Capitalism Broke the Climate. Now It Can Fix It | Akshat Rathi | TED
Summary
TLDRThe video script explores the role of capitalism in addressing climate change. It illustrates how profit-driven markets, combined with government policies and technological innovation, have significantly reduced the cost of renewable energy solutions like solar panels and electric cars. The narrative challenges the notion that capitalism is inherently harmful to the environment, suggesting that with the right incentives and regulations, it can be harnessed to drive climate solutions and achieve zero emissions.
Takeaways
- đ The speaker installed solar panels on their parents' rooftop in India, which quickly paid back and provided free solar power for 15 years, illustrating the affordability and benefits of renewable energy.
- đĄ Capitalism played a role in making solar panels affordable through profit-seeking companies and government policies like subsidies and regulations.
- đ The price of solar panels, wind energy, and lithium-ion batteries has dramatically decreased, making renewable energy more accessible and competitive.
- đ The concept of 'climate capitalism' suggests that governments and businesses can work together to use market forces to create solutions for climate change.
- đ The Chinese government's support for electric vehicles, including subsidies and regulations, has helped China become a leader in the electric car industry.
- đż The US has a history of using government instruments to support industries like semiconductors, biotech, airlines, and the internet, showing that government intervention can drive innovation.
- đš Europe's carbon pricing and legally binding targets have helped reduce carbon emissions and change business practices towards sustainability.
- đ Companies like Ărsted (formerly a Danish natural gas company) have transitioned from fossil fuels to renewable energy, demonstrating that businesses can adapt to climate policies.
- đ„ The climate crisis is the greatest market failure, with governments allowing free pollution that causes climate impacts and health inequalities.
- đĄïž Extreme heatwaves affecting businesses like ice cream makers show that climate change can have direct economic consequences, pushing businesses to act on climate change.
Q & A
What was the main point of the climate protest poster that said 'burn capitalism not coal'?
-The poster was suggesting that to effectively tackle climate change, it's not just about stopping the burning of coal, but also about addressing the underlying economic system, capitalism, which has contributed to environmental degradation.
How did the author's personal experience with solar panels in India illustrate the potential of capitalism in addressing climate change?
-The author's experience showed that even in a country with a relatively low income per person, the deployment of solar panels was made possible due to market forces driven by profit-seeking companies, coupled with government subsidies and regulations, making renewable energy accessible and affordable.
What is the term 'climate capitalism' as used by the author?
-'Climate capitalism' refers to the adaptation of capitalist principles to drive solutions for climate change, leveraging market forces, government policies, and technological advancements to create and scale environmentally friendly technologies and practices.
How did the price of solar energy change between 2009 and 2019 according to the script?
-The price of solar energy fell by 90% between 2009 and 2019, which is a testament to how economies of scale and technological advancements can make renewable energy more affordable and accessible.
Who is Wan Gang and what is his significance in the global rise of electric cars?
-Wan Gang is a Chinese auto engineer who played a pivotal role in advocating for electric vehicles in China. He led a government program that built hundreds of electric cars and buses, demonstrating the viability of electric transportation and setting the stage for China's massive investment in electric vehicles.
How did the Chinese government support the electric vehicle industry?
-The Chinese government supported the electric vehicle industry by providing tens of billions of dollars in subsidies, implementing regulations to discourage the purchase of fossil fuel cars, and creating a favorable environment for the growth of the electric vehicle market.
What is an example of how the US government has historically influenced the development of industries?
-The US government has historically influenced industry development by redirecting investments towards national priorities. For example, the creation of Silicon Valley was significantly aided by contracts from the Department of Defense.
What is the significance of the Inflation Reduction Act of 2022 in the context of climate capitalism?
-The Inflation Reduction Act of 2022 is significant as it represents a substantial government commitment to providing subsidies for a range of climate solutions, from green hydrogen to heat pumps, which is expected to stimulate private investment and accelerate the transition to cleaner technologies.
How has Europe's approach to pricing pollution influenced business operations?
-Europe's approach to pricing pollution has led to legally binding targets and a carbon market, which has incentivized businesses to reduce their carbon footprint and adapt their operations to comply with environmental regulations.
What challenges does the author mention that are associated with implementing climate capitalism?
-The author mentions several challenges, including job losses due to high carbon prices, industries relocating to avoid carbon pricing, and the complexity of the climate challenge itself. Additionally, the need for governments and businesses to be flexible and adapt policies that are not working is highlighted.
How does the author suggest businesses are starting to see the benefits of acting on climate change?
