Sustainability Symposium 2025 Climate Capitalism

00:00:04:18 - 00:00:35:00
Mike Collignon: All right. We're going to get the proceedings started today with Oxford Rathi. Now he is an award winning senior climate reporter for Bloomberg News. He's also the host of zero, a weekly climate podcast for Bloomberg Green. And he writes a weekly newsletter on climate solutions. Oxford joins us live from London. Now he's going to be joined by Sarah Gutterman, the CEO of Green Builder Media, after his presentation for an interactive discussion that I am definitely looking forward to.

00:00:35:02 - 00:00:38:10
Mike Collignon: So action. Thank you for joining us today.

00:00:38:12 - 00:01:12:02
Akshat Rathi: Thank you for having me. And thank you for everybody joining in. That was a lovely introduction. And what I'm going to do with my time, as a journalist is I'm going to tell you a few stories, a few stories around the theme, a few stories from my book, Climate Capitalism. So that we can get into a discussion because, the topic I cover, the topic you are all here to listen, about sustainability and how to act on climate change is one of the most dynamic fields there is.

00:01:12:05 - 00:01:48:02
Akshat Rathi: We have constant change, whether that's at a government level, as we are seeing in the US right now or, at a technology level, as we see, ever new technologies coming in and incumbents, facing new challenges. And so to me, it it is helpful to have some stories of the past that can inform how we manage in this, rapidly changing environment, both to deal with the problem that climate change brings, but also, to create business opportunities as, we tackle this challenge.

00:01:48:09 - 00:02:18:21
Akshat Rathi: So let me start with the title of the book, Climate Capitalism. Now, speaking to, a largely American audience. You know, there isn't that much of a conflict. Capitalism is something that has brought much, benefit to America. And, sure, climate change should be able to, fit into that, box and be able to work in a capitalist economy if we have to bring those solutions.

00:02:18:23 - 00:02:50:21
Akshat Rathi: But if that seems like an uncontroversial idea to you, I can assure you, having spoken to, you know, people all across the aisle around the world, whether that is, whether that's activists, climate activists or whether that's entrepreneurs who obviously are, driven by capitalism or, to politicians, it is not yet even today, seen as, a fully set idea that capitalism can actually be a part of the system that tackles climate change.

00:02:50:25 - 00:03:25:22
Akshat Rathi: And why is that? The people who are skeptical about climate, about capitalism's role in trying to tackle climate change, have a point, right? Over the past 200 years, the amount of wealth that we have seen around the world has been powered mostly by fossil fuels. And the costs that have come from using those fossil fuels in the in, in the form of pollution, whether that's of air or water or now, of greenhouse gases in the atmosphere that are heating the planet are costs that have not always been counted in the economy.

00:03:25:25 - 00:03:51:29
Akshat Rathi: And so many people pay the costs of pollution. But few people benefit from, the, the benefits of having, accessible, cheap, energy. And so that problem has lingered on with three decades of climate talks that have gone on to try and figure out a solution to deal, with this global challenge, trying to bring countries together.

00:03:52:01 - 00:04:17:24
Akshat Rathi: And as the bean counters will tell you, emissions keep rising. Last year was the hottest year ever recorded, and it was also the year where we had the highest amount of greenhouse gas emissions put out, in history. And so you can see from that point of view, if this system is what got us here, why would people believe that this system can also get us out of the mess?

00:04:17:26 - 00:04:37:18
Akshat Rathi: And so as somebody watching this space, writing about it on a day to day basis, it felt to me that there was a big divide between these two groups, people who believe that capitalism could be the solution and people who, actively, wanted to care, wanted to get rid of capitalism because they thought another system is needed to solve this problem.

00:04:37:21 - 00:05:06:17
Akshat Rathi: And so what I did as a journalist is I went around the world to try and find an answer to this seeming conflict. Is there a conflict here? Could capitalism not be reshaped at all? To try and solve the climate challenge. And the result was the book Climate Capitalism, which by the title tells you that what I found is that there are a certain number of things that you can do to make the system work for the climate and not against it.

00:05:06:19 - 00:05:27:08
Akshat Rathi: So let me get to the stories. I'm going to tell you three stories. And each of them will have some lessons that could be applied to your specific contexts, could be applied to a country context, but are stories that definitely have lessons for, people in industry? So the first story is of a guy named One Gang.

