Speaker 1: Hello, and welcome back to Drilled. I'm Amy Westerwaldt. Today
Speaker 1: we are bringing you another episode in our series Drilling Deep,
Speaker 1: in which we look at different books that are coming out,
Speaker 1: either on climate or on science or history, democracy, all
Speaker 1: of the things that we kind of look at here
Speaker 1: on Drilled. Most of the time these interviews are being
Speaker 1: done by Adam Lowenstein, Bless him. He's reading all the
Speaker 1: books and talking to all the authors and having these
Speaker 1: very very interesting conversations.
Speaker 2: Today we're bringing.
Speaker 1: You a book that has a lot to do with
Speaker 1: what's happening in climate politics at the moment, because the
Speaker 1: annual conference of the Parties, the UN Climate Summit, is
Speaker 1: underway at the moment in Brazil, and it's a good
Speaker 1: time to look at how that process has been politicized.
Speaker 1: In the book Existential Politics, Jessica F. Green from the
Speaker 1: University of Toronto argues that head on conflict with fossil
Speaker 1: fuel interests is a prerequisite for real progress. Green is
Speaker 1: a longtime observer of global climate negotiations and an expert
Speaker 1: on a carbon accounting and she argues that the cop
Speaker 1: embodies a win win approach to the problem of the
Speaker 1: climate crisis and the transitions necessary to deal with it,
Speaker 1: for which someone has to lose. The challenging is to
Speaker 1: make sure the right people do the winning well, the
Speaker 1: fossil asset owners, as Green describes them, do the losing.
Speaker 1: Adam had a really interesting conversation with Green, who's someone
Speaker 1: that I've also spoken with in the past about cop proceedings.
Speaker 1: She's really, really, really interesting on this stuff. I think
Speaker 1: you'll enjoy this chat.
Speaker 3: It's coming up after this quick break.
Speaker 4: One thing I was curious about as I was reading
Speaker 4: the book is the what drove you to write this book?
Speaker 4: Because it's incredibly complex stuff. As we were discussing a
Speaker 4: few minutes ago, it's not uplifting, So yeah, what was
Speaker 4: the driving force behind writing this book? Existential politics?
Speaker 2: There are a couple of motivations for the book. One,
Speaker 2: I've been studying carbon accounting and the politics of carbon
Speaker 2: accounting for like fifteen twenty years. My first book, Rethinking
Speaker 2: Private Authority, looks a lot at the creation of private
Speaker 2: standard setters, who you know, eventually became the voluntary carbon market,
Speaker 2: and even then I was like, this is not going
Speaker 2: to end well. So I, you know, I just have
Speaker 2: a deep knowledge of this stuff and it is very technical,
Speaker 2: and so therefore it sort of flies under the radar
Speaker 2: are And so given that I've sort of seen the
Speaker 2: evolution of the voluntary carbon market, I studied the origins
Speaker 2: of the Greenhouse Gas Protocol, which is now an ISO
Speaker 2: standard for how all firms measure their greenhouse gas emissions. Like,
Speaker 2: I just know a lot about where all of this
Speaker 2: came from, and it's important to understand where it came
Speaker 2: from to understand how well it can or cannot work.
Speaker 2: So that's one motivation, and the other is I wrote
Speaker 2: a scholarly article with two colleagues, Tom Hale and Jeff
Speaker 2: Colgan called Asset Revaluation and Existential Politics, and that was
Speaker 2: part of my thinking about this topic. And it was
Speaker 2: born out of the frustration that so many people say, oh,
Speaker 2: this is a collective action problem and we all have
Speaker 2: to cooperate to reduce emissions. And you know, what I
Speaker 2: saw as a student of climate politics over many, many
Speaker 2: years is that this is really a distributional problem. This
Speaker 2: is about you know, who gets what when and how,
Speaker 2: and so the idea of like, oh, if we all
Speaker 2: just cooperate was just it seemed to me just the
Speaker 2: wrong looking at the wrong problem, and so those were
Speaker 2: the two real motivations for thinking about Okay, well, you know,
Speaker 2: like we need to wake up to the fact that
Speaker 2: we're just largely thinking about this the wrong way.
Speaker 4: Yeah, we'll come back to the obsession, you might say,
Speaker 4: with cooperation among the elite standard setters and other organizations
Speaker 4: who have been leading the global charge on a lot
Speaker 4: of the stuff you write about in the book. But
Speaker 4: before we get there, I wanted to ask if you
Speaker 4: could define what existential politics are and then talk about
Speaker 4: how they differ from regular politics if they do it all.
Speaker 1: Yeah.
Speaker 2: So I define existential politics in the book as Okay,
Speaker 2: so I define existential politics as a political contest between
Speaker 2: different kinds of asset owners. And I offer this sort
Speaker 2: of very simple model of three kinds of asset owners
Speaker 2: fossil asset ownersulnerable asset owners, and green asset owners. And
Speaker 2: fossil asset owners are obviously like fossil fuel companies, mining companies,
Speaker 2: heavy industry, all of the kind of foundations, the high
Speaker 2: emitting industries that are the foundations of our economy. Green
Speaker 2: asset owners are precisely what you would think they would be,
Speaker 2: you know, the basically the engines of the decarbonized economy,
Speaker 2: so producers of evs, solar PV cells, wind turbines, all
Speaker 2: the infrastructure we need to run those. And then there
Speaker 2: are vulnerable asseid owners, and vulnerable asset owners are those
Speaker 2: whose assets will be destroyed by the effects of climate change.
Speaker 2: And so the idea, the basic idea of the book
Speaker 2: is that we have this profound asymmetry that fossil acid
Speaker 2: owners are running the show. They have been for decades,
Speaker 2: and saying that we're all in this together if we
Speaker 2: just cooperate, is ignoring the elephant in the room, which
Speaker 2: is these very powerful interests that have a vested interest
Speaker 2: in maintaining the value of their assets. And the reason
Speaker 2: that I say that it's existential is so we describe it,
Speaker 2: as in the first article as distributional politics on steroids.
