uh, it's dark out, the Bloomberg studios are empty. 0:00:42.520 --> 0:00:47.159 It's kind of interesting evening recording. But what can I 0:00:47.200 --> 0:00:51.680 tell you? His his track record is astonishing. He's created 0:00:51.720 --> 0:00:55.200 a ton of wealth over the years. His philosophy of 0:00:55.280 --> 0:01:00.040 investing is pretty straightforward. Be a value investor, be a 0:01:00.040 --> 0:01:03.160 air of the data. Understand when things are getting out 0:01:03.160 --> 0:01:06.560 of hands. Um, you may not get the timing perfect, 0:01:07.400 --> 0:01:11.840 but when things become excessively pricey, when the animal spirits 0:01:11.959 --> 0:01:16.880 run amuck, when the bubbles begin to form, you know 0:01:16.959 --> 0:01:21.240 how that ends, and it's never well. The history he's 0:01:21.240 --> 0:01:27.680 put together of warning and positioning himself correctly before the 0:01:27.760 --> 0:01:32.080 nineteen late eighties, Japanese bubble popped, UH, the dot com 0:01:32.120 --> 0:01:36.039 bubble in the late nineties, the Great Financial Crisis. His 0:01:36.160 --> 0:01:41.160 timing has been pretty extraordinary. He's been pretty bearish on 0:01:41.440 --> 0:01:46.040 US stocks um over the past few years and has 0:01:46.120 --> 0:01:51.720 become much more enthusiastic for emerging market value stocks. He 0:01:51.800 --> 0:01:54.800 has warned if you jump into e M, you're gonna 0:01:54.840 --> 0:01:59.160 feel foolish and uncomfortable for a period of time and 0:01:59.200 --> 0:02:02.560 not your first buying opportunity, then it becomes even more 0:02:02.600 --> 0:02:05.680 painful that your second buying opportunity. But if you have 0:02:05.720 --> 0:02:09.200 a ten or a twenty year window, UM, that's where 0:02:09.240 --> 0:02:13.560 you want to be. We discuss philanthropy. He's basically donated 0:02:14.560 --> 0:02:18.519 all of his money to his charitable foundation, and of course, 0:02:18.840 --> 0:02:21.120 since it was Jeremy Grantham, we talked a lot about 0:02:21.160 --> 0:02:26.440 climate change. It's his favorite philanthropic issue, and he's basically 0:02:26.560 --> 0:02:29.919 warns that if we don't do something in soon, uh, 0:02:29.960 --> 0:02:31.880 there ain't gonna be a whole lot of people around 0:02:31.960 --> 0:02:36.440 in fifty years. That we're standing on the precipice of 0:02:36.480 --> 0:02:41.640 a catastrophic um set of of changes. And he says 0:02:41.760 --> 0:02:46.680 he approaches climate change the same way GMO has approached investing. 0:02:46.720 --> 0:02:49.320 He looks at the data, he looks at the overall 0:02:49.360 --> 0:02:55.079 trend and makes what he believes are intelligent, reasonable UH 0:02:55.160 --> 0:02:58.280 decisions based on that data, and those decisions have led 0:02:58.360 --> 0:03:02.960 him to be extremely cautious about what's coming our way 0:03:03.040 --> 0:03:08.679 courtesy of UM rising carbon in the atmosphere caused primarily 0:03:08.800 --> 0:03:13.919 by burning wood coal, UH and oil and gasoline, and 0:03:14.000 --> 0:03:16.880 we need to UH figure out if we want to 0:03:16.880 --> 0:03:19.560 be here a century from now or not. UH. He 0:03:19.639 --> 0:03:24.000 talked about the propaganda industry that's been pushing back against this, 0:03:24.080 --> 0:03:26.400 how the oil industry and the Koch Brothers have funded 0:03:26.800 --> 0:03:32.800 UH disinformation campaign, as he said, brilliantly, quite successfully, and 0:03:32.960 --> 0:03:36.680 lots of people no longer believe in science because it's 0:03:36.760 --> 0:03:39.760 profitable for these companies to have the public not believe 0:03:39.800 --> 0:03:42.680 in science. I could talk about our conversation for hours 0:03:42.680 --> 0:03:45.320 and hours, but rather than listen to me, continue to 0:03:45.360 --> 0:03:53.680 babble with no further ado. My conversation with Jeremy Grantham. 