Capitalism Broke the Climate. Now It Can Fix It | Akshat Rathi | TED

Summary

The 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

• 🌞 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.
• 💡 Capitalism played a role in making solar panels affordable through profit-seeking companies and government policies like subsidies and regulations.
• 📉 The price of solar panels, wind energy, and lithium-ion batteries has dramatically decreased, making renewable energy more accessible and competitive.
• 🌍 The concept of 'climate capitalism' suggests that governments and businesses can work together to use market forces to create solutions for climate change.
• 🚗 The Chinese government's support for electric vehicles, including subsidies and regulations, has helped China become a leader in the electric car industry.
• 🌿 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.
• 💨 Europe's carbon pricing and legally binding targets have helped reduce carbon emissions and change business practices towards sustainability.
• 🏭 Companies like Ørsted (formerly a Danish natural gas company) have transitioned from fossil fuels to renewable energy, demonstrating that businesses can adapt to climate policies.
• 🔥 The climate crisis is the greatest market failure, with governments allowing free pollution that causes climate impacts and health inequalities.
• 🌡️ 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

00:00

🌍 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.

05:02

🔋 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.

10:02

🚗 China’s 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. Wu’s 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. China’s approach, inspired in part by U.S. policies, shows that even democracies can adopt similar strategies.

🇺🇸 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. China’s 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.

🌿 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 Ørsted, once a fossil fuel company, transitioned to becoming the largest offshore wind power developer, thanks to Denmark’s carbon pricing. While climate capitalism has successes, there are challenges, such as job losses due to high carbon prices in Europe, India’s slow progress in meeting renewable energy goals, and China’s continued emissions despite clean energy advancements. Governments and businesses must adapt policies to remain effective, balancing certainty with flexibility to achieve climate goals.

🍦 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 farmers—who supply essential ingredients—are 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.

Keywords

💡Climate Capitalism

Climate capitalism refers to the idea of harnessing capitalist market forces to address climate change. The script highlights how profit-driven companies, incentivized by government policies and subsidies, are creating solutions like solar panels and electric cars. It demonstrates that capitalism, when redirected, can contribute to solving environmental issues rather than exacerbating them.

💡Solar Power

Solar power is a key example of renewable energy discussed in the script. The speaker mentions how their parents installed solar panels in India and quickly recovered their investment, showcasing the economic benefits of solar energy. This highlights how climate solutions, like solar power, can be both environmentally and financially advantageous.

💡Government Subsidies

Government subsidies play a critical role in climate capitalism by supporting the development and scaling of clean technologies. The script describes how countries like China and the U.S. have provided massive subsidies for electric vehicles, renewable energy, and batteries, demonstrating how public policy can guide the market towards climate-friendly solutions.

💡Market Forces

Market forces refer to the economic mechanisms that drive supply and demand. In the context of the video, the speaker explains that market forces, when properly aligned with climate policies, can accelerate the development of green technologies like solar panels and electric cars. This shows that economic incentives can be harnessed for environmental goals.

💡Carbon Pricing

Carbon pricing is a policy tool that puts a financial cost on greenhouse gas emissions, aiming to reduce pollution by making it more expensive to emit carbon. The script mentions Europe's success in cutting carbon footprints through carbon pricing and how it changes business operations, like the transformation of Ørsted from a fossil fuel company into a renewable energy leader.

💡Electric Vehicles

Electric vehicles (EVs) are highlighted as a major climate solution. The script discusses China's massive push for EVs, driven by both government support and market investments, like those from Warren Buffett. It showcases how electric cars reduce reliance on fossil fuels and how they can become economically viable through supportive policies.

💡Air Pollution

Air pollution is used as an example of a pressing issue that drives climate action. The script notes how China's electric vehicle push was partially motivated by the need to reduce harmful air pollution in cities. This illustrates how climate solutions can be framed around local environmental concerns, making them more urgent and politically feasible.

💡Lithium-ion Batteries

Lithium-ion batteries are essential for renewable energy storage and electric vehicles. The script notes that their cost has dropped by 85% between 2009 and 2019, which has enabled the scaling of clean technologies like solar power and EVs. This highlights how technological innovation and economies of scale can drive down costs and make climate solutions more accessible.

💡Energy Security

Energy security refers to a nation's ability to secure stable and affordable energy supplies. In the script, the speaker points out that countries like China pursue renewable energy not just for environmental reasons, but to reduce dependency on imported fossil fuels. This shows that climate action can also align with national interests, such as reducing reliance on volatile energy markets.

💡Innovation

Innovation is a recurring theme in the script, referring to the development of new technologies that can address climate challenges. The speaker emphasizes that innovations like solar panels, wind energy, and electric vehicles have become cheaper over time due to market competition and policy support. Innovation is key to making climate capitalism work and solving the climate crisis.

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.

China’s 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.

Europe’s 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.

Denmark’s Ørsted 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 China’s 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 isn’t 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