Speaker 2: So it's not just about who gets what, but whose
Speaker 2: assets become completely worthless, whose houses disappear, whose livelihoods disappear,
Speaker 2: which countries disappear as a result of both climate policies
Speaker 2: and the effects of climate change. So it's really about
Speaker 2: the existence of many, many things, and unless we grapple
Speaker 2: with the visceral reactions, so that that is going to
Speaker 2: provoke in people, then we're not going to make much progress.
Speaker 4: The title of the first chapter, which is very direct,
Speaker 4: we are not all in this together. And I think
Speaker 4: that gets at the heart of what you're saying there,
Speaker 4: which is that this is ultimately a question of power,
Speaker 4: and the power asymmetries, as you mentioned between right now,
Speaker 4: tilted very heavily in favor of the fossil asset owners
Speaker 4: and against the vulnerable and the green asset owners. There
Speaker 4: is this idea, and we're going to get into this
Speaker 4: a little bit more, that there is a way that
Speaker 4: tackling the climate crisis can be a win win, that
Speaker 4: everyone can come out ahead if we just do this together.
Speaker 4: And I think the thing that we are not all
Speaker 4: in this together that message gets at is the fact
Speaker 4: that no in order to tackle this crisis, someone has
Speaker 4: to lose, and that someone is not just the fossil
Speaker 4: fuel industry, but everyone invested in the fossil asset class
Speaker 4: and the status quo. So can you talk about that
Speaker 4: a little bit, The fact that as much as we
Speaker 4: might like to think, and it makes us feel better
Speaker 4: to think that there is a comfortable world in which
Speaker 4: everybody wins, that's not the case. We've tried that and
Speaker 4: it's not working.
Speaker 2: Yeah. I mean, I think again, as long time observer
Speaker 2: of climate politics, the UNF Triple C, the Framework Convention
Speaker 2: on Climate Change, and then subsequently the Kyoto Protocol and
Speaker 2: now the Paris Agreement. The UNF Triple C started, you know, assigned.
Speaker 2: The Framework Convention was signed in nineteen ninety two. It
Speaker 2: was the heyday of the liberal international order. We were
Speaker 2: writing environmental treaties left and right. You know, humanitarian intervention
Speaker 2: was a thing that we did for better or for worse.
Speaker 2: The WTO was expanding and there was a lot of
Speaker 2: international cooperation and that's when we started, you know, as
Speaker 2: a global community working on climate and so I think
Speaker 2: it began in this moment where it's like we can
Speaker 2: all cooperate. You know, look, we're doing it in all
Speaker 2: these ways, and it you know, ignored the fact that
Speaker 2: as early as the nineteen nineties, when the before the
Speaker 2: Framework Convention was even inked, you know, the fossil fuel
Speaker 2: industry was already generating disinformation around the science of climate change.
Speaker 2: And that's been well documented. So you know, there's the
Speaker 2: argument here is that you cannot collaborate with obstructionists and
Speaker 2: there is this very long tradition of obstructionism, and so
Speaker 2: until we realize that we're just sort of fiddling at.
Speaker 4: The margins, it seems like it describes sort of the
Speaker 4: status quo approach of some of these elite global institutions
Speaker 4: in some ways, fiddling at the margins in a way
Speaker 4: that doesn't try to tackle the fundamental political dynamics.
Speaker 2: Look, I think it's worth saying that the world has
Speaker 2: changed a lot, like right, and the climate crisis has
Speaker 2: changed a lot. So like in nineteen ninety two, you know,
Speaker 2: I don't know the exact number, but it's one hundred
Speaker 2: somewhere between one hundred and eighty and one hundred and
Speaker 2: ninety countries quickly signed the Framework Convention, which is, you know,
Speaker 2: it's not very highly It doesn't require a huge amount
Speaker 2: from countries other than sort of starting to take stock
Speaker 2: of what their emissions are and you know, cooperating on
Speaker 2: science and these these kinds of things. But you know,
Speaker 2: it seemed like there was some consensus. And also the
Speaker 2: climate crisis was far away, so it was sort of like, okay, well,
Speaker 2: probably you know, arguably some of the politics weren't existential.
Speaker 2: Then there could be you know, winners and losers, but
Speaker 2: the losers maybe wouldn't lose as much or as quickly.
Speaker 2: But now that we've just repeatedly kicked the can down
Speaker 2: the road, we're in a sort of do or diet moment,
Speaker 2: and those costs become much more precipitous, those changes become
Speaker 2: more precipitous, the costs becomes steeper, and therefore the politics
Speaker 2: more conflictual.
Speaker 4: In one of the ways we've kicked the can down
Speaker 4: the road is what you describe as measuring tons. Can
Speaker 4: you give an overview of types of quote unquote solutions
Speaker 4: that it encompasses.
Speaker 2: So yeah, so I refer to it as actually managing tons.
Speaker 2: And the idea is that we have this very narrow
Speaker 2: construction of the climate problem as a technical problem of measuring,
Speaker 2: managing or sorry, measuring, verifying, buying, and selling an account
Speaker 2: for carbon emissions. So we're just it's just this focus,
Speaker 2: this very narrow focus on measurement and buying and selling
Speaker 2: and making claims about the level of emissions. And so
Speaker 2: measuring emissions is actually, in many ways very difficult. Some
Speaker 2: things are very straightforward, some are extremely difficult, Like we
Speaker 2: know how much energy is embedded in a ton of
Speaker 2: coal for you know, fossil fuels, so the direct combustion
Speaker 2: of those we can measure. But when you get into
Speaker 2: things like avoided emissions, how many emissions would there have
Speaker 2: been if you know, the German government had not invested
Speaker 2: in a cook stove project in Malawi. You know, that's
Speaker 2: a very difficult set of calculations to make, which rely
Speaker 2: on a hypothetical baseline like this is what the world
Speaker 2: would have looked like if we hadn't done this. And
Speaker 2: then we take that hypothetical and we commodify it and
Speaker 2: we sell it and we say this is the you know,
Speaker 2: this buy this absence of emissions, which you know, if
Speaker 2: somebody came to your door and said, by this absence
Speaker 2: of a I don't know a set of encyclopedias, you
Speaker 2: wouldn't do it.
