TED Talks Daily : Capitalism broke the climate. Now it can fix it

Capitalism can be blamed for worsening the climate crisis, says journalist Akshat Rathi, but it can also be used to drive the solutions to fix it. In this episode of TED Talks Daily, recorded at the Bloomberg Green Festival in Seattle, Rathi discusses his book Climate Capitalism, and how the strategic use of market forces and government policies can make sustainability profitable.

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Episode Transcript

Speaker 1 (00:00):
Hi, It's suckshat as the year comes to a close
and zero takes a break for the holiday. This week,
there's a special holiday Vonus. I wanted to share with
you an episode of Ted Talks Daily which featured my
Ted Talk. It came out of the work I did
on my book Climate Capitalism, which by the way, would
make for a great gift if you're doing any last

(00:21):
minute holiday shopping. I finished writing the book two years ago,
but in today's politics, where the issue of climate is
hardly front and center, the thesis of the book feels
even more relevant because for climate solutions to last in
the long run, they need to make money. They need
to be profitable. Enjoy the tech Talk. Next week we'll

(00:42):
be revisiting my conversation with Nicola Twilly, author of Frostbite,
and we'll be back in the new year with fresh episodes,
including a conversation with science fiction writer Kim Stanley Robinson
on what to expect for the climate in twenty twenty five.

Speaker 2 (01:00):
You're listening to Ted Talks Daily, where we bring you
new ideas to spark your curiosity. Every day. I'm your host,
Elise Hugh. Could the market forces of capitalism help combat
climate change, or was capitalism the very cause of the
global climate crisis in the first place. Climate reporter uckshut
Rathi says the answers are complex and offers solutions for

(01:23):
how capitalism can be used for climate solutions the world needs.

Speaker 1 (01:29):
I was at a climate protest and I saw a
poster that said, in big letters, burn capitalism, not coal.
How many of you agree that to tackle climate change
we should stop burning coal? Raise your hands, almost all
of you, And how many of you agree that to
tackle climate change we should burn capitalism? There are a

(01:52):
few hands, but not as many. I'm a journalist and
I write about climate solutions, and when I ask this
question of people, I get the full range of answers,
from those who say that the system that got us
into this mess can never get us out of it,
to those who say that the only answer is to

(02:13):
unleash market forces for the innovations we need. But who
is right? I wanted to find the answer for myself,
so I started on the rooftop of my childhood home
in India. I wanted to get solar panels for my parents.
It took two days to get quotes, two weeks to
have those shiny devices up on the roof, ready to

(02:36):
capture the sun's energy. The payback was quick. Electricity bills
fell and my parents have recovered the investment in five years.
For the next fifteen years they can enjoy solar power
for free. So what has capitalism got to do with it? Well,
India did not invent the technologies that go into solar panels.

(03:00):
Even today, India manufactures only a small fraction of what
it deploys, and yet a country with less than three
thousand dollars of income per person per year is able
to benefit from what is now one of the world's
cheapest sources of energy. This has happened because profit seeking
companies want to sell all of us more and more

(03:22):
solar panels. But it has happened because governments created that
market through subsidies and regulations. We know the more we build,
the cheaper it gets. And it's not just the story
of solar. Between twenty nine and twenty nineteen, the price
of solar fell ninety percent, win seventy percent, lithemian batteries

(03:46):
eighty five percent. This is what I call climate capitalism.
Climate emergency is forcing governments and businesses to change how
capitalism works, to use its forces for creating the solutions
we need, rather than making the problem worse. And look,
it's not happening everywhere or at the pace which we need.

(04:10):
There are still companies that are profiting from pollution. However,
in country after country where I've had a chance to report,
I've found that a combination of people, policy, and technology,
when they come together, climate solutions do work. Now, the
primary motivation to deploy these solutions does not have to

(04:32):
be tackling climate change. Other pressing issues such as air pollution,
or energy security or global competitiveness can garner even more support.
How exactly, let me tell you the story of Wangam.
You've probably never heard of him, but he has done
more for the global rise of electric cars than Elon Musk.

(04:54):
Juan was born in China. He trained as an auto
engineer before moving to Germany and working for Audi. There,
he saw the lifestyle the Germans lived and realized that
perhaps Chinese people may never be able to experience it.
That's because in two thousand, China burned about one barrel

(05:15):
of oil per person per year. Germans burned twelve times
as much. So he made the case to the Chinese
leadership that the country needed to work on an alternative,
and that he was willing to lead the charge. So
he was given a chance to work on a government program.
One's team, in a period of eight years, built hundreds

(05:36):
of electric cars and buses that were used at the
Beijing Olympics. In those same eight years, the country's oil
built ballooned and its cities became globally infamous for air pollution.
But One had shown that an alternative could work. If
China could scale the manufacturing of electric cars, air pollution

(05:58):
would be cut, all import would be cut, and most importantly,
China would create a new industry that could compete with
other countries. So One was made the science minister and
the government started giving out tens of billions of dollars
in subsidies for the manufacturing of electric cars and lithemian batteries.