00:05:27:10 - 00:05:54:20
Akshat Rathi: Now one gang is somebody who you may or may not know. The likelihood of you not knowing him if you've not read the book is quite high. But I would argue he has done more for the growth and rise and, creation of the electric car industry than Elon Musk. And the story of what gang is, is one that most people don't know about because, it's a Chinese person.

00:05:54:20 - 00:06:31:08
Akshat Rathi: It's a bureaucrat. And and not somebody who has a big, large social media platform shout out about their achievements. But one gang was born in China. He, grew up there. He got a scholarship to go and study in Germany, where he studied automotive engineering. He started working for Audi, making fossil fuel cars. And while he was there in the late 90s, he started to see visits from Chinese ministers coming to Germany to the automakers to try and find out why is it that Chinese automakers are so much worse than German ones?

00:06:31:08 - 00:07:06:26
Akshat Rathi: And what can they learn from the Germans that could be applied to that industry? And in one of those visits, one gang found out that, he was going to see the science minister coming in, and he made the case to the science minister that look, if China is to be a country that has the kind of quality of life that Germany does, we should be thinking about a different technology, because at that time, and this was in the year 2000, Germans burned about 16 barrels of oil per person per year, and the Chinese burned one barrel of oil per person per year.

00:07:06:28 - 00:07:34:25
Akshat Rathi: If Chinese people, which are, you know, far more in number, would live that kind of lifestyle of burning 16 barrels of oil per year, there just wouldn't be enough oil in the world. And if they did, there would be so much air pollution that they'll have to deal with. And so he said, look, there are other technologies, things like electric cars that are powered by batteries, which, if China invested in early, could be the technology that solves so many of our problems.

00:07:34:25 - 00:07:57:13
Akshat Rathi: So you don't have to import oil, which we don't have. We can try and deal with air pollution, and we create a technology that, if we can make cheaply, will be the world's largest, producer of and supplier of that technology. And so the Chinese minister was skeptical but said, look, we are interested. We'll give you a, a government program.

00:07:57:13 - 00:08:31:08
Akshat Rathi: Why don't you try and show us what you can do? And so in the rise up to, 2008, when China was hosting the Beijing Olympics, he was given the duty of coming up with some electric cars and busses for, the athletes who were coming into Beijing. And he made, a few dozen electric cars and a few dozen, electric busses and, and Beijing Olympics was, even today, considered one of the most splendid large, spending from a government, which had electric cars and busses, ferrying athletes.

00:08:31:10 - 00:08:56:11
Akshat Rathi: And that early success, got the government to think very, strategically. And so by 2011, one gang was made science minister, and he was given the duty to try and, create a whole industry in China that would supply electric, that would make electric cars. And, to make electric cars, you would need batteries. So you need both industries to form.

00:08:56:13 - 00:09:20:25
Akshat Rathi: And what China did over the next, decade was a mixture of policies. Some of it was, very much state led, subsidies. So making a cheap for, for carmakers, to produce those cars by giving them perhaps free land, some lower taxes. But at the same time, it also made it harder for people to buy, fossil fuel cars.

00:09:21:02 - 00:09:39:12
Akshat Rathi: And so even today, if you're in Shanghai and you want to buy, a car, if you want to buy a fossil fuel car, you have to apply for a lottery system, win the lottery, and then you are allowed to buy that car. But if you want to buy an electric car, you could just go to a showroom and buy one.

00:09:39:15 - 00:10:09:27
Akshat Rathi: So this combination of carrots and sticks, allowed for the creation of, at one point, 400 electric car makers. Even today, there are about 90 car makers, that remain in China. And of course, you know, what has been the impact of that industry? You don't see in America very many Chinese electric cars, but almost anywhere else in the world you go if you're seeing EVs, you're seeing electric cars as either a Tesla or a bid.

00:10:10:00 - 00:10:47:00
Akshat Rathi: And BYD, which is the Chinese electric car, now sells more electric cars in the world than Tesla does. So what we can learn from this story and the stories that follow is that to be able to get, a climate technology to scale, to market, to be profitable, you need a combination of three things. You need people like one gan you need policy like the ones that the government put out, whether that's incentives or, or, sticks so that you can, move to a new technology.

00:10:47:03 - 00:11:12:10
Akshat Rathi: And you need, technology itself. Right? If you don't have the solutions that are affordable, that are cheap enough, people are not going to buy them. And you might also think that, look, China can do it because they have, a they don't have a democracy, they have a dictatorship. And they have the ability to be able to, put out all these policies which are, you know, seemingly very good, and they make things work.