0:03:53.720 --> 0:03:57.320 I have an extra special guest this week. His name 0:03:57.800 --> 0:04:00.080 is Jeremy Grantham and he is one of the co 0:04:00.240 --> 0:04:04.480 founders of GMO, where he is also chief Investment strategist, 0:04:04.800 --> 0:04:08.160 a member of the Asset Allocation Team, and a member 0:04:08.200 --> 0:04:12.240 of GMO's board of directors. Previously, he was co founder 0:04:12.280 --> 0:04:16.200 of Battery March Financial Management. He began his career as 0:04:16.240 --> 0:04:20.160 an economist with Royal Dutch Shell. He did his undergraduate 0:04:20.200 --> 0:04:23.800 work at the University of Sheffield, got his MBA from 0:04:23.839 --> 0:04:29.200 Harvard Business School. Jeremy Grantham, Welcome to Bloomberg. Hello, pleasure 0:04:29.240 --> 0:04:33.560 to be here. So let's let's start with the Battery 0:04:33.680 --> 0:04:39.440 March Financial Management that was nixt nine. GMO was seven. 0:04:39.960 --> 0:04:44.680 I'm curious the seventies were not especially fun period to 0:04:44.760 --> 0:04:48.560 be an equity investor. How much of your investing philosophy 0:04:48.600 --> 0:04:53.000 was shaped by your experience in the nineteen seventies. The 0:04:53.080 --> 0:04:59.080 seventies were hugely kind to us country to what you're suggesting. 0:05:00.040 --> 0:05:05.279 We had a battle plan to invest all our money 0:05:05.400 --> 0:05:11.159 in small cap value before institutionally they had invented small 0:05:11.600 --> 0:05:16.920 or value. Everybody invested with Morgan Guarantee Trust, and they 0:05:16.960 --> 0:05:20.640 bought the nifty fifty, the Great Avon's and ibm s, 0:05:21.320 --> 0:05:25.240 and we bought Great Lakes Dark and Dredge and which 0:05:25.279 --> 0:05:30.479 and no one had heard of. And they went down 0:05:30.720 --> 0:05:34.039 with the rest of the market, but no more badly 0:05:34.120 --> 0:05:37.120 than the Avon's. They all everybody went down in the 0:05:37.120 --> 0:05:43.159 great and then where they rallied for a year, we 0:05:43.320 --> 0:05:47.240 just rallied and rallied, and the small cap inherited the earth. 0:05:47.880 --> 0:05:52.000 And between seventy four and eight two a small cap 0:05:52.200 --> 0:05:55.760 outperformed by well over a percentage points. So did that 0:05:55.839 --> 0:05:59.040 experience affect your philosophy? Did that make you more of 0:05:59.080 --> 0:06:02.880 a small care up in value factor investor? It made 0:06:02.920 --> 0:06:07.760 me much more a devotee of trying to find which 0:06:07.800 --> 0:06:13.960 group might do better in a D two. We basically 0:06:14.000 --> 0:06:16.640 abandoned small cap and went into large cap because they've 0:06:16.680 --> 0:06:20.680 done so well. So we gave up our ten years 0:06:20.720 --> 0:06:25.400 of background together Dick Mayo and me and being the 0:06:25.600 --> 0:06:29.320 m M GMO being the m M GMO and and 0:06:29.480 --> 0:06:33.400 changed because when something has a run and beats the 0:06:33.440 --> 0:06:36.359 market by a hundred points, you better be ready to 0:06:36.400 --> 0:06:39.360 abandon chip, and so we did so before we get 0:06:39.440 --> 0:06:42.400 up to the I want to stay. In the nineteen seventies, 0:06:42.839 --> 0:06:46.360 when you were at Battery March, you worked with Dean 0:06:46.440 --> 0:06:50.080 LeBaron and the two you kind of put together an 0:06:50.080 --> 0:06:53.640 idea that you first floated at a Harvard Business School 0:06:53.680 --> 0:06:57.680 seminar um, and the concept was maybe people should just 0:06:57.760 --> 0:07:00.640 buy a Brouin index of stocks and stead of trying 0:07:00.640 --> 0:07:04.160 to pick individual names'll just tell us how that played out. 0:07:04.360 --> 0:07:09.080 Dean had a a friend, Lee Bowden Hammer, and this 0:07:09.240 --> 0:07:13.800 was a summer course for pension fund officers at HBS, 0:07:14.640 --> 0:07:19.240 and they had written a special case where these pension 0:07:19.280 --> 0:07:23.320 fund guys were going to choose between the establishment Morgan 0:07:23.360 --> 0:07:28.840 Guarantee Trust they JP Morgan basically and and the other 0:07:28.880 --> 0:07:32.920 banks in New York owned the pension fund business back then. 0:07:33.960 --> 0:07:37.880 And the second player was tro Price, which was relatively 0:07:37.960 --> 0:07:43.360 new and represented growth, which was also relatively new, and 0:07:44.000 --> 0:07:48.120 and the third one was a little unheard of new company. 