(06:20):
The government also started putting regulations to make it harder
to buy fossil fuel cars. Even today, if you're in
Shanghai and you want to buy a gasoline power car,
you have to enter a lottery and win it. If
you want an electric car, you can just go to
a showroom and buy one. The Chinese government provided direction,
but it was the practitioners of capitalism that made a

(06:43):
small electric car industry into the global giant that it
is today. One of those investors was Warren Buffett. He
invested in a little known company then called BYD. Today
BYD sells more electric cars than Tesla. Now you might
think what China did cannot be replicated by democracies, but

(07:06):
as it happens, China took inspiration from the paragon of capitalism,
the USA. Throughout the previous century, the US has used
the instruments of government to redirect investments toward national priorities.
Take the semiconductor industry the reason why California is home
to Silicon Valley. It was created with generous contracts from

(07:31):
the Department of Defense. It's also a similar case for biotech,
for airlines, for the Internet. All of them have fingerprints
of the government from its birth. In fact, China's electric
vehicle policy is a modified version of California's zero emissions

(07:52):
vehicle mandate. That policy was crucial in keeping Tesla afloat
by providing subsidies. But that China has a lead on
all sorts of green technologies, the US is being forced
to catch up. The inflation reduction Act, passed in twenty
twenty two, is one response. It will see the US
government provide hundreds of billions of dollars of subsidies towards

(08:14):
all kinds of solutions, from green hydrogen to heat pounds
that will be multiplied by matching private investment. But climate
capitalism isn't just about putting government subsidies to work. That's
because the climate crisis is the greatest market failure of
all time. Governments around the world have allowed corporations to

(08:39):
pollute for free, and all that pollution is causing damages
to all of us in the form of climate impacts, health, inequalities,
dislocation of communities. In some parts of the world, leaders
are starting to correct that mistake. Europe has put a
price on pollution and created legally binding targets that has

(09:03):
helped the continent cut its carbon footprint faster than any other.
It's also changed how businesses operate in Europe. The Danish
Island Natural Gas Company was founded in nineteen seventy two.
For forty years, it dug up fossil fuels. Then Denmark
adopted a carbon price and a climate law, and suddenly

(09:24):
its business model became implausible. Today, you know that company
has orstered. It transitioned away from fossil fuels starting in
two thousand and nine, and it has become the largest
developer of offshore wind power. This hasn't been a smooth ride.
There just aren't as many success stories as the world needs.

(09:46):
That's because the climate challenge is really complicated. India has
an ambitious renewables goal, but it's falling behind. Europe has
seen job losses because its carbon price has been too high.
That has caused some industries to shut down and move
to other parts where there isn't a carbon price, and
China's emissions last year rose despite a record clean energy

(10:08):
build out. For climate capitalism to work, governments and businesses
need to be flexible. They need to recognize when there
are policies that require certainty, but if they're not working,
then they must be changed. India is now doubling down
on solar with batteries because it's seeing rise in electricity demand.

(10:32):
Europe has introduced a carbon tariff that's going to put
a price on pollution on imports that will level the
playing field for domestic industry and stem job losses. And
some experts think that if China can continue its clean
energy build out at the same pace its emissions may
have peaked last year. Now what's remarkable is that some

(10:56):
businesses are saying that it's in their self interest to
act on climate change with or without regulations. So far,
we've looked at big economy wide changes. Now let's think
about something as simple as ice cream. You would think
that during a heat wave and an ice cream maker
will turn big profits selling lots and lots of ice cream.
But heat waves are becoming so extreme that people are

(11:18):
choosing to stay at home instead. At the same time,
small hold of farmers that are the supply chain of
ice cream makers are seeing their productivity fall. That's because
of intense heat, drought, floods. It means the cost of
making ice cream is going up. It's a double whammy,
lower sales, higher costs. Increasingly, businesses are recognizing that there

(11:44):
are fewer profits to be made on a planet on fire.
So let's go back to that poster. Is the answer
to tackle climate change to burn capitalism, not coal. I
hope the examples I've shared show that the problem is
in capitalism, but how it's been allowed to run. We

(12:04):
only have a few decades left to get to zero emissions.
The fastest way to get there is to change capitalism.
How to do it through a combination of people, policy
and technology. Dedicated people, smarter policies and cheaper technologies. That

(12:24):
is how you'll get businesses to focus on the solutions
the world needs. That is how people like my parents
in India and all of us around the world will
get access to those solutions. And that is how the
world will finally stop burning coal and all other fossil fuelds.
Thank you.

Speaker 2 (12:49):
That was Ukshatrathi at Ted's Countdown Bloomberg Green Festival in
twenty twenty four. If you're curious about Ted's curation, find
out more at ted dot com slash curation guidelines. And
that's it for today. Ted Talks Daily is part of
the Ted Audio Collective. This episode was produced and edited
by our team Martha Estefanos, Oliver Friedman, Brian Green, Autumn Thompson,

(13:10):
and Alejandra Salazar. It was mixed by Christopher Faizy Bogan
additional support from Emma Tobner and Daniella Balaaiso. I'm Elise Hugh.
I'll be back tomorrow with a fresh idea for your feed,
Thanks for listening.

Speaker 1 (13:25):
Thank you for coming to my ted Talk, and thanks
to Elise Hugh and the Ted Talk's daily podcast team.
Do check out their daily feed. Each day the show
brings you a new idea that might just change the future,
and it's all under fifteen minutes. I am Akshatrati. Back soon.