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How to Reach Net Zero Within a Capitalist System · Merryn Talks Money

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
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  Speaker 2: John Man, it's been a while since we talked. A
• 0:11
  Speaker 2: lot has happened, and I was thinking, what are we
• 0:14
  Speaker 2: going to cover in this tiny little bit that we
• 0:16
  Speaker 2: get to chat before we move on Finthia. What's it
• 0:18
  Speaker 2: going to be? So I've decided it's going to be
• 0:20
  Speaker 2: absolutely everything, and I hope you're down with that decision
• 0:24
  Speaker 2: because we've only got five minutes. So here we go.
• 0:26
  Speaker 2: Are you ready?
• 0:27
  Speaker 1: Okay? Gold gold?
• 0:28
  Speaker 2: How do you feel about gold?
• 0:29
  Speaker 1: Oh? Amazing, it's been up like it isn't a rule,
• 0:32
  Speaker 1: It's like, wow, this kind of you know, the gold
• 0:35
  Speaker 1: bugs were right all those decades ago.
• 0:38
  Speaker 2: The way what you're saying is, Maren, you were right.
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  Speaker 1: Just as West Japan. You just have to be patient.
• 0:44
  Speaker 2: In the end, wait twenty years, you get there. So
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  Speaker 2: new high after new high after new high. It's exciting,
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  Speaker 2: but we know it's not the or up until now,
• 0:52
  Speaker 2: it has not been the Western retail investor, right, it's
• 0:55
  Speaker 2: been the retail investors in China in particular, it's been
• 0:58
  Speaker 2: central banks because we've seen outflows from from ETFs in
• 1:01
  Speaker 2: the West year after year after year, flattened out, maybe
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  Speaker 2: turning around.
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  Speaker 1: Yeah, the Japanese retail invested as well. I was reading
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  Speaker 1: this morning a good piece by Charles Gav's son guy
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  Speaker 1: his name escapes me visit Gavico, and he was pointing
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  Speaker 1: out that after the last Bank of Japan Central Bank meeting,
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  Speaker 1: where they were much more dubbish than expected, activity in
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  Speaker 1: the Japanese version of the physical gold ETF just went behind,
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  Speaker 1: as he puts it, And basically it sounds like the
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  Speaker 1: Japanese are fed up with the nbing devalued, and now
• 1:35
  Speaker 1: the Chinese are getting fed up with the yuan being devalued,
• 1:39
  Speaker 1: and so everyone in those countries is basically reacting to
• 1:42
  Speaker 1: what they see as ramping currency debasement by buying gold.
• 1:45
  Speaker 1: So I mean, it's fascinating, Okay.
• 1:47
  Speaker 2: So everything that we've been talking about for is is
• 1:49
  Speaker 2: sort of slightly coming to fruition. People are increasingly concerned
• 1:53
  Speaker 2: and inflation is not going away, that the value of
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  Speaker 2: the currency is not going to hold, that the dollar
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  Speaker 2: is not what it was, that buying US treasuries is
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  Speaker 2: not the answer to everything. So I wrote a column
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  Speaker 2: about this earlier in the week where I said that
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  Speaker 2: effectively gold is the everything hedge for central banks. And
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  Speaker 2: if it's good enough for them, do you know what
• 2:09
  Speaker 2: it's good enough for us? So that's gold silver.
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  Speaker 1: Silver was where is Sebastian Lion? Lion always described it
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  Speaker 1: as gold on crack, So I think you should take
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  Speaker 1: that exactly at face value, have a play with it
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  Speaker 1: if you want to, but be very careful and don't
• 2:27
  Speaker 1: expect too much of it. You know, if it goes
• 2:31
  Speaker 1: up an awful lot, then maybe you should look at
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  Speaker 1: taking Profit's definitely a trade rather than a buy and
• 2:35
  Speaker 1: hold portfolio insurance.
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  Speaker 2: That's just from John, don't take too much crack? Thanks John? Right?
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  Speaker 2: What else? The widening out of the US market. So
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  Speaker 2: we've had this incredibly intense concentration into the Magnificent seven.
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  Speaker 2: They're not all doing very well anymore. In fact, we're
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  Speaker 2: now down to I think the Magnificent three in terms
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  Speaker 2: of ones that are doing very well. And as to
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  Speaker 2: someone intro out to me yesterday that in dollar terms,
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  Speaker 2: gold has done better than the Magnificent seven so far
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  Speaker 2: this year. So we're beginning to say the performance of
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  Speaker 2: the megatech slide relative to everything else, We're beginning to
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  Speaker 2: say widening out of the market, that seems like a
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  Speaker 2: good thing right or does it tell us there's a
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  Speaker 2: big crush coming right now?
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  Speaker 1: If I'm one is that I think it's a good thing.
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  Speaker 1: I think it boils down the market currently terms, but
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  Speaker 1: the idea that maybe there's not going to be a recession,
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  Speaker 1: and also feeling broadly optimistic about the economy's ability to
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  Speaker 1: cope with higher interest rates. Maybe a bit of fear
• 3:37
  Speaker 1: of inflation thrown in because you can see the commodities
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  Speaker 1: are coming back, and that's partly because China seems to
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  Speaker 1: be leveling out, if not bouncing back, and certainly Chinese
• 3:48
  Speaker 1: stocks have rebounded strongly. So overall, I wouldn't say it's
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  Speaker 1: something to be worried about, but you may have read
• 3:54
  Speaker 1: something that I haven't.
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  Speaker 2: I'm always worried. I'm always worried, and you know, if
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  Speaker 2: there is that if inflation is not defeated as you
• 4:04
  Speaker 2: and I have been talking about for ages, and we've
• 4:05
  Speaker 2: been talking for ages about higher for longer rather than
• 4:08
  Speaker 2: lower sooner. We've been worried about energy markets. We've been
• 4:11
  Speaker 2: worried about the oil price, in which we may well
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  Speaker 2: have been justified. Is there an energy crisis ahead? Et cetera.
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  Speaker 2: Will come to more of that in a minute. So
• 4:18
  Speaker 2: you know, I'm watching the oil price pretty closely. That's
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  Speaker 2: always a worry. But I'm also looking at looking at
• 4:24
  Speaker 2: the big stocks and thinking, well, hang on, they've definitely
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  Speaker 2: gone far enough. This concentration is out of control. So
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  Speaker 2: what happens what happens next is that is there a
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  Speaker 2: mini crisis there or do we get the second order
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  Speaker 2: stock saying the ones that will definitely do very well
• 4:39
  Speaker 2: out of AI, but aren't the ones making the chips,
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  Speaker 2: et cetera. Do we see them coming to the forefront,
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  Speaker 2: which kind of what we saw in the nineties. Right,
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  Speaker 2: So there's lots of interesting things going on in the markets,
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  Speaker 2: which we will keep writing about. But moving on to
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  Speaker 2: the next bit, which is the wrappers inside which you
• 4:55
  Speaker 2: keep those investments you've written about ices. We love ices,
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  Speaker 2: we don't like to see interference and ice is you're
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  Speaker 2: a bit worried about that? You I sed to say
• 5:02
  Speaker 2: them just beginning by the way, get that twenty grand in.
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  Speaker 1: The problemse So it's a kind of leftish think tank.
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  Speaker 1: The Resolution Foundation came out with a bit of an
• 5:11
  Speaker 1: attack on I as saying that essentially attax breaks are
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  Speaker 1: too generous. So because not everyone can put twenty grand
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  Speaker 1: a year in an ISA, and they do sympathize. The
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  Speaker 1: suggestion is that, well, it's all of this tax relief,
• 5:24
  Speaker 1: if you like, is being weighted towards the wealthiest in society,
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  Speaker 1: blah blah blah, So we should cap the overall amount
• 5:31
  Speaker 1: you can stick in an ISA the same way that
• 5:34
  Speaker 1: they had a cap on the pension the lifetime allowance
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  Speaker 1: to one hundred pounds exactly. And I mean, it's just
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  Speaker 1: it's a typical economist argument where they frame it in
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  Speaker 1: kind of number terms, but really it just boils down
• 5:46
  Speaker 1: to your political viewpoint and they don't think about what
• 5:49
  Speaker 1: the knock on that problem will be as soon as
• 5:52
  Speaker 1: you start messing around with eyes as you get to
• 5:54
  Speaker 1: the same problem we've got with pensions, which is that
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  Speaker 1: they are mercilessly messed up around with by governments on
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  Speaker 1: a kind a semi annual basis, and that is one
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  Speaker 1: good reason why people don't trust them. And if you
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  Speaker 1: do the same way issis then that you know, you're
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  Speaker 1: just putting a big target on the the side of
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  Speaker 1: them for all future chancellors to either raid or mess about,
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  Speaker 1: and it really would be an extremely damaging thing. To
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  Speaker 1: do to what is a popular and still relatively simple
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  Speaker 1: savings product. So I just think is a bad idea.
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  Speaker 1: And at the same time I'm worried that it's the
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  Speaker 1: direction of travel, because you know, we are getting a
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  Speaker 1: labor government most likely, you know, in the next expert.