0:07:48.200 --> 0:07:52.000 They actually invented a new name for us. And they 0:07:52.000 --> 0:07:55.000 had to decide between these three. And at the end 0:07:55.000 --> 0:07:58.200 of the class, when they had gone through their proceedings, 0:07:59.200 --> 0:08:05.320 as it's typically the case, they the boss asked the 0:08:05.480 --> 0:08:09.640 visitors sitting on the back bench, had they got any comments. 0:08:09.800 --> 0:08:12.080 You're not allowed to talk during the class, but you 0:08:12.320 --> 0:08:17.240 usually get asked. And I can't remember what Dean said, 0:08:17.320 --> 0:08:19.920 but what I said was when I looked at the case, 0:08:20.320 --> 0:08:22.720 and I looked at the data for the three players 0:08:22.880 --> 0:08:25.640 and the SMP. I was surprised that no one in 0:08:25.680 --> 0:08:28.560 the room had suggested giving their money to the gentleman 0:08:28.600 --> 0:08:31.840 from standard and pause. That was it went over like 0:08:31.880 --> 0:08:35.120 a lead balloon. No one twitched and on the car 0:08:35.480 --> 0:08:37.840 back in the drive, I had said to Dean, why 0:08:37.840 --> 0:08:43.360 don't we take this seriously? Honestly, think about it. GM 0:08:43.440 --> 0:08:46.280 is said to have a hundred different managers. What chance 0:08:46.320 --> 0:08:49.640 did they have of actually beating the SMP. They're drowning 0:08:49.760 --> 0:08:54.480 in turnover and management fees. So if you look at it, 0:08:54.600 --> 0:08:58.679 you know one thing with absolute certainty. The players are 0:08:58.720 --> 0:09:01.640 going to pay percent or two percent a year to 0:09:01.679 --> 0:09:04.959 play the game, and the observers sitting at the bar, 0:09:05.080 --> 0:09:07.600 if you will, watching the poker game, are going to 0:09:08.640 --> 0:09:13.080 have a market return. Therefore, by definition, the guys at 0:09:13.080 --> 0:09:15.440 the bar are going to be the average of the 0:09:15.440 --> 0:09:19.160 poker players, because there will be a zero sum poker players. 0:09:19.720 --> 0:09:22.560 Some of them may do brilliantly well by inflicting their 0:09:22.559 --> 0:09:26.400 transaction costs and their management fees on one of the 0:09:26.480 --> 0:09:29.920 less good poker players. And but at the end of 0:09:29.960 --> 0:09:32.320 the game, all the players will sum to minus one 0:09:32.360 --> 0:09:35.040 and a half, and all the observers will sum to 0:09:35.480 --> 0:09:39.960 zero and and you would win. And why don't we 0:09:40.000 --> 0:09:42.920 suggest to the big players instead of instead of having 0:09:43.000 --> 0:09:46.240 thirty investment managers or a hundred, that they put a 0:09:46.240 --> 0:09:50.360 big chunk of their money into the market. So the 0:09:50.600 --> 0:09:54.160 entire logic was zero sum game, which was a sufficient 0:09:54.200 --> 0:09:56.800 reason to do it then and is a sufficient reason 0:09:56.840 --> 0:10:01.120 to do it today. And no one was interested. We 0:10:01.200 --> 0:10:05.680 offered it. Dean was a brilliant propagandist. No one was interested. 0:10:05.720 --> 0:10:08.960 No one was interested, and he got written up the 0:10:09.040 --> 0:10:13.640 story in the New York Times magazine, supplement and so 0:10:13.720 --> 0:10:16.200 on and so forth, and it got a lot of exposure, 0:10:16.280 --> 0:10:19.120 and at the end of a year, Pension and Investment 0:10:19.160 --> 0:10:22.440 the Trade Rag jokingly gave us an award for the 0:10:22.480 --> 0:10:25.840 most talked about product with no business? How did you 0:10:25.880 --> 0:10:30.839 first get interested in the challenges of climate change? When 0:10:30.880 --> 0:10:35.080 when I'm giving my stump speech to financial people, I 0:10:35.160 --> 0:10:38.560 always hope that someone will ask me this question. And 0:10:38.720 --> 0:10:41.440 what I say is, you've seen the data that I've 0:10:41.480 --> 0:10:44.840 just gone through, and you're asking me this damn stupid question. 