Speaker 4: No matter how much I opposed encyclopedias. I would not
Speaker 4: think that it was anti encyclopedia.
Speaker 2: You know. So we're commodifying things that are very difficult
Speaker 2: to measure, and then we are making them the foundation
Speaker 2: of our climate policy. And you know it's I think
Speaker 2: in many ways the book does not make very novel arguments,
Speaker 2: in the sense that, of course climate change is a
Speaker 2: political problem about winners and losers. But I think the
Speaker 2: contribution is to say, as long as we are thinking
Speaker 2: about it in this technocratic way, which is pervasive in
Speaker 2: climate policy, then we're not going to make real progress.
Speaker 4: I actually think the way that you articulate the pervasiveness
Speaker 4: of it is pretty novel. The reason I say that
Speaker 4: is because, yes, the root of the problem is the
Speaker 4: fossil acid owners, and they're decades of obstructionism, But there
Speaker 4: is also this consensus, this entire cottage industry of corporations, NGOs,
Speaker 4: organizations that exist sort of in the space between those
Speaker 4: two that are deeply, deeply invested in managing tons and
Speaker 4: all of the verification and in validation and certification that
Speaker 4: this really complicated technocratic approach demands and has created. Can
Speaker 4: you just talk about that industry a little bit, because
Speaker 4: I think it's really hard for people who have not
Speaker 4: experienced it to appreciate just how broad it is, how
Speaker 4: connected it is with positions of power, governments and corporations
Speaker 4: and corporate trade groups and things like that, and also
Speaker 4: how much they just have invested in continuing the inertia
Speaker 4: of managing tons.
Speaker 2: Yeah, so I'll talk about this in the context of
Speaker 2: carbon offsets, and then I can talk about sort of
Speaker 2: corporate corporate night zero as well. But carbon offset project
Speaker 2: so very basic overview carbon offset project is party A
Speaker 2: pays Party B to do a carbon reducing thing, and
Speaker 2: Party B gets the money and Party A gets the
Speaker 2: emissions reductions. But it doesn't just involve Party A and
Speaker 2: Party B. Someone's got to design the project. Someone has
Speaker 2: to make sure that the project conforms to whatever methodologies
Speaker 2: are required. Then the project has to be validated, generally
Speaker 2: by a third party that says, yeah, this looks good,
Speaker 2: the methodology is sound, this is going to reduce approximately
Speaker 2: as much as you know. The document estimates and the
Speaker 2: calculations estimate, and we sign off on this. Then the
Speaker 2: project is funded and that may involve a bunch of funders,
Speaker 2: and then the credits are then generated and sold through
Speaker 2: usually through a registry or a platform like other comodities
Speaker 2: are sold, and there are some that work on platforms
Speaker 2: where other commodities are sold. And then at the end
Speaker 2: of the project there's someone who are a third party,
Speaker 2: a different third party that verifies yes, that verifies that
Speaker 2: everything has happened right, so that the project actually took place.
Speaker 2: That it generated the amount of reductions that it said
Speaker 2: it would, so on and so forth. So there's this
Speaker 2: big supply chain basically of actors involved in generating a
Speaker 2: carbon offset, buying and selling those credits. And what I
Speaker 2: show in the book, what I argue in the book
Speaker 2: is that everybody who's involved in that project has a
Speaker 2: vested interest in the numbers adding up, and they want
Speaker 2: the biggest numbers possible for the least amount of money
Speaker 2: so that they can put that on their ledger and say,
Speaker 2: look how much we reduce because we pay for this project.
Speaker 2: There's no constituency demanding high quality. Even though there have
Speaker 2: been all of these efforts tom the offset market, particularly
Speaker 2: the voluntary offset market, from a political perspective, it doesn't
Speaker 2: seem that these will be successful because really nobody has
Speaker 2: a vested interest in much deviation from the status quo,
Speaker 2: and so the numbers all add up, but the reductions
Speaker 2: aren't actually there.
Speaker 4: Reductions and emissions, you mean, the.
Speaker 2: Reductions and emissions are not actually there.
Speaker 5: There was a recent study done by some folks in
Speaker 5: California that reviewed twenty percent of all of the offsets
Speaker 5: produced basically both in governmental programs and involuntary programs and
Speaker 5: found that they represent actually sixteen percent of the.
Speaker 2: Total amount of emissions reductions claimed, so that there's almost
Speaker 2: an order like it's like shocking how little these are
Speaker 2: actually reducing emissions or avoiding emissions. And you know, I
Speaker 2: go through a lot of other problems with them besides
Speaker 2: just this number problem. But offsets are not only very
Speaker 2: problematic for this reason, but they are everywhere in climate policy.
Speaker 2: So it's not just I mean some of us, like
Speaker 2: it's sort of like common knowledge in I would say
Speaker 2: in climate policy circles that offsets are kind of bullshit,
Speaker 2: but we use them everywhere anyway, all the time. So
Speaker 2: there's this real disjuncture between like what we know about
Speaker 2: how these work and how we actually use them as
Speaker 2: a policy instrument.
Speaker 4: I feel like they're also one of the climate again
Speaker 4: quote unquote solutions that has broken through in sort of
Speaker 4: a mainstream way. Like if you go to book an
Speaker 4: airline ticket, most airlines now will say you can pay
Speaker 4: us extra money to offset your emissions, which is such
Speaker 4: a multi tiered scam that I can't. It's just PSA
Speaker 4: to everyone listening, don't pay your airline or any other
Speaker 4: company to offset whatever you're doing just to make yourself
Speaker 4: feel better. They're just pocketing that money and it's not
Speaker 4: doing anything correct.
Speaker 2: Answer, absolutely, And it's also usually like four bucks, Like
Speaker 2: how is four bucks set your flight across the country
Speaker 2: or across the ocean? I don't know.
Speaker 4: And they're pretty deeply entrenched in the Paris Agreement and
Speaker 4: other global climate negotiations and climate agreements, right, Yeah.