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  Speaker 2: The labor government that has started talking about tax dodging
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  Speaker 2: rather than dividing things up between evasion and avoidance, which
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  Speaker 2: is so important. What is legal, what isn't legal. No
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  Speaker 2: one can be criticized for tax avoidance. They can definitely
• 6:54
  Speaker 2: be criticized for tax avision, which brings us, of course
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  Speaker 2: to poor Angela and Rna very briefly, and the I
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  Speaker 2: don't need to talk about the issues around whether she
• 7:06
  Speaker 2: did or didn't or sort of shouldn't, because we have
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  Speaker 2: no idea. But what it does show up is the
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  Speaker 2: extraordinary complication of the UK tax system. And this is
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  Speaker 2: the bit that I'm looking and going, well, hang on,
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  Speaker 2: you know, so what someone like Angela Raina had to
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  Speaker 2: do when living in a house with one person or
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  Speaker 2: not living in a house with one person, I don't know.
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  Speaker 2: But married, if you're married, you can only have one
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  Speaker 2: principle home for tax purposes. How do you even know that,
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  Speaker 2: How are people supposed to know that? And how are
• 7:32
  Speaker 2: they supposed to choose which one it is? How are
• 7:34
  Speaker 2: they supposed to understand the nomination process? How all these
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  Speaker 2: things are impossibly complicated and difficult. And then you find
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  Speaker 2: you do have to play capital gains on one house
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  Speaker 2: because you didn't nominated, or because you live somewhere else,
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  Speaker 2: or whatever it is. And then there are a million
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  Speaker 2: allowances that you can claim against that. So what might
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  Speaker 2: look like a twenty eight percent tax bill of a
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  Speaker 2: ten plus thousand pounds can be brought down to zero
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  Speaker 2: in the blink of an eye with exemptions and exceptions,
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  Speaker 2: et cetera. If I were in government, which is never
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  Speaker 2: going to happen because my Twitter account I'm sure would
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  Speaker 2: never allow it. If I would be in government, the
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  Speaker 2: first thing I would do is say, hang on. The
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  Speaker 2: lesson we could learn here as a new government is
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  Speaker 2: that this system is out of control, complicated. Let's go,
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  Speaker 2: let's go simple, low and unavoidable. I've got a column
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  Speaker 2: coming out on why that means it's time. It really
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  Speaker 2: is time, And I'm sure at this point Angela Arena
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  Speaker 2: would agree it really is time for a low, flat
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  Speaker 2: rate of capital gains tax on all property sales in
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  Speaker 2: the UK we brought in hand in hand with the
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  Speaker 2: full abolition of stamp duty. Just agree with me, John,
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  Speaker 2: You know you want to wait?
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  Speaker 1: Are you talking about whole home sales even my family home?
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  Speaker 2: Yes, your family home. And you know, while I'm at it,
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  Speaker 2: I might withdraw that IHT exemption on your family home.
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  Speaker 1: What melnha like bomb?
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  Speaker 2: You know what I want you to do. Stop treating
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  Speaker 2: that house as though it's the greatest investment in the
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  Speaker 2: world because you don't have to pay any tax on it.
• 9:08
  Speaker 2: It's not an investment, it's your home. Put your investment
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  Speaker 2: money somewhere else. That's all I want from you, John.
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  Speaker 1: I think you should stand for prime ministers. So I
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  Speaker 1: totally agree with this. In case anyone thought I wasn't joking.
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  Speaker 1: That's a great idea.
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  Speaker 2: No, simple, unavoidable. Let's do it. Talking to you, Kistarma,
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  Speaker 2: talking to you Angela Reina. Do you think they're listening?
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  Speaker 1: Yes, of course, of course.
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  Speaker 2: Okay, excellent. So John, for our first week back from
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  Speaker 2: our holidays, we've had this wonderful quick fire around. I
• 9:43
  Speaker 2: know everybody's enjoyed it. We didn't get anywhere near the
• 9:45
  Speaker 2: tax gap. I'm living that for next week. Actually know John,
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  Speaker 2: John's going to write a column about a tax gap,
• 9:50
  Speaker 2: aren't you or am I? One of us is going
• 9:51
  Speaker 2: to we'll one of us. Well, anyway, first week back,
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  Speaker 2: we're actually, unusually we are discussing a book by a
• 9:59
  Speaker 2: colleague of ours. No one from the outside this time.
• 10:01
  Speaker 2: We're all inside this week. Actually Rathi he's a senior
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  Speaker 2: reporter on the team covering climate issues, and he hosts
• 10:08
  Speaker 2: his own podcast Zero, which obviously you should listen to.
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  Speaker 2: He's written a book called Climate Capitalism, Winning the Global
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  Speaker 2: Race to Zero Emissions. Now, John, the bit I like
• 10:17
  Speaker 2: about this, but I like about this, and I know,
• 10:19
  Speaker 2: I know you've read the transcript, is that it's called
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  Speaker 2: climate capitalism, not climate destroy capitalism.
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  Speaker 1: That works for me, Yeah, it's reassured as soon as
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  Speaker 1: I hear the word claim it. You know, there's a
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  Speaker 1: little bit of me that can daze and sage usually,
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  Speaker 1: but it's uh, well, I mean, clearly dis duty the
• 10:41
  Speaker 1: uncontrolled effects of global warming. But other than that, it's
• 10:45
  Speaker 1: but not I think when you see it campagned with capitalism,
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  Speaker 1: it's like we're starting to talk about this stuff like adults.
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  Speaker 1: So that's good.
• 10:52
  Speaker 2: Yeah, yeah, and it takes us away from the whole.
• 10:54
  Speaker 2: In order to deal with climate change, we need to
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  Speaker 2: absolutely destroy the system that created it, because you know,
• 10:59
  Speaker 2: you can either say, well that's just ridiculous because there's
• 11:02
  Speaker 2: the only system that works, or you can say there
• 11:04
  Speaker 2: isn't time for it anyway. Welcome to Merrin Dogs Money,
• 11:10
  Speaker 2: the podcast in which people who know the markets explain
• 11:13
  Speaker 2: the markets. I'm merensumset Web. Here's my conversation with Bloomberg
• 11:16
  Speaker 2: Senior reporter ak Chet Ratthi. Before Bloomberg actually worked for
• 11:19
  Speaker 2: Quartz and The Economist, and his work has been cited
• 11:22
  Speaker 2: in widely read global publications including The New York Times
• 11:25
  Speaker 2: in New York at, the Guardian and the Wallbury Journal
• 11:27
  Speaker 2: and the Financial Times. That's pretty much everything, actually, and
• 11:30
  Speaker 2: I discussed the main thesis behind his book, climate Capitalism.
• 11:33
  Speaker 2: So here we go. So thank you very much for
• 11:36
  Speaker 2: your book. I've enjoyed reading it enormously and I wanted
• 11:39
  Speaker 2: to start with the with the big, big picture stuff,
• 11:43
  Speaker 2: which is how you really feel about capitalism in that
• 11:47
  Speaker 2: when when someone picks up your book, they go straight in.
• 11:50
  Speaker 2: They're going to start at the introduction and the first
• 11:53
  Speaker 2: couple of pages they're going to hear a lot about
• 11:55
  Speaker 2: the extractive economic system built up to maximize profits, concentrate wealth,
• 11:59
  Speaker 2: and hands of the rich. They're going to go on
• 12:01
  Speaker 2: to unfettered capitalism and some discussion about the conceivable possibility
• 12:07
  Speaker 2: of overthrowing capitalism, etc. By the time they get to
• 12:09
  Speaker 2: page three, they're going to think that this is going
• 12:12
  Speaker 2: to be a book about overthrowing capitalism, changing the world
• 12:15
  Speaker 2: completely and introducing a different system, which of course we
• 12:17
  Speaker 2: know never works. But that's not for this podcast. That's
• 12:20
  Speaker 2: for another time. But of course, as we go through
• 12:22
  Speaker 2: the book, that's not really how you feel, is it.
• 12:25
  Speaker 2: So let's talk about your sort of slightly conflicted feelings
• 12:28
  Speaker 2: around what capitalism represents.
• 12:32
  Speaker 3: In a way, the conflicted feeling of capitalism is what
• 12:35
  Speaker 3: I observe in the audience right there, is all the
• 12:40
  Speaker 3: evils are sometimes put into this basket of capitalism and
• 12:43
  Speaker 3: very rarely defined what it is. But I also wanted
• 12:47
  Speaker 3: to start this book by taking the view that environmentalists
• 12:50
  Speaker 3: have taken, which is that there is just no way
• 12:52
  Speaker 3: to solve the climate problem without overthrowing capitalism, and they
• 12:57
  Speaker 3: never offer an alternative that actually worked, and so you
• 13:01
  Speaker 3: know by page three you also get Noam Chomsky, the
• 13:05
  Speaker 3: famous anti capitalist, who tells you, well, if this is
• 13:08
  Speaker 3: to be sold on a deadline, there is no way
• 13:10
  Speaker 3: to overthrow capitalism. You just have to modify it to
• 13:14
  Speaker 3: make it work. And my reporting shows that in around
• 13:19
  Speaker 3: the world, in countries of all types of economic and
• 13:23
  Speaker 3: political contexts, in all types of affordability, from developing countries
• 13:28
  Speaker 3: like India to rich countries like the US, there are
• 13:32
  Speaker 3: tweaks being made to the market system so that it
• 13:35
  Speaker 3: can start to finally address the climate challenge in a
• 13:39
  Speaker 3: scale that is necessary.