0:10:45.400 --> 0:10:48.640 Why why would I be excited if you've seen the data? 0:10:49.200 --> 0:10:51.559 The real question is, what the hell are you doing, 0:10:51.600 --> 0:10:54.920 not being excited. How is it possible that the great 0:10:54.960 --> 0:10:57.320 majority of you sitting in the audience have done nothing 0:10:57.600 --> 0:11:01.280 and no very little about this threat, which is the 0:11:01.320 --> 0:11:03.920 most severe one you will have to deal with for 0:11:03.960 --> 0:11:05.559 the rest of your life. There was a book out 0:11:05.640 --> 0:11:08.520 not too long ago called Windfall, and one of the 0:11:08.559 --> 0:11:13.040 conclusions of the book was the dry areas are gonna 0:11:13.040 --> 0:11:15.520 get drier, the wet areas going to get what wetter. 0:11:16.320 --> 0:11:18.320 Where it's hot, it's going to get hotter. Where it's cold, 0:11:18.320 --> 0:11:21.199 it's going to get colder. And the way this falls 0:11:21.240 --> 0:11:26.960 out across the planet is disproportionately on the poorest people 0:11:27.120 --> 0:11:30.520 in the world. Does does that still ring true? Is 0:11:30.520 --> 0:11:33.080 that what we're looking at going forward? Yeah? I think 0:11:33.160 --> 0:11:37.480 in general the consequences of climate damage here I felt 0:11:37.559 --> 0:11:42.040 in the most sensitive areas, which are occupied mainly by 0:11:42.080 --> 0:11:45.040 the poor, they live in the least desirable parts of 0:11:45.040 --> 0:11:49.720 the world, the semi desert zones of Africa and the 0:11:49.720 --> 0:11:53.760 Far East being classic examples. However, the cold, the cold 0:11:53.800 --> 0:11:57.880 areas are not getting colder. Actually, the further north and 0:11:57.960 --> 0:12:01.559 south you go towards the poles, the faster it's warming up, 0:12:01.960 --> 0:12:04.800 and the closer you get to the equator, the more 0:12:04.840 --> 0:12:08.720 slowly it's warming up, which interestingly has has some profound 0:12:08.720 --> 0:12:13.000 effects because the wind draws its power from the temperature 0:12:13.000 --> 0:12:16.200 differential between the pole and the equator, and if you 0:12:16.280 --> 0:12:19.440 narrow that by having the polls get warmer faster, you 0:12:19.520 --> 0:12:22.959 slow down the winds. So now hurricanes are moving ten 0:12:22.960 --> 0:12:26.120 percent slower, So you're more likely to have a hurricane 0:12:26.200 --> 0:12:28.640 amble its way across your territory and rain a whole 0:12:28.679 --> 0:12:31.880 lot more rain, which is what happened in spades in Houston, 0:12:31.960 --> 0:12:35.080 where it rained thirty inches in three days. You have 0:12:35.280 --> 0:12:38.480 raised the question as to whether or not energy will 0:12:38.559 --> 0:12:42.320 give us a serious and sustained set of problems over 0:12:42.360 --> 0:12:45.959 the next fifty years. What what you're thinking about energy? 0:12:46.440 --> 0:12:49.920 Looks like parts of the world are transitioning to renewables 0:12:49.960 --> 0:12:53.440 somewhat slowly, but it's moving forward. Tell it. Tell us 0:12:53.440 --> 0:12:59.080 about energy? Well, the technology and energy has been unexpectedly great. 0:12:59.360 --> 0:13:03.600 It's moving at great speed, has a thousands of new 0:13:03.720 --> 0:13:08.280 enterprises trying to push it along, and in general it's 0:13:08.320 --> 0:13:13.040 been a very pleasant surprise, meaning the costs have come down, 0:13:13.040 --> 0:13:16.160 the efficiency costs of wind have come down more than 0:13:16.200 --> 0:13:21.720 anyone dreamt possible years ago, costs of solar have come 0:13:21.760 --> 0:13:25.760 down the same um. Solar is now equal or cheaper 0:13:25.800 --> 0:13:30.800 than coal. Is that a fair statement? A modern utility 0:13:30.880 --> 0:13:34.480 plant for solar or wind in any one of half 0:13:34.480 --> 0:13:38.760 a dozen better states is cheaper to construct and run 0:13:39.040 --> 0:13:41.800 than it is merely to run an existing coal plant. 