Speaker 2: So offsets are there's an offset market created by the
Speaker 2: Paris Agreement. It's called the Paris Agreement Crediting Mechanism. It's
Speaker 2: the successor to the one in the Kyoto Protocol called
Speaker 2: the Clean Development mechanism. So there's one there, a lot
Speaker 2: of the credits, not all of them, but a lot
Speaker 2: of the credits from the Kyoto Protocol are being grandfathered in,
Speaker 2: even though we know that there's a lot of problems
Speaker 2: with quality of those credits. There's also this huge a
Speaker 2: reference for this huge voluntary market, right, which is basically
Speaker 2: run by non state actors. I also call it the
Speaker 2: unregulated market because a bunch of you know, NGOs and
Speaker 2: private firms said, this is what constitutes a carbon offset
Speaker 2: project in you know, afforestation or methane capture, or whatever right.
Speaker 4: Or self regulation in their preferred euphemism.
Speaker 2: Yes, it's self regulation. And they started selling those and
Speaker 2: corporations started buying them, and then they started, you know,
Speaker 2: those purveyors of offsets started lobbing for them to be
Speaker 2: used as compliance instruments. So in twenty fifteen, countries got
Speaker 2: together through ECAL, the International Civil Aviation Organization, and created
Speaker 2: an emissions agreement to manage aviation emissions because that's not
Speaker 2: covered in the Paris Agreement, and that relies principally on offsets, right,
Speaker 2: because we don't have fossil fuel free means of air transport.
Speaker 2: So you know, it's going to create a demand for
Speaker 2: between one and two billion credits between now and like
Speaker 2: twenty thirty five, and voluntary credits generated on the voluntary
Speaker 2: market are now going to be accepted as compliance grade.
Speaker 2: So we have this self regulated market and now these
Speaker 2: are going to these these offsets are going to be
Speaker 2: used in an international inter governmental agree. So that's the problem.
Speaker 4: Can you talk a bit about why fossil asset owners,
Speaker 4: fossil fuel industry very much included, love this approach so much,
Speaker 4: Why it serves their interests so well?
Speaker 2: Yeah, because they can say that they're doing things. They say, look,
Speaker 2: we bought all of these offsets at like five bucks
Speaker 2: a ton, or like, look here's our here's our really
Speaker 2: shiny annual report that measure reports all of our emissions.
Speaker 2: And now we know that shareholders have all the information
Speaker 2: they need to make responsible decisions about climate risk. And
Speaker 2: it's like, no, they don't. Nobody reads that, and even
Speaker 2: if they did, they wouldn't understand it. It's I think
Speaker 2: it provides a lot of political cover for the status
Speaker 2: quo that these basically fossil asset owners can say that
Speaker 2: they're doing something that doesn't really address the problem of
Speaker 2: reducing the supply of fossil fuels. And indeed, if you
Speaker 2: look at like carbon pricing, one of these so this
Speaker 2: is the you know, the gnarling of economists and before
Speaker 2: it became political poison of many governments as well. Carbon pricing,
Speaker 2: if you look at the extent to which it is
Speaker 2: driving reductions, it tends to be for things like efficiency
Speaker 2: improvements or fuel switching. So these aren't really changes from
Speaker 2: the perspective of a fossil acid owner. These aren't changes
Speaker 2: that are fundamentally threatening their business model. Right, this is
Speaker 2: just like Okay, we're doing some stuff on the margins
Speaker 2: that's actually maybe that's good because it's cutting costs for
Speaker 2: us a little bit, but it's not catalyzing real decision
Speaker 2: making about how we wind down the use of these
Speaker 2: fossil assets.
Speaker 4: Which is one of the reasons the entrenched interests love
Speaker 4: it so much. And also the fact that, as you
Speaker 4: point out in the book, Carbon Pricing, you know, carbon
Speaker 4: tax or cap and trade type of system is so
Speaker 4: politically unpopular. And I wrote a story about an organization
Speaker 4: called the Climate Leadership Council a few years ago which
Speaker 4: was exon BP other trade groups. Fossil fuel companies backed
Speaker 4: organization that was advocating for a carbon tax. And one
Speaker 4: of the reasons they love it is because it's so
Speaker 4: politically unpopular that they can say, therefore something, and because
Speaker 4: people hate it because it has all the costs upfront
Speaker 4: and all the benefits down the road or diffuse you know,
Speaker 4: throughout the world. It's never going to pass. It's never
Speaker 4: going to go anywhere, so they don't have to worry
Speaker 4: about the solution that they say therefore ever becoming law.
Speaker 2: It's it's so insidious, or they will advocate for Airmission's
Speaker 2: trading scheme and then lobby for free allowances, which is
Speaker 2: basically like, okay, well, we're participating in this thing, but
Speaker 2: we literally paid no costs because the government gave us
Speaker 2: free a free right to pollute up to x amount,
Speaker 2: you know, and once you start giving those away, it's
Speaker 2: very hard, you know, to take them back. So yeah,
Speaker 2: they're both pretty insidious because they look on the face
Speaker 2: of them like something is happening, but in reality, very
Speaker 2: little is happening.
Speaker 4: And then the last one I wanted to make sure
Speaker 4: we touch on probably briefly, because it shared there's a
Speaker 4: lot of the same flaws as what we've been talking
Speaker 4: about is the obsession with net zero, which you describe
Speaker 4: as an elaborate distraction. It's another thing that has obviously
Speaker 4: broken through in sort of the mainstream discourse, the idea
Speaker 4: of net zero. And you won't find a corporation or
Speaker 4: a government that has not proclaimed except maybe America, that
Speaker 4: has not proclaimed it's commitment to net zero. By some
Speaker 4: far off distant point in the future.