-The author suggests that businesses are recognizing the financial risks associated with climate change, such as lower sales and higher costs due to extreme weather events, and are starting to act in their self-interest to mitigate these risks, even in the absence of regulations.
Outlines
đ Capitalism vs Coal: The Debate at Climate Protests
The speaker discusses a climate protest where a poster read 'burn capitalism, not coal.' While most attendees agreed that coal should be phased out to tackle climate change, fewer people supported the idea of 'burning capitalism.' The speaker, a journalist focused on climate solutions, explores this divide, noting how people hold different views on whether the system that contributed to the problem can also provide solutions. The speaker's own journey to answer this question begins on the rooftop of their childhood home in India, where solar panels were installed, lowering energy costs and illustrating how capitalism can promote green technologies through market forces and government policies.
đ Climate Capitalism: Solar, Wind, and Batteries Revolution
The speaker delves into how capitalism and government intervention have played a role in making renewable energy cheaper and more accessible. India, though not a major manufacturer of solar technology, has benefited from global innovation driven by profit-seeking companies and government subsidies. Between 2009 and 2019, the prices of solar, wind, and lithium-ion batteries dropped significantly. The speaker coins the term 'climate capitalism,' arguing that governments and businesses are shifting the workings of capitalism to drive the adoption of climate solutions. Although not yet widespread or fast enough, this shift demonstrates that the combination of people, policies, and technology can be effective.
đ Chinaâs Electric Car Revolution Led by Wu Gang
The speaker introduces Wu Gang, a little-known figure who has played a significant role in the rise of electric cars in China. Initially an auto engineer, Wu convinced Chinese leadership to pursue electric vehicles as a solution to the country's growing oil consumption and pollution problems. Wuâs team developed hundreds of electric vehicles for the Beijing Olympics, and China later ramped up subsidies and regulations to support the electric car industry. Investors like Warren Buffett took notice, and Chinese companies like BYD now outperform Tesla in electric vehicle sales. Chinaâs approach, inspired in part by U.S. policies, shows that even democracies can adopt similar strategies.
đșđž U.S. Influence on Climate Solutions and Industrial Policies
While China leads in green technologies, its strategies are rooted in U.S. practices of using government instruments to drive innovation. The speaker references historical U.S. government involvement in industries like semiconductors, biotechnology, and the internet. Chinaâs electric vehicle policies were influenced by California's Zero Emissions Vehicle (ZEV) mandate, which also helped Tesla survive. Now, the U.S. is trying to catch up with China's lead by passing the Inflation Reduction Act in 2022, which allocates substantial subsidies toward green technologies. The speaker stresses that climate capitalism is not just about subsidies but addressing the market failure that allowed unchecked pollution.
đż Carbon Pricing and Europe's Climate Leadership
The speaker highlights how Europe is leading in climate policy by putting a price on pollution and creating legally binding carbon targets. Denmark's Ărsted, once a fossil fuel company, transitioned to becoming the largest offshore wind power developer, thanks to Denmarkâs carbon pricing. While climate capitalism has successes, there are challenges, such as job losses due to high carbon prices in Europe, Indiaâs slow progress in meeting renewable energy goals, and Chinaâs continued emissions despite clean energy advancements. Governments and businesses must adapt policies to remain effective, balancing certainty with flexibility to achieve climate goals.
đŠ Heatwaves, Ice Cream, and Capitalism's Climate Crisis
In a surprising example, the speaker explains how even industries like ice cream are affected by climate change. Extreme heatwaves are keeping people indoors, reducing ice cream sales, while smallholder farmersâwho supply essential ingredientsâare struggling due to droughts, heat, and floods, leading to higher production costs. The speaker emphasizes that businesses are beginning to realize that climate change threatens profits, demonstrating the need to reform capitalism. The conclusion revisits the initial protest question, asserting that the problem is not capitalism itself but how it is currently functioning. With better policies, people, and technologies, capitalism can focus on climate solutions, benefiting everyone globally.
Mindmap
Keywords
đĄClimate Capitalism
đĄSolar Power
đĄGovernment Subsidies
đĄMarket Forces
đĄCarbon Pricing
đĄElectric Vehicles
đĄAir Pollution
đĄLithium-ion Batteries
đĄEnergy Security
đĄInnovation
Highlights
At a climate protest, a poster read: 'Burn capitalism, not coal.' This sets the stage for a debate on whether capitalism or coal burning is more to blame for climate change.
The speaker observed varying opinions on whether capitalism is the root cause of climate issues or if market forces could provide the solutions we need.