0:13:42.360 --> 0:13:46.560 It's actually fully costed cheaper than the marginal cost of 0:13:46.600 --> 0:13:50.400 the best nuclear and the best coal plants. Do you 0:13:50.440 --> 0:13:54.560 see much of a future from nuclear? My my motto 0:13:54.640 --> 0:14:00.559 is never underestimate science and also, unfortunately, never underestimate Homer 0:14:00.640 --> 0:14:05.120 sapiens ability to screw it up the But in terms 0:14:05.120 --> 0:14:09.679 of nuclear there are endless attempts to come up with 0:14:09.720 --> 0:14:14.559 what you might call third generation fusion, trying to bypass 0:14:14.640 --> 0:14:16.520 some of the problems that have slowed them down for 0:14:16.559 --> 0:14:19.440 twenty thirty years based on the new technologies. They have 0:14:19.520 --> 0:14:23.880 so much invested in in the old approach to fusion 0:14:23.920 --> 0:14:26.960 that they're kind of now they're thirty billion in the hole. 0:14:27.000 --> 0:14:29.360 They feel they have to keep going, and some of 0:14:29.400 --> 0:14:33.760 these new people working on a shoestring may may get lucky, 0:14:33.800 --> 0:14:36.480 may come up with a form of fusion. There was 0:14:36.520 --> 0:14:38.680 there was a buzz A couple of years ago about 0:14:38.760 --> 0:14:41.520 thorium reactors that kind of came in, and and even 0:14:41.640 --> 0:14:47.880 on fishing thorium or new engineering tricks small scale, you 0:14:47.960 --> 0:14:50.760 can't rule them out. If you come back in thirty years, 0:14:51.080 --> 0:14:53.400 I think there's maybe a fifty fifty shot that one 0:14:53.520 --> 0:14:56.600 or the other will have come through with something that 0:14:56.760 --> 0:15:01.640 is helpful. Um of course by their and energy storage, 0:15:01.680 --> 0:15:04.040 which is the key to wind and solar, and may 0:15:04.080 --> 0:15:06.680 have become so cheap that it's that it's not really 0:15:06.720 --> 0:15:11.760 necessary even even if it's technically feasible um solar and wind, 0:15:11.880 --> 0:15:14.200 which are continuing to decline by the way out into 0:15:14.200 --> 0:15:16.760 the distant future as far as one can see. I 0:15:16.920 --> 0:15:19.400 just give you one example of that, and that is 0:15:19.480 --> 0:15:22.880 that the winds over the ocean is faster than the 0:15:22.880 --> 0:15:28.840 winds on land, and the bigger the wind tower, much 0:15:28.880 --> 0:15:33.360 more efficient it becomes. It's the swept area, so that 0:15:33.480 --> 0:15:36.360 a twenty fourth blade doesn't give you twice the energy 0:15:36.360 --> 0:15:38.360 of a ten foot blade, it gives you four times. 0:15:39.400 --> 0:15:42.520 And as you go up the wind speed increases, and 0:15:42.560 --> 0:15:44.920 the power of a windmill is a cube of the 0:15:44.920 --> 0:15:47.320 wind speed. That's why hurricanes of a hundred and forty 0:15:47.360 --> 0:15:50.320 miles are so much more deadly than a hundred and twenty. 0:15:50.360 --> 0:15:52.480 It sounds like it should be seventeen percent, but it's 0:15:52.480 --> 0:15:55.760 fifty or sixty percent. And so if you can build 0:15:55.800 --> 0:15:58.880 a truly giant windmill, and the ones you drive past 0:15:58.960 --> 0:16:01.360 on a cycling trip in under two megawats, and the 0:16:01.400 --> 0:16:04.160 one you can order from ge if it's still around 0:16:04.440 --> 0:16:09.440 but delivery in two is twelve megawats, and that is 0:16:09.520 --> 0:16:12.280 almost as high as the Eiffel Tower, believe it or not. 0:16:12.840 --> 0:16:16.040 And they are massively efficient, and you can only build 0:16:16.040 --> 0:16:18.880 them in in in the oceans where the wind is 0:16:18.880 --> 0:16:21.640 more constant. And if you could find the technology to 0:16:21.680 --> 0:16:24.320 build it in the North Atlantic and have cables that 0:16:24.360 --> 0:16:28.880 could carry it back to civilization. Uh, the wind is 0:16:28.920 --> 0:16:31.240 blowing e t plus percent of the time in the 0:16:31.280 --> 0:16:33.720 winter when you really need it in the northern hemisphere. 