Speaker 2: Right It's like, so, you know, maybe thirty or forty
Speaker 2: years ago, the rhetoric shifted from environment from like development too,
Speaker 2: like sustainable development, it's sustainable development. Was this a great
Speaker 2: thing because you can bele and developed at the same time,
Speaker 2: and you could sort of put whatever you want in
Speaker 2: that conceptual basket. And I argued that net zero is
Speaker 2: the same because because the math is so difficult, particularly
Speaker 2: for firms, like for governments, it's a different issue. So
Speaker 2: I want to bracket that for a moment. But if
Speaker 2: you claim to be net zero as a company, right,
Speaker 2: you have to measure what are called your scope one,
Speaker 2: your scope to, and your scope three emissions. Most people,
Speaker 2: I'm assuming a lot of your listeners have heard of those,
Speaker 2: the direct and indirect emissions. So Scope one are your
Speaker 2: direct emissions, either through you know, production or generated through
Speaker 2: purchased electricity. And then scope too are some of the
Speaker 2: closely monitorable indirect emissions, like the commuting of employees. And
Speaker 2: then Scope three is sort of everything else. So it's
Speaker 2: everything all along the supply chain. So if your Walmart,
Speaker 2: your direct emissions are you know, the electricity used to
Speaker 2: keep the lights on, but you know the electricity or
Speaker 2: the emissions from electricity for your suppliers, or the carbon
Speaker 2: emitted through moving things along the supply chain? Are your
Speaker 2: scope three missions and so measuring scope three emissions is,
Speaker 2: particularly if you have one hundred thousand suppliers like Walmart does,
Speaker 2: is impossible, right, because you can't get all that data.
Speaker 2: You can ask your suppliers to you know, to give
Speaker 2: it to you, but it'll be incomplete, it'll be self reported,
Speaker 2: all of these kinds of things, and so what we
Speaker 2: get is a very partial picture of what the company's
Speaker 2: scope three emissions are, which is, you know, not entirely
Speaker 2: their fault because how you get all of that information,
Speaker 2: but it's extremely misleading about what their emissions actually are.
Speaker 2: And one of the points I make in the book
Speaker 2: is everyone's scope three emissions are somebody else's scope one emissions.
Speaker 2: So if you measured everyone's direct emissions through say regulation,
Speaker 2: then you wouldn't have to have this kind of rigmarole
Speaker 2: where people are. You know, there's again a huge cottage
Speaker 2: industry of ESG officers and you know, carbon accounting firms
Speaker 2: and all these kinds of things of helping these companies implement,
Speaker 2: you know, measure their their emissions. And I just argue
Speaker 2: that that is really not it's not getting it the
Speaker 2: fundamental question of asset ownership, right, it's just sort of
Speaker 2: window dressing in many cases.
Speaker 4: For people again who have not maybe been in this
Speaker 4: world directly, it's hard to overstate how lucrative the you know,
Speaker 4: measuring net zero, measuring scope one, two and especially three emissions.
Speaker 4: That entire industry of measuring and reporting for consulting firms,
Speaker 4: accounting firms, ngeos, smaller companies is you know, the more complex,
Speaker 4: the better from their perspective. In a lot of ways,
Speaker 4: it's an entire sub industry that only grows as this
Speaker 4: gets more complicated.
Speaker 2: And I should say there is you know, there has
Speaker 2: been a little bit of progress, like there's a number
Speaker 2: of countries that now have sort of anti greenwashing laws
Speaker 2: on the books that kind of help control some of
Speaker 2: the claims that companies can make. But it's you know,
Speaker 2: it's it's not really enough, and it's not really the
Speaker 2: key issue.
Speaker 4: Something I thought was really interesting was an example you
Speaker 4: gave on that front about I think legislation in Canada
Speaker 4: that led to some very dramatic change in public performance
Speaker 4: of the oil Sands Pathways Alliance. Can you just talk
Speaker 4: about that real quick, just as an example of how
Speaker 4: what regulation can do in terms of prompting actual change
Speaker 4: in actual action from this industry group.
Speaker 2: In I'm not I'm not, it's it's been in the
Speaker 2: last couple of years, Canada hassed to bill that basically
Speaker 2: said control what kinds of claims firms can make about
Speaker 2: their net zero work. And the Pathways Alliance is a
Speaker 2: group of basically companies that do oil extraction in the
Speaker 2: Tarsans and they are planning to be net zero, which
Speaker 2: if you think about it's a bit of an oxymoron,
Speaker 2: like it's some of the dirtiest oil in the world.
Speaker 2: How on earth do we get from that to net zero?
Speaker 2: And so this bill was passed and basically the Pathways
Speaker 2: Alliance scrubbed their website overnight and just you know, had
Speaker 2: some nice pictures and took down all of the all
Speaker 2: of the words and all of the language because it
Speaker 2: didn't comply with or I mean, there was some criticism
Speaker 2: of the law. I can't remember what number it is.
Speaker 2: There was some criticism that it was, you know, not
Speaker 2: sufficiently specific, and so that left the Pathways Alliance and
Speaker 2: other companies potentially open to litigation because of you know,
Speaker 2: how the law was being interpreted. But nonetheless it led
Speaker 2: to an about face by by the Pathways alliance, which yeah,
Speaker 2: I think speaks to your point of like, actually, yes,
Speaker 2: we can have regulations to you know that that will
Speaker 2: change behavior rather quickly and rather dramatically if there's the
Speaker 2: public will to do it.
Speaker 4: So as the Conference of the Parties, the un COP
Speaker 4: thirty conference, approaches, there's certainly, as we were talking about
Speaker 4: before we started recording, there's certainly going to be an
Speaker 4: enormous amount of media coverage and fanfare and feel good
Speaker 4: pledges and things like that that emerge from the forthcoming conference.
Speaker 4: I wanted to read two sentences that you write in
Speaker 4: the book because I think they're important to keep in
Speaker 4: mind as we head into the conference. The first thing
Speaker 4: you write is that at this point, the Paris Agreement
Speaker 4: is teetering on the brink of complete irrelevance, and the
Speaker 4: COP appears to be collapsing under its own weight. Can
Speaker 4: you just unpack those two arguments a little bit.