• 13:42
  Speaker 2: Okay, but the key thing here is that capitalism is
• 13:46
  Speaker 2: the solution to climate change, in that there is only
• 13:50
  Speaker 2: one system that we know has worked long term to
• 13:52
  Speaker 2: pull people out of poverty. Right about this yourself, about
• 13:56
  Speaker 2: the way the combination of capitalism and fossil fuels has
• 13:59
  Speaker 2: been the most extraordinary game changer for humanity in terms
• 14:03
  Speaker 2: of making us rich, making us prosperous, pulling people out
• 14:06
  Speaker 2: of poverty. And so the best thing for us to
• 14:09
  Speaker 2: do from here is to say, hey, this is really something,
• 14:12
  Speaker 2: and we should use the power of this to pull
• 14:16
  Speaker 2: ourselves out of the whole we've dug ourselves into we don't.
• 14:19
  Speaker 3: Have a better system to try and find this signal
• 14:24
  Speaker 3: in the noise around the world. Right markets provide this
• 14:28
  Speaker 3: really good sorting mechanism of connecting the buyers with the
• 14:33
  Speaker 3: sellers at ideally the right price. But what has happened
• 14:38
  Speaker 3: is that in this process we have as an economic
• 14:42
  Speaker 3: system ignored the cost of the pollution, and that is
• 14:47
  Speaker 3: now being incorporated into the economic system, and I think
• 14:49
  Speaker 3: that's what's changing climate capitalism to work.
• 14:54
  Speaker 2: So what we're doing here is we're recognizing that occasionally
• 14:58
  Speaker 2: the market doesn't include thing in the price, and we
• 15:01
  Speaker 2: have to give it a nudge to get the last
• 15:04
  Speaker 2: bit in the price correct. Okay, all right, So then
• 15:09
  Speaker 2: can we just talk before we go on to talking
• 15:11
  Speaker 2: about the wonderful stories in the book, because I mean,
• 15:14
  Speaker 2: I'm thrilled by your book, because John and I always
• 15:16
  Speaker 2: talk about how we expect human ingenuity to solve all
• 15:18
  Speaker 2: the problems, and you know, there's so much doom and
• 15:21
  Speaker 2: gloom and less doom and gloom, but in the end,
• 15:24
  Speaker 2: so far human ingenuity has always solved most of the problems.
• 15:28
  Speaker 2: But this is a slightly bigger problem than most, right
• 15:33
  Speaker 2: in that moving to anything close to net zero involved
• 15:38
  Speaker 2: the kind of transformation of global economics, global systems, global
• 15:43
  Speaker 2: living standards that has really never happened before, particularly given
• 15:48
  Speaker 2: the size of the global population.
• 15:49
  Speaker 1: Now.
• 15:49
  Speaker 2: So when we look back at previous transformations, you know,
• 15:53
  Speaker 2: say into fossil fuels, etc. Populations have been much smaller,
• 15:56
  Speaker 2: systems have been much smaller. It's a very different thing
• 15:59
  Speaker 2: to changing an energy system that drives the population of
• 16:03
  Speaker 2: say eight billion people. So it's a huge thing. So,
• 16:08
  Speaker 2: even with all the sort of rather exciting things that
• 16:12
  Speaker 2: you write about in the book, I wanted to get
• 16:16
  Speaker 2: a sense here of what you believe is actually possible
• 16:20
  Speaker 2: within say the next twenty thirty years.
• 16:23
  Speaker 3: Yeah, it's a very good question because previous transformations, say
• 16:27
  Speaker 3: going from wood to coal or from coal to oil
• 16:29
  Speaker 3: as the major source of energy, have happened over timelines
• 16:34
  Speaker 3: that were driven by the economics rather than a deadline
• 16:39
  Speaker 3: given to you by scientists. Right, that is the net
• 16:42
  Speaker 3: zero framework we have that until we reach zero emissions,
• 16:46
  Speaker 3: we keep warming the planet up and extreme weather events
• 16:49
  Speaker 3: keep increasing. Now, what is possible Theoretically net zero by
• 16:53
  Speaker 3: twenty fifty is possible. And I'd say theoretically because there
• 16:58
  Speaker 3: is a plan it's been put forward by the Intergovernmental
• 17:01
  Speaker 3: Panel on Climate Change that is being signed off by
• 17:04
  Speaker 3: one hundred and ninety five countries to deliver on that goal.
• 17:09
  Speaker 3: So it's certainly doable. Now what is practical is a
• 17:13
  Speaker 3: different question, because and let me.
• 17:16
  Speaker 2: Stop you there. Then when you say it's doable, what
• 17:19
  Speaker 2: would the be the consequences of doing it inside that
• 17:25
  Speaker 2: timeframe to that plan? I guess we'll move on to
• 17:28
  Speaker 2: the extent that whether it's practical or not. But when
• 17:30
  Speaker 2: you say it's doable, what do you mean?
• 17:33
  Speaker 3: So to think about the NAT zero challenge, it helps
• 17:36
  Speaker 3: to perhaps split it into four parts. For pieces of
• 17:39
  Speaker 3: the PI, say a quarter is electricity, a quarter is transport,
• 17:45
  Speaker 3: a quarter is industry, and a quarter is agriculture. And
• 17:49
  Speaker 3: what we now have is solutions for at least half
• 17:52
  Speaker 3: of them, which is how to get electricity sector to
• 17:57
  Speaker 3: zero emissions using solar wind batteries, geothermal hydropower, a combination
• 18:03
  Speaker 3: of large transmission across huge amounts of distances in transportation
• 18:10
  Speaker 3: again through electric cars, through lithium I in batteries, through
• 18:15
  Speaker 3: new modes of transport that are coming through in aviation
• 18:19
  Speaker 3: and shipping. There is a plan to get to zero
• 18:22
  Speaker 3: emissions industrial sector. We are at a younger stage in
• 18:27
  Speaker 3: those technologies, but those technologies are starting to become commercial.
• 18:31
  Speaker 3: So either you apply carbon capture, which is an ability
• 18:34
  Speaker 3: to take the emissions from the smokestacks of industry put
• 18:38
  Speaker 3: it deep underground, or you move to hydrogen, which is
• 18:41
  Speaker 3: happening in Sweden converting steel production from using coal to hydrogen,
• 18:47
  Speaker 3: or just use electricity to be able to convert iron
• 18:52
  Speaker 3: ore to iron, which is also starting to happen. That's
• 18:55
  Speaker 3: the industrial pie. And then agriculture is actually fascinating because
• 18:59
  Speaker 3: there are big challenges in that there are hundreds of
• 19:03
  Speaker 3: millions of farmers who need to be able to adopt
• 19:05
  Speaker 3: these solutions. But if you do adopt those solutions, you
• 19:09
  Speaker 3: actually start to use agriculture to store carbon into the
• 19:12
  Speaker 3: ground rather than be a producer of emissions. And so
• 19:16
  Speaker 3: that's what I say that this plan exists, that there
• 19:19
  Speaker 3: are technologies that are there, and slowly the economic systems
• 19:23
  Speaker 3: are also being put to make these technologies be deployed.
• 19:27
  Speaker 2: Okay, skip, you quick give back to agriculture because on
• 19:30
  Speaker 2: the previous three you explained what you meant, But when
• 19:33
  Speaker 2: what are the systems in agriculture you're talking about we
• 19:35
  Speaker 2: have we've done a podcast before on posture ad farming
• 19:41
  Speaker 2: and that kind of thing and sequestration in the soil.
• 19:45
  Speaker 2: Is that what you mean or is there something something else?
• 19:48
  Speaker 3: So agricultural emissions are split into perhaps two big gases.
• 19:52
  Speaker 3: One is carbon dioxide that has come from losing carbon
• 19:57
  Speaker 3: from the soil, and the second is nitrogen emissions that
• 20:02
  Speaker 3: come from using fertilizers that are made synthetically. Right, we
• 20:06
  Speaker 3: create ammonia from natural gas right now, So moving to
• 20:13
  Speaker 3: ammonia that's made from hydrogen that is produced from green
• 20:16
  Speaker 3: electricity is now possible. It is slightly expensive, but you
• 20:19
  Speaker 3: start to make it cheaper, you start to reduce the
• 20:21
  Speaker 3: emissions that come from ammonia production, but you'd still have
• 20:26
  Speaker 3: nitrogen emissions that are generated in the soil. Those need
• 20:29
  Speaker 3: to be managed by a counterbalancing force, which is you
• 20:33
  Speaker 3: start to absorb ceoto rather than produce. And so what's
• 20:36
  Speaker 3: happening on COO two, specifically on agriculture is there are
• 20:41
  Speaker 3: methods called regenerative agriculture where you can actually increase the
• 20:46
  Speaker 3: yield of a farm while increasing the amount of COO
• 20:50
  Speaker 3: to that is absorbed by those soils. Is just a
• 20:53
  Speaker 3: new way of thinking about how to do this, not
• 20:55
  Speaker 3: to say it's never been done in the past. Lots
• 20:58
  Speaker 3: of people around the world, Indigenous communities have mastered these ideas,
• 21:02
  Speaker 3: but we've moved to an industrial structure where it has
• 21:06
  Speaker 3: been much more extractive and not thinking about the regenerative
• 21:09
  Speaker 3: aspect as much. It just requires a change in thinking.