Solar power success story: In India, the installation of solar panels on a household rooftop led to a significant reduction in electricity bills, showcasing the economic benefits of renewable energy.
Rapid cost reductions in clean energy technologies: Between 2009 and 2019, the price of solar power fell by 90%, wind by 70%, and lithium-ion batteries by 85%, demonstrating the impact of 'climate capitalism.'
Climate capitalism involves using market forces and government policies to create solutions rather than exacerbate the problem, as seen in the case of solar energy deployment in India.
China's success in electric vehicle production is largely attributed to a government-led push, backed by subsidies and regulations, and supported by private investments.
Wang Gang, a key figure in China's electric vehicle sector, played a crucial role in demonstrating the viability of electric vehicles, leading to large-scale government support and industry growth.
Chinaâs strategy for scaling electric vehicle manufacturing was inspired by the U.S., particularly California's Zero Emissions Vehicle (ZEV) mandate, illustrating the interplay between different governance models.
Warren Buffett's investment in BYD, a Chinese electric vehicle company, highlights how global investors can drive the growth of green industries.
The U.S. Inflation Reduction Act of 2022 aims to channel hundreds of billions of dollars into green technology, mirroring China's extensive use of subsidies to advance its own clean energy sectors.
Europeâs approach to climate policy, including carbon pricing and legally binding targets, has made it a leader in reducing its carbon footprint, though it faces challenges such as job losses in some sectors.
Denmarkâs Ărsted transitioned from a fossil fuel-based company to the largest offshore wind power developer after Denmark introduced a carbon price, showing how policy can drive business transformation.
Despite India's ambitious renewable energy goals, it is falling behind, and Chinaâs emissions have risen despite significant clean energy investments, indicating the complexity of the climate challenge.
Climate capitalism requires a flexible approach, adapting policies when necessary, such as India's focus on integrating solar power with battery storage to meet rising electricity demands.
Businesses are beginning to act on climate change out of self-interest, recognizing that extreme weather events can hurt profits, as seen in the case of ice cream sales dropping during heatwaves.
The core message: The problem isnât capitalism itself but rather how it has been managed. Reforming capitalism through smarter policies, engaged people, and innovative technology is key to addressing the climate crisis.
Transcripts
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 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 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 2
days to get quots two weeks to have
those shiny devices Up on the Roof ready
to capture the sun's energy the payback
was quick electricity bills fell and my
parents have recovered the investment in
5 years for the next 15 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
even today India manufactures only a
small fraction of what it deploys and
yet a country with less than $3,000 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
more and more 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 2009 and 2019
the price of Solar fell
90% wind 70% lithium ion batteries
85% 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 there are still companies
that are profiting from pollution
however in country after country where
I've had a chance to report I found that
a combination of 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 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 w gang you've
probably never heard of him but he has
done more for the global rise of
electric cars than Elon Musk 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 2000
China burned about one barrel of oil per
person per year Germans burned 12 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 Juan's team in a
period of 8 years built hundreds of
electric cars and buses that were used
at the Beijing
Olympics in those same 8 years the
country's oil Bill ballooned and its
cities became globally Infamous for air
pollution but Juan had shown that an
alternative could work if China could
scale the manufacturing of electric cars
air pollution would be cut All Imports
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
lithium ion batteries the government
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 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 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 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 Z zero
emissions vehicle mandate that policy
was crucial in keeping Tesla afloat by
providing subsidies that by the way is
George W bush in a hydrogen powered
electric bus in California in 2006 but
now 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 2022 is one
response it'll see the US government
provide hundreds of billions of dollars
of subsidy
towards all kinds of solutions from
Green hydrogen to heat
pumps 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 pollute for free
and all that pollution is causing Dam
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 helped the continent
cut its carbon footprint faster than any
other it's also changed how businesses
operate in Europe the Danish o natural
gas company was founded in
1972 for 40 years it dug up fossil fuels
then Denmark adopted a carbon price and
a climate law and suddenly its business
model became
implausible today you know that company
as ERS it transitioned away from fossil
fuels starting in 2009 and it has become
the largest developer of offshore wind
power this hasn't been a smooth ride
they just aren't as as many success
stories as the world needs that's
because the climate challenge is really
complicated India has a 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
buildout 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 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 buildout at
the same Pace its emissions may have
peaked last
year now what's remarkable is that some
businesses are seeing 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
heatwave an ice cream maker will turn
big profits at
lots and lots of ice cream but heat
waves are becoming so extreme that
people are choosing to stay at home
instead at the same time small holder
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 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 isn't capitalism
but how it's being allowed to run we
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 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 fuels
thank you
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