0:16:34.240 --> 0:16:37.040 So there is a lot of potential up our sleeve 0:16:37.120 --> 0:16:40.000 for the next few decades. In the end, I think 0:16:40.040 --> 0:16:43.480 we will have a plentiful supply of green energy. We 0:16:43.560 --> 0:16:46.080 will not, as a civilization, be brought to our knees 0:16:46.520 --> 0:16:49.000 for a lack of green energy. The problem will be 0:16:50.200 --> 0:16:52.840 how long has it taken us to get there? So 0:16:53.000 --> 0:16:55.440 we will get plenty of energy in fifty years, will 0:16:55.480 --> 0:16:58.160 be fully decombonized. I should think in a hundred years, 0:16:58.200 --> 0:17:01.920 maybe sooner, but the damage that will have been done 0:17:02.560 --> 0:17:06.480 by then. As the carbon dioxide count rises. We have 0:17:06.600 --> 0:17:09.560 seen and been amazed, including the scientists, by the way, 0:17:09.800 --> 0:17:12.680 at the rate at which the damage in fires and 0:17:12.800 --> 0:17:15.919 floods and the hurricanes, and the speed they build up 0:17:15.960 --> 0:17:19.640 their power drought some floods for agriculture, We've all been 0:17:19.680 --> 0:17:23.800 horrified by how quickly that has escalated. And if you 0:17:24.000 --> 0:17:27.520 extrapolate what is going on today, we have no hope 0:17:27.520 --> 0:17:29.560 of controlling this for one and a half degrees, that 0:17:29.760 --> 0:17:33.320 is merely an intellectual exercise. We have no real hope. 0:17:33.320 --> 0:17:35.639 But two degrees, we're going to have to fight and 0:17:35.760 --> 0:17:38.760 scratch and do much better than we are doing today 0:17:38.880 --> 0:17:41.560 to keep it below three degrees. And at three degrees, 0:17:41.680 --> 0:17:45.399 all manner of bad things are already happening, and some 0:17:45.560 --> 0:17:48.879 of them may actually get out of control, become self 0:17:49.440 --> 0:17:54.639 reinforcing vicious cycles. There's no guarantee that that will not 0:17:54.800 --> 0:17:58.880 happen anytime in the next few decades. So so let's 0:17:58.880 --> 0:18:05.160 talk for a moment about agnetology or culturally constructed ignorance. Um, 0:18:05.240 --> 0:18:08.479 you have a line that I'm intrigued by. You wrote, 0:18:09.160 --> 0:18:15.280 the misinformation machine is brilliant. Please explain. The Koch Brothers 0:18:15.320 --> 0:18:18.760 and and the excellence of the world have been basically 0:18:18.800 --> 0:18:26.200 funding a disinformation for thirty years, maybe longer, and they 0:18:26.200 --> 0:18:33.120 have help set up institutes, UM. Right wing institutes who 0:18:33.800 --> 0:18:37.159 basically defend the idea that climate change is a hoax 0:18:38.000 --> 0:18:42.320 are in that sense anti science. And they've done it well. 0:18:42.400 --> 0:18:46.840 They've been persistent, they've funded it, if you will, generously, 0:18:47.680 --> 0:18:52.480 and they have achieved remarkable results. In comparison, science has 0:18:52.520 --> 0:18:57.720 been diffident and cautious, careful not to overstate anything, and 0:18:57.720 --> 0:19:01.640 and in that care they have garanteed they understate everything. 0:19:02.160 --> 0:19:04.600 And as I like to tease them, it may be 0:19:04.720 --> 0:19:07.600 dangerous to overstate most things in science. But one thing 0:19:07.720 --> 0:19:11.760 is absolutely certain, and that is it's dangerous to understate 0:19:12.119 --> 0:19:16.160 climate change. If by understating it, by being too cash, cautious, 0:19:16.200 --> 0:19:22.199 too careful, you you influence a politician to underreact, you 0:19:22.880 --> 0:19:27.160 influence the general public to underreact, you may be making 0:19:27.200 --> 0:19:32.520 a huge, painful, dangerous mistake. So the tobacco industry managed 0:19:32.560 --> 0:19:37.040 to keep people confused about the impact of tobacco for 0:19:37.359 --> 0:19:41.600 decades and decades before they ultimately how to make a 0:19:41.760 --> 0:19:45.480 multibillion