00:11:12:15 - 00:11:49:01
Akshat Rathi: But they may not be popular and they don't have to listen to people, to, to get these things done. But turns out the formula that China used to build its electric car industry is a formula which is largely known as industrial policy, that has been copied from the, the champion of capitalism from America. So America through the 20th century has used industrial policy in one form or the other, where government has been involved at the early stage of the creation of an industry.

00:11:49:03 - 00:12:21:17
Akshat Rathi: And then it backs out once the industry is ongoing, and it's profitable. It's done that in, in making trains, in making the rail network. It's done that in, making the, making airlines. And the airline industry is done that more recently in, making, semiconductor chips, in making biotechnology is possible at almost every one of these major industries, which you would count as trillion dollar industries.

00:12:21:20 - 00:13:06:06
Akshat Rathi: The government has played a role initially to try and support the industry against an incumbent or against the risk that this industries technology might not, succeed. But when it succeeded, it's created a whole market for itself, where the government is rarely, involved at the level that it was in the initial days. It's also a formula that is not the only way to do, only way to make capitalism work where you have a heavy handed government, involvement in the creation of an industry, another route which is being taken here in Europe, where I live, is to price carbon, is to actually price the pollution, and price the cost of

00:13:06:06 - 00:13:30:26
Akshat Rathi: that pollution to society, which forces people to move on to cleaner things. And so in Europe, there is, a carbon price on the emissions that come from power plants and from industry that exists here in the UK, too, which are separated from Europe but still keeps, the emissions trading system and that, policy, which seems like a, largely a stick policy.

00:13:30:26 - 00:14:08:05
Akshat Rathi: Right. Like they're telling you, you can't pollute. If you do pollute, you have to pay a fine. Also incentivizes, companies to move to cleaner technologies, but at the same time, when Europe is doing it, it also realized that it can't simply punish its own industry because, otherwise the industry will, suffer. Because if you're importing from, say, China or from India, which does not have a carbon price, then their, production is cheaper than the ones that are being made in Europe, where there is a carbon price and, the companies become less competitive.

00:14:08:05 - 00:14:46:15
Akshat Rathi: And so Europe is not launched. What is known as a carbon border adjustment mechanism, which is basically the, a system where it's not just the companies inside European borders who pay a price on carbon. It's also, being charged on the imports that are coming from places like China and India. And so as a result, seeing that Europe is, making sure that there's a level playing field for its own domestic industry versus, versus imports, we have seen in countries like China and India start to build out the carbon market.

00:14:46:15 - 00:15:09:16
Akshat Rathi: China now has a fully functional carbon market. India is considering one. And this idea of a carbon border adjustment mechanism is being adopted by other countries. So the UK, is in the process of building one. Mark Carney in Canada, who just got elected as prime minister, has made it a policy that he's going to, install a carbon border adjustment mechanism in Canada.

00:15:09:18 - 00:15:35:08
Akshat Rathi: And that way you're allowing for, for domestic industries to have the same, capacity to be able to, develop these technologies in a way that is, good for the environment, but also good for people. So those are three examples I wanted to bring up. I, you know, through through the book, you'll see there are a number of case studies.

00:15:35:08 - 00:16:10:15
Akshat Rathi: I go to different technologies, from electric cars to, to solar, but also to, oil to, gas, to the use of different instruments. In, in the financial world, like shareholder activism to try and get incumbent companies, to become more climate friendly. All examples that work within the capitalistic economy that exist in the world today, ones that require some tweaks because the system as it exists, does not address the climate challenge as it must.

00:16:10:18 - 00:16:35:15
Akshat Rathi: But those tweaks are being made, around the world in different places, and everybody can learn from how to apply them, to their own context. And in the US context right now, the federal government is, very much against, climate policies of all sorts and you're seeing that play out in big ways. But the U.S system is also a federal system, and states have a lot of power.

00:16:35:21 - 00:17:19:15
Akshat Rathi: And so we are seeing states push back on certain rules. You know, California is already fighting a lawsuit on for for example, it's it's car, car emission standards, which California has the ability to put out on its own. But but the federal government, wants to take that away. And so in that process, of having the, lab, the experiment of states coming up with their own policy, what can be done despite, a federal government that is not friendly to, to climate today, is to have states experiment with what is it that works for people and for the environment and for making profits

00:17:19:15 - 00:17:39:18
Akshat Rathi: and for bringing in jobs and for being a competitive economy. There are many, many different climate technologies that do that. And now is the time to apply either a new experiment or learn from the experiments that have been going on around the world. I'll end there and look forward to the questions you may have.

