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Unfettered capitalism has been a major fuel to the fire of global warming for years, so I tend to be a little bit skeptical about suggestions that capitalism is going to solve the climate crisis. But in both his book and in this interview, actually injected some nuance into that conversation that's kind of been missing for a while, and I felt like it was important to share. I hope you find our conversation interesting. That's coming right up after this quick break.

a little bit surprised about. That's encouraging to hear exactly right.

for that we need success stories for. But I try and pick one that I feel like we really need to get on very quickly, is how can we move billions and trillions of dollars into developing countries for climate solutions that we know work, are scalable, and they desperately want them.

the markets. What are the solutions to making sure that that doesn't continue, because you know, there are these success stories in renewables and other types of technologies, but there's also kind of continued work to try to block that success. So I'm curious what you think about that as well.

But first let's talk about the development funding thing. Is there anything that you've seen that makes you think that people have a good plan in place, Like, you know, do you think what Barbados is doing is potentially the way.

what they can't reduce, they'll buy offsets. From developing countries and that'll transfer funds that developing countries need to be able to make that transition happen themselves. Of course, we know what happened. Offsets have been a failure in both what they deliver on the common savings as they promise, but also on the amount of money that actually got

transferred to developing countries. A lot of it was taken up by middlemen, and if any projects did take off, it's unclear how much of a difference they have really made. So the modern iteration of climate finance is only really

starting in the last few years. The earliest example of it is this wonky term the Just Energy Transition Partnership, where G seven countries mostly are coming together and trying to make deals with countries like South Africa, Indonesia, Vietnam, and then there's a whole host of other countries in the waiting list where they want to try and provide funds, both government funds but also private funds to help these

countries transition away from coal. And again it's a good bet to make to try and help these countries that do want to move away from coal, but it's messy because each of the country has very different politics. Each of the country has different reliance on coal, and we don't know whether it's going to work, but at least that's one large scale attempt right now that is in process. Then there's a third one which is more theoretical and yet has a number of people who are pushing towards it,

which is the Bridge Doown initiative. And again it's a very complicated thing. They've gone through two iterations of making this much bigger than what it was in the first iteration. But it comes down to trying to reform international financial institutions so that they can actually use that money that they do have toward climate purposes and also increase the amount of money that they can give towards climate purposes.

One example that I've found quite interesting is again a bit won key, but quite crucial, is to provide currency risk hedging, which is basically to say, you know, if you're investing in South Africa and you're investing in a country that is not operated on the dollar, then you're going to have some risk, especially if it's an emerging economy, that their currency might fall, it might be volatile, it might change value more frequently than the dollar. Changes value.

But if you are an international investor who wants the return in dollars, you want some form of guarantee that that currency exchange will be more stable than it typically is, and international financial institutions can really enable that. But again, these are just proposals right now, so that's why it's not there in the book.

for now a few years. But India's solar journey began in the early to mid two thousands when the country started to recognize that there is this technology that is clean, that is distributed, that can be quite easily used in India given it its own solar resources, and so India started to copy some of the policies that had been invented in the West, where it said we'll provide a feed in tariff, which is basically, we'll provide you payment if you install solar on your roof, and that way,

even though solar panels in the mid two thousand and early twenty tens are a little more expensive than they should be, you'll be able to make that money back because we'll pay you for generating that solar power. However, India as a country is quite capital restricted, which is it doesn't have that much money to be able to build huge amount of solar, and even individuals trying to build rooftop solar don't have the kind of capital needed to really make solar work. But despite that, the country

was keen on trying to set a target. So what it did in twenty fourteen in the run up to the Paris Agreement is set a target for a twenty gigawatt deployment by twenty twenty two, thinking that's a good ambitious goal and we should try and meet it. In the process, it gave the signal to a lot of market players to get ready to try and grab onto the opportunity that presents itself because the government has put

a mandate. And one of the companies that a profile in the book is renew Power, which is now just called renew And it started with this guy who had worked in the West, who'd worked in the financial industry in America, but his Indian by birth, and he comes back to India, has worked in the wind energy industry, looking at how renewables can work in India and recognize that solar is the opportunity I should grab onto and

creates this company. And what he recognizes is that if you want to scale technologies in a country like India,

you really do require capital. And he uses some of his own expertise from working in the finance industry in the US to try and raise money from the likes of Goldman Sachs eventually from the Canadian Pension Fund, and then marries it to trying to work in a country where governance's weak, corruption is high, where things don't happen as quickly as businesses would be pretty used to happening in Europe or America. And at every step he's figuring out what in Hindi would call jugaad or what we

would refer to in the West as hustling. Every step where there is a blockage, they hustle. They find a solution that allows them to open it up a little bit and allows them to grow their company, and slowly but surely, through that process, Renew goes on to become

the largest solar developer in the country. And even since I've written the chapter, there have been so many other players that are trying to catch up to what Renew is doing, and now some of them are even succeeding despite not having capital being raised from abroad, because the market has proven itself and solar is a solution that people can see works and actually makes money. So you do need these initial injections of that may come from abroad.

But once you get the engine going, the capitalist engine, so to speak, with the government direction, obviously, you can see that success can be scaled in other places.

countries had it. It was mostly sitting in America and in Europe, and there was a human cry about how if we're able to develop a vaccine using this technology, that technology and that vaccine should be made available worldwide, globally without patents, so that we can solve this problem quickly.

And of course we didn't do that. Patterns still remained, and yes, eventually we did get the vaccine to most places, but in the process we did lose probably millions of lives that could have been saved had we not had our world where technology transfer is so complicated with green technologies, there is a risk of that happening, But I would suggest that because the climate emergency isn't at quite the concentrated scale that a pandemic is, and that it's not

one technology that's going to tackle all problems. We need all sorts of technologies that we actually have more room to be able to make technology transfer work across countries. A very good example is solar panels. They were invented in America, they were really scaled up as an industry for climate purposes in Europe where Germany and then eventually Spain gave lots and lots of subsidies to deploy solar panels.

It was really China that made it absolutely cheap. It's China that is now responsible for the solar boom that the rest of the world is experiencing, and of course that's come with risks of trying to raise trade barriers so that you know, countries like America or parts of India also have their own capacity to be able to

make solar panels. But what we do know is, unlike fossil fuels, which have to be mined and then transported from one specific place, once you provide a solar panel, you don't also have to provide the sun that's already there. So there is a distributive nature in green technologies that we can use to acceleate the energy transition, and so far,

fortunately technology transfer hasn't been a barrier for progress. But in a world where we are starting to put up more trade barriers and where future technologies like hydrogen or carbon capture or carbon removal, which is a growing technology that we eventually will need a lot of, it is a risk that we will slow down the energy transition, that we will slow down our ability to be able to reach net zero to stop warming, and it's a risk that we all should be aware of and working to avoid.

it in better ways. So yeah, i'd love to hear you talk about that a little bit, and also about the governance that's needed to enable that to happen.

any progress from happening. And so one reason I wanted to write the book was to try and see if that is true, if progress is not happening at all, And very quickly I found out that's not the case. So through the book, I have these examples of how solar scaled in India, how windscale scaled in Denmark, how batteries and electric cars scaled up in China. But alongside it, I also recognized very quickly that there are very crucial enabling factors that allowed these technologies to get to scale,

and those are policy, finance, global diplomacy, shareholder activism. All of these things are also starting to play out in their own way at scale in different countries. And so it is possible, even in the economic system that we sit and that we must recognize has contributed to worsening climate change, that it's possible to tweak it to work for tackling climate change. And we have many examples of it.

We don't have to look at one. The American capitalistic system, with what's happening with the Inflation Reduction Act, is trying to use whatever political agreement there can be in one party to try and push for subsidies for green technologies. The European capitalism is quite different. There is actually broad political agreement in Europe to do something about climate change, but they do not have quite the capital capacity of America, so they are not going down the huge subsidies route.

They are providing some subsidies, but mostly they're providing direction. They're laying out a clear plan for when we need to get to net zero, what each sector in the economy must do. They are taxing emissions, which incentivizes people to pollute less, and they're laying down very strict rules around what a green investment would be, and that's allowing for people to put money in the right places. Chinese

capitalism is very different. It doesn't start with the place of we want to tackle climate change, although they do because they recognize China is going to be affected. It starts with we want to provide our people the kind of lifestyle that people in the West have, but we recognize fossil fuels are limited, energy resources are limited, and we as an economy need to grow while we do that.

So their solution has been to try and basically build huge industries that do green technology probably better than anybody else does in the world right now, and then just export all that green technology while earning money. And it's

a little bit jingoistic. It's driven by a lot of subsidies, but there is clearly a market for these companies because even as they start off heavily subsidized by state, eventually they become private enterprises, they consolidate, and there are some champions that remain that then go on to build factories outside China. A very good example is what's happening with batteries and how China is using its lead in batteries to go out and build factories in Germany, in Hungary,

eventually in the US and in Mexico. So you get these different forms of capitalism that are showing you that within the political context that is available, you can start to tweak the rules such that they will help reduce emissions while addressing global competitiveness, economic growth, all things that the capitalist system requires for you to be able to push these solutions forward.

to sort of artificially increase demand. You see in the tracking context is like the most obvious right where you had kind of unfettered development of that resource, then a glut. They pushed for a lift on the export band to deal with that glut, and they got it. Then they pushed to basically use one of the byproducts of tracking

for plastic that nobody wanted. That didn't stop them from building out a massive number of petrochemical plants that are just dumping simply use plastics on the market, and everyone is saying they're projections for demand for that are off,

but that hasn't actually impacted the supply side yet. And you know, you see it with sympeic fabrics and stuff too, right, So this thing that's happened where certain industries, for sure in the US are sort of allowed to just tinker with the market to suit their needs.

and deal with this problem, progress can be made. Now coming to the specific problem of American capitalism and how much of it is tied to essentially corporate greed, because your ability as a company to lobby politicians to just do your bidding very strong in America, not to say it's not there in other countries. That exists in almost

all resource intensive countries. Canada has it, Norway has it, Australia has it, and to some extent countries like India where there's a big base of coal jobs, even as most of the coal industry is state owned, has that lobbying power because those are state owned industries that are talking into the years of the very politics who are making these decisions. But one thing to recognize is that climate progress is sort of two steps forward, one step back.

You know, all the curves that we see on climate models that say to reach one point five degrees celsius, here's a smooth path that you must take to reach zero, is likely to be pretty jagged because we are going to get these swings between politicians who care about climate and politicians who don't. And it's again not just an America problem. We're starting to see that here in the UK with the Conservative government that was responsible for a net zero target now sort of turning its back on

green policies. But what happens here is that now we' vented this period where there is recognition that climate change and climate impacts are very real, very intense, and they are going to hurt not just people but economies. Right from a capitalistic perspective, is it going to hurt growth, yes? Is it going to hurt companies yes. Even if you don't care about people, you're going to have to care about these other forces that capitalism forces you to think about.

If you have any amount of long term thinking in your political mindset, in your company mindset, you recognize that the future is going to have green technologies in abundance, and if you don't get ahead of the game, you're

going to be lost behind. You know, a very good example is Tesla for all the problems that Elon Musk is for social media and for political views, we do know that Tesla has allowed lots of other auto manufacturers to start focusing on electric cars, and we are going to get that across different domains and across different industrial sectors. Will we do it fast enough? Is the question? Whether we'll do it or not is no longer the question. That's really interesting.

think is most necessary is the development finance piece. I think this is such a big thing going into cop and I keep seeing a lot of a lot of talk around the thing that you also mentioned the book, which is like, look, yes, some global salt countries are going to need to use fossil fuels for longer in order to sort of catch up on development and to unlock some of the capital needed for the energy transition

and for climate adaptation and all of that stuff. And I'm wondering if you could just like break that down a little bit, because I feel like this is another thing that becomes very black and white in climate conversations.

will make more money. So building a solar plant is going to make more money because we know solar plants can be profitable, but there is an upfront cost for it and that needs to be met and developing countries require that help. But because at the end of it you're going to make money, the difficulty of actually moving that money is less. There's a second bucket, which we can class as adaptation, but it's essentially a bucket where governments have to pay for it now so that they

avoid future costs. If you're able to avoid if you're able to adapt to a certain level of warming, if you're able to adapt to a certain level of sea level rise, then you will avoid costs from the damages that may come if you don't adapt to it. So that is something that governments can are capable of doing because they have the ability to be able to think a little more long term and to be able to sort of borrow from the future to pay for current expenses.

And then there's the last bucket, which is the smallest bucket should be the smallest bucket, which is loss in damage, which is paying for impacts that developing countries are suffering will suffer at greater scale in the future, for damages that are being caused because of rich countries emissions that have warmed the planet. So mitigation, adaptation, compensation could be

the three ways in which you understand it. But because the buckets have money doing different things and can be paid for for in different things, it's much better to think about what that money does. So now take it to what cop twenty eight is all about It's about global diplomacy. It's about trying to mostly now get developing

countries the money from developed countries that they deserve. But that money has to be split into these three buckets and has to be fought over with that clarity, because if you're going to ask for one hundred million dollar climate finance fund, which is going to help you build solar panels, that's actually a much easier fight to have now because that solar panel is going to make money.

But if you're fighting for compensation for loss and damage from climate impacts, it's a much harder fight because no rich country just wants to give money to developing countries. We are living in a world where foreign aid is being cut not just for climate, but for all kinds of purposes, and so you have to come with a different negotiation tactic, a different motivation to try and fight

for lost and damage funds. I think what's happening now is trying to put it all together muddels of the conversation, both for people but also for the various parties that need to sort this out. And money is the bottleneck right now for enabling the transition to go at the speed at it to go at the speed as it must. There is enough money in developed countries being put into climate solutions. There is nowhere enough money being put into climate solutions in developing countries.

unlock funding and all of these things. Just I feel like if that were the case, then more money would have been going into the grid in general, distribution networks, all of that, which would also help with the energy transition, and none of that has really happened. Can I have you talk about the risk of repeating some of the less savory aspects of capitalism as the transition gets underway.

example is around mining. China currently has essentially a strangled hold on battery metals, not because they're all mined in China, but because China has got long term contracts or their own companies mining materials in Congo or in other countries where you get cobalt and nickel and manganese and lithium to be able to build batteries, and then they are processed in China, and then those batteries have that material regardless of whether they are manufactured in China or not,

because that's where the material processing is happening. And of course we are living in the twenty first century where many of the developing countries are really developing countries because of colonialism and the amount of wealth transfer that happened

in that period. There is a risk that rich developed countries with democracies fall for the sort of green colonialism trap where they do the same thing that China is doing by going to a country and essentially owning portions of that country to be able to satisfy their own needs. We are starting to see some of that happen in

the carbon offset market. There have been recent announcements of a Dubai company signing up memorandums of understanding with countries like Zimbabwe, and Liberia essentially taking up as much as five or ten percent of the entire country to be able to generate carbon credits. But there are better ways to actually solve this problem because it is true that some of these metals are just in other countries, but you could be much more responsible in tapping into that resource.

One example that I am following is looking at what the European Union is doing with trying to get access to lithium and copper in South America, where it is going out and working with governments in those regions to say, look, we recognize you have these resources. The world needs resources, but we will also want to take on these resources only if we are able to provide you something in return, not just money. And so they are working to try

and get technology transferred. So they want electric bus manufacturing happening in those regions where European companies can set up shop, will have local manufacturing, will create both batteries and electric cars. Sorry, we'll create both batteries and electric buses in those regions which require those buses, while also being able to have deals where they can access metals like copper and lithium

for the energy transition. There are ways in which we can do it right, and we should really seek solutions where they are working, because this is a global problem and if we are going to try and tackle it, then we need countries to work together as much as possible. And if you go down the green colonialism route, the risk of fracturing what is already a pretty fractured world only grows. Capitalism has become this big thing which people basically just lump all the problems that are there in

the world under one word. At its core, capitalism is private ownership in a competitive market. And the only way in which capitalism can ever survive on the planet is if it's working for the people it is serving. And we know that none of these markets have ever been free, right, They're always regulated, whether they're regulated by governments or they're

regulated by nature. And so what we just need to understand is that as an incentivizing mechanism, capitalism has its problems, but those problems can be managed and can be harnessed to do our bidding, and I mean ours in humanity's bidding. And so rather than thinking of it as something foreign that somebody else is operating with fingers in the back, as some global conspiracy. It's much simpler to recognize it as a four that is available to be harnessed and

that needs to be honest through collective action. That's why I think capitalism gets the bad framing, and yes, it has its problems, but we also know we can use it for good.

survive if they're able to use capitalism well. But leaving the second step apart, the first step is absolutely crucial. The places where capitalism has thrived have been places where democracy has thrived, and the places where democracies have struggled

capitalism has run rough shot and caused problems. So I think in the series that you point out where democracies are cracking down on human rights, on fundamental ability to protest, on fundamental restrictions, on being able to make their voice heard, to ensure that excesses of capitalism do not run roughshot, is going to end up causing a lot of harm. Right, it's not capitalism alone at fault, but flawed democracies that

are at fault. So when we think of the problems that we face, you know, a, it's obviously always much more nuanced than pointing to one thing as the problem, but also recognizing that there is agency. I feel like what the series showed to me as I've listened to it is that despite these draconian laws coming into place, people aren't losing hope yet. If anything, they are more charged up. If anything, they are doubling down and trying

to overcome these problems. And yes, it's a dark turn to be in a place where protests in a country like the UK, which is supposed to be a paragonautic democracy, are being crushed for pretty unreasonable reasons. But it's also true that at the same time you have all these people committed and doubly committed to try and make it work despite it