dollar, multi decade settlement. How long will it take 0:19:45.520 --> 0:19:50.680 before the carbon industry, UH, similarly stops pulling the wool 0:19:50.720 --> 0:19:53.159 over so many people's eyes. I think we're changing very 0:19:53.280 --> 0:19:57.840 rapidly this last couple of weeks. That's been a confluence 0:19:57.840 --> 0:20:03.679 of reports and coupled with the terrible forest fires burning 0:20:03.680 --> 0:20:09.560 all the time in California. Regrettably, those natural horrors are 0:20:09.920 --> 0:20:14.159 seemed seemed to be necessary to move public opinion. But 0:20:14.240 --> 0:20:19.080 the confluence of that tragedy with all these major reports 0:20:19.119 --> 0:20:24.840 one from NASA, a government agency, and and major one 0:20:24.960 --> 0:20:29.119 from the U, n H I, p c C talking 0:20:29.160 --> 0:20:31.959 about the chances and costs of holding it at one 0:20:32.000 --> 0:20:35.160 and a half degree centigrade, and and and also three 0:20:35.280 --> 0:20:40.520 or four other articles and peer reviewed seriously important journals, 0:20:40.560 --> 0:20:43.040 what I would call the top three science journals. That 0:20:43.200 --> 0:20:47.040 confluence has created an enormous amount of attention in the press, 0:20:47.040 --> 0:20:49.520 which is so rare, and it's played, and it's played 0:20:49.520 --> 0:20:53.480 in my opinion, and I think Trump has agitated the 0:20:53.520 --> 0:20:57.399 science world into standing up and actually stating now for 0:20:57.440 --> 0:21:01.240 the first time in terms that rep present that honest belief. 0:21:01.840 --> 0:21:04.440 So I think the worms have turned fairly big time. 0:21:05.160 --> 0:21:08.199 I I used to tease them. I hadn't actually a 0:21:08.200 --> 0:21:11.919 commentary in Nature, perhaps the number one journal, and it 0:21:12.040 --> 0:21:17.200 was called be brave, be persuays if be arrested if necessary, 0:21:17.480 --> 0:21:20.080 And there was haranguing these guys for not stepping up. Well, 0:21:20.160 --> 0:21:24.159 now Trump has done what many people couldn't, and he 0:21:24.280 --> 0:21:27.840 stepped up. They have stepped up. I should say, let's 0:21:27.880 --> 0:21:31.600 talk a little bit about philanthropy. I read a fascinating statistic. 0:21:32.440 --> 0:21:37.320 Only two to four of all charitable donations made each 0:21:37.400 --> 0:21:43.400 year go towards environmental causes? Is that possibly right? Sadly, 0:21:43.480 --> 0:21:47.120 it's absolutely right. I mean, it's it's tragic. It reflects 0:21:47.160 --> 0:21:51.320 I think the motivation for a lot of charitable giving, 0:21:52.320 --> 0:21:55.280 which to be uncharitable, is to move in the right 0:21:55.359 --> 0:21:58.439 circles and be recognized for what you do. And you 0:21:58.520 --> 0:22:04.320 move with illuminati, and you go to dances and balls 0:22:04.440 --> 0:22:09.760 and photographed and put in in the tatler, and and 0:22:09.840 --> 0:22:14.679 so it goes on. And in comparison, lowly defense of 0:22:14.720 --> 0:22:21.399 the environment is not very good from promoting your your 0:22:21.440 --> 0:22:24.760 your life in in in smart circles it's it's a 0:22:24.840 --> 0:22:28.439 kind of country cousin and and it gets two percent, 0:22:28.560 --> 0:22:33.639 even though without solving the climate problem. Your college is 0:22:34.080 --> 0:22:37.480 your museums, everything. In the end, it's not going to 0:22:37.520 --> 0:22:41.280 be worth much if we can't maintain a fairly stable 0:22:42.600 --> 0:22:47.520 global civilization, which is seriously at risk. And almost any 0:22:47.760 --> 0:22:50.639 serious scientists would come from that. So let's talk a 0:22:50.680 --> 0:22:53.480 little bit about the Grantham Foundation for the Protection of 0:22:53.480 --> 0:22:57.119 the Environment. What what sort of activities does that fund? 0:22:58.400 --> 0:23:02.640 First of all, let me say it hasn't of my 0:23:02.880 --> 0:23:07.840 accumulated ill gotten gains from the financial world, and that 0:23:08.040 --> 0:23:11.120 is a pretty effective statement of how serious I think 0:23:11.160 --> 0:23:13.760 it is. I don't even see it really as philanthropy. 