00:17:39:20 - 00:18:06:24
Sara Gutterman: Actually, thank you so much. That was fascinating. And I wish we had, much more time to listen to your storytelling, because clearly you have a lot to share. So I want to start our Q&A, first by reminding attendees to please enter any questions that you have into the Q&A box. And I'll try to keep an eye on that and weave those into, the questions that I have for Akshat.

00:18:06:26 - 00:18:40:17
Sara Gutterman: Let's start just with an announcement that, we learned we heard today breaking news, that, in the UK, all new homes will be required to have solar starting in 2027. And that's kind of interesting timing given the blackouts in Spain and Portugal. So, can you talk about that within the context of this, policy framework and the regulatory framework that you think are essential to support and scale climate capitalism effectively?

00:18:40:20 - 00:19:01:04
Akshat Rathi: Yeah. So I mean, the solar example is actually very, interesting, especially from where my journey in this began. So in 2019, you know, my parents live in India. I grew up there in 2019. I was hoping that I can get solar panels for them in, my hometown. And, the process even then was remarkably simple.

00:19:01:04 - 00:19:25:01
Akshat Rathi: In, in a couple of days, we had quotes from suppliers. In two weeks, the solar panels were up and running. And, for us, for a six kilowatt system, it only cost $3,000, which is, which is now as of, as of middle of 2024, been completely recouped by, not paying as much electricity bills as my parents used to.

00:19:25:04 - 00:19:42:21
Akshat Rathi: So in a period of five years, my parents have recovered all the investments on on their solar panels. Now, India is a place where installing, solar panels is much cheaper than it is in other parts of the world. And so the, the the years in which they could recoup those costs, were, were, shorter. But also India is a sunny place.

00:19:42:21 - 00:20:02:18
Akshat Rathi: So you get, you get, you know, a five year return on investment is, is amazing because solar panels are going to last for 20 years. But even in a country like the UK, which is much more expensive, to install solar, which is not as sunny as India is, even here, your breakeven costs on solar are ten years or less.

00:20:02:18 - 00:20:30:02
Akshat Rathi: So you are, getting to a place where with current regulations, not even the breaking news that we talked about solar is, a technology that, saves households money. But as regulations don't exist, what happens is you have to opt in to build solar after your home has been built. And that is a much more expensive process, because then you have to retrofit, you have to make sure that the roof is ready to be able to take on this load.

00:20:30:02 - 00:20:50:03
Akshat Rathi: You have to have people in, set up the solar panels in a way that is suitable for for your specific, type of home. And that makes the process much more expensive than it really needs to. And so with this regulation, what will happen is the process of building the solar panel will be fed into, the building of the home itself.

00:20:50:07 - 00:21:19:05
Akshat Rathi: And that will, reduce prices. Now, the context in which, it's happening is also interesting. Right? We, here in Europe, there was a large blackout, perhaps the largest blackout that a Western economy has seen in in recent years. When, power in Spain and Portugal went down for about half a day, altogether. And affected, you know, tens of millions of people, we still don't know what caused, the, the outage.

00:21:19:08 - 00:21:55:15
Akshat Rathi: And there are big, big questions being asked. What do we what we do know is that, Spain is among the, the countries, like, among the regions, like Texas, like California, like Australia, where there's a lot of solar, that's on, on the, on the grid. And especially so during, during daytime when, when the, outage began and so it's important to recognize that as much as green technologies are cleaner now, cheaper, they also need to be integrated in a way that, make the use of them, resilient.

00:21:55:15 - 00:22:08:08
Akshat Rathi: And so there going to be lots of questions about how to make sure that even as this cheap technology is being adopted widely, that we make sure that the grid and the technologies that come with it are operating in a resilient manner.

00:22:08:10 - 00:22:18:10
Sara Gutterman: Thank you. Now, looking ahead, what emerging trends or technologies do you see as game changers in aligning capitalist markets with climate goals?

00:22:18:12 - 00:22:42:11
Akshat Rathi: So the ones that are being adopted, at at pace right now, you know, you could split the sort of technology set in climate in two buckets, one that are being adopted at a commercial scale, and those are solar and wind and batteries and electric cars. Those have momentum behind them because they are they, they have investors, but they also are profit making.

00:22:42:14 - 00:23:18:05
Akshat Rathi: And so you have it multiple industries that are, that have their own momentum and that are going their whole suite of other technologies that are sort of in the middle, which are ready to become commercial, but haven't yet quite got the scale that, these other frontier technologies do have, things like heat pumps, things like, home batteries or heat batteries, that are being used, which, or things like more, efficient, H-back technology.