Speaker 2: On the irrelevance question, Look, it gives me no joy
Speaker 2: to say any of this. I don't want this to happen,
Speaker 2: but it is happening, and so I think we need
Speaker 2: to reckon with that. So there's a few reasons. I mean,
Speaker 2: what is the Obviously, what political scientists would call output legitimacy,
Speaker 2: like institution is viewed as legitimate if it does what
Speaker 2: it says it's going to do, and it's not doing that,
Speaker 2: it's failing by its own measure. Right, The target in
Speaker 2: Paris is to limit warming to one point five degrees
Speaker 2: c and there's already substantial evidence to suggest that we're
Speaker 2: above that. We're at one point six as the global average.
Speaker 2: So that's number one. It's not doing what it says
Speaker 2: it's going to do. It hasn't succeeded at bending the
Speaker 2: curve on emissions. Number two is like what the sort
Speaker 2: of coverage that happens every year and has for the
Speaker 2: last few years about you know, the growing influence of
Speaker 2: both petro states and the fossil fuel industry. So you know,
Speaker 2: the last two cops were in Azerbaijohn and the UAE,
Speaker 2: and those are obviously big petro states, So there was
Speaker 2: a lot of criticism about you know, how how could
Speaker 2: you possibly have a cop in those countries, and I mean,
Speaker 2: I'm of two minds about that. Obviously, there's some conflicts
Speaker 2: of interest, and in particular in the UAE, there was
Speaker 2: some suggestion that the president who of the of the COP,
Speaker 2: who was also in a leadership position in the in
Speaker 2: the state owned oil company ADNOC, was kind of tilting
Speaker 2: things away from consensus on the phase out of fossil fuels.
Speaker 6: So yes, there's a conflict of interest, but this is
Speaker 6: also a multilateral institution.
Speaker 2: You can't start introducing a litmus test for who gets
Speaker 2: to host and who gets to chair. I mean it
Speaker 2: looks like Australia's going to be chairing next year. Also
Speaker 2: a huge emitter, and arguably you you know, those countries
Speaker 2: really have to wrestle with what they're going to do next.
Speaker 2: So it's a complicated issue. But that's another reason that
Speaker 2: the COP and the UNF Triple C is really struggling
Speaker 2: with legitimacy. And I would say the third is just
Speaker 2: the growing presence of the fossil fuel industry. I don't
Speaker 2: go to the COPS anymore because it's just an absolute circus.
Speaker 2: But you know, everybody that I know who goes, you know,
Speaker 2: says that there's tons and tons of representatives from the
Speaker 2: fossil field industry. They hold side events, they have you know,
Speaker 2: a big physical presence there. So again, if this is
Speaker 2: the thing that we're purportedly trying to regulate and phase out,
Speaker 2: and yet you know we have you know, obviously the
Speaker 2: optimistic view would be, oh, well, you need those people
Speaker 2: at the table, but even the former Executive Secretary of
Speaker 2: the UNF Triple C, Christiana Figiettiz, said we can't have
Speaker 2: those people at the table anymore because they are obstructing progress. Right,
Speaker 2: So you know, there's there's a lot that's not going
Speaker 2: well in the un of Triple C. It's hard, I mean,
Speaker 2: it's hard to know what to do, right because this
Speaker 2: is the place where all countries get represented and that
Speaker 2: counts for something, particularly in a world where like global
Speaker 2: cooperation is sinking by the second. But you know, on
Speaker 2: the flip side, it's not producing any results. And so
Speaker 2: you know, we have more meetings, more more subsidiary bodies,
Speaker 2: more financial mechanisms. This year there's going to be a
Speaker 2: push for address transition mechanism. Last year it was loss
Speaker 2: in damage. So there's just kind of more and more
Speaker 2: on the agenda without actually completing the tasks that have
Speaker 2: come before them.
Speaker 4: All right, and I will add not just the fossil
Speaker 4: fuel companies themselves, but all of their enablers as well,
Speaker 4: the pr firms and consulting firms and all the other
Speaker 4: companies who make money off them making money yes, and
Speaker 4: who can also say publicly and to their employees and
Speaker 4: their perspective employees, oh look here we are at cop
Speaker 4: We must care about the climate crisis. Hire us, come
Speaker 4: work for us. There's kind of some second and third
Speaker 4: order money making off the appearance of doing stuff that
Speaker 4: follows from these.
Speaker 2: Absolutely.
Speaker 4: Yeah, I feel like we should spend a little bit
Speaker 4: of time talking about what we should do instead of
Speaker 4: managing tons, not just the problems with man tons. Can
Speaker 4: you give a bit of an overview of I hesitate
Speaker 4: to call it a solution section, because I feel like
Speaker 4: that has been so trivialized in a lot of ways,
Speaker 4: because solutions are always kind of a or have been
Speaker 4: just like performative in a lot of cases. Yours are not, though,
Speaker 4: and so I want to make sure we spend some
Speaker 4: time unpacking them.
Speaker 2: I described the approach in the book as radical pragmatism.
Speaker 2: It's radical in that it gets to the root of
Speaker 2: the problem, which is this fundamental power asymmetry between fossil
Speaker 2: asset owners and green asset owners. But it's pragmatic in
Speaker 2: the sense that like, we need things that are actually
Speaker 2: possible and that don't require an entire remaking of the
Speaker 2: international order, because we just don't have time for that.
Speaker 2: Climate wise, you know, solutions are hard. We're really there's
Speaker 2: a lot of grid luck, there's a lot of polarization,
Speaker 2: and so I tried, really there's a lot, but there's
Speaker 2: also a lot of doomerism, right, And so I tried
Speaker 2: really hard to think about, Okay, well, how can we
Speaker 2: chip away at this problem of the incumbency of fossil
Speaker 2: asset owners and really not just think about the energy transition,
Speaker 2: but think about the politics of creating conditions for destabilizing
Speaker 2: the fossil fuel industry, which includes building up green asset
Speaker 2: owners as political you know, political interests of their own.
Speaker 2: And so with all of those caveats, like so basically
Speaker 2: I say, okay, well, if we're not going to think
Speaker 2: about tons, we got to think about dollars. How do
Speaker 2: we move dollars around in the global economy? And the
Speaker 2: first Solutions chapter really looks at it looks at tax
Speaker 2: and investment policy, and so I did this deep dive
Speaker 2: into international tax law, which I cannot recommend to anyone.