• 21:11
  Speaker 2: Yeah, it it seems ambition is good, but it seems
• 21:16
  Speaker 2: an extraordinary ambition that you could achieve that across the
• 21:19
  Speaker 2: global agricultural sector in a couple of decades. Correct, And
• 21:24
  Speaker 2: when I look at the numbers, I mean, obviously what
• 21:25
  Speaker 2: was absolutely christlist to remind everybody that net zero is
• 21:28
  Speaker 2: not zero, right, because when you speak to people about
• 21:31
  Speaker 2: net zero sometimes there is a sort of an odd
• 21:34
  Speaker 2: assumption that it means that by net zero means that
• 21:37
  Speaker 2: we don't use fossil fuels at all, and of course
• 21:38
  Speaker 2: it means absolutely nothing of the sort. It means that
• 21:40
  Speaker 2: we work to get ourselves to a net level of zero.
• 21:43
  Speaker 2: But when you look at the numbers for the last
• 21:46
  Speaker 2: twenty years or so, and you see that we've worked
• 21:48
  Speaker 2: so hard on, for example, renewable when solo biofuels, et cetera,
• 21:53
  Speaker 2: and we've increased our use with them by fifty sixty times,
• 21:56
  Speaker 2: but we are still over eighty percent dependent on fossil fuel.
• 22:00
  Speaker 2: So whenever we talk about all these wonderful, optimistic things,
• 22:05
  Speaker 2: but then when we look at the raw data, it's
• 22:08
  Speaker 2: hard to see progress because of the rising demand for energy.
• 22:14
  Speaker 3: Yes, it is, and let me give you the practical
• 22:17
  Speaker 3: side of it in two forms. One, the challenge is
• 22:20
  Speaker 3: actually not as big as eighty percent, and I'll tell
• 22:23
  Speaker 3: you why. Because most of the fossil fuels that are
• 22:25
  Speaker 3: burned today in cars, in factories, in power plants are wasted.
• 22:31
  Speaker 3: And when I say wasted, the heat that is produced
• 22:34
  Speaker 3: that is actually converted into useful work is a tiny fraction.
• 22:38
  Speaker 3: In a car, it's like twenty five percent. In a
• 22:41
  Speaker 3: power plant, it's usually forty percent. And so when you
• 22:45
  Speaker 3: move to an electrical system, it is just a ton
• 22:48
  Speaker 3: more efficient. So for the same unit of energy in
• 22:52
  Speaker 3: an electric car, you can go four times the distance
• 22:55
  Speaker 3: as you would in a fossil fuel car. So you
• 22:57
  Speaker 3: don't need to replace a system that is say one
• 22:59
  Speaker 3: hundred un of energy today with one hundred units of
• 23:02
  Speaker 3: energy in net zero system, you actually need to do
• 23:05
  Speaker 3: only sixty units maybe, so that's one. But the second
• 23:09
  Speaker 3: side is absolutely right. The practicality of how quickly we
• 23:12
  Speaker 3: change this system is really hard and there are again
• 23:17
  Speaker 3: two sides to think about. This has always been the challenge,
• 23:21
  Speaker 3: right moving to a renewable system that would have even
• 23:24
  Speaker 3: ten or twenty or thirty percent on the grid was
• 23:27
  Speaker 3: thought to be impossible. There will be blackouts, Well we
• 23:31
  Speaker 3: are now. It's sixty seventy percent in some countries in
• 23:33
  Speaker 3: Europe on an annual basis, and those blackout fears haven't
• 23:39
  Speaker 3: come true. So there's the reality of faction.
• 23:42
  Speaker 2: That's but that's because we still have the backup systems
• 23:44
  Speaker 2: in place. We still have the you know, we've dealt
• 23:47
  Speaker 2: with the intermittency by still having gas and coal et
• 23:50
  Speaker 2: cetera in place. Correct, Yes, you know that there's a
• 23:53
  Speaker 2: push to the push to to not recognize intermittency. That's
• 23:58
  Speaker 2: where you run into trouble. And of course our grids
• 24:00
  Speaker 2: are increasingly old and creaky and we can't really i mean,
• 24:05
  Speaker 2: certainly in the UK, we can't really put up much
• 24:08
  Speaker 2: much more in the way of renewable We can't connect
• 24:10
  Speaker 2: much more without revamping the grid. Right, So we've got
• 24:14
  Speaker 2: to a certain point and we're very reliant on our
• 24:17
  Speaker 2: backup systems, and we're very reliant on a crumbling grid.
• 24:20
  Speaker 2: So I've interrupted you. I'm sorry, but I sort of
• 24:24
  Speaker 2: slightly feel we've got as far as we can go
• 24:27
  Speaker 2: without really doing some very significant building and without recognizing
• 24:36
  Speaker 2: the problem of intermittency slightly more than we have so far.
• 24:39
  Speaker 2: Is that wrong?
• 24:40
  Speaker 1: For sure?
• 24:40
  Speaker 3: I think you're absolutely right. We have done a significant
• 24:43
  Speaker 3: amount of building just deploying renewable assets here in the UK,
• 24:47
  Speaker 3: say offshore wind, but the interconnections need to come through,
• 24:50
  Speaker 3: the technologies to store energy need to come through. But again,
• 24:54
  Speaker 3: this challenge is a global challenge. So if the UK
• 24:56
  Speaker 3: and Denmark are places where you get fifty sixty seventy
• 24:59
  Speaker 3: percent and renewable electricity, you can make that happen in India,
• 25:03
  Speaker 3: which currently gets less than ten percent from solar and wind.
• 25:06
  Speaker 2: Right.
• 25:07
  Speaker 3: So India has a huge way to go, and so
• 25:09
  Speaker 3: you can start to see how this comes in place.
• 25:12
  Speaker 3: But going back to the practicality, you know one point
• 25:15
  Speaker 3: five degrees celsius and two degrees celsius. These are the
• 25:17
  Speaker 3: two goals set in the Paris Agreement. The likelihood of
• 25:21
  Speaker 3: us meeting one point five is becoming vanishingly small, but
• 25:25
  Speaker 3: the likelihood of actually reaching two is still very much possible.
• 25:29
  Speaker 3: And so you may not get the perfect outcome of
• 25:33
  Speaker 3: net zero by twenty fifty, but you might get net
• 25:35
  Speaker 3: zero by twenty seventy, which is still so much better
• 25:39
  Speaker 3: than the world we are headed towards right now, which
• 25:41
  Speaker 3: is three degrees celsius of warming.
• 25:44
  Speaker 2: Okay, all right, So in practical terms, it's just going
• 25:49
  Speaker 2: to take longer, be more difficult than the big optimist think,
• 25:55
  Speaker 2: but it's still possible within a slightly longer timeframe. And
• 25:59
  Speaker 2: of course we have no idea what happens next. We're
• 26:01
  Speaker 2: incredibly bad at predicting the future. We I mean, as humans,
• 26:05
  Speaker 2: we're really lousy at this. We think things are going
• 26:07
  Speaker 2: in one direction, and mostly they're not. We think something's
• 26:10
  Speaker 2: going to change the world, we find we've gone and
• 26:11
  Speaker 2: slightly the wrong direction. We think we've got everything under control,
• 26:14
  Speaker 2: and then we have a pandemic and find we don't
• 26:15
  Speaker 2: know how to make masks. You know, we're very bad
• 26:18
  Speaker 2: at this. So all sorts of things could happen in
• 26:20
  Speaker 2: the intervening period that show us that we're right or wrong.
• 26:23
  Speaker 2: We've got got red heiring here or red heiring there,
• 26:25
  Speaker 2: or gone down the wrong road with some kind of
• 26:27
  Speaker 2: electric car or something like that. But in the round,
• 26:30
  Speaker 2: in the round, you think that we are on the
• 26:33
  Speaker 2: correct track.
• 26:34
  Speaker 3: Yes, we are bad at predicting the future. And that's
• 26:37
  Speaker 3: why I think the capitalistic system is actually the better
• 26:41
  Speaker 3: one to rely on, because instead of a government choosing
• 26:46
  Speaker 3: a technology to back to get us to the answer
• 26:49
  Speaker 3: that we think we have, it is so much better
• 26:53
  Speaker 3: to have governments support a bunch of bets through market
• 26:59
  Speaker 3: directly that we need to get to a decarbonized grid,
• 27:02
  Speaker 3: but don't pick up particular winner. They allow the market
• 27:06
  Speaker 3: to have these signals and noise to come through and
• 27:09
  Speaker 3: show us which one works, because the solution for a
• 27:12
  Speaker 3: particular place may be different, you know. Or the UK
• 27:15
  Speaker 3: has offshore win. India may not have so much off
• 27:18
  Speaker 3: your win, but it has a ton of solar.