00:23:18:07 - 00:23:40:15
Akshat Rathi: These are things that are not yet widely adopted, but have the potential to be. And then there are lots of technologies that are still not yet commercial that need to become commercial from the the sort of global, ability to try and tackle climate change. So things like carbon removal, which is the ability to pull down carbon dioxide from the atmosphere because we've just put out too much of it.

00:23:40:15 - 00:24:13:01
Akshat Rathi: And if we are going to stay in, a safe environment, we are going to have to also remove some of this excess carbon dioxide, eventually. And you need to build those technologies today, or things like nuclear fusion, which are, you know, technologies that have been worked on for decades but might just become commercial within the next decade or two, and could provide really clean, unlimited power, and are worthy of investments even, as we develop the mature technologies on climate that we do have.

00:24:13:03 - 00:24:36:01
Sara Gutterman: Thank you. And my final question for you. I'm just glad we've got a couple minutes before we have to wrap. Wrap up is in your book, Climate Capitalist Excuse me, climate capitalism. You argue that capitalism, while a driver of climate change, can also be its solution. So how do you reconcile the inherent growth driven nature of capitalism with finite resources of our planet?

00:24:36:01 - 00:24:54:04
Sara Gutterman: And I also want to weave in, a question that was put into the Q&A, which is do we just basically have to reconcile in our own minds that things are going to be more expensive in order to solve for climate or do those economics even out with the supply and demand for us?

00:24:54:07 - 00:25:25:17
Akshat Rathi: Yeah, very good question. So on the growth side, it's worth recognizing that growth doesn't just come from greater material use. That has been the case in the past, but we've also started to dematerialized growth. So a lot of economic growth that comes these days is not because you are producing a ton of copper or iron ore, but it's because you are creating, an AI technology that is helping people solve problems on a day to day basis.

00:25:25:19 - 00:25:57:09
Akshat Rathi: And so, that split between growth, of materials versus growth of the economy is there and it can grow faster. One way to do that is actually to use fewer fossil fuels. So today, in terms of extraction, we extract billions and billions of tons of oil, gas and coal, for the fuels that we need, while we extract maybe tens of millions of tons of, metal that we use to build things like solar panels or electric cars.

00:25:57:11 - 00:26:21:25
Akshat Rathi: And so if you are able to use, you know, plentiful sun, and wind, which are renewable energy sources, you stop using as much material, in terms of fossil fuels that is being extracted. So, I don't think growth and climate are opposite as they seem to be. It is certainly true that growth of, materials and climate can be opposite.

00:26:21:25 - 00:26:43:11
Akshat Rathi: And there is a way to dematerialize as we build the climate solution set. Now, the question about cost is a very important one, one that we have grappled with very strongly across the world in, and it's shown up in election results. Right. One of the reasons for a Donald Trump presidency is because people are tired with the cost of living.

00:26:43:13 - 00:27:11:21
Akshat Rathi: It's the same case here in, in the UK when the previous conservative government was kicked out and labor was brought in, it was because of the cost of living. So cost is really important. But there are ways in which you manage it and you can do it right. So this is why the sort of subsidies that governments provide for frontier technologies is crucial, because it's allowed, people to make, greener choices even when the greener choices are more expensive.

00:27:11:21 - 00:27:31:23
Akshat Rathi: So an electric car, even today, is more expensive than a, an equivalent gasoline car. But with a tax credit, you can make that, solution set to work. And so that is one way to do it. But the other one is once you have done it, things are just cheaper. People are building solar panels on homes here in the UK.

00:27:31:26 - 00:27:57:20
Akshat Rathi: So about 40% of new homes are being built with solar panels today out of choice, because solar is the cheaper option for them to have. But now with regulation, that's just going to make it even cheaper for them to build solar. So, the cost equation is a very important one and one that we should never forget because without making, these solutions affordable now and in the long run, they are not going to be adopted.

00:27:57:22 - 00:28:06:09
Akshat Rathi: And people, you know, rightly choose comfort before they choose, saving the planet. We should make it easier to put.

00:28:06:12 - 00:28:27:16
Sara Gutterman: Thank you. Well, Akshat, thank you so much for your insight. I really recommend that anyone in attendance, check out Akshat book Climate Capitalism. You can get it on Amazon or you can get it in the link. That's posted in the chat. Actually, I can't wait to hear more of your stories. And again, thank you for your time.