Speaker 4: Thanks for taking one for the team there exactly.
Speaker 2: The OECD is now in the process of implementing these rules.
Speaker 2: They're called the Model Rules on base erosion and profit shifting,
Speaker 2: basically to put in place at corporate minimum tax to
Speaker 2: reduce offshoring corporations offshoring their profits to low tax jurisdictions,
Speaker 2: so to reduce tax avoidance and tax arbitrage. And this
Speaker 2: is actually surprisingly like well underway. It was the Model
Speaker 2: rules themselves. It's not a treaty, but it's like the
Speaker 2: sort of agreement that it puts together a framework that
Speaker 2: countries can go and implement in their domestic laws. So
Speaker 2: in twenty twenty one they came to this agreement and
Speaker 2: slowly but surely countries about sixty of them now have
Speaker 2: put in place some pieces of this corporate minimum tax.
Speaker 2: And I argue that this is good for a bunch
Speaker 2: of reasons. Number one, governments need money, and they need money.
Speaker 2: And even number two, ideally they use this money for
Speaker 2: climate stuff. Maybe they don't. Number three, even if they
Speaker 2: don't use it for climate stuff, if they are taxing
Speaker 2: wealthy fossil asset owners, they are taking power away from
Speaker 2: material power, away from those actors, which is important.
Speaker 4: I actually thought that was a really revolutionary point. It's
Speaker 4: so straightforward, but I've certainly never come across it in
Speaker 4: the climate discourse, the fact that even if that money
Speaker 4: doesn't get used to tackle the climate crisis, it still
Speaker 4: makes them less powerful. And that is just such a
Speaker 4: fundamentally clear and straightforward argument for doing it.
Speaker 2: And the related one is that we know that wealth
Speaker 2: inequality is a huge contributor to climate change. So again,
Speaker 2: the more you can chip away at this huge income inequality,
Speaker 2: you are contributing at least indirectly to reducing emissions.
Speaker 4: Can you actually explain how wealth and incoming equality drives
Speaker 4: or contributes to the climate crisis.
Speaker 2: Yeah, So, OXPAN does this report every year called the
Speaker 2: Carbon Inequality Gap, and it just shows I don't have
Speaker 2: the numbers quite in front of me, but it shows
Speaker 2: that the wealthier you are, the more you emit. And
Speaker 2: so that the top ten percent of people in the
Speaker 2: world that in terms of income are responsible for something
Speaker 2: like seventy percent of global emission, some overwhelming whelming number. Right. So,
Speaker 2: and you know we see it in like the tabloids
Speaker 2: or whatever all the time, yachts and private jets and
Speaker 2: all these kinds of things, eating meat, flying around. All
Speaker 2: these very carbon intensive activities are enabled by wealth, and
Speaker 2: when you don't pay taxes, you get richer. It's pretty
Speaker 2: you know, pretty basic math. So I mean, the corporate
Speaker 2: minimum tax doesn't apply to individuals, although there is a
Speaker 2: separate discussion about a billionaire's tax for a very small
Speaker 2: number of people in the world. This covers corporations, but
Speaker 2: it is a step in that direction nonetheless. So I
Speaker 2: can talk a little bit about the investment piece as well,
Speaker 2: which is also another Yeah, let's do that. So the
Speaker 2: other thing that I look at in the book is
Speaker 2: called the Investor State Dispute Settlement System, which is basically
Speaker 2: a set of investment protections for FDI for foreign direct investment.
Speaker 2: So if you are a company and you invest in
Speaker 2: the you have a project where you're investing in a country,
Speaker 2: if that country does something that jeopardizes your investment, the
Speaker 2: company can sue basically through an arbitration system. So it's private,
Speaker 2: private arbitrators. And what the work of others has shown
Speaker 2: is that these protections through ISDS have resulted in huge
Speaker 2: payouts to fossil fuel companies and mining companies because they
Speaker 2: build a mine or they start to, you know, prospect
Speaker 2: for oil and then countries say, hey, we're not doing
Speaker 2: offshore oil prospecting anymore, or you know, we're not doing
Speaker 2: you know, because we pass some climate regulations and then
Speaker 2: the country, the firm can sue that country. So in
Speaker 2: the US, yes, and Canada when so you might have
Speaker 2: heard of this little thing called the Keystone pipeline when
Speaker 2: the US canceled those permits Canada, the Alberta Well, there's
Speaker 2: a couple of different suits, but basically a couple of
Speaker 2: energy firms in Canada, TC Energy included wanted to sue
Speaker 2: the US for fifteen billion dollars because it couldn't build
Speaker 2: its pipeline, saying we lost our you know, we lost
Speaker 2: this potential revenue. And this case didn't go through because
Speaker 2: it was brought under KUZMA as opposed to NAFTA. NAFTA
Speaker 2: had these ISDS protections in the treaty, but KUZMA does
Speaker 2: not for Canada, so it can't make these claims.
Speaker 6: So but that's an example of like TC Energy, we
Speaker 6: don't need to be subsidizing pipelines. TC Energy doesn't need
Speaker 6: any more money. And you know, in the case of
Speaker 6: the US potentially it could have paid it.
Speaker 2: But in a lot of cases these are in developing
Speaker 2: countries where it's just huge amounts of money for governments
Speaker 2: that really can't afford to pay. The proposal here is
Speaker 2: a very basic one, which is to say, again doesn't
Speaker 2: involve a huge amount of work, is just to say
Speaker 2: countries should withdraw from or change the terms of treaties
Speaker 2: that have these ISDS protections. It can be done unilaterally,
Speaker 2: and there are some countries that have done this.
Speaker 4: How much do you think the threat of a suit
Speaker 4: or some sort of arbitration from the ISDS process has deterred,
Speaker 4: especially maybe smaller mid sized countries from putting in place
Speaker 4: climate related regulations or laws.
Speaker 2: So Kyla Shanhara, who has done a lot of work
Speaker 2: on this, calls this a regulatory chill that developing countries
Speaker 2: are legitimately afraid of being sued and so they don't
Speaker 2: put in place climate regulations because of this fear. So
Speaker 2: it's not just the payouts, it's the legend slation foregone
Speaker 2: for fear of you know, arbitration from these private firms.
Speaker 2: So it's a double whammy and it needs to go.
Speaker 2: It would also, you know, if we really care about
Speaker 2: sort of accurately pricing climate risk, we wouldn't have these
Speaker 2: kind of protections, right, So building a pipeline or opening
Speaker 2: a mind becomes a much riskier endeavor when you know
Speaker 2: that you can't potentially get a payout from some country
Speaker 2: if they decide not to do this anymore.
Speaker 4: There's a lot of stuff in the book that we
Speaker 4: didn't get to talk about. One of them is your
Speaker 4: argument what we sort of touched on it, but your
Speaker 4: argument that one of the ways to counter the power
Speaker 4: of fossil asset owners is to create a more powerful
Speaker 4: class of green asset owners to create winners. So climate
Speaker 4: policy is not seen as something that is just a
Speaker 4: loss or a punishment, but actually we have people who win.
Speaker 4: We have organizations, entrenched interests who in when these policies
Speaker 4: go into a place. And so there's something you raised
Speaker 4: toward the end of the book that I wanted to
Speaker 4: ask you about, which is the service industry. And a
Speaker 4: lot of this discussion focuses on manufacturing for good reason,
Speaker 4: but there's as you point out, there's you know a
Speaker 4: huge portion of a lot of countries workers are working
Speaker 4: in service jobs. And how do you bring decarbonization to
Speaker 4: the industries they work in in a way that they win.
Speaker 4: And I'm just wondering how you're thinking about that.
Speaker 2: It's a great question. And I started thinking about this
Speaker 2: when I, you know, did this, you know, started looking
Speaker 2: at sort of green industrial policy and how do we, yeah,
Speaker 2: how do countries really think systematically about decarbonization as an
Speaker 2: economic policy? And I thought, wait a minute, Like, I mean,
Speaker 2: and I've seen it here, Like, you know, Canada is
Speaker 2: not going to become a global leader in the production
Speaker 2: of evs, right, so if they're going to green their
Speaker 2: you know, their economy, they're going to have to figure
Speaker 2: out other ways to do it. And so I looked
Speaker 2: around a lot to see, Okay, well who's thought about this,
Speaker 2: and most people said, we need to think about this.
Speaker 2: So I'm just going to sort of plant to flag
Speaker 2: and say we need to think about this. I mean,
Speaker 2: there's been some discussion of sort of green jobs and reskilling,
Speaker 2: and I think that that's you know, a piece of it,
Speaker 2: and there are people who have looked sort of more
Speaker 2: carefully at specific sectors. But I mean, I think we
Speaker 2: also need to think about like the care economy as
Speaker 2: part of decarbonizing, you know, take that tax money and
Speaker 2: pay for teachers and nurses. These are all low carbon
Speaker 2: activities that we need desperately in a lot of OECD nations.
Speaker 2: So I don't have a good proposal for like, how
Speaker 2: do we think about that, except to say, I mean,
Speaker 2: I think one of the sort of arguments underpinning a
Speaker 2: lot of the book is that solutions, even the sort
Speaker 2: of pragmatic ones, require a more muscular state. That is
Speaker 2: not something that's really on the menu these days. Although
Speaker 2: things are changing so quickly with the sort of explosion
Speaker 2: or I should say implosion of the global trading regime
Speaker 2: that countries are really now trying to figure out, well,
Speaker 2: how do we retool our economies if we can't just
Speaker 2: buy and sell cheap stuff all the time?
Speaker 7: Right?
Speaker 2: And so that I think it provides a window for
Speaker 2: countries to think more carefully about what the service the
Speaker 2: role of the service industry is, But we haven't. I
Speaker 2: don't think we've seen a lot of it play out
Speaker 2: in politics thus far.
Speaker 4: Is there anything in particular that you will be looking
Speaker 4: for when the COP convenes I think the second week
Speaker 4: in November. Are there signs that would tell you, you know,
Speaker 4: some of the ideas you talk about in the book
Speaker 4: might be seeing some progress or not.
Speaker 2: Well, I mean, I think developing countries have been in particular,
Speaker 2: have been fighting very hard for language and activity around
Speaker 2: just transition. Like a lot of that is sort of
Speaker 2: code for my need to develop in countries to decarbonize.
Speaker 2: And so if there's any thinking about a just transition
Speaker 2: that involves a real mechanism for funding beyond, hey, guys,
Speaker 2: let's all contribute to this, like this is what we've seen.
Speaker 4: At some point in the future, we promise, Yes.
Speaker 2: At some point in the future, we promise we'll do it.
Speaker 2: But if there's a real conversation about like linking that
Speaker 2: mechanism to other actual flows of existing money, that might
Speaker 2: be a step in the right direction. But right now
Speaker 2: I think it's a reckoning moment. Like I think, you know,
Speaker 2: I make some suggestions in the book about how we
Speaker 2: can sort of adjust our expectations downward for what the
Speaker 2: cop can and can't do, and I think that's really
Speaker 2: what we need to think about, because otherwise we're going
Speaker 2: to have this cottage industry sort of keep pushing for
Speaker 2: managing tons and legitimating this process, and you know, round
Speaker 2: and round we go.
Speaker 4: There are a couple of points in the book where
Speaker 4: you address that cottage industry directly, which I appreciated very much,
Speaker 4: And I certainly hope that a copy of your book
Speaker 4: will end up in the hands of everyone there, which
Speaker 4: would also be great for book sales too, but I
Speaker 4: think it would be good for the climate as well.
Speaker 2: Bad for my carbon footprint, but good for it. Yeah,
Speaker 2: so we'll see.
Speaker 4: Thanks so much, Jessica.
Speaker 2: Awesome thing. It was lovely to talk to you and
Speaker 2: thank you for reading my book.
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