0:23:13.840 --> 0:23:17.480 I see it as defensive investment, trying to look after 0:23:18.119 --> 0:23:24.479 my children, grandchildren and their progeny indefinitely. And I am 0:23:24.520 --> 0:23:29.280 always amazed that more people don't see it that way. UM, 0:23:29.840 --> 0:23:31.960 I'm not a scientist and you don't. But you don't 0:23:32.000 --> 0:23:36.399 have to be a scientist to understand the science that 0:23:36.520 --> 0:23:41.040 is coming down the road so fast. So let's talk 0:23:41.040 --> 0:23:45.000 a little bit about, um, your long term goals. How 0:23:45.000 --> 0:23:49.760 do you specifically identify different recipients that you fund? You 0:23:49.760 --> 0:23:52.320 you fund a lot of existing groups as well as 0:23:52.359 --> 0:23:56.280 some of your own new projects. To start with the 0:23:56.359 --> 0:24:01.879 exciting stuff of our corpus UM is invested in green 0:24:02.359 --> 0:24:08.000 investing by us directly in in in venture capital. So 0:24:08.160 --> 0:24:12.760 and I have three very industrious sharp helpers and we 0:24:12.840 --> 0:24:16.000 spend I spend as much time as I can, and 0:24:16.040 --> 0:24:20.760 they spend all their all their time really um chasing 0:24:20.800 --> 0:24:24.639 down great opportunities in this field. And one of the 0:24:24.720 --> 0:24:28.119 rules we have is they have to be capable of 0:24:28.160 --> 0:24:32.840 really making it a difference, changing the probabilities of surviving 0:24:32.840 --> 0:24:36.119 all all of these stressful points. And we spend a 0:24:36.119 --> 0:24:40.720 lot of time face to face with scientists and entrepreneurs 0:24:40.760 --> 0:24:45.560 scientists slash entrepreneurs, and it's amazing what they're up to. 0:24:45.640 --> 0:24:49.560 They have done um incredible things. I just give you 0:24:49.640 --> 0:24:53.080 a few examples. We our r n A is the 0:24:53.160 --> 0:24:56.679 kind of engineering part that sends messages to the d 0:24:56.800 --> 0:25:00.399 NA what to do. And the problem with it was 0:25:00.640 --> 0:25:04.639 so so expensive to isolate that a lot of work 0:25:04.880 --> 0:25:07.639 just couldn't be undertaken. It was a thousand dollars a 0:25:07.720 --> 0:25:10.800 Graham and we bumped into a group that with a 0:25:10.840 --> 0:25:14.200 completely different approach, can now make it. At thirty five 0:25:14.400 --> 0:25:17.280 cents a Graham with a target of ten cents next year. 0:25:18.080 --> 0:25:22.399 That's the kind of order of magnitude you need to 0:25:23.200 --> 0:25:27.640 be disruptive. And and having obtained the material, they can 0:25:27.680 --> 0:25:32.640 now design h endless things. But one of them they 0:25:32.640 --> 0:25:34.840 started with a very obvious one was to send the 0:25:34.880 --> 0:25:41.679 instructions to a very expensive beetle, the Colorado potato beetle 0:25:42.320 --> 0:25:46.040 um that can devastate whole fields in in kind of 0:25:46.040 --> 0:25:51.320 one sitting as it were, and the RNA says, are 0:25:51.359 --> 0:25:54.840 you a Colorado beetle? Yes, I am, Please proceed to 0:25:54.880 --> 0:25:57.840 this part of your DNA. Now we will turn off 0:25:57.960 --> 0:26:03.280 this particular switch. And what does is unique to that beetle. 0:26:03.720 --> 0:26:08.240 It will make it impossible to digest cellulosic fiber. So 0:26:08.280 --> 0:26:11.159 the beetle munches away on the potato and dies of 0:26:11.200 --> 0:26:14.480 starvation and drops harmlessly to the ground where it's not 0:26:14.520 --> 0:26:16.800 even poisonous and can be eaten up by the other 0:26:16.880 --> 0:26:22.520 local insects, and all of the literally poisonous insecticides that 0:26:22.600 --> 0:26:26.040 previously we're used can be dispensed with. I mean that 0:26:26.200 --> 0:26:28.320 that is the kind of thing that could really change 0:26:28.320 --> 0:26:32.280 the world. And another one is we we fund a 0:26:32.480 --> 0:26:36.440