The Great Divide: Why Some Fear, Others Ignore Climate Change

the answers to these questions. And he analyzed this data in one of our recent consumer radar report series titled What Divides and Unites on Climate Action and Awareness. If you'd like to read it, you can find it on the Bloomberg terminal at benof Go or on BNF dot com. Quick reminder, B and e F does not provide investment or strategy advice, and we've got a full disclaimer at the end of the show. But now Mark and I are going to talk to you, Hugh. Thanks for joining

us today. Thanks. Then it's graduated back, so let's start off the show today with you explaining what it is that you do for bn e F because you have a bit of a unique role and write research that you know you wouldn't necessarily typically associate with us. Yeah,

I suppose that's right. It's maybe a function that people aren't even aware that exists within Bloomberginne f my role, who's really to think about the consumers and how consumers interact with the technology and the sectors that we care

care about the transport, energy, and climent sustainability. So it really that's thinking about consumer behavior and demographics and who's buying the gadgets that we care about, that vendor strategy and how do you sell to consumers one of the more successful strategies there, and finally outcomes how consumes interacting and driving outcomes in these sectors. My backgrounds have been being with being there for a number of years now.

I've sat within many of these technology teams. Covering the technology is how you know, covering the companies that are selling these technologies. Now certainly the other side of that thinking about you know, what are the consumers looking for here and how are they driving the outcomes? So today the title of the note is well, in addition to being part of our Humor Radar series, what divides and unites us on climate action and awareness. So where do

you get that sort of information? What sort of data are you calling upon? Yes, so the Consumer RATAR something we made putting out for over a year now. It's a quarterly series and we're drawing heavily on third party surveys through out there to get an understanding and kind of monitor opinions that are shaping the energy sector and transport sector. We're trying to get some leading indicators of customer preferences and social consensus that might be changing across

the energy, transport and climate. The reason for that is twofold one. Those indicators of where sales might occur in the future are really important. You know, BNF always is a great job tracking where sales are occurring or have occurred, But I'm looking for the leading indicators who's going to buy next, what demographics, what region is going to buy next? And secondly, it kind of helps us get an understanding

of consumer or voter priorities and mandates. And this becomes really important when you think about kind of as ambition to decarbonize increases amongst many nations corporations, then role of consumers become was far more involved you know, households are responsible for something like three quarters of a global g h D emissions when you think that all the value changes that they rely upon. At the end of the day,

there there is an consumer. There, there's a household or a consumer, and they are ultimately making the decisions that will affect you know, whether these net zero and deep decolganization targets are achievable or indeed, if they give their governments a mandate to go and set targets in the first place, these decisions seem to be based you know, and what people buy seem to be based on their beliefs right where their their perceptions of climate and sustainability.

I guess can you kind of walk us through some of the key findings from the report that relate to that. Yes, so data emasion before inat report tends to have a theme, and this particular report looked at kind of what divides the units and climate action. So rather than just thinking about where are people most engaged on a climate where are we seeing greater support and mandate for government action, which I tried to this time, think about, well what

separates them? Why are they're still people pushing back against the who is that. So we looked across across a number of surveys published in the last quarter and thought about, well, demographically, whereas their division between different stakeholders, and then where there's not a demographic division, can it be explained by politics. We looked at things like whether there's a generational divide and educational divide and different opinion between genders, and and

it's kind of universally those things are true. You know, the younger people are more engaged on climate than older people, more educated, people with post secondary education are more engaged, more likely to believe that the climate change is an emergency than people without a secondary education and interested. The general is a little bit more complicated, but you know, in in middle income countries, men are far more likely to believe the climate changes the emergency than women, and

in hiring income countries the opposite is true. Women are more likely to agree. But there are some universal law, almost universal rules, they're that kind of are worth teasing out and understanding of why this is shaping belief and opinions. Well, so let's talk about what of the study that you called upon in this report in a little more details. So one of them was the World Economic Forums Global

Risk Report, and it's their one edition. Unfortunately those of you guys listening can't see it, but let's talk you through what's on there. I think there were some themes that really emerged. So it evaluated risks well, perception of impacts, on likelihood of global risk and broken down by economic, environmental, geopolitical, societal, and technological and what sorts of trends did you see regarding what things I mean, I guess to put it

really bluntly, what things people are actually care about right now? Well, it's an interesting surver. This is survey conducted at the end of published in January one. Everyone's coming out of this really horrible year, where like clearly in the pandemic is going to be front of mine, and yet climate action failure is still ranked as the highest global risk,

the most significant global risk in this survey. Now, yes, they rated infectious diseases as having the highest impact, climaction failure having the second highest impact, and they rated extreme weather as having the highest likelihood, climate changing the second highest likelihood. But across the board you saw all these kind of climate related themes climate action and failure, environmental damage, bio diversity, lost extreme weather all ranked very highly. In fact,

you in the top five places. You see the majority of those spots are filled up by climate related issues. Was there anything that surprised you in particular about this report here? You know, a lot of things have fallen from front of mind, you know, things around terrorist attacks and technological concerns and risk that people that was very much front of mine kind of a year or two have really slipped away. Climate changes really hung in there.

It's placed in the top five most impactful risk and top five most most likely since whilst all these other issues are kind of coming gone. Do you think it will help to call it something else? So? Yeah, I think calling something else is something that we've kind of picked up on a number of surveys over the last year. Is there's certain labels that the consumers absolutely resiant. Green New Deal is one of them that just has a

really low support regardless of what it contains. Right now, Infrastructure seems to do better certainly across the board, and anything to do with sustainability. Certainly a lot of misunderstanding or misconceptions with consumers that are unable to differentiate between climate change issues and broader environmental topics around recycling and sustainability,

they really conflate the two things. So the more that you know a policy making can almost leverage that misconception in some ways, and past climate policies that are part of a broader sustainability package or or infrastructure package better.

The other thing we saw really high support levels for in in some more recent surveys and one published by Morning Console, was support amongst both Republicans and Democrats to require public companies to disclose those climate res So there is kind of a little bit of appetite their regulation around reporting. Not necessarily for action, but you know, it's a starting point just to to get some days to get the data into that those decisions can be made

down the track. Can I say kind of after will question, do you think this stuff matters? I mean, like, one way I've always looked at renewable energy and maybe they're showing my cards too much to the to the public, is that one benefit of it is if you just make the energy green, people don't necessarily have to think about it so much when they turn on their light switch.

So if you put an infrastructure deal through and you green things and you make things more sustainable, you let the public go on living as they were, and things just get greener and more sustainable. So does public opinion matter as much or are they actually the ones? You know? Are they going to vote people out for doing an infrastructure bill and things like that. So there's two pieces that I think kind of up until now or maybe in the near future, that kind of thought process does hold.

But the moment you start to plan and go about implementing a path toward zero, it gets much more complicated. Yes, you can decarbonize the infrastructure that supplies consumers, but really it's unlikely to get you far enough, and you need to start thinking about how can you decarbonize the technologies of the consumers use themselves, or even better, how do you change consumers behavior. So in two of those three scenarios, and likely you'll need to implement all three, you really

do need consumers on board. And the second part of it is that consumers aren't just there to use energy. They're also better put governments in place and said about their political priorities. So if consumers don't understand and don't drive the policies, then you know, be forever in this situation where policy makers where I'm sitting in Australia or you know, across the U S. And other countries are able to kind of, you know, see this really partisan division.

What we can see is climate change remains at outwege issue in those countries. Within a Pew Research Center study that you called the Pine, just staying with the US for a moment longer, you saw some demographic leans in terms of Republican versus Democrat, and you didn't see too much. I mean, you start a breakdown between male and female, but where you really saw differences were in age and in race. What were some of the findings that we had in the regard It's interesting because you do see

a division between race. It's fifty percentage points difference between the white population believes that dealing with climate change a priority versus you know, this is the Hispanic community, where the white look Caucasian community is a much lower percentage you believe that similar thing with age, you see that your younger people more likely to see that as a priority.

For this year, eighteen nine year olds is just two of fifty to sixty four year olds and a little bit of a gender divide, you know, six percent men at thirty five percent. Women at forty one percent believe in climate change an issue. And we already said before that in that separate global pole produced by the UN d P, the US was really low in terms of

division on education. Just having a post secondary education just makes you just one percent more likely to believe the climate change of emergency than if you don't have that post secondary education. So the US is, you know, there's there's divisions in some ways, but all of this this is really dwarfed by the partisan division forty four percent divide between Republicans and Democrats in saying the president's priority of this president in Congress to deal with climate change

this year. Now for a very short break, stay with us. Well, so let's of the US for a moment, although we're going to come back and I think specifically around some of the events and recently regarding the cold snap in Texas and that how may change people's views in the United States. But let's go all the way to the other side of the world and let's look at Japan. So there was a japan awareness survey of eighteen year olds.

Now you may have noticed in the news recently the Japanese government has made a carbon neutral by fifty pledge along with the number of other countries in the world. Actually, what's really interesting here is around whether or not the eighteen year olds actually believe it's going to happen. So what did we learn. It's industry survey. It's a server that the Nippon Foundation does every year of a Japanese eighteen year old and always as a theme, and this

year's theme was around global warming and climate change. And what it found is that, you know, the eighteen year old understandably support that pledge. You know, sixt eighteen of Japanese eighteen year old support that pledge to be carbon neutral by But what's amazing is the only fourteen percent of them believe it will actually be achieved by There's a real belief that pledges not achievable certainly on that timeline.

And even more so, there's a willingness in amongst Japanese culture, in Japanese youth culture, just to just say I don't know respondents, and I don't know whether that will be met by. And we also dug a little deeper because Japan in the UNDP Global Survey was the country that stood out as having the lowest demographic division between young and old, between different education levels, and between genders. And then how about the older population, of which is I

believe the majority of the population in Japan. Yeah, well, that's thoughts strange, right. We ever see other surveys across the world whether the older population is more skeptical of climate chains or see as less of a risk and certainly see less need to act upon it. But in

Japan the total opposite is true. So if you look at belief that I see sales can be phased out by the mid twenty thirties amongst the older Japanese are here of talking seventy plus, it's twelve percent of the older Japanese belief that target is definitely achievable, and over a third believe it is may be not achieved by the mid twenty thirties, but but achieved very soon thereafter. So you've got quite a significant gap to all compared

to young Japanese adults. I think this is an interesting one because you look at the source of this data, and it's actually the Japan Automobile Federation, so they have a vested interest in understanding how people feel about internal combustion engines versus electric vehicles. So it's it's always interesting to see, you know, who's digging a little bit deeper

on each of these questions. It is, and it's such a counterintuitive result that I I dug a little deeper myself and I approached our our team in Tokyo and to kind of understand what what could be driving this sort of result when we tossed a few ideas back to the forward. But one thing that really stood out is that thinking about this generation of of older Japanese, the change that they have seen a witness in their lifetime. They have certainly seen dramatic economic change within Japan and

the emergence of Japan as as a technology powerhouse. And then secondly they also suffered through a number of industrial waste crisis in the nine in fifties and sixties that resulted a number of health crises that would have shaped you in many ways their views on the pace of change and the need to change in response to environmental issues.

And maybe that's something the Japanese youth, or at least young adults kind of haven't experienced the witnessed is that the key hue is it experiencing something related to climate change as you mentioned this in Japan. It seems like that's kind of what we've seen in China, although that's not included in the in the study this time, but could that be also what's happening in the US. Maybe with Texas they had the cold snap and then all of a sudden, Yeah, people maybe started teams of tune

on on climate and activity or action towards it. Experience does seem to matter. So we we saw that in this survey of Japanese or it's one way to explain that, so of Japanese consumers. You're right in China that we also saw recalli belief in climate change and need for action in Australia following the wildfires at the end of and now we're starting to see data come out of Texas UM and you're absolutely right. So there's no survey unfortunately done before the cold snap in Texas that know

what what the starting positions were. What we see now is that the surveys taken in the days following the polls, sixty percent of Texas Republicans believe it's now a priority to pass legislation to address climate change, compared to forty per cent of Republicans across the country, so quite a divide there. So we didn't see the same movement in Democrats. It's of Texas nationally. It is a huge jump. If

this could explain it. You could also say that, you know, Texas Republicans have seen changes over the last decade or more regarding the wind turbines that have been built across

across the state. But this this number is stark and um and and the fact that it was taken just after the storm suggestedly dealing with and and experiencing these sorts of climate catastrophes really can shape your belief It's unclear, and in fact, the surveys I alluded to before, past experiences in China, the US, China, Australia have made maybe even Japan kind of show this might not last forever, but in the immediate aftermath does seem that conservatives and

and and skeptics more broadly views can be changed as a result of of of experience experiencing the effects of

climate change. But this is interesting that you point this out because we're saying the effects of climate change, but in reality, all of these are extreme weather events that depending upon how you want to look at it, could be linked to climate change have increased the probability of these one in a hundred years one in a thousand years storms, but there's no direct causal relationship that can

be unrefutedly connected. So the way that people look at climate change but then experience it is actually through weather, and as we know, whether in climate are very different. So I think one of the things that I find really interesting is people experience these extreme weather events and they say, don't want that to happen anymore. Could be the climate change is the problem, and then they have

to figure out what the solution is. And you had some interesting data points in here regarding views around whether or not wind power specifically and solar could be a part of the solution, whether or not that was a

direction that Texas was looking at. Even if these consumers don't don't believe they can change the weather, they have experienced blackouts, they've experienced some sort of lifestyle disruption, if not trauma over the last few weeks as a result of this, So they do need to start attributing blame

and even more so looking for solutions. One of the other survey questions that was included in these boarding Console polls was thinking about these solutions that Texans would support as a result of these storms, and what we saw was across the board generally pretty high support levels amongst

Republicans and Democrats, but certainly amongst Texas. Texas Republicans for modernization of the power system, energy storage, energy efficiency, and resiliency efforts really kind of nondescript, no brains, no massive political divide attached to them. But when it into clean energy and increasing the use of clean energy solars when we started, we suddenly see this partisan rift re emerge and we see that I'm fifty two percent of Republicans

across the country would support increased use of renewables. Yes, it's still a majority of Republicans, but a very slim majority. That number increases the sixty percent in Texas, so there is a a an eight percent, a reasonable but not overwhelming increase in the number of Texans that would support clearly more additional clean energy. The contrast that with Democrats at eighty seven and seven national ninety Texans Texas, so

a massive partisan divide there. I think really that comes down to renewables being the wedge issue that climate changes fought upon, which is really interesting and for those who are not familiar with this extreme called staff that hit

you know, Texas and actually several surrounding states. We have a podcast for that that we did right after the storm happened that really explained the root causes in terms of how the power structure has and one of the things that came out very clearly was that the natural gas pipelines had a potentially bigger role to play than the wind industry did in terms of causing these power outages.

So it's it's very interesting to see the actual root causes of the issue versus those things that are highly politicized in terms of what ends up making people's decisions. Moving on, actually a little bit to what do we do with this information? So if I'm listening to this and I'm working potentially at a corporation thinking about how people think and feel about different things regarding climate change

and how their business should potentially act. If I'm working at maybe a let's go with a consumer discretionary brand of sorts, what sorts of things would you look for and would you take away from these sorts of studies

to help influence the way you run your business. One thing I think that maybe all these poles kind of suggested aggregate is that the pace of policy change and consumers mandate ful policymakers too and at string of climate measures is related to climate change itself, and there is this feedback loop between the effects of climate change, whether effects or climate effects, changing perceptions and resulting in stronger, stronger push and strong and and tightening policy across the board.

And I think that's really it's really going to be present in the massive economies that are that are highly emitting and currently divisive, and that is the US, Russia, and India. In these surveys, they're the countries that you need to watch and watch for the effects of climate change because it will shape public opinion and ultimately change change change of climate policies that the corporations are bound by. Okay, so Hugh, last question, what did you find most surprising

in this round of research that you did. I think the Japanese generations of the divide is fascinating because it goes against so many other surveys we've seen in other countries where the older generations are typically less earned by climate change and its effects, and it's supportive of solutions than the younger generations. In Japan. The absolute opposite is true.

But I think again that tied back to this bigger picture, which is that the lived experience, the experience of environmental catastrophe and climate change is really going to shape how you see the future and the pace of change you expect from your government. Really fascinating research. How often do you produce these? And basically when are we going to have you back on the show again. It's been great to be here. These consumer radars come out every quarter.

There's always a different theme depending on kind of what's driving events at the time. Um and really we're trying to unpick kind of what what what is what is shaping preferences and giving give a leading indicator of this change. It's been great having you here today. Thank you. Today's episode of Switched on and was edited by Rex Warner, the Great Stoak Media. Bloomberginni ACA is a service provided

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