• 27:20
  Speaker 2: Yeah, you have an amazing solar and at least I
• 27:22
  Speaker 2: know they get they get proper son.
• 27:25
  Speaker 3: Yes exactly. And so you allow for markets to participate
• 27:30
  Speaker 3: in a solution that they are well capable of delivering on.
• 27:34
  Speaker 2: Okay, So which country do you think is doing the
• 27:37
  Speaker 2: best job of nudging prices to make this work.
• 27:42
  Speaker 3: So climate capitalism sort of shows that this can happen
• 27:44
  Speaker 3: in different context Let's take three examples. The US is
• 27:49
  Speaker 3: doing it through the Inflation Reduction Act. Now it's the
• 27:52
  Speaker 3: last one to come to the party. The US has
• 27:54
  Speaker 3: dragged its feet on trying to do much on decarbonization.
• 27:57
  Speaker 3: You can blame the politics, you can blame other factors,
• 28:01
  Speaker 3: like it's become a fossil fuel giant, but now it
• 28:04
  Speaker 3: is at the party, at least under this presidency. The
• 28:08
  Speaker 3: Inflation Reduction Act, which is passed in twenty twenty two,
• 28:11
  Speaker 3: was passed despite the political divide between the Democrats and
• 28:14
  Speaker 3: Republicans on climate and the likelihood of it lasting regardless
• 28:19
  Speaker 3: of where the politics goes this year when the election
• 28:22
  Speaker 3: happens is quite high because of the way it was structured.
• 28:27
  Speaker 3: In this American system, it's all about tax credits, it's
• 28:30
  Speaker 3: all about giving benefit to companies building clean energy technologies.
• 28:35
  Speaker 3: That's not the system Europe has adopted. Europe has a
• 28:39
  Speaker 3: Green Deal which was signed over the last few years,
• 28:42
  Speaker 3: and it is very much a cat and stick model,
• 28:45
  Speaker 3: and the stick is typically bigger, and that's to do
• 28:48
  Speaker 3: with European countries not having quite the capacity to spend
• 28:52
  Speaker 3: like America does. But also because of the European system,
• 28:56
  Speaker 3: where the European Union has only so much power, all
• 29:00
  Speaker 3: the countries within it have to do the rest. And
• 29:03
  Speaker 3: then you have the Chinese system, which is data.
• 29:05
  Speaker 2: And we should sorry, I should just interrupt you to
• 29:08
  Speaker 2: say that despite all that a good news coming out
• 29:12
  Speaker 2: of the US, it's still it's oil production is still
• 29:14
  Speaker 2: at a record high, isn't.
• 29:15
  Speaker 1: It very much?
• 29:16
  Speaker 3: So not just oil productions, gas production is a record
• 29:20
  Speaker 3: high too. And you know, we live in this two
• 29:23
  Speaker 3: track world where you know, climate impacts will keep getting
• 29:27
  Speaker 3: worse as we extract more fossil fuels and put more
• 29:30
  Speaker 3: ginas gases into the atmosphere. But also because of the
• 29:34
  Speaker 3: urgency of the problem and because many of these technologies
• 29:37
  Speaker 3: are actually just cheaper, you're getting an acceleration of the
• 29:40
  Speaker 3: solutions that are being deployed. And so, you know, the
• 29:43
  Speaker 3: Chinese version has not been so much driven by the
• 29:46
  Speaker 3: emissions or by trying to meet climate goals. It's been
• 29:50
  Speaker 3: driven by trying to create domestic industries, to create export
• 29:55
  Speaker 3: industries and grow its economy. It did that with solar
• 29:59
  Speaker 3: and wind, and then it did it with batteries and
• 30:01
  Speaker 3: electric cars, and now it's starting to get into hydrogen.
• 30:04
  Speaker 3: And so because of its stayed driven capitalism and it's
• 30:09
  Speaker 3: sort of political nature where leader stays in power for decades,
• 30:14
  Speaker 3: it has had that ability to work on that problem
• 30:17
  Speaker 3: for a long time. And that's starting to give dividends
• 30:20
  Speaker 3: for that country and for the world because those technologies
• 30:24
  Speaker 3: have become cheaper as a result.
• 30:26
  Speaker 2: It's interesting though, I mean, China remains the biggest polluta.
• 30:29
  Speaker 2: It continues to burn what percentage of the planet's called
• 30:33
  Speaker 2: and I don't know, fifty percent something like that, and
• 30:36
  Speaker 2: continues to put up new coal plants at the same time.
• 30:40
  Speaker 2: Is doing all this so obviously, unlike other countries, there
• 30:44
  Speaker 2: isn't a feeling behind the Chinese shift of we want
• 30:49
  Speaker 2: to save the world. The shift is we want to
• 30:52
  Speaker 2: create new industries and control those industries and flog them
• 30:55
  Speaker 2: to the rest of the world. It's a slightly different dynamic.
• 30:58
  Speaker 2: I see a very different dynamic.
• 31:01
  Speaker 3: Yes, I mean that is the primary driver. But it
• 31:03
  Speaker 3: is also true that China recognizes the challenge because China
• 31:07
  Speaker 3: is one of the most vulnerable countries when it comes
• 31:09
  Speaker 3: to climate change. So, in this period where you had
• 31:12
  Speaker 3: tensions between US and China grow, and they still remain.
• 31:15
  Speaker 3: The one thing that through that tense period they continue
• 31:18
  Speaker 3: to collaborate on was climate because they see this as
• 31:22
  Speaker 3: a global problem. Without the two biggest emitters on the
• 31:25
  Speaker 3: planet actually working together, the rest of the planet doesn't
• 31:27
  Speaker 3: come along.
• 31:30
  Speaker 2: Okay, And do you I mean there is much discussion
• 31:33
  Speaker 2: about the problem that we create for ourselves when we
• 31:37
  Speaker 2: allow China to become to control so much of the
• 31:43
  Speaker 2: industry and the minerals around the transition. Is that a
• 31:49
  Speaker 2: problem for the rest of the world.
• 31:50
  Speaker 3: Do you think, Well, this is where the geopolitics and
• 31:54
  Speaker 3: the economics collide. Right in the economic model of trying
• 31:59
  Speaker 3: to get to climate solutions, you'd want the cheapest solutions
• 32:02
  Speaker 3: to win out, doesn't matter who produces them, And China
• 32:06
  Speaker 3: currently does make the cheapest of all clean technologies. And
• 32:10
  Speaker 3: if you just allow for only Chinese solar panels and
• 32:13
  Speaker 3: winterbines and batteries to power the clean energy future, we
• 32:17
  Speaker 3: are likely to pay a lower price to get to
• 32:19
  Speaker 3: net zero. But of course that's why the geopolitics collides,
• 32:23
  Speaker 3: because that means taking away jobs from places like the
• 32:26
  Speaker 3: US or Europe where they need to move away from
• 32:30
  Speaker 3: the dirty industries to the clean industries. And so you're
• 32:34
  Speaker 3: going to have to make difficult choices where it may
• 32:37
  Speaker 3: not be the most economically efficient way to get to
• 32:40
  Speaker 3: net zero, but it would be the most politically expedient
• 32:44
  Speaker 3: way to get to net zero, while you have to
• 32:46
  Speaker 3: pay a higher cost because you're going to bring that
• 32:49
  Speaker 3: manufacturing back to your shore. And some of that is
• 32:51
  Speaker 3: starting to happen in the US with this Inflation Reduction
• 32:54
  Speaker 3: Act money same things trying to be done by India
• 32:58
  Speaker 3: but also by Europe to try and get more solar
• 33:01
  Speaker 3: manufacturing in within those borders, or getting more battery manufacturing
• 33:06
  Speaker 3: or recycling in those borders. So it's going to be
• 33:10
  Speaker 3: a messy transition. I think that's a given, you know.
• 33:12
  Speaker 3: So you see these parts of net zero going from
• 33:15
  Speaker 3: where we are at forty billion tons of emissions to zero,
• 33:18
  Speaker 3: they look smooth. They're going to be nothing like it.
• 33:21
  Speaker 2: And do you worry? I want I want to get
• 33:24
  Speaker 2: onto the exciting stories in your book in a minute,
• 33:26
  Speaker 2: but before that, I want to ask you the extent
• 33:29
  Speaker 2: to which you worry, because I know you watched this
• 33:31
  Speaker 2: kind of thing all the time, much more, much more
• 33:33
  Speaker 2: than I do about the backlash against net zero that
• 33:38
  Speaker 2: we've seen a bit of in the UK, we've seen
• 33:40
  Speaker 2: a bit of in other countries, and we've seen, particularly
• 33:43
  Speaker 2: in the US, a major backlash against ESG, against investing
• 33:49
  Speaker 2: with environmental social governance factors and particular environmental factors at
• 33:53
  Speaker 2: the top on the basis that it doesn't appear to outperform, etc.
• 33:56
  Speaker 2: So we've seen that conversation around that. Do you feel
• 34:00
  Speaker 2: a backlash against the transition that may impact the transition?
• 34:05
  Speaker 3: Yes, and that backlash is very real and it's playing
• 34:08
  Speaker 3: out in multiple countries around the world right now. It's
• 34:11
  Speaker 3: not the only story. There are other places, like in
• 34:14
  Speaker 3: Brazil or in Australia where climate elections have driven governments
• 34:19
  Speaker 3: to do more. You know, you might see that here
• 34:21
  Speaker 3: in the UK later this year when the election happens
• 34:24
  Speaker 3: and maybe the Conservatives are booted out and labor is
• 34:27
  Speaker 3: brought in. But yes, that backlash is real, and the
• 34:30
  Speaker 3: reality is, perhaps if we were to find one answer
• 34:34
  Speaker 3: is that governments have not been good at communicating to
• 34:40
  Speaker 3: people what they have signed up to with net zero,
• 34:44
  Speaker 3: that what kind of transformation it's going to involve. For
• 34:47
  Speaker 3: people's everyday lives. What are the costs that people will
• 34:51
  Speaker 3: have to bear upfront, because many of these technologies are
• 34:55
  Speaker 3: expensive upfront, even if they're long run, they're cheaper than
• 34:58
  Speaker 3: fossil fuel alternatives now, And that these things will have
• 35:03
  Speaker 3: to be done in a consistent manner over decades. That
• 35:07
  Speaker 3: you can't just go this year, we are not focused
• 35:09
  Speaker 3: on net zero. Next year, we are focused on net zero.
• 35:12
  Speaker 3: These policies just have to stick around for much longer
• 35:14
  Speaker 3: for them to actually pay off. And that communication hasn't happened,
• 35:19
  Speaker 3: That reality check hasn't come from politicians, and I think
• 35:23
  Speaker 3: that may be perhaps the biggest reason to blame the
• 35:27
  Speaker 3: backlash the cost.
• 35:28
  Speaker 2: One of the things isn't it is that governments consistently
• 35:31
  Speaker 2: tell people that the transition will mean cheaper energy for them,
• 35:34
  Speaker 2: but they never add the words on the end in
• 35:37
  Speaker 2: the very long term, right, in fact, short term, that's not.
• 35:41
  Speaker 3: True, correct, Yes, And I think that conversation needs to happen,
• 35:44
  Speaker 3: and I think that backlash is going to focus the
• 35:47
  Speaker 3: minds of the politicians who understand the climate challenge to
• 35:50
  Speaker 3: get to this communication. But there's the second thing I
• 35:52
  Speaker 3: worry about, which as a climate journalist I have to
• 35:56
  Speaker 3: worry about, which is the unknown impacts that come from
• 36:00
  Speaker 3: the unknowns of climate science. There are tipping points and
• 36:05
  Speaker 3: acceleration in the climate impacts that we really don't understand.
• 36:08
  Speaker 3: For example, the record temperatures we are experiencing over the
• 36:12
  Speaker 3: past year around the world are not being explained by
• 36:15
  Speaker 3: climate models, and that is really alarming. Because climate models
• 36:20
  Speaker 3: have become better and better, our ability to understand where
• 36:23
  Speaker 3: we are headed has become better and better. But if
• 36:27
  Speaker 3: climate change and global warming is outrunning those models, then
• 36:32
  Speaker 3: those impacts may come sooner, and that can cause all
• 36:34
  Speaker 3: kinds of real world problems. Right, you might get more
• 36:37
  Speaker 3: migration because countries become destabilized. You might get agricultural production
• 36:42
  Speaker 3: falling in places you don't want it to fall, and
• 36:46
  Speaker 3: that could cause problems for net zero because imagine if
• 36:50
  Speaker 3: you have ten times as many people wanting to get
• 36:53
  Speaker 3: into America from the southern border, what the politics could
• 36:57
  Speaker 3: look like.
• 36:58
  Speaker 2: Well, we know about model, don't We very rarely correct,
• 37:02
  Speaker 2: but you never know which direction they're going to be
• 37:04
  Speaker 2: wrong in. Okay, let's move into the positive bed. Let's
• 37:07
  Speaker 2: talk about some of the fantastic examples of progress. You
• 37:11
  Speaker 2: write about in the book, and one of the things
• 37:13
  Speaker 2: that I've found one of the actually I found all
• 37:15
  Speaker 2: the chapters inted it and we might go onto the
• 37:16
  Speaker 2: reforma lator. I really like that. But let's talk about
• 37:19
  Speaker 2: India and solar and the entrepreneurialism around that.
• 37:23
  Speaker 3: So India is a low middle income country. I grew
• 37:28
  Speaker 3: up there. It's a very price sensitive market. If it's
• 37:32
  Speaker 3: not cheap, it is not scaling. And so in India,
• 37:36
  Speaker 3: you know, it came to the renewables party late, but
• 37:39
  Speaker 3: when it showed up, it really showed up. And so
• 37:44
  Speaker 3: the story that I chart is between twenty ten and
• 37:46
  Speaker 3: twenty twenty off India starting to realize that solar is
• 37:51
  Speaker 3: going to become the cheapest source of energy and that
• 37:54
  Speaker 3: it has a ton of potential. So governments brought in
• 37:57
  Speaker 3: some of the policies that we've seen in the world
• 38:00
  Speaker 3: where you have people being paid for producing so called
• 38:04
  Speaker 3: feed and tariff. But India is also a very difficult
• 38:08
  Speaker 3: place to do business. There is corruption, bureaucracy, government entities
• 38:13
  Speaker 3: that have to pay for solar production are delayed in
• 38:16
  Speaker 3: their payments. And so I feature the story of Sumantsina,
• 38:20
  Speaker 3: who's the head of renew which is one of the
• 38:23
  Speaker 3: largest renewable energy companies in India right now, and how
• 38:27
  Speaker 3: he went about finding his ways around the bureaucracy to
• 38:32
  Speaker 3: make solar deployment work at scale. And these are sometimes
• 38:36
  Speaker 3: very small, silly things like having a team that to
• 38:40
  Speaker 3: go and harangue the government officials to make sure the
• 38:43
  Speaker 3: payments are coming in, or they are more systemic things
• 38:46
  Speaker 3: where companies are informing governments on what kind of policy
• 38:52
  Speaker 3: is needed so that companies can deploy solar and make
• 38:56
  Speaker 3: the price of electricity cheaper for everybody and not things
• 39:00
  Speaker 3: that typically happen in the Indian market often enough. And
• 39:04
  Speaker 3: now that it's happened and through what renew was able
• 39:08
  Speaker 3: to do, it's really opened up the market. Solar story
• 39:12
  Speaker 3: in India has just been one of the most interesting
• 39:16
  Speaker 3: stories to watch as a technology story but also as
• 39:19
  Speaker 3: a business story over the past decade.
• 39:22
  Speaker 2: And can that model be extended to other countries? Would
• 39:27
  Speaker 2: it work elsewhere?
• 39:29
  Speaker 3: That was the hope that I wanted to see if
• 39:31
  Speaker 3: there are lessons that you can draw from India and
• 39:34
  Speaker 3: see if within that political economic context that is India,
• 39:38
  Speaker 3: those lessons could be applied to Nigeria, to Kenya, to
• 39:42
  Speaker 3: South Africa places which are rich and solar but are
• 39:45
  Speaker 3: developing countries, and some of that is starting to play out.
• 39:49
  Speaker 3: So in Nigeria, for example, which is an astonishing place
• 39:53
  Speaker 3: given you know, Legos has about one gigawot off power production.
• 39:59
  Speaker 3: Same side city, which is Shanghai, has thirty gigawats of
• 40:03
  Speaker 3: power production, and so you have this enormous population that
• 40:06
  Speaker 3: wants electricity but doesn't have it. And what's happened over
• 40:10
  Speaker 3: the past year is that diesel subsidies have been taken
• 40:13
  Speaker 3: off and so suddenly there's a solar boom in Nigeria.
• 40:16
  Speaker 3: And many of the lessons learned from what's happening in
• 40:19
  Speaker 3: India where you bring in some of the foreign capital,
• 40:22
  Speaker 3: but you also bring in reform on the electricity markets
• 40:25
  Speaker 3: are being applied now in Nigeria and we'll see over
• 40:29
  Speaker 3: the next few years. The rate of growth of solar
• 40:31
  Speaker 3: has been astonishing over the past year and it's likely
• 40:34
  Speaker 3: to continue fascinating.
• 40:37
  Speaker 2: Now, I want to talk about one of the other
• 40:39
  Speaker 2: chapters in the book about batteries, because none of this works.
• 40:44
  Speaker 2: None of this works unless we can really find a
• 40:47
  Speaker 2: way to store large amounts of energy over significant amounts
• 40:51
  Speaker 2: of time. Right, This is the big problem with intermittency
• 40:55
  Speaker 2: is if we can't store it, then we always have
• 40:59
  Speaker 2: to have that cup systems. But here you've seen significant
• 41:02
  Speaker 2: progress as well.
• 41:03
  Speaker 3: Right, Yes, So the battery chapter focuses on CTL, which
• 41:08
  Speaker 3: is now the world's largest lithium ion battery company in
• 41:11
  Speaker 3: the world. And it is an astonishing story given CTL
• 41:16
  Speaker 3: was only formed in two thy eleven, and the story
• 41:21
  Speaker 3: comes from a little bit of background in how China developed. Sorry,
• 41:26
  Speaker 3: and perhaps the story actually starts a decade before that.
• 41:29
  Speaker 3: So in its previous form, there was a company called
• 41:32
  Speaker 3: ATL that was created in nineteen ninety nine and China
• 41:36
  Speaker 3: was just about to join the WTO. It was starting
• 41:39
  Speaker 3: to become the factory of the world, and the founders
• 41:42
  Speaker 3: of ATL wanted to make batteries for the gadgets that
• 41:46
  Speaker 3: we were enjoying at that time. You know, I don't
• 41:49
  Speaker 3: think podcasts had been invented, but you had those little
• 41:51
  Speaker 3: workmen that we used for listening to music, and they
• 41:54
  Speaker 3: were supplying those batteries to those devices, eventually to Samsung
• 41:59
  Speaker 3: and Apple when they started making smartphones. But as soon
• 42:03
  Speaker 3: as they got into manufacturing lithium man batteries, they started
• 42:07
  Speaker 3: getting incoming from electric car companies unusually. The earliest one
• 42:11
  Speaker 3: they got was from an Indian electric car company called Reva,
• 42:15
  Speaker 3: which was running electric cars. These two seater cars on
• 42:18
  Speaker 3: lead acid batteries and wanted to use lithium man batteries instead,
• 42:22
  Speaker 3: and the founders realized that there's actually an opportunity in
• 42:27
  Speaker 3: moving to cars where you're going to need thousand times
• 42:29
  Speaker 3: the size of a battery we are putting in a gadget,
• 42:32
  Speaker 3: and it seems their policies being put in place both
• 42:36
  Speaker 3: in China but in other countries to move to electrification,
• 42:39
  Speaker 3: and so they created CTL. And unlike what other Chinese
• 42:44
  Speaker 3: manufacturers have been blamed for, this wasn't about stealing technology
• 42:48
  Speaker 3: or just making copycats of things that were being made
• 42:53
  Speaker 3: elsewhere in the world. They actually went out and bought
• 42:57
  Speaker 3: licenses for the technology early on, but also created a
• 43:00
  Speaker 3: search department to bring in technology innovation within COTL, and
• 43:05
  Speaker 3: that started to show up very soon. They landed contracts
• 43:08
  Speaker 3: with foreign car manufacturers. BMW was one of the earliest ones,
• 43:12
  Speaker 3: and now it has huge contracts with pretty much every
• 43:16
  Speaker 3: car maker, and so much so that its technology development
• 43:20
  Speaker 3: now is becoming the source of jealousy for many of
• 43:24
  Speaker 3: the large battery makers that existed before c ATL came around,
• 43:27
  Speaker 3: the Japanese ones, the South Korean ones, and even American
• 43:30
  Speaker 3: battery makers.
• 43:33
  Speaker 2: Do you think talking about batteries, one of the things
• 43:38
  Speaker 2: that we talked about earlier was problems with the grid
• 43:41
  Speaker 2: and the difficulties of delivering power and the difficulties of interconnectors, etc.
• 43:46
  Speaker 2: And of course I've been writing recently about about the
• 43:49
  Speaker 2: NIMBYs not in my backyard when it comes to the grid.
• 43:51
  Speaker 2: Nobody wants a great, big pylon in their back garden,
• 43:54
  Speaker 2: and they have massive impact on house prices, etc. And
• 43:57
  Speaker 2: so we've been looking at, you know, small modular reactors
• 44:02
  Speaker 2: and looking at how nuclear can solve that problem by
• 44:04
  Speaker 2: bringing the power to where it's needed rather than the
• 44:07
  Speaker 2: power having to be transmitted long distances. I mean, you
• 44:09
  Speaker 2: haven't written about this in the book at length, but
• 44:12
  Speaker 2: is nuclear a big part of the answer here? Maybe
• 44:14
  Speaker 2: a bad part of the answer?
• 44:16
  Speaker 3: Well, I wanted to write a chapter on nuclear. The
• 44:19
  Speaker 3: only country that is scaling nuclear in the era of
• 44:24
  Speaker 3: climate action is China, and I got no access to
• 44:30
  Speaker 3: China's nuclear fleet. There's just that is one place where
• 44:33
  Speaker 3: as a reporter you can't go, and so all these
• 44:37
  Speaker 3: other ideas on small modular nuclear reactors or even a
• 44:40
  Speaker 3: renaissance in trying to build large nuclear reactors is currently
• 44:46
  Speaker 3: a dream. And the costs of actually building nuclear are
• 44:51
  Speaker 3: so high that if you're going to try and do
• 44:53
  Speaker 3: that as a clean energy alternative with solar and batteries combined,
• 44:59
  Speaker 3: you're not able to compete. So if you look at
• 45:02
  Speaker 3: net zero projections, for example from BLOOMAGNEF, they see nuclear
• 45:09
  Speaker 3: contributing one percent of electricity in the twenty to fifty
• 45:14
  Speaker 3: net zero mix, which is nineteen percent lower than the
• 45:20
  Speaker 3: electricity that nuclear provides today to the global grid.
• 45:25
  Speaker 2: Day depressing, isn't it. How can an individual invest in
• 45:30
  Speaker 2: the transition take advantage of some of the exciting trends here.
• 45:33
  Speaker 3: The easiest way you could have done it maybe two
• 45:35
  Speaker 3: years ago was to move to responsible investing to ESG investing,
• 45:40
  Speaker 3: which is these options now are available in your pension parts,
• 45:44
  Speaker 3: in the places you can put money in. But that's
• 45:47
  Speaker 3: getting muddled because of two things. One there's the political
• 45:51
  Speaker 3: backlash that you're seeing from certain parts on ESG, and
• 45:55
  Speaker 3: then there is also just the muddling of ESG itself,
• 45:58
  Speaker 3: which is the metrics that it counts, and whether it's
• 46:01
  Speaker 3: investing in the right places or making false promises to
• 46:04
  Speaker 3: the investor that that money is going towards the transition.
• 46:08
  Speaker 3: So right now, it's actually not a good time to
• 46:11
  Speaker 3: think about how as an individual you can invest in
• 46:14
  Speaker 3: the transition. And it's a problem that investors need to
• 46:17
  Speaker 3: solve if they want the amount of capital that needs
• 46:21
  Speaker 3: to come through in the energy transition.
• 46:23
  Speaker 2: Okay, brilliant, Thank you so much for your time today
• 46:26
  Speaker 2: and listeners, Climate capitalism winning the global race to zero emissions,
• 46:30
  Speaker 2: highly recommend it, not least by the way by Bill Gates,
• 46:33
  Speaker 2: who says on the front and important read for anyone
• 46:35
  Speaker 2: in need of optimism. Thanks very much, Thank you, Right, John,
• 46:46
  Speaker 2: I know that you and I both feel conflicted about
• 46:50
  Speaker 2: a lot of the policy around climate change because we
• 46:53
  Speaker 2: tend to think, well, you know, you're making it worse here,
• 46:56
  Speaker 2: you're making it better? Are you're affecting living standards in
• 46:58
  Speaker 2: the way that you intended to? Are you making energy
• 47:01
  Speaker 2: too expensive? Is this even possible? You know, we worry,
• 47:04
  Speaker 2: don't we worry about some of the directions that have
• 47:07
  Speaker 2: been taken in policy terms, But did listening to this
• 47:10
  Speaker 2: conversation make you feel more rare assured.
• 47:15
  Speaker 1: If I'm honest. Yes, And the thing that stood out
• 47:20
  Speaker 1: to me is, I guess what we were talking about
• 47:21
  Speaker 1: in the introduction. It's like, actually makes the really important point,
• 47:25
  Speaker 1: and the one that we are always making about why
• 47:28
  Speaker 1: markets and capitalism are a good system is that it's
• 47:31
  Speaker 1: all about signalant and so you know, it's his point
• 47:35
  Speaker 1: is the capitalist system is the best one to rely
• 47:38
  Speaker 1: on because it's the one that tells you the best
• 47:42
  Speaker 1: sorts the places in which to put your resources. And
• 47:46
  Speaker 1: you know, and again, the whole point about this, and
• 47:48
  Speaker 1: I think the other thing that concerns us a lot
• 47:50
  Speaker 1: of the time when you talk about this is the
• 47:53
  Speaker 1: capitalism is the only system for making the trade offs.
• 47:57
  Speaker 1: There's an awful lot of the time when people talk
• 47:59
  Speaker 1: about this, the act as if there aren't any trade offs.
• 48:01
  Speaker 1: You know, the act is I, oh, well, we could
• 48:03
  Speaker 1: just do de growth without mentioning that that would mean
• 48:06
  Speaker 1: about six billion people would die anyway, because you know,
• 48:09
  Speaker 1: capitalism is the only thing that has made you know,
• 48:12
  Speaker 1: the current global population sustainable, et cetera, et cetera.
• 48:15
  Speaker 2: And they talk about transforming agriculture such that it produces
• 48:19
  Speaker 2: zero emissions without pointing out that would also mean many
• 48:21
  Speaker 2: millions of people would stop to death. Would kind of
• 48:23
  Speaker 2: be a bad Yes, great scheme exactly.
• 48:25
  Speaker 1: Yeah, Yeah, the growth is basically a death cult, whether
• 48:30
  Speaker 1: people recognize it or not. Whereas this is good, this
• 48:33
  Speaker 1: is a kind of healthy way of looking at how
• 48:35
  Speaker 1: do we actually deal with the fact that we you know,
• 48:39
  Speaker 1: we need to stop pumping as much carbon dioxide into
• 48:43
  Speaker 1: the atmosphere, So let's do something sensible about it, rather
• 48:46
  Speaker 1: than saying we're all just going to go back to
• 48:48
  Speaker 1: the Stone age.
• 48:49
  Speaker 2: And he recognizes the recognizes that the difficulty of the
• 48:54
  Speaker 2: time frames that we put in place, and the absurdity
• 48:57
  Speaker 2: of saying we will meet net zero by a particular doubt,
• 49:00
  Speaker 2: and we have no idea whether we'll be able to
• 49:01
  Speaker 2: come up with the technologies to allow that to happen,
• 49:04
  Speaker 2: as we say, without going the growth and death, and
• 49:07
  Speaker 2: so all those contradictions are recognized in this conversation, which
• 49:10
  Speaker 2: is quite refreshing. We also talk about the problem of
• 49:13
  Speaker 2: intermittency and the ridiculous idea that you can have renewables
• 49:17
  Speaker 2: without backup and without batteries. It just can't work. We
• 49:20
  Speaker 2: talk about that, which which is very interesting, I think
• 49:23
  Speaker 2: because often you discuss these things with people and you
• 49:25
  Speaker 2: don't hear these really important restrictions on the speed at
• 49:31
  Speaker 2: which we can move.
• 49:32
  Speaker 1: Yeah, and I mean I think it's there's a lot
• 49:35
  Speaker 1: of exciting stuff and as well, I mean the idea
• 49:38
  Speaker 1: of countries with ample sunshine, etc. You know, can I
• 49:43
  Speaker 1: be able to leap frog certain parts of the electricity
• 49:46
  Speaker 1: system and just rely in solar. I mean one thing
• 49:51
  Speaker 1: I would actually Lake explain to me in much more
• 49:54
  Speaker 1: detail being honesty. And I know that some of our
• 49:56
  Speaker 1: lesseners are engineers and things like that. But I don't
• 49:59
  Speaker 1: get why everyone who talks about this is still so
• 50:04
  Speaker 1: resolutely opposed to nuclear And now it's expensive, But why
• 50:08
  Speaker 1: is it expensive? Why is it less expensive and less
• 50:11
  Speaker 1: more expensive and more infrastructure heavy than havingly stick a
• 50:15
  Speaker 1: hole over the cables between different countries in the world,
• 50:18
  Speaker 1: because you know, the Soviet produces lots of sign and
• 50:21
  Speaker 1: we need in the UK. Do you know what I mean,
• 50:23
  Speaker 1: I'm startingly thinking.
• 50:25
  Speaker 2: I mean, when we talked about this before, the answer
• 50:27
  Speaker 2: is always regulation, and that the regulation around nuclear is
• 50:31
  Speaker 2: so intense, so difficult, and we will not relax it
• 50:35
  Speaker 2: in any way at all despite them. You remember our
• 50:37
  Speaker 2: conversation with Catherine brought her back a few months ago
• 50:40
  Speaker 2: when we talked about and about her that you know,
• 50:42
  Speaker 2: the incidence of nuclear accents is incredibly low, and the
• 50:47
  Speaker 2: incidence of death as a result of those nuclear accidents
• 50:50
  Speaker 2: is also incredibly low, lower than in all other parts
• 50:54
  Speaker 2: of the energy industry. But nonetheless we cannot find it
• 50:57
  Speaker 2: within us somehow to make it easier to build. But
• 51:01
  Speaker 2: I mean, there is change coming here because you know,
• 51:03
  Speaker 2: our big bad billionaires in the US. And we talked
• 51:06
  Speaker 2: about this the other day when we were talking about
• 51:08
  Speaker 2: AI and the extraordinary amount of energy that AI requires.
• 51:11
  Speaker 2: And someone asked me the other day, which I thought
• 51:13
  Speaker 2: was fascinating, said to me, has anyone done the sums
• 51:16
  Speaker 2: on the video and the four cast sales of chips.
• 51:20
  Speaker 2: If all those chips were used, how much energy would
• 51:23
  Speaker 2: be required? Well, I'm interested an insane amount, more than
• 51:25
  Speaker 2: more than we have.
• 51:26
  Speaker 1: You know, this is nuts.
• 51:28
  Speaker 2: So we must have nuclear And we can already see
• 51:31
  Speaker 2: in the US that the big billionaires are going there.
• 51:33
  Speaker 2: I look at Bill Gates in his activity there for example.
• 51:36
  Speaker 2: You know you can see that this is a solution
• 51:38
  Speaker 2: that bad capitalists or possibly good capitalists are looking at
• 51:43
  Speaker 2: very carefully. But from a public point of view, it's
• 51:46
  Speaker 2: all about I think, as I understand it, regulation. But
• 51:49
  Speaker 2: on the face of it, if an alien came down
• 51:51
  Speaker 2: today and looked at what we were doing and what I well,
• 51:53
  Speaker 2: hang on a tech you could do. You don't need
• 51:55
  Speaker 2: two hundred thousand acres for solo. You could just have
• 51:58
  Speaker 2: three acres for nuclear and the interconnectors would be so
• 52:02
  Speaker 2: much easier because the nuclear park can go where electricity
• 52:05
  Speaker 2: is required rather than somewhere else. You know, we have
• 52:09
  Speaker 2: our wind turbines, we have them way way way offshore,
• 52:11
  Speaker 2: and the interconnectors we have to create for that to
• 52:13
  Speaker 2: get them back to where we use the energy. This
• 52:16
  Speaker 2: is massive. Well, you can just put a little, little, small,
• 52:18
  Speaker 2: modular reactor right next to the town. So I don't know,
• 52:22
  Speaker 2: and I'm with you on this, I'm very confused by
• 52:24
  Speaker 2: And it's something that actually and I didn't talk about.
• 52:27
  Speaker 2: And I can only assume that governments have these conversations
• 52:30
  Speaker 2: at high levels when they talk about infrastructure spend and
• 52:33
  Speaker 2: how we simply can't afford that infructures spand obviously and
• 52:35
  Speaker 2: in the UK we clearly can't afford to do what
• 52:38
  Speaker 2: we need to do to revamp the grade in such
• 52:40
  Speaker 2: a way as to use solar and wind in the
• 52:42
  Speaker 2: way that we're talking about. I've rambled.
• 52:44
  Speaker 1: I've rambled. No, that's sort of sorry, John, kind of topic.
• 52:49
  Speaker 2: Yeah, you speak, otherwise we'll get more of those emails
• 52:51
  Speaker 2: that say, Marin, let them speak.
• 52:54
  Speaker 1: Well, no, I was literally just that sort of I
• 52:56
  Speaker 1: was unrambling my head because I was thinking, everyone says, Race,
• 52:59
  Speaker 1: if you can plug in your electric cars and then
• 53:02
  Speaker 1: run the grid off the battery, why can't we plug
• 53:04
  Speaker 1: the nuclear submarines in overnight and run the country off
• 53:07
  Speaker 1: for their batteries.
• 53:08
  Speaker 2: Okay, this is exactly the kind of time when when
• 53:10
  Speaker 2: our producer, Summer is going to interrupt and say, Marin, don't.
• 53:13
  Speaker 1: Try to him speak, don't let him bring this, Bring
• 53:16
  Speaker 1: this to an end, stop the idiot from talking.
• 53:20
  Speaker 2: I think, bringing this to an end. If anyone knows
• 53:23
  Speaker 2: the answer to John's question why we can't just plug
• 53:26
  Speaker 2: the electricity grid into the submarines, let us know. Thanks
• 53:34
  Speaker 2: for listening to this week's Maren Talks Money. We'll be
• 53:36
  Speaker 2: back next week. In the meantime, you like our show,
• 53:38
  Speaker 2: rate review and subscribe wherever you listen to podcasts. This
• 53:41
  Speaker 2: episode was hosted by me Maren sumset Web. It was
• 53:44
  Speaker 2: produced by Samasari, additional editing by Blake Maple. Special thanks
• 53:47
  Speaker 2: to Action Rathy and to John Stebk. And actually, seriously,
• 53:50
  Speaker 2: the more I think about it, why can't we have
• 53:52
  Speaker 2: submarines offshore all around the UK and the grip plugged
• 53:55
  Speaker 2: into them